Close Window Print this Page
|
|
|
|
 |
|||
|
|||
| Top Five Most Commonly Asked Questions | |||
| What if interest rates go down after I lock my rate? | |||
| What causes mortgage rates to change? | |||
| How soon can I close on my loan? | |||
| What documents will I need to provide to complete my transaction? | |||
| How is my appraisal obtained? | |||
|
|||
| General | |||
| Why did I receive a message directing me to mortgagequestions.com? | |||
| How soon do I have to return my application package? | |||
| How is my appraisal obtained? | |||
| Who can tell me what my property taxes will be? | |||
| What is a Good Faith Estimate? | |||
| What is a Truth-in-Lending statement? | |||
| Are fees I've paid to you refundable? | |||
| What causes mortgage rates to change? | |||
|
|||
| Rates and Costs | |||
| Why is the Annual Percentage Rate (APR) different from the interest rate? | |||
| What if interest rates go down after I lock my rate? | |||
| What happens if my loan does not close before the rate lock expiration date? | |||
| If I have selected rate protection and do not exercise my one-time float down option, what will happen? | |||
| What are points? | |||
| Are discount points tax deductible? | |||
| What is Private Mortgage Insurance (PMI)? | |||
| What conditions need to be met to terminate Private Mortgage Insurance? | |||
|
|||
| Loan Decision | |||
| How long is my Letter of Approval valid? | |||
| What does a mortgage lender consider when making a loan decision? | |||
| I already put earnest money down on the property. Is this included on the Good Faith Estimate? | |||
| What documents will I need to provide to complete my loan transaction? | |||
| What is a 4506 form? | |||
|
|||
| Closing | |||
| How soon can I close on my loan? | |||
| Do I have to attend closing? What are my options? | |||
| How does it benefit me to let you select the closing agent? | |||
| Where do I go to close the loan? | |||
| Can I bring a personal check to the closing? | |||
| What is title insurance and why is it required? | |||
| How much title insurance do I need? | |||
| How much homeowner's insurance do you require? | |||
| How do I know if I need flood insurance? | |||
| How are my property tax bills paid? | |||
| What type of inspections do I need before I close on my home? | |||
| What is a HUD-1 and when should I expect to receive it? | |||
|
|||
| Top Five Most Commonly Asked Questions |
|||
| What if interest rates go down after I lock my rate? | |||
| Once you lock the rate, it cannot be changed. For that reason, it's important to consider carefully the timing of your rate lock. If you follow the market or plan to watch it closely, be sure you're comfortable with the trends you see before you lock. You may want to consider our Rate Protect Program to help safeguard against changes in interest rates. | |||
 return to top |
|||
| What causes mortgage rates to change? | |||
| Interest rates charged to consumers for mortgages change based on the supply and demand of mortgage securities. Among the biggest influences on rates are economic reports on the performance of our economy. Economic news is viewed in one of three ways, inflationary, deflationary or neutral. If news is inflationary rates tend to increase, and conversely, if the news is viewed as deflationary the rates tend to drop. Inflation is associated with a growing economy. When the economy grows too strongly, the Federal Reserve increases short-term interest rates to slow the economy down and reduce inflation. When the economy is weak, the Federal Reserve decreases short term rates to spark the economy and drive growth. | |||
| return to top |
|||
| How soon can I close on my loan? | |||
| We can schedule your closing once all conditions have been satisfied and all costs finalized. This date will differ depending on the state in which you live and the required information that needs to be gathered. | |||
| return to top |
|||
| What documents will I need to provide to complete my loan transaction? | |||
| We have included a list of some sample documents you may be required to submit. This list is not all-inclusive. — A fully executed agreement of sale for the property being purchased — Financial statements for bank and brokerage accounts — A HUD-1 settlement statement on the property you are selling, if applicable — Copy of your most recent pay stub — Previous W2s — Copy of a rental lease — Form 4506 — Homeowner's insurance policy — Flood insurance policy |
|||
| return to top |
|||
| How is my appraisal obtained? | |||
| Once your loan is approved, we will arrange a date and time for your property appraisal. You will be asked to provide a contact name, and the appraiser will contact that person for access to the property. If you are purchasing a home, you can list either your real estate agent or the seller's agent. Once the appraisal is complete, the appraiser will send us the results, and your mortgage processor will contact you. | |||
| return to top |
|||
| General |
|||
| Why did I receive a message directing me to mortgagequestions.com? | |||
| This means that you have gone through the closing process and signed all the papers necessary to complete your mortgage. You will now begin making payments. Information related to this can be found at our Web site MortgageQuestions.com. What's available from MortgageQuestions.com? Your Account Information Review current payment information View escrow account balances and payments View year-end interest and tax statement from last year View information on Private Mortgage Insurance removal See transaction details for the last 150 transactions Request Services/Transactions Request a payoff statement Set up automatic payments from your checking account Use SpeedPay to transfer this month's payment from your checking account Request a Coupon Book |
|||
| return to top |
|||
| How soon do I have to return my application package? | |||
| To provide you with the best service, we would like to have your package back to us within 3-4 days from the time you receive it. If you are closing within 30 days, it is important that you send your package back to us within 24 hours. | |||
| return to top |
|||
| How is my appraisal obtained? | |||
| Once your loan is approved, we will arrange a date and time for your property appraisal. You will be asked to provide a contact name, and the appraiser will contact that person for access to the property. If you are purchasing a home, you can list either your real estate agent or the seller's agent. Once the appraisal is complete, the appraiser will send us the results, and your mortgage processor will contact you. | |||
| return to top |
|||
| Who can tell me what my property taxes will be? | |||
| The seller and/or your Realtor should provide you with the current taxes for the property. Property taxes are reassessed from time to time, so this amount may change. For confirmation of your property taxes, you can call your county Recording Office. | |||
| return to top |
|||
| What is a Good Faith Estimate? | |||
| Required by federal law, the Good Faith Estimate is a written list of the estimated closing costs associated with your mortgage transaction, including the lender's charges along with the local closing agent's charges and fees. It also includes estimated amounts for real estate property taxes and homeowner's insurance. | |||
| return to top |
|||
| What is a Truth-in-Lending statement? | |||
| Required by federal law, the Truth-in-Lending statement provides detailed information about the total charges that you will incur over the life of the loan. It includes the Annual Percentage Rate, the amount of interest you'll pay, the amount financed and schedule of payments, the total of your payments, and late payment charges. | |||
| return to top |
|||
| Are fees I've paid to you refundable? | |||
| If you decide to cancel your transaction with us, the mortgage origination fee is NONREFUNDABLE. However, if your loan is declined, this money will be used to cover the mortgage origination fee (as permitted by state and federal law) and the remaining balance will be refunded to you. | |||
| return to top |
|||
| What causes mortgage rates to change? | |||
| Interest rates charged to consumers for mortgages change based on the supply and demand of mortgage securities. Among the biggest influences on rates are economic reports on the performance of our economy. Economic news is viewed in one of three ways, inflationary, deflationary or neutral. If news is inflationary rates tend to increase, and conversely, if the news is viewed as deflationary the rates tend to drop. Inflation is associated with a growing economy. When the economy grows too strongly, the Federal Reserve increases short-term interest rates to slow the economy down and reduce inflation. When the economy is weak, the Federal Reserve decreases short term rates to spark the economy and drive growth. | |||
| return to top |
|||
| Rates and Costs |
|||
| Why is the Annual Percentage Rate (APR) different from the interest rate? | |||
| The annual percentage rate reflects the total cost of your mortgage loan. To calculate the APR, lenders consider the interest rate on your mortgage loan, the term of the loan, and other loan fees such as closing costs, points, etc. Your monthly payment is calculated based on the mortgage note rate, not the APR. The APR will be higher than your interest rate, especially if you are paying any points. To be used as a valid evaluation tool, the APR must be loan specific. The actual APR will show up on the Truth-in-Lending statement that you will see once you have submitted your information and reserved your funds. When comparing loan programs based on APR, make sure you check each lender's criteria for determining the APR. |
|||
| return to top |
|||
| What if interest rates go down after I lock my rate? | |||
| Once you lock the rate, it cannot be changed. For that reason, it's important to consider carefully the timing of your rate lock. If you follow the market or plan to watch it closely, be sure you're comfortable with the trends you see before you lock. You may want to consider our Rate Protect Program to help safeguard against changes in interest rates. | |||
| return to top |
|||
| What happens if my loan does not close before the rate lock expiration date? | |||
| When you lock your interest rate, you are guaranteed to receive that rate as long as you close and fund your loan by the specified expiration date. If your loan closes and funds after this date, you are no longer guaranteed your locked interest rate. Instead, you will receive the higher of the current market rate or your locked rate. Please note that you cannot receive a lower rate by allowing your lock to expire. | |||
| return to top |
|||
| If I have selected rate protection and do not exercise my one-time float down option, what will happen? | |||
| If you do not exercise your one-time option to float down, your rate will automatically be locked at the market rate, five days prior to your closing date. If the rate has gone up and over your capped rate, you will receive the capped rate. If the rate is lower than the cap, you'll be locked in at the lowest rate available to you. | |||
| return to top |
|||
| What are points? | |||
| Points are a percentage of the loan amount paid at closing that affect your interest rate. For instance, on a $90,000 loan, 1 point = 1% or $900. If you pay points, you are buying down the rate. Alternatively, in exchange for a higher rate, the lender pays points to offset your closing costs. These are considered negative points. Negative points may be a wise option if you have limited funds to use at closing. Points are also referred to as discount points. Points are itemized on your Good Faith Estimate and are typically paid at closing. | |||
| return to top |
|||
| Are discount points tax deductible? | |||
| In many cases they are. Contact your tax preparer or the IRS to obtain a qualified opinion and the best expert advice. | |||
| return to top |
|||
| What is Private Mortgage Insurance (PMI)? | |||
| Private Mortgage Insurance is an insurance that protects the lender against financial loss is case of default by the borrower. Lenders generally require borrowers to purchase private mortgage insurance on loans with less than 20 percent down payment. | |||
| return to top |
|||
| What conditions need to be met to terminate Private Mortgage Insurance? | |||
| Under the Homeowners Protection Act of 1998, automatic termination of borrower paid PMI must occur on the date the outstanding principal balance on a loan closed on or after July 29, 1999 is scheduled to reach 78% of the lesser of the sales price or the original appraised value. All loan payments must be current on the loan as of this date in order for termination to occur. If the payments are not current at that time, termination must occur as of the date the borrower becomes current. | |||
| return to top |
|||
| Loan Decision |
|||
| How long is my Letter of Approval valid? | |||
| If the information you provided to us remains the same, the letter of approval will remain valid until you close your loan. If any of the information you provided to us changes, such as your income or debt, we will need to re-evaluate your approval. We will also need your permission to re-evaluate your credit every 60 days to make sure nothing has changed. If you have not decided on a rate lock option, you can obtain a new letter by changing your personal information online and resubmitting the information to us. If you have already chosen a rate lock option and paid your fee, you will need to call your loan processor for an updated letter. |
|||
| return to top |
|||
| What does a mortgage lender consider when making a loan decision? | |||
| A mortgage lender generally looks at three areas: — Income and Assets: To determine your ability to repay the loan. — Debts and Credit History: To evaluate your buying habits and your history of repaying other financial obligations. — Property Information: An appraiser compares the home you are buying to similar homes in your area to make sure the property provides sufficient collateral for your loan. |
|||
| return to top |
|||
| I already put earnest money down on the property. Is this included on the Good Faith Estimate? | |||
| Yes. Any earnest money paid is listed under "Prepaid deposit for property" on the Good Faith Estimate. | |||
| return to top |
|||
| What documents will I need to provide to complete my loan transaction? | |||
| We have included a list of some sample documents you may be required to submit. This list is not all-inclusive. — A fully executed agreement of sale for the property being purchased — Financial statements for bank and brokerage accounts — A HUD-1 settlement statement on the property you are selling, if applicable — Copy of your most recent pay stub — Previous W2s — Copy of a rental lease — Form 4506 — Homeowner's insurance policy — Flood insurance policy |
|||
| return to top |
|||
| What is a 4506 form? | |||
| A 4506 form is an IRS form that authorizes a mortgage lender to obtain copies of a borrower's tax returns directly from the IRS. | |||
| return to top |
|||
| Closing |
|||
| How soon can I close on my loan? | |||
| We can schedule your closing once all conditions have been satisfied and all costs finalized. This date will differ depending on the state in which you live and the required information that needs to be gathered. | |||
| return to top |
|||
| Do I have to attend closing? What are my options? | |||
| It is not required that you attend the closing if you've given an acceptable power of attorney or taken the necessary steps to complete a mail away closing. Your mortgage processor can help determine your options based on your needs. | |||
| return to top |
|||
| How does it benefit me to let you select the closing agent? | |||
| By using one of our closing agents, we can guarantee your closing date on any conventional loan. If we do not meet this date, we will lower your interest rate by 1/8th of a percent for the life of the loan.* In addition, by using our network, you will receive a competitive price for the closing agent's services and the superior service that you deserve. * Approved, conventional, purchase loans only, using our preferred closing agent. Closing date to be mutually agreed upon between customer and bank, and customer must provide all required documentation. Timely request for payment under guarantee is required. |
|||
| return to top |
|||
| Where do I go to close the loan? | |||
| In most cases, you will go to a local title company or attorney's office for the closing. If you let us select the closing agent for you, we will work with our network and try to find an agent within 15 minutes of the property. If you prefer a different location (e.g. your office, home, bank) our preferred closing agents will work with you to try to accommodate your needs. The closing agent will have all the mortgage documents needed for your closing. You may need to bring money, picture identification, etc. Your closing agent will let you know what you need to bring. |
|||
| return to top |
|||
| Can I bring a personal check to the closing? | |||
| You will need a cashier's check or certified check for closing. Since this is such a large transaction, a cashier's check provides verification that the funds are actually available. | |||
| return to top |
|||
| What is title insurance and why is it required? | |||
| Title insurance protects the lender or you against losses from disputes over the title of a property. It ensures against the possibility that there may be an unknown lien or any discrepancies in ownership. You may want to consider purchasing a separate buyer's policy to protect your interests. | |||
| return to top |
|||
| How much title insurance do I need? | |||
| The amount of title insurance needed is based on the value of your home and the amount of your mortgage. Lenders are covered for the full value of the mortgage. This policy is required and will vary from state to state. There is a one-time fee for the policy that you pay at closing. In addition, you can obtain a separate owner's insurance policy to cover the full value of your home. However, this additional policy is not required. | |||
| return to top |
|||
| How much homeowner's insurance do you require? | |||
| Your homeowner's insurance policy must cover the cost to rebuild the home. The insured amount may be higher or lower than the actual purchase price as long as it meets the program requirements. The insurance company you choose can give you an actual quote based on specific information about the property. | |||
| return to top |
|||
| How do I know if I need flood insurance? | |||
| We will perform a flood hazard determination for your property. If your home is located in a Special Flood Hazard Area, federal law requires you to purchase flood insurance. Most standard homeowner's insurance policies do not cover loss due to flood. If you choose, you can obtain flood insurance coverage even if you are not required to do so by the lender. | |||
| return to top |
|||
| How are my property tax bills paid? | |||
| It depends on your loan program and state requirements. Generally, if your monthly mortgage payment includes money for property taxes, these funds are held in escrow by the lender and the lender pays your property taxes as they become due. Generally, if your payment does not include property taxes, you are responsible for paying them by the due date mandated by your state. | |||
| return to top |
|||
| What type of inspections do I need before I close on my home? | |||
| Certain inspections may be required under your particular loan program. However, depending on the home and the location, there are a variety of inspections you may want to consider before you close on your new home even if they are not required under your program, such as: — Home Inspections — Termite Inspection — Water Test (for well water) — Septic Tank Inspection — Radon Test |
|||
| return to top |
|||
| What is a HUD-1 and when should I expect to receive it? | |||
| A HUD-1 statement is a form used by the settlement agent to itemize all charges imposed upon a borrower and seller for a real estate transaction. You should receive this statement a least one day before closing from your title company, closing attorney or escrow agent. Monies should not be exchanged without you first signing the HUD-1 settlement statement. Click here to view a sample HUD-1. | |||
| return to top |
|||