Mortgage Checklist / Programs Offered / Questions and Answers
What is the first step when buying a home?
A: Talk to one of our professionals regarding what price home you can afford to buy. Our loan officers will assist you in your application process. This includes credit check and employment verification.
What documents will I need to provide when I apply for a loan?
A: You must be prepared to provide verification of income, bank account numbers, information about long term debt, including credit cards, auto loans, and child support. Information must be updated with every financial change.
Does my credit history have to be perfect?
A: Your profiled credit report will help us determine how efficiently you meet your obligations. Your credit history does not need to be perfect to apply.
Can a Mortgage Broker find me the best interest rate?
A: Yes! Brokers have access to lenders in several states which enhance your chances for a lower interest rate.
Will I end up paying more for my loan if I receive it from a broker?
A: Not necessarily, although the broker's services require a fee, the lenders often discount loans to a broker. This may end up saving you money in the long run.
What is a home improvement loan?
A: The home improvement loan is a second mortgage for people who have little or no equity in their property. This loan is designed to give the homeowner the ability to improve on their home while also increasing the value of the property. You as the homeowner are in full control of the proceeds of this loan. All improvements are eligible! Landscaping, room additions, kitchen and bathroom remodels, swimming pools, painting and flooring.
What kind of mortgage should I apply for?
A: Once you have decided to make the investment to buy a home, you will need something that fits your financial budget. Our loan officers will help you determine your options and select a mortgage.
What about mortgage rates that are not fixed?
A: An Adjustable Rate Mortgage (ARM) can vary during the life of the loan to reflect changes in the market conditions. The benefit of an ARM is a lower monthly payment in the initial period of the loan, but be prepared for increased payments as rates rise.
What is an escrow account?
A: The escrow account, in a mortgage payment context, is a special account that the lender holds on behalf of the borrower. This payment is deposited monthly for property taxes, homeowners insurance, and PMI if required. The lender then pays these obligations on behalf of the borrower when they are due.
How large is my downpayment?
A: It all depends on the loan amount; you may be able to put down a very small percent of that loan. We offer 0% downpayment loans, as well.
What does "rate lock" mean?
A: When a rate is "locked" the lender is being asked to guarantee the price of a commodity, the price of which changes daily. The longer the lock period, the riskier the position of the lender, hence the higher the loan price or points charged to the borrower. Many borrowers ask that the lender commit or "lock" the initial rate quoted for a period of time sufficient to close the transaction.
What is included in my PITI amount?
A: Your "PITI" amount includes principal and interest on the mortgage, taxes real estate, and homeowners insurance. The "PITI" is the total monthly payment you will make to your appointed lender.
What is Private Mortgage Insurance?
A: Private Mortgage Insurance, or PMI for short, insures the lender against losses which could occur should the borrower not make the required payments. The insurance allows lenders to make loans where the borrower's downpayment is less than 20%. We have mortgage programs which avoid PMI with less than 20% downpayment.
What is Homeowners Insurance?
A: Homeowner's Insurance, also referred to as hazard insurance, is your traditional insurance used to protect the borrower/ homeowner against property loss from fire, weather, etc.
What is Title Insurance?
A: The Title Insurance insures your ownership rights in the property. Specifically, it insures the ability of past owners to pass ownership rights on to you.
What is an APR vs. an interest rate?
A: The Annual Percentage Rate can help you to choose a mortgage loan. This is made up of your interest rate, points, per diem interest, and other applicable fees. The interest rate is the rate your loan will be amortized by - not the APR rate.
What is a point?
A: This is equal to one percent of the principle amount of your mortgage. Lenders charge points in the form of fixed-rate and adjustable-rate mortgages in order to cover loan closing costs and/or buy down your interest rate.
What will my closing costs look like?
A: Your costs will contain all of the expenses associated with the transaction. Some of these charges consist of appraisal fee, title search fee, title insurance and taxes.
Why should I own when I can rent?
A: With the proper planning, fulfilling the goal of homeownership is well within your reach. By owning your own home, you will make an investment for the future, save on taxes and build up equity.
How do I know when it is a good time to refinance?
A: First you must consider the savings in monthly payment, the costs of the loan transaction, and the term of the new loan compared to the old term. The key is to determine whether the benefit of payment savings and/or term reduction exceeds the cost of the transaction.
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