Mortgage FAQs (Frequently Asked Questions)
Q: How does the loan process work?
A: One of our qualified Loan Officers will work with you to choose the best loan program and interest rates available. You will be provided a list of the documents/documentation needed to start your loan. Throughout the initial phase of your purchase or refinance, your Loan Officer will update you by email and over the phone. As items are needed, our goal is to limit the number of requests for documentation to make things far less stressful. This is a large financial commitment and creating a worry-free environment is critical in helping you fully understand the ins and outs of the process.
Q: How do I know if I can get a loan?
A: Try our tools to see how much mortgage you qualify for. You are also encouraged to contact us for help on evaluating your loan potential. We have been in the industry for a combined 35 plus years (some may say too long but we love it), and guiding you in the right direction is something we pride ourselves on. The next step is to get pre-qualified for a loan. That means you can APPLY ONLINE for a mortgage before you actually start looking for a home (FYI, this is HIGHLY recommended as most Real Estate Agents will not show homes without some form of pre-qualification). This will help you understand exactly how much you can afford to spend, and speed up the process once you do find the home of your dreams.
Q: What is a credit score?
A: A credit score is an industry indicator of your credit history, ability to meet your financial obligations, and assists the lender in measuring your ability to repay a debt in the future.
Q: Can I become a home-buyer even if I have had bad credit, and don’t have much for a down-payment?
A: Yes. Your credit doesn’t have to be perfect to purchase a home. Difficult financial situations are often because of illness, divorce, or temporary unemployment. If you can demonstrate that the problem was in the past, and you have been able to re-establish a good track record for a sufficient amount of time, you may be in a good position to get a mortgage loan. Also, the down payment for your home can come from your own funds, a gift, an agency offering Down Payment Assistance, and other contributing persons/entities. Ask your Loan Officer about down payment alternatives.
Q: What documents do I need to have ready when applying for a mortgage?
A: Good question! You should at least have:
- If you and your spouse are applying for the loan, social security numbers for both you and your spouse
- The two most recent pay stubs for each member applying for the loan and currently working
- Copies of your checking and savings account statements for the past 2 months
- Evidence of any other assets like bonds or stocks
- Copies of your most recent 2 years worth of W2’s and/or 1099’s
- Copies of your most recent 2 full years tax returns (all pages and schedules)
- If you are self-employed, speak with your Loan Officer as some items listed here may not apply and other may
- Depending on your lender, you may be asked for other information/documents too
Q: I don’t have the standard documentation necessary to get a loan, can I still apply for loan?
A: We offer special loan programs for such type cases, for further information contact us using the “Contact Us” form.
Q: When should I refinance my mortgage?
A: To determine whether you should refinance, compare the following:
- Contact us since rates listed throughout the Internet vary significantly, and finding the right fit can be difficult. Other options are:
- Compare the industries current interest-rates to the rate you currently pay
- Compare your current Principle and Interest (P&I) payment only to the potential P&I payment based on the possible new rate
- Make sure you plan on being in your home for at least the next 6-12 months to take full advantage of the cost to payment reduction ratio
Q: How can a shorter term save me money on a Fixed-Rate Mortgage?
A: If you elect to refinance to a shorter loan term, you can save ten’s of thousands of dollars (sometimes over a hundred though dollars) in interest expenses because you’ll be paying off the loan sooner. Although your payment may be more each month, it may not be as much as you may think.
Q: What is a Loan Estimate (LE)?
A: A Loan Estimate (LE) is an estimate of the costs you will incur during the mortgage process. This is provided to you when you apply for your loan and is subject to change based on changes made throughout your loan process.
Q: How are the funds from my escrow account used?
A: The funds from your escrow account are used to pay property taxes and homeowners insurance. The payment is called an escrow payment, and a mortgage servicing company withdraws the money from the payment you make monthly, places a portion into an escrow account, and subsequently distributes the funds to the city/state/county and homeowners insurance company when the bill is due. This ensures you do not miss payments or become significantly delinquent on either of these bills while you have loan.