Frequently Asked Questions
What is a mortgage note?
My real estate agent recommended that I get a pre-approval letter. What is a pre-approval letter, and why should I get one?
When mortgage lenders refer to "PITI" what are they referring to?
When my loan officer asks me if I want to waive escrows, what exactly does she mean?
What does my mortgage lender mean by points or origination fee?
What is Annual Percentage Rate (APR)?
How do I know what my interest rate will be?
Do I need to have a certain amount of money left after I buy my home?
What is Private Mortgage Insurance (PMI)?
Do all mortgages have PMI?
Will I have two separate payments if I have a second lien?
How will I be updated on the status of my loan?
What documentation will I have to provide for my loan to be approved?
Why did I receive a Truth-In-Lending?
Will I get a copy of my credit report and appraisal?
What inspections are required by the lender?
Where do I go for closing?
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What is a Mortgage Note?
Watch my brief video explaining What is a mortgage note?
2. My real estate agent recommended that I get a pre-approval letter. What is a pre-approval letter, and why should I get one?
The lender gives a commitment letter that states the lender agrees to provide a mortgage to a homebuyer based upon certain criteria being met. Commitment letters help you set realistic goals while you're house-hunting, provide the same negotiating ability as a cash buyer and enable you to move quickly once the perfect home is found.
Get Pre-Approved
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2. When lenders refer to "PITI" what are they referring to?
PITI is principal, interest, taxes, and insurance - the components of a monthly mortgage payment.
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3. When my loan officer asks me if I want to waive escrows, what exactly does she mean?
When you waive escrows, you take the responsibility of paying your taxes and insurance rather than having them included in your monthly payment. Waiving escrows may add a small fee to your closing costs. You can only waive escrows if your loan program allows for this such as conventional loans that have a loan value of 80% or less on your first lien.
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4. What does my mortgage lender mean by points or origination fee?
One point is equal to one percent of the loan amount. Points and origination fees are used to buy down the interest rate. Origination fees help pay the cost for the lender to do the loan.
Free Report: 5 Myths About Mortgage Points
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5. What is Annual Percentage Rate (APR)?
The APR (Annual Percentage Rate) differs from the interest rate as it is the financing rate calculated with the finance charges over the life of the loan. In other words, your interest rate on the mortgage note is a reflection of the amount of interest over the term of the loan. The APR is a reflection of the total cost of the loan of the term. APR is calculated by using interest paid on the mortgage note plus closing costs to arrive at an APR rate.
APR is a very difficult concept to understand. Please contact me with any questions.
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6. How do I know what my interest rate will be?
Once you have made an offer on a home and your offer has been accepted, your Realtor will draw up a sales contract. At that time, we will lock your interest rate which means you are guaranteed that rate for 30 days.
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7. Do I need to have a certain amount of money left after I buy my home?
Reserve requirements are program specific and will be gone over with you by the Loan Officer.
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8. What is Private Mortgage Insurance (PMI)?
PMI is insurance required to help cover the lender expenses should the borrower default on the loan. It is required on certain loan products and LTVs.
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9. Do all mortgages have PMI?
PMI can be eliminated by having a down payment of at least 20% or by obtaining a second lien with an 80-10-10 or an 80-15-5 loan program.
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10. Will I have two separate payments if I have a second lien?
Borrowers with a second lien will make two separate payments each month - one on the first lien and one on the second lien.
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11. How will I be updated on the status of my loan?
We have found that the most efficient means of communicating this information to you is through email. If you have informed us that you prefer a different form of communication or do not use email, we will respect your preferences and contact you in your preferred method. I send out regular updates on Monday mornings to you and via email or contact you by phone if you prefer. Generally, if email is your preferred form of communication, we will not call unless absolutely necessary.
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12. What documentation will I have to provide for my loan to be approved?
You will be provided with a document checklist at the time of application that will outline what you will need to provide to support what is on the application. Please provide photocopies. Originals are not necessary unless specifically asked for.
Click here to download our document checklist.
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13. Why did I receive a Truth-In-Lending Disclosure?
Truth-In-Lending disclosures are sent to all borrowers after a loan application has been made. The Truth-In-Lending Act is a federal law requiring lenders to reveal all of the terms of a mortgage.
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14. Will I get a copy of my credit report and appraisal?
I will provide you with a copy of your credit report and appraisal. You will receive a copy of your appraisal at your closing.
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15. What inspections are required by the lender?
The lender requires an appraisal on most transactions. A clear termite report is required on government transactions. If the appraiser recommends repairs or if repairs are mentioned in the contract, the lender will require that those repairs be done before closing. The appraiser then will perform a final inspection to assure that the repairs were completed. If the termite report recommends treatment, treatment is required. We will need a receipt showing the name and amount of chemicals used and a clear termite inspection.
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16. Where do I go for closing?
Your closing will take place at the title company or can be arranged to take place at a more convenient place such as your workplace usually for an extra charge. The title company name and address appears in your sales contract. Your closing time will be scheduled based on the scheduled day of closing on your sales contract. Times are generally 8am– 4pm Monday—Friday.
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