FAQ

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Mortgage

I am purchasing a home. Why do you need the name of the real estate broker?

One of the first things we’ll do after your loan is approved is to contact the broker to discuss the items required for closing for which the broker or seller might be responsible. Though there is some variance across the country, generally the broker is involved in ordering the title policy or scheduling the appraiser’s inspection of the home. We’ll make sure that everything necessary has been taken care of so that your closing happens as efficiently as possible.

The broker may also want to know that you have taken the steps to obtain financing and that your loan request has been approved. We’ll only provide basic information about your loan approval. It’s really up to you to decide what details you want to share.

Do you provide financing for properties on large tracts of land?

In most cases, we are able to offer financing for homes on large tracts. What’s most important is to determine if the size of your property is common for the area. The appraiser must be able to provide detailed information about the recent sale of similar homes on similar lots that have occurred recently.

If that’s not possible, we may not be able to provide the financing that you are looking for. It’s also important that your property be residential in nature. If the property is a working farm or is used for any commercial purposes, there may be restrictions or barriers to overcome. Contact your Loan Officer if you have concerns about the acceptability of your property.

Does the purpose of my home equity loan make a difference?

The purpose of your home equity loan doesn’t make a difference to us and won’t affect your approval decision. It does make a difference to the federal government, however! We’ll use the information you provide about the purpose of your loan to determine if certain characteristics of your loan must be reported.

What’s the difference between a home equity loan and a refinance?

A home equity loan is generally a second mortgage against your home, meaning it is a loan that you take out using your home as collateral without paying off your first mortgage. A refinance typically means that you’ll be paying off your existing first mortgage and replacing it with a new first mortgage.

Determining whether it’s best to refinance or to obtain a home equity loan can be complicated and depends on many factors. You should consider contacting your tax advisor to determine what makes the most sense for you. Comparing monthly payments of your existing first mortgage and a new home equity loan as opposed to a new first mortgage should help. You should also keep in mind the term of each of your loans, especially if monthly payment is not a significant issue for you.

Can I lock an interest rate and discount points before I find a home?

Unfortunately, we’ll need to gather some information about your actual home before we can offer a rate lock. You’ll need to have an accepted contract to purchase your new home before we can lock in your interest rate.

I won’t be able to attend the closing. What other options are there?

If you won’t be able to attend the loan closing, contact your Loan Officer to re-schedule or discuss other options. If someone you trust is able to attend on your behalf, you can execute a Power of Attorney so that this person can sign documents on your behalf. In some cases, we may be able to mail you the documents in advance so that you can sign them and forward them to the closing agent. We’re sure to have a solution that will work in your circumstances.

How long does it take for the property appraisal to be completed?

Licensed appraisers who are familiar with home values in your area perform appraisals. We order the appraisal as soon as the appraisal fee is paid, and then it generally takes 10-14 days before the written report is sent to us. We follow up with the appraiser to ensure that it is completed as soon as possible.

If you are refinancing, and an interior inspection of the home is necessary, the appraiser should contact you to schedule a viewing appointment. If you don’t hear from the appraiser within seven days of the order date, please inform your Loan Officer.

If you are purchasing a new home, the appraiser will contact the real estate agent (if you are using one) or the seller to schedule an appointment to view the home.

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.

Is comparing APRs the best way to decide which lender has the lowest rates and fees?

The Federal Truth in Lending Act requires that all financial institutions disclose the APR (annual percentage rate) when advertising a rate. The APR is designed to present the actual cost of obtaining financing by requiring that some, but not all, closing fees are included in the APR calculation. These fees, in addition to the interest rate, determine the estimated cost of financing over the full term of the loan.

Unfortunately, the APR doesn’t include all the closing fees, but the APR can be compared to other loan programs for a consistent comparison. Fees for things like appraisals, title work, and document preparation are not included, even though you’ll probably have to pay them.

For adjustable rate mortgages, the APR can be even more confusing. Since no one knows exactly what market conditions will be in the future, assumptions must be made regarding future rate adjustments.

You can use the APR as a guideline to shop for loans, but you should not depend solely on the APR in choosing the loan program that’s best for you. Look at total fees, possible rate adjustments in the future (if you’re comparing adjustable rate mortgages), and consider the length of time that you plan on having the mortgage. Don’t forget that the APR is an effective interest rate — not the actual interest rate. Your monthly payments will be based on the actual interest rate, the amount you borrow, and the term of your loan.