Mortgage FAQs

Since many different factors determine which mortgage program is best for you, it is best to consult with a Loan Officer who will help you answer this question by considering some of the following:

• What are your current finances?
• How long do you plan on living in your new home?
• What are your future goals?

A Pre-Qualification is the first step in determining which program best suits your personal financial situation and goals.  A Loan Officer will ask you about your income, available funds for down payment and pull your credit report.  Once this information is available, your mortgage loan officer will be able to assess your pre-qualification and present financing options to you.

We have a number of mortgage calculators available to you for estimating payments in various scenarios including:

• Payment Amortization
• Rent Vs Own
• Annual Percentage Rate
• Debt Consolidation
• Prepayment Savings
• Early Payoff
• Refinance Break Even
• Tax Savings

Closing costs are fees charged for services performed in connection with your loan closing.  These fees will generally (this is not an all-inclusive list) consist of the following:

• Title company fees (title search, title insurance, recording and escrow fees)
• Real Estate Agent commissions (most commonly paid by the seller)
• Lender Fees
• Courier Fees
• Document Preparation Fees

Your lender will set up an account to hold your monthly payment of taxes and insurance, which are included in your monthly mortgage note.  Each month your escrow payments will be deposited into this non-interest bearing account, and funds will be withdrawn to pay the tax bill and insurance premiums when they become due each year.

LTV is an abbreviation for the term Loan-To-Value.  The LTV is the difference between your loan amount and the value or purchase price of the property.  For example, if you are purchasing a home for $100,000 and are borrowing $90,000 your LTV is 90%.

An interest rate refers to the rate at which interest is paid by a borrower for the use of money they borrow from a lender.

The term APR (Annual Percentage Rate) is the interest on the loan annualized, and must include certain fees paid by the consumer to obtain the loan.

Whenever you decide to proceed with the chosen mortgage program and your loan application is complete, you will be given the opportunity to Lock-In the Interest Rate.  This will guarantee the Interest Rate for a specific length of time.

Once you have decided which mortgage program you want to pursue, you should consider Locking In the rate as soon as possible.

Interest rates can be locked for as little as 15 days or as long as 60 days.  It all depends on how long you and your mortgage loan originator feel is needed to get the necessary paperwork together.

Hazard insurance is also known as homeowners insurance.  A typical Hazard insurance policy will also include coverage for “wind and hail”.  Hazard insurance is required in order to obtain a mortgage loan on your home.  A basic policy provides coverage for hazards such as, wind, hail, fire and other hazards that can cause damage to the home.

Private Mortgage Insurance is an insurance policy which is required when the equity or down payment is less than 20% of the value or purchase price.