Should I wait to buy a new home if I have debt?
Not necessarily. We look at your employment and income, your assets, your credit record and the value of the home you wish to purchase. All these factors contribute to the credit decision. We also look at your total debt-to-income ratio to determine how much of your income is already set aside for making monthly payments. Please don't hesitate—apply today!
What is the right type of mortgage for me—fixed or adjustable rate?
With a fixed-rate loan, the principal and interest portion of your payment will usually remain the same for the life of the loan, which is an attractive option if you prefer a more predictable payment. With an adjustable-rate loan, the principal and interest portion of your payment will change periodically. Your Loan Officer can further explain the products available so you understand your choices.
When should I lock in my interest rate?
When a loan program and loan terms are agreed to by the borrower and lender, the loan is considered “locked.” Until the program and terms are “locked,” the loan is considered a “float.” As an informed buyer, be aware of recent interest rate movements. Have the rates been falling or rising? Depending on the market, you may want to wait before locking in an interest rate, or you may want to lock in the rate as soon as possible. We offer many lock options, but the decision to lock is ultimately a personal one. Consult with your Loan Officer on rate and lock options available for your loan.
How can I help loan process go smoothly?
The fastest way to receive an underwriting decision is to come to your loan appointment fully prepared with all the items on our Borrower's Checklist. Try to be accessible if we need additional information or documents during processing. Quick response to our requests helps us keep everything on schedule.
How much money will I need at closing?
Your closing costs will depend upon the sales price, the amount of your down payment and the various fees connected with the purchase of your home. Closing costs and escrow items include prepaid taxes, title insurance, homeowner insurance premiums, lenders fees and discount points. Your Loan Officer will provide you with a Good Faith Estimate after you have applied for your loan, which will give you a ballpark estimate of what you should have on hand at closing.
How is my mortgage payment calculated?
Mortgage payments are made up of four basic components—principal, interest, taxes and insurance—commonly referred to as PITI. The principal and interest portion of your payment is based on your loan amount, interest rate and loan term. Taxes are based on approximately 1/12 of the annual property taxes (calculated at fully assessed value for new properties). Insurance is based on approximately 1/12 of the annual premium for your homeowner's insurance. Other expenses, like mortgage insurance, may also apply.
What is mortgage insurance?
Private Mortgage Insurance (PMI) is a form of insurance typically required for homebuyers who take out a conventional mortgage loan for more than 80% of the total value of the home. This added insurance protects the lender against loss if the borrower defaults on the loan. PMI may allow you to buy a home with a down payment as low as 5%. If you have a down payment of 20% or more, you may not be required to carry PMI. Homeowners with a Federal Housing Administration (FHA) insured loan, which only calls for a 3.5% minimum down payment, are required to pay monthly mortgage insurance, even if they make a larger down payment.
What mortgage expenses are associated with buying a home?
If you are pre-approved for a loan, you will receive a Good Faith Estimate outlining the costs associated with your mortgage. You may see a charge for an origination fee, processing fee and underwriting fee. Other fees may include, but are not limited to, attorney's fees, filing fees, property taxes, title insurance fees and tax service fees. You may also need to establish an escrow account for real estate taxes, hazard insurance and monthly mortgage insurance. Some fees may be collected at the time of application or prior to ordering the appraisal.