To determine the value of the property you are purchasing or refinancing, an appraisal will be required. An appraisal report is a written description and estimate of the value of the property. National standards govern not only the format for the appraisal; they also specify the appraiser's qualifications and credentials. In addition, most states now have licensing requirements for appraisers evaluating properties. The appraiser will create a written report for us and you will be given a copy before your loan closes. Usually the appraiser will inspect both the interior and exterior of the home.
As soon as we receive your appriasal, we will update your loan with the estimated vlaue and provide you a copy.
An Appraisal will usually be required to determine the value. You may choose to obtain a home inspection.
The appraiser will make note of obvious construction problems such as termite damage, dry rot or leaking roofs or basements. Other obvious interior or exterior damage that could affect the salability of the property will also be reported.
However, appraisers are not construction experts and won't find or report items that are not obvious. They won't turn on every light switch, run every faucet or inspect the attic or mechanicals. That's where the home inspector comes in. They generally perform a detailed inspection and can educate you about possible concerns or defects with the home.
Accompany the inspector during the home inspection. This is your opportunity to gain knowledge of major systems, appliances and fixtures, learn maintenance schedules and tips, and to ask questions about the condition of the home.
Licensed appraisers who are familiar with home values in your area perform appraisals. We order the appraisal as soon as the is paid. Generally, it takes 10-14 days before the written report is sent to us. We will promptly give you a copy of any appraisl, even if your loan does not close.
Federal Law requires all lenders to investigate whether or not each home they finance is in a special flood hazard area as defined by FEMA, the Federal Emergency Management Agency. Floods happen anytime, anywhere. But the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 help to ensure that you will be protected from financial losses caused by flooding.
We use a third party company who specializes in the reviewing of flood maps prepared by FEMA to determine if your home is located in a flood area. If it is, then flood insurance coverage will be required, since standard homeowner's insurance doesn't protect you against damages from flooding.
Interest rates fluctuate based on a variety of factors, including inflation, the pace of economic growth, and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will almost always lead to low interest rates, while concerns about rising inflation normally cause interest rates to increase. Our nation's central bank, the Federal Reserve, implements policies designed to keep inflation and interest rates relatively low and stable.
An adjustable rate mortgage, or an "ARM" as they are commonly called, is a loan type that offers a lower initial interest rate than most fixed rate loans. The trade off is that the interest rate can change periodically, usually in relation to an index, and the monthly payment will go up or down accordingly.
Against the advantage of the lower payment at the beginning of the loan, you should weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. It's a trade-off. You get a lower rate with an ARM in exchange for assuming more risk.
For many people in a variety of situations, an ARM is the right mortgage choice, particularly if your income is likely to increase in the future or if you only plan on being in the home for three to five years.
For more information regarding ARM loan programs, please contact a Loan Originator.
Points are considered a form of interest. Each point is equal to one percent of the loan amount. You pay them, up front, at your loan closing in exchange for a lower interest rate over the life of your loan. This means more money will be required at closing, however, you will have lower monthly payments over the term of your loan.
To determine whether it makes sense for you to pay points, you should compare the cost of the points to the monthly payments savings created by the lower interest rate. Divide the total cost of the points by the savings in each monthly payment. This calculation provides the number of payments you'll make before you actually begin to save money by paying points. If the number of months it will take to recoup the points is longer than you plan on having this mortgage, you should consider the loan program option that doesn't require points to be paid.
The Federal Truth in Lending law requires that all financial institutions disclose the APR when they advertise a rate. The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all, closing fees are included in the APR calculation. These fees in addition to the interest rate determine the estimated cost of financing over the full term of the loan.
You can use the APR as a guideline to shop for loans but you should not depend solely on the APR in choosing the loan program that's best for you. Look at total fees, possible rate adjustments in the future if you're comparing adjustable rate mortgages, and consider the length of time that you plan on having the mortgage.
Don't forget that the APR is an effective interest rate--not the actual interest rate. Your monthly payments will be based on the actual interest rate, the amount you borrow, and the term of your loan.
Mortgage interest rate movements are as hard to predict as the stock market and no one can really know for certain whether they'll go up or down.
If you have a hunch that rates are on an upward trend then you'll want to consider locking the rate as soon as you are able. Before you decide to lock, make sure that your loan can close within the lock-in period. It won't do any good to lock your rate if you can't close during the rate lock period. If you're purchasing a home, review your contract for the estimated closing date to help you choose the right rate lock period.
The monthly payments are somewhat higher than a 30-year loan, the interest rate on the 15-year loan is usually a little lower and more importantly - you'll pay less than half the total interest cost of the traditional 30-year mortgage.
Many borroweres find the higher payment out of reach and choose a 30-year mortgage. It still makes sense to use a 30-year mortgage for most people.
For more information please contact a Loan Originator.
None of the loan programs we offer have penalties for prepayment. You can pay off your mortgage any time with no additional charges.
The interest rate market is subject to movements without advance notice. Locking a rate protects you from the time that your lock is confirmed to the day that your lock period expires. Once you lock your rate, a lock-in agreement will be provided to you that details the terms.
A home loan often involves many fees, such as the appraisal fee, title charges, closing fees, and state or local taxes. These fees vary from state to state and also from lender to lender. Any lender or broker should be able to give you an estimate of their fees, but it is more difficult to tell which lenders have done their homework and are providing a complete and accurate estimate.
If you have further questions or would like a cost worksheet, please contact a Loan Originator. Once you receive your Loan Estimate (LE), you will not receive a cost worksheet and any updates to the fees, program, etc. will be noted on a revised LE.
First of all, let's make sure that we mean the same thing when we discuss "mortgage insurance." Mortgage insurance should not be confused with mortgage life insurance, which is designed to pay off a mortgage in the event of a borrower's death. Mortgage insurance makes it possible for you to buy a home with less than a 20% down payment by protecting the lender against the additional risk associated with low down payment lending. Low down payment mortgages are becoming more and more popular, and by purchasing mortgage insurance, lenders are comfortable with down payments as low as 3 - 5% of the home's value. It also provides you with the ability to buy a more expensive home than might be possible if a 20% down payment were required. The mortgage insurance premium is based on loan to value ratio, type of loan, and amount of coverage required by the lender.
The maximum percentage of your home's value depends on the purpose of the loan and your qualifications.
A combination loan is a combination of a first mortgage and a second mortgage. Together,
the two loans provide the funds required to purchase or refinance a property. It is called
a combination loan because the second mortgage is “stacked” on or combined with the first.
Generally the first mortgage is for 80% of the home’s value, and the second mortgage is used
to finance a portion of the remaining balance that isn’t covered by the down payment. In most
cases, the interest rate on the second mortgage is higher than the interest rate on the first
A combination loan eliminates the need for Private Mortgage Insurance (PMI), which is typically required any time a first mortgage is provided for more than 80% of the home’s value. This is accomplished by limiting the first mortgage to no more than 80% of the home’s value and financing any additional funds that are needed using a second mortgage. Typically the interest rate of the second mortgage is higher than that of the first mortgage, but generally less expensive than the cost of PMI. You should always compare the cost of a combination loan with the cost of a first mortgage. Even when combined with the additional cost of a second mortgage, at higher interest rate, the combination loan may still be less than the PMI premium because mortgage interest is tax deductible, whereas PMI is not. It is always prudent to review all your financing options before deciding which is best for you.
Yes, starting an online inquiry for a mortgage loan before you find a home may be the best thing you could do! When you find the perfect home, you'll simply call your Mortgage Loan Officer to complete your inquiry. You'll have an opportunity to lock in our great rates and fees then and we'll complete the processing of your request.
A credit score is one of the pieces of information that we'll use to evaluate your inquiry. Financial institutions have been using credit scores to evaluate credit card, mortgage, and auto inquirys for many years.
Credit scores are based on information collected by credit bureaus and information reported each month by your creditors about the balances you owe and the timing of your payments. A credit score is a compilation of all this information converted into a number that helps a lender to determine the likelihood that you will repay the loan on schedule. The credit score is calculated by the credit bureau, not by the lender. Credit scores are calculated by comparing your credit history with millions of other consumers. They have proven to be a very effective way of determining credit worthiness.
Some of the things that affect your credit score include your payment history, your outstanding obligations, the length of time you have had outstanding credit, the types of credit you use, and the number of inquiries that have been made about your credit history in the recent past.
Credit scores used for mortgage loan decisions range from approximately 300 to 900. Generally, the higher your credit score, the lower the risk that your payments won't be paid as agreed.
Using credit scores to evaluate your credit history allows us to quickly and objectively evaluate your credit history when reviewing your loan inquiry. However, there are many other factors when making a loan decision and we never evaluate an inquiry without looking at the total financial picture of a customer.
An abundance of credit inquiries can sometimes affect your credit scores since it may indicate that your use of credit is increasing.
There is no charge to you for the credit information we'll access with your permission to evaluate your online inquiry. You will only be charged for a credit report if you make an application and close the loan.
Yes, you can borrow funds to use as your down payment! However, any loans that you take out must be secured by an asset that you own. If you own something of value that you could borrow funds against such as a car or another home, it's a perfectly acceptable source of funds. If you are planning on obtaining a loan, make sure to include the details of this loan in the Expenses section of the online inquiry. Please keep in mind that the terms of the borrowed funds loan may impact your loan qualification.
We take full advantage of an automated underwriting system that allows us to request as little information as possible to verify the data you provided during your mortgage inquiry. Gone are the days when it was necessary to verify every piece of data collected during the inquiry.
The automated underwriting system compares your financial situation with statistical data from millions of other homeowners and uses that comparison to determine the level of verification needed. In many cases, a single W-2 or pay stub can be used to verify your income or a single bank statement can be used to verify the assets needed to close your loan.
Generally, the income of self-employed borrowers is verified by obtaining copies of personal (and business, if applicable) federal tax returns for the most recent two-year period.
We'll review and average the net income from self-employment that's reported on your tax returns to determine the income that can be used to qualify. We won't be able to consider any income that hasn't been reported as such on your tax returns. Typically, we'll need at least one, and sometimes a full two-year history of self-employment to verify that your self-employment income is stable.
In order for bonus, overtime, or commission income to be considered, you must have a history of receiving it and it must be likely to continue. We'll usually need to obtain copies of W-2 statements for the previous two years and your most recent 30 days of paystubs to verify this type of income. If a major part of your income is commission earnings, we may need to obtain copies of recent tax returns to verify the amount of business-related expenses, if any. We'll average the amounts you have received over the past two years to calculate the amount that can be considered as a regular part of your income.
If you haven't been receiving bonus, overtime, or commission income for at least one year, it probably can't be given full value when your loan is being reviewed.
We will ask for copies of your recent pension check stubs, or bank statement if your pension or retirement income is deposited directly in your bank account. Sometimes it will also be necessary to verify that this income will continue for at least three years since some pension or retirement plans do not provide income for life. This can usually be verified with a copy of your award letter.
Generally, only income that is reported on your tax return can be considered when inquirying about a mortgage. Unless, of course, the income is legally tax-free and isn't required to be reported.
If you own rental properties, we'll generally ask for the most recent year's federal tax return to verify your rental income.
Generally, two years personal tax returns are required to verify the amount of your dividend and/or interest income so that an average of the amounts you receive can be calculated. In addition, we will need to verify your ownership of the assets that generate the income using copies of statements from your financial institution, brokerage statements, stock certificates or Promissory Notes.
Typically, income from dividends and/or interest must be expected to continue for at least three years to be considered for repayment.
Information about child support, alimony, or separate maintenance income does not need to be provided unless you wish to have it considered for repaying this mortgage loan.
Income from a second job may be considered if a history of secondary employment can be verified.
Having changed employers frequently is typically not a hindrance to obtaining a new mortgage loan. This is particularly true if you made employment changes without having periods of time in between without employment. We'll also look at your income advancements as you have changed employment.
If you're paid on a commission basis, a recent job change may be an issue since we'll have a difficult time of predicting your earnings without a history with your new employer.
If you were in school before your current job, enter the name of the school you attended and the length of time you were in school in the "length of employment" fields. You can enter a position of "student" and income of "0."
Unfortunately, if you are purchasing a home, we'll have to use the lower of the appraised value or the sales price to determine your down payment requirement.
Gifts are an acceptable source of down payment on many loan programs. Some loan programs have limitations regarding gifts. As each scenario is unique, please contact a Loan Originator to discuss your situation.
Prior to closing, we'll verify that the gift funds have been transferred to you by obtaining a copy of your bank receipt or deposit slip to verify that you have deposited the gift funds into your account.
If you're selling your current home to purchase your new home, we'll ask you to provide a copy of the settlement or closing statement you'll receive at the closing to verify that your current mortgage has been paid in full and that you'll have sufficient funds for our closing.
Congratulations on your new job! If you will be working for the same employer, complete the inquiry as such but enter the income you anticipate you'll be receiving at your new location.
If your employment is with a new employer, complete this online inquiry as if this were your current employer and indicate that you have been there for one month. The information about the employment you'll be leaving should be entered as a previous employer. We'll sort out the details after you submit your inquiry.
Generally, a co-signed debt is considered when determining your qualifications for a mortgage.
Yes. If you are not sure what the monthly payment will be at this time, enter an estimated amount.
If you've had a bankruptcy or foreclosure in the past, it may affect your ability to get a new mortgage.
An installment debt is a loan that you make payments on, such as an auto loan, a student loan or a debt consolidation loan.
In some areas of the country it is very customary, and sometimes required by law, to have an attorney represent you at the closing. In other areas, attorneys are not as common at a real estate closing. Please contact the closing agent if you have questions about attorney representation.
Yes, you will receive a Closing Disclsoure 3 days prior to closing for review. Other documents are available upon request.
The closing agent acts as our agent and will represent us at the closing. However, your personal Mortgage Loan Officer will contact you prior to closing to talk about your final documents and to provide a final breakdown of your closing fees. If you have any questions that the closing agent can't answer during the closing, ask them to contact your Mortgage Loan Officer by phone and we'll get you the answers you need - before the closing is over!
If you won't be able to attend the loan closing, contact your Originator to discuss other options.
We use a nationwide network of closing agents and attorneys to conduct our loan closings. We'll schedule your closing to take place in a location that is located near your home for your convenience.
We'll deliver our loan documents and wire transfer your loan funds to the closing agent or attorney prior to closing so that they'll have plenty of time to prepare for your closing.
Automated monthly payments are available. At the loan closing an automated payment inquiry will be provided. Simply return it at your earliest convenience to enroll in the automated payment program.