The answer to all your questions:
FHA and VA loans are insured and administered by the federal government. Both loan types generally require lower down payments and have more lenient lending requirements than conventional loans. (Only qualified veterans can obtain VA loans.) Additionally, FHA and VA loans have established maximum loan amounts. Not every lender can offer ‘government' loans, but First Internet Bank does. It’s always a good idea to talk to one of our mortgage loan experts, who can help you compare all eligible loan programs to determine which is best for your situation.
A home equity line of credit is a form of revolving credit in which your home serves as collateral. Because your home is likely your largest asset, you should consider a home equity line of credit for the purchase of major items such as education, home improvements, or medical bills and not for day-to-day expenses.
With a home equity line, you will be approved for a specific amount of credit — your credit limit — meaning the maximum amount you can borrow at any one time. Since you can get approved for an amount of credit now and not access the funds until you need them, a home equity line of credit is a good choice if you simply want the ability to access cash as you need it.
With our home equity line, you'll have the ability to access funds, up to the amount of your credit limit, by simply writing a check. A small supply of checks will be sent to you after closing. The monthly payment for a home equity loan is typically based on your daily balance and the daily interest rate.
If you are thinking about a home equity line of credit, you also might want to consider a more traditional second mortgage loan. This type of loan provides you with a fixed amount of money repayable over a fixed period. Usually, the payment schedule calls for equal payments that will pay off the entire loan within that time. You might consider a traditional second mortgage loan instead of a home equity line if, for example, you need a set amount for a specific purpose, such as an addition to your home.
In this situation, you'll have a little extra work to do. We'll need to get the permission of your second mortgage lender to pay off your existing first mortgage and replace it with your new first mortgage. Generally, their major concern will be the relationship of your new loan amount to the value of the home.
Your second mortgage lender will probably ask us to provide some documentation such as a copy of the mortgage note you'll be signing and the appraisal before they provide their approval. We won't be able to schedule your loan closing until we receive their approval. You may want to consider a lock period of more than 30 days to ensure we don't run out of time.
There's absolutely no obligation to close the loan with us — even after you submit your loan for approval.
A home loan often involves many fees, such as the appraisal fee, title charges, closing fees, and state or local taxes. These fees vary from state to state and also from lender to lender. Any lender or broker should be able to give you an estimate of their fees, but it is difficult to tell which lenders have done their homework and are providing a complete and accurate estimate.
At First Internet Bank, we take quotes very seriously! We've completed the research necessary to make sure that our fee quotes are accurate — down to the city level. Below is some more detailed information to help you understand our fees.
Third Party Fees: Fees that we’ll collect and pass on to the person who actually performed the service. (For example, an appraiser is paid the appraisal fee and a title company or an attorney is paid the title insurance fees.) Fees that we consider third party fees include the appraisal fee, the credit report fee, the settlement or closing fee, the survey fee, tax service fees, title insurance fees, flood certification fees, and courier/mailing fees. Typically, you'll see some minor variances in third party fees from lender to lender since a lender may have negotiated a special charge from a provider they use often, or one that offers nationwide coverage at a flat rate. You may also see that some lenders absorb minor third party fees such as the flood certification fee, the tax service fee, or courier/mailing fees.
Taxes and Other Fees: Fees that we consider to be taxes and other 'unavoidables' include state/local taxes and recording fees. These fees will most likely have to be paid regardless of the lender you choose. If some lenders don't quote you fees that include taxes and other unavoidable fees, don't assume that you won't have to pay them. It probably means that the lender who doesn't tell you about the fee hasn't done the research necessary to provide accurate closing costs.
Lender Fees: Fees such as discount points, document preparation fees, and loan processing fees are retained by the lender and are used to provide you with the lowest rates possible. This is the category of fees that you should compare very closely from lender to lender before making a decision.
Required Advances: You may be asked to pre-pay some items at closing that will actually be due in the future. These fees are sometimes referred to as pre-paid items. One of the more common required advances is called 'per diem interest' or 'interest due at closing.' All of our mortgages have payment due dates of the first day of the month. If your loan is closed on any day other than the first of the month, you'll pay interest from the date of closing through the end of the month. For example, if the loan is closed on June 15, we'll collect interest from June 15 through June 30 at closing. This also means that you won't make your first mortgage payment until August 1. This type of charge should not vary from lender to lender, and does not need to be considered when comparing lenders. All lenders will charge you interest beginning on the day the loan funds are disbursed. It is simply a matter of when it will be collected. If an escrow or impound account will be established, you will make an initial deposit into the escrow account at closing so that sufficient funds are available to pay the bills when they become due. If your loan requires mortgage insurance, up to two months of the mortgage insurance will be collected at closing. Whether you must purchase mortgage insurance depends on the size of your down payment. If your loan is a purchase, you'll also need to pay for your first year's homeowner's insurance premium prior to closing. We consider this to be a required advance.