Have a question on your mind?
First-time homebuyers, and those who already own a home, always have questions during the loan process. Even if you have taken out a mortgage before, you may have forgotten the reason behind some of the rules and procedures. Or, you may have a question specific to your own situation.
Here are a few of the many questions we hear most often. If your question isn’t found below, give our loan originators a call. We're here to help you.
1. Do I really need to be pre-qualified to look for a house and make an offer?
We recommend that you get pre-qualified so you know exactly how much you can afford before you start shopping.
2. Who is responsible for having the house inspected? Who pays for it?
A home inspection is not a requirement for your mortgage, but it will help you determine if the house has any problems that need to be addressed. You, as the buyer, are responsible for this expense.
3. Do I need to purchase mortgage insurance if I’m making a large down payment?
We have several options on bypassing mortgage insurance. Ask any loan originator and they can explain these scenarios.
4. Is hazard insurance mandatory? Aren’t I covered by my regular insurance company?
Hazard insurance is just another way of saying homeowner’s insurance. You must have insurance on your home in order to get a mortgage.
5. Should I go ahead and pay points upfront? When does it make sense to pay or not to pay them?
On average, one point will bring your interest rate down 0.25 percent. If this is a good decision or not depends on how long you will be occupying the property. Ask any loan originator to show you how long it would take to break even on this expense.
6. I want a 20 year mortgage instead of a 30 year, but it means I’ll have to cut back on a lot of things to afford it. Would you allow me to do that?
We offer 5, 10, 15, 20, 25 or 30 year mortgages. Our loan originators can assist you with making this decision.
7. How often can the interest rate on an adjustable rate mortgage (ARM) be changed? Is there a period of time the new rate locks in, or can the lender change it every month if he wants to?
This depends on the type of ARM you choose. Typical ARM loans have a lock period that is followed by a yearly adjustment. For example, if you choose a 5/1 ARM, you would be guaranteed a five-year lock, and the rate would adjust on the fifth year anniversary date and every subsequent year.
8. If I’m pre-qualified for a loan, isn’t it just a technicality that keeps me from being pre-approved?
If I qualify, I should be approved too. A pre-qualification is based on what you tell us at the time of application. A pre-approval requires us to verify all of this information. For example, you tell us what your salary is and we need to get a paystub to confirm the salary information.
9. If my mortgage and hazard insurance payments are kept in escrow until needed, do I earn interest while the money is being held?
Escrow accounts cannot earn interest. Also, the mortgage company that holds your escrow account cannot earn interest on this money.
10. I think the real advantage of the fixed-rate mortgage is knowing what my payment will be every month. Are there any disadvantages to fixed-rate mortgages?
If you know that you will be moving to a new location in less than five years, you should consider an adjustable rate mortgage (ARM) loan. This will lower your interest rate slightly.
11. What if I take out a 30 year loan, but plan on paying it off in 20 years? Is there a penalty for that?
In most cases, there is no penalty.
12. This is the first time I’ve bought a house. Are there any special programs available to me?
There are several programs that do not require any money down and offer assistance to first-time homebuyers. Ask any loan originator for details.
13. If everything goes smoothly, how long does it take to go from applying for the loan to the closing?
On average, the process takes 30 days.
15. I had a few months of making late payments because my child was sick and I couldn’t always go through my bills promptly. It hurt my credit rating. What can I do?
We would need a completed application and credit report in order to assess your situation. Then, we would work with you to try and find a solution.
16. I’m recently divorced, and have no credit history because everything was in my spouse’s name. Can I still get a loan?
We would need a completed application and credit report in order to assess your situation.
17. Why do I need to pay for an expensive title search? Isn’t the title transferred to the new owner every time a sale was made?
A title search is done in order to prove that there are no current liens or judgments on the property you are purchasing. It is the bank’s responsibility to prove that you are purchasing a “free and clear” property.
18. My family is giving me the money for my down payment. Is this a problem?
This is allowable under certain circumstances. Ask a loan officer for details.