Mortgage FAQs

Your Questions Answered

Whatever your questions or concerns, we’re here to help.

We know the mortgage process can be confusing at times. To help you navigate the process, we’ve outlined the most commonly asked questions from our borrowers.

 

Our mortgage dictionary is a great resource for defining any terms or phrases you may be unfamiliar with. If you have additional questions not addressed here, please contact one of our experienced loan officers today. We can guide the way.

Your Mortgage Application

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What information will I need to provide on my mortgage application?

You will need a variety of documents demonstrating your income, your assets, and your monthly obligations. The financial documentation should include W-2s, tax returns, and account statements. See our loan checklist for a full list of the typical documents that will be required. Preparing these documents up front during your application process will reduce your loan approval time and help you focus on what truly counts: the excitement of purchasing your new home.

How is my mortgage rate determined?

Mortgage rates are influenced by credit score, debt-to-income ratio, loan product, and down payment, among other factors. Interest rates can fluctuate daily or even more frequently. When you and your loan officer determine it is time to lock your interest rate, your rate for closing purposes will be established. Use our calculators to estimate what you may pay as a homeowner, or contact a loan officer to get preapproved for a specific loan amount now.

What can I do to improve my rate or lower my monthly payment?

Your rate can be improved by increasing your credit score, your down payment, or by changing the mortgage option you’ve chosen. Paying points up front can also influence your rate. Learn about points on our mortgage dictionary page, or get in touch with a loan officer to learn more about lowering your monthly payment.

What is prequalification?

Typical prequalification means your lender has reviewed your preliminary credit report, as well as the income and asset details you’ve provided, and thinks you are a good candidate for a mortgage. It should not be confused with a preapproval. Under preapproval, the details of your loan application will be verified to safely establish appropriate underwriting guidelines.

What are closing costs?

In general terms, closing costs are the combination of closing costs associated with obtaining your loan and prepaids, which are costs associated with homeownership. Examples of closing costs include the appraisal fee, title insurance, title company’s fee for closing your loan, and document preparation fees, to name a few. Closing costs are any costs incurred related to the origination, processing, title company, and other loan-related tasks.

Prepaids are associated with homeownership and include items such as your first year’s homeowner’s insurance premium, per diem interest from the date of closing to the end of the month, and monthly escrows for property taxes and homeowner’s insurance.

How long does it take to close on a home?

Typically, it takes the lender from 21 to 30 days to close on a home. Closing may take longer if additional documentation is required or if issues related to the appraisal or title arise. To prevent these delays, make sure to gather your financial paperwork early and communicate with your loan officer often. When circumstances require a quick closing, in many cases, we can make it happen.

How much of a down payment do I need?

Your down payment will depend on the type of loan you’ve secured, as well as how much you want your monthly payment to be. Down payments typically vary, starting at a minimum of 3 percent, though you can increase this amount at your discretion.

Do I have to be present for my closing?

It’s customary that you’re present for your closing, but under some circumstances, a power of attorney will be acceptable. Mobile notary services can also be an option. If you’ll anticipate that attending your closing personally may be an issue, talk to your closing agent early in the process.

Managing Your Mortgage

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What’s private mortgage insurance?

Private mortgage insurance, also known as PMI, is much like a traditional insurance policy. It protects your lender in the event you default on your loan, and it is generally required on all loan options with less than a 20 percent down payment. It may be included in your monthly payment or paid up front as an additional closing cost.

When can I cancel my PMI?

You may be able to cancel your monthly mortgage insurance premium once you have accumulated a certain amount of equity in your home. This is subject to the type of mortgage loan and mortgage insurance you choose as well as your demonstrating you have met the cancellation policies. The Federal Homeowners Protection Act (HPA) provides rights to remove private mortgage insurance under certain circumstances and is the best resource to consult regarding canceling private mortgage insurance.

When is a refinance or HELOC appropriate?

Refinances are prudent options if mortgage rates drop below your current loan’s interest rate. Home equity lines of credit (HELOCs), as well as cash-out refinances, may be an option when you have significant equity in your home and need a low-interest line of credit to pull from.