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FAQ's
What is a Pre-approval?
This allows you the ability to get approved for a specific loan amount prior to finding the home you want to purchase. The loan is underwritten and the lender commits to a specific loan amount. This can give you a great advantage with a homeowner or realtor if someone else is interested in the same home at the same time. Also, if you're thinking about refinancing and want to payoff creditors or take cash out, but not sure you would qualify - you can apply for a pre-approval and could save on the cost of getting an appraisal on your home until you know if you qualify.
How long will the loan process take?
Loan approval and funding time frames vary depending on the type of transaction (purchase, refinance, home equity loan) and the complexity of your personal finances. The process can be as fast as 7 days for a home equity loan and up to 45 days on a purchase.
What are low down payment options, for buyers who can't afford a 20% down payment?
Assuming you can afford (and qualify for) monthly mortgage payments and have a qualifying credit score; you should be able to find a low (5% to 15%) or even no down payment loan. However, you may have to pay a slightly higher interest rate than someone making a larger down payment.
If you put down less than 20%, you may have to either pay a monthly premium for private mortgage insurance (PMI) or, to avoid PMI, take out two loans (a first mortgage and a second mortgage).
What is private mortgage insurance (PMI)?
Private mortgage insurance or "PMI" policies are designed to reimburse a mortgage lender up to a certain amount if you default on your loan and your house isn't worth enough to entirely repay the lender through a foreclosure sale. Most lenders require PMI on loans where the borrower makes a down payment of less than 20%.
Premiums are usually paid monthly and the cost can vary on the loan program you qualify for. You can normally cancel the PMI once your equity in the house reaches 20-25%, so long as you've made timely mortgage payments.
What's the difference between a fixed and adjustable rate mortgage?
With a fixed rate mortgage, the interest rate and the amount you pay each month remain the same over the entire mortgage term, traditionally 15, 20 or 30 years. A number of variations are available, including five- and seven-year fixed rate loans with balloon payments at the end.
With an adjustable rate mortgage (ARM), the interest rate fluctuates according to the interest rates in the economy. Initial interest rates of ARMs are typically offered at a discounted interest rate that is lower than the rate for fixed rate mortgages. Over time, when initial discounts are filtered out, ARM rates will fluctuate as general interest rates go up and down. Different ARMs are tied to different financial indexes, some of which fluctuate up or down more quickly than others. To avoid constant and drastic changes, ARMs typically regulate (cap) how much and how often the interest rate and/or payments can change in a year and over the life of the loan. A number of variations are available for adjustable rate mortgages, including hybrids that change from a fixed to an adjustable rate after a period of years.
Which is better -- a fixed or adjustable rate mortgage?
It depends. Because interest rates and mortgage options change often, your choice of a fixed or adjustable rate mortgage should depend on:
  • The interest rates and mortgage options available when you're buying or refinancing
  • Your view of the future (generally, high inflation will mean ARM rates will go up and lower inflation means that they will fall)
  • Your personal financial and investment goals, and
  • Length of time you are planning on living in your home
When mortgage rates are low, a fixed rate mortgage is the best bet for many buyers. Over the next five, ten, or thirty years, interest rates are more apt to go up than further down. Even if rates could go a little lower in the short run, an ARMs teaser rate will adjust up soon and you won't gain much if you plan to stay in the house more than a few years (we can tell you your break-even point). In the long run, ARMs are likely to go up, meaning many buyers will be best off locking in a favorable fixed rate now and not taking the risk of much higher rates later.
When can I lock-in my rate?
You can lock or float your interest rate at any time during the process of your loan. We will discuss these options with you upon taking your loan application.
How do I know what loan is best for me?
Review your current situation and future goals, and then answer the following questions to help determine the direction you may wish to take. We also make sure to discuss these questions with you to help determine the type of loan you need.
  • How long do you expect to stay in the house?
  • Which are more important, low monthly payments, or low closing costs?
  • Will my income increase or decrease in the next three years?
  • How comfortable are you with your monthly payment potentially increasing?
When should I start shopping for a mortgage and how do I know what I can afford?
The best time to look for a mortgage is before you look for a house. This way you'll know exactly the amount of money you can borrow. By getting pre-approved for a mortgage before shopping for a home you'll maximize your negotiating power.
Can I be approved for a loan if I have credit problems?
We offer mortgage loan options to clients who may not have perfect credit. If you are concerned about your credit we can take the time to sit down with you and review your credit profile and educate you on how to take steps to improve your credit score.
Where do I close and sign for my loan?
Typically your closing will take place at a title closing agent's office. When all parties agree upon a closing date, we will provide you with the exact location and time of your loan closing. In the case of a refinance or home equity loan in-home closings are also an option.