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Mortgage

I may want to change my loan type before closing. What do I need to do?

If you have decided to change loan programs, contact your Loan Officer to discuss your options, but keep in mind that your pricing and closing date could be impacted. Generally, changing loan programs could require a new application, and at a minimum, will trigger a waiting period before closing. If you’ve already locked in an interest rate, the pricing for the new loan type may not be the same as our current pricing.

The interest rate you offer is just a little less than what I am paying now. How do I know if it makes sense to refinance?

The rule of thumb for determining whether it makes sense to refinance is to analyze the amount that it will cost you to refinance compared to the monthly savings you’ll have by reducing your payment. By dividing the cost of refinancing by the monthly savings, you can determine how many monthly payments you’ll have to make before you’ve recaptured the initial refinance cost. If you plan on staying in your home longer than the recapture time, it may make sense for you to refinance.

To fully analyze whether it’s the time to refinance, you’ll have to look deeper. The remaining term of your current loan must also be considered, as well as your tax bracket. As always, you can contact one of our Loan Officers at 1-866-742-5158 to discuss whether it makes sense to refinance.

I’m getting a financial gift from someone else. Is this an acceptable source for my down payment?

Gifts are an acceptable source of down payment, if the gift giver is related to you or your co-borrower. We’ll ask you for the name, address, and phone number of the gift giver, proof of receipt as well as the donor’s relationship to you.

I’m self-employed. How will you verify my income?

Generally, the income of self-employed borrowers is verified by obtaining copies of personal (and business, if applicable) federal tax returns for the most recent two-year period. However, based on your entire financial situation, we may not need full copies of your tax returns.

We’ll review and average the net income from self-employment that’s reported on your tax returns to determine the income that can be used to qualify. We won’t be able to consider any income that hasn’t been reported as such on your tax returns. Typically, we’ll need at least a full two-year history of self-employment to verify that your self-employment income is stable.

Do you require flood insurance?

Federal Law requires all lenders to investigate whether each home they finance is in a special flood hazard area as defined by FEMA, the Federal Emergency Management Agency. The law can’t stop floods. Floods happen anytime, anywhere. But the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 help to ensure that you will be protected from financial losses caused by flooding.

We use a third party company who specializes in reviewing flood maps that have been prepared by FEMA to determine if your home is located in a flood area. If it is, then flood insurance coverage will be required, since standard homeowner’s insurance doesn’t protect you against damages from flooding.

I’m purchasing a home. Do I need a home inspection AND an appraisal?

Both a home inspection and an appraisal are designed to protect you against potential issues with your new home. Although they have totally different purposes, it makes the most sense to rely on each to help confirm that you’ve found the perfect home.

The appraiser will make note of obvious construction problems such as termite damage, dry rot or leaking roofs or basements. Other obvious interior or exterior damage that could affect the salability of the property will also be reported. However, appraisers are not construction experts and won’t find or report items that are not obvious. They won’t turn on every light switch, run every faucet or inspect the attic or mechanicals.

That’s where the home inspector comes in. Inspectors generally perform a detailed review of the entire house and can educate you about possible concerns or defects with the home. Accompany the inspector during the home inspection. This is your opportunity to gain knowledge of major systems, appliances and fixtures, learn maintenance schedules and tips, and to ask questions about the condition of the home.

I’m currently renting and haven’t told my landlord that I might be moving. Will you need to contact my landlord?

In most cases, we won’t need to contact your landlord at all. However, if you have a limited credit history, obtaining information about your rental payment history may help us to approve your loan. Please let us know if you would prefer that we not contact your landlord.

What’s the difference between a fixed and a variable rate?

A fixed rate does not change over the life of the loan. A variable rate, also known as an adjustable or floating rate, is adjusted periodically and is usually based on a standard market rate outside the control of the bank, such as the prime interest rate. These rates often have a specified floor and/or ceiling, called a cap or a collar, which limit the adjustment.

How are interest rates determined?

Interest rates fluctuate based on a variety of factors, including inflation, the pace of economic growth and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will almost always lead to low interest rates, while concerns about rising inflation normally cause interest rates to increase. Our nation’s central bank, the Federal Reserve, implements policies designed to keep inflation and interest rates relatively low and stable.