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Common Questions about the Mortgage Lending Process


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Frequently Asked Questions

Choose a category for the complete list of questions.

Before You Apply
After You Apply
Interest Rates
Closing
Mortgage Insurance
Privacy & Security

Before You Apply

Can I apply for a loan if I have filed for bankruptcy?
Yes. In most cases, we can provide you with a loan if your bankruptcy discharge is at least 4 years old and you've had excellent credit since the discharge. If your bankruptcy was discharged less than 4 years ago or if your credit problems have continued, it may be more difficult to approve your loan.

I live outside the United States. Can I still get a loan?
If you are a United States citizen or green cardholder and are purchasing a property within the United States, you are eligible for our loan programs - even if you currently live outside the United States. However, we do not provide loans for properties located outside the United States.

Can I finance 100% of my loan?
Yes. We have several loan programs that offer 100% financing on purchases. You must, however, have excellent credit to be eligible for most of these programs.

Do you require a minimum loan amount?
Yes. Currently we do not accept applications for loans less than $80,000. You must enter a loan amount of at least $80,000 to be considered for our programs and interest rates.

Is there any cost to apply?
No. We do not require an up-front fee to submit an application and begin the loan process. You will be required to make a good faith deposit once your application is in process; however, this payment is not a fee, it is a deposit that will later be credited toward your closing costs.

How do I determine how much I can afford to borrow?
Our calculators are easy-to-use tools for estimating your buying power. By entering a monthly mortgage payment that suits your budget, our calculator will tally the maximum loan amount you can afford to borrow based on a default interest rate and term.

I do not have a lot of money for a down payment. Can I still get a loan?
Yes. We have a variety of loan programs that offer a loan with a minimal down payment. Your personal loan officer can explain these options to you and help you find the best program for your needs.

Will you check my credit if I complete your online application?
Yes. Our goal is to make the loan process as quick and efficient as possible, so our loan officers request a credit report shortly after you complete the online application. This allows us to gain an accurate financial profile quickly, and allows our loan officers to determine early in the process if we have a loan program that fits your needs. We know your time is valuable, and we don't want to waste days or weeks completing all the necessary paperwork only to find that you do not qualify for our programs, or to discover that you are not interested in the programs we have to offer.

What criteria do you use to evaluate my loan application?
In addition to the information you submit in the online application form, we review your personal finances, including your credit history, employment and income, collateral, liabilities and assets.

How long does it take to complete the online application form?
The online application form is one of the shortest and easiest applications on the Internet! On average, it takes around 10 minutes to complete.

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After You Apply

What should I expect once I complete the online application?
After completing one of our online forms, a loan officer will contact you to answer any questions you may have, discuss your loan program options and complete the application process.

How long will it take for my loan to be approved?
We can approve your loan within 1 business day if your loan qualifies for one of our automated underwriting systems. Even if you do not qualify for desktop underwriting, your loan can be approved within 5 business days, provided we have obtained sufficient up-front information from you.

Who do I contact once my loan is in process?
Once we have received your completed application and supporting documentation, an underwriter will be assigned to your file. Your underwriter will be responsible for collecting any remaining documentation, preparing your application for approval, and clearing your file for closing. You may also visit our website to check the status of your loan.

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Interest Rates

What are the differences between fixed and adjustable rate mortgages?
Adjustable rate mortgages (ARMs) offer a lower initial interest rate than most fixed rates loans; however, the interest rate can change periodically (usually in relation to an index) and your monthly mortgage payment will go up or down accordingly. With a fixed rate mortgage, your interest rate and monthly mortgage payments will stay the same for the life of your loan, regardless of market conditions. When weighing the advantages and disadvantages of both, it is important to consider how much risk you are willing to assume. For many people, an ARM is the right mortgage choice, particularly if your income is likely to increase in the future or if you only plan on being in the home for 3 to 5 years. On the other hand, if you are looking to put the kids through college or buy a new car in the future, then a fixed rate mortgage is a safer choice.

How do I know if it's best to lock my rate or let it float?
Mortgage interest rate movements are as hard to predict as the stock market, and no one can really know for certain whether they'll go up or down.

If you have a hunch that rates are on an upward trend, then you'll want to consider locking the rate as soon as you are able. Before you decide to lock, make sure that your loan can close within the lock-in period. It won't do you any good to lock your rate if you can't close during the rate lock period. If you think rates might drop while your loan is being processed, take a risk and let your rate "float" instead of locking. You can watch rates and lock in at any time. It's a good idea to discuss your options with your loan officer - he or she is an excellent resource for rate information. 

When can I lock my rate?
You can lock your rate as soon as you find a property and complete our application. After submitting your completed online application, your personal loan officer will contact you. At that time, you may decide to lock your rate. Please note that you must specify a property address in order to lock. 

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Closing

If I apply for a mortgage online, where will the closing take place?
We use a nationwide network of settlement agents to conduct our loan closings. Usually, the closing is held at the title company from whom we obtained your title, but in some instances it is held at an attorney's office. Regardless, we will arrange for your closing to take place at the approved settlement agent office that is located closest to your home. We will not be present at the closing, but we'll deliver our loan documents and wire transfer your loan funds to the settlement agent or attorney at least 24 hours prior to closing.

When will I know the exact amount of money I will need at closing?
Just to make sure there are no surprises at closing, your underwriter will contact you a few days before the closing date to review your final costs and loan terms. If you're purchasing a new home, the numbers that the underwriter provides are related to your new mortgage only. Additional costs or even credits may need to be applied based on your agreement with the seller. The closing agent will calculate the exact amount that you'll need to bring to closing and contact you at least 24 hours prior to closing with the final figures. The funds you bring to closing must be in a certified form, such as a bank check or money order, and made payable to the closing agent.

What happens at the loan closing?
The closing will take place at the office of a title company or attorney in your area. If you are purchasing a new home, the seller may also be at the closing to transfer ownership to you, but in some states these two events actually happen separately. During the closing, you will be reviewing and signing several loan papers, including the Settlement Statement, the Truth-in-Lending Statement, the Note and the Mortgage or Deed of Trust. Just to make sure that there are no surprises at closing, your underwriter will contact you a few days before closing to review your final fees, loan amount, first payment date, etc.

What's included in closing costs?
Closing costs are expenses over and above the price of the property. Closing costs include origination fees, attorney's fees, taxes, prepaid insurance, points, escrow, title insurance and survey fees. Closing costs usually amount to between 2 and 6 percent of your mortgage. A complete list of your closing costs can be found on the HUD 1 Settlement Statement, and your underwriter will go over your closing cost items with you as well. 

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Mortgage Insurance

What is Private Mortgage Insurance or PMI?
PMI is a type of insurance provided by a private mortgage insurance company that protects us, the lender, in the event that you default on the loan. Mortgage insurance is usually required on a conventional loan when your down payment is less than 20%.

How do I pay for mortgage insurance?
Mortgage Insurance premiums can be paid annually from an escrow account, paid up-front as a closing cost or financed in your loan amount and paid monthly as part of your mortgage payment.

How can I avoid mortgage insurance?
The easiest way to avoid PMI is to make a down payment of at least 20% of the purchase price of the property. However, if you do not have the funds, you may consider a second trust loan, sometimes called a piggyback loan. The most common type of second trust is an 80/10/10, where a down payment of 10% is made, 80% is financed as usual, and the remaining 10% is financed in a second trust at a higher interest rate.

When can I cancel my mortgage insurance?
Typically, PMI will no longer be required once your loan balance falls below 80% of the home value. You can reach this 80% level by 1) paying off enough of your loan over time to reduce the principal balance, 2) your home appreciating (increasing in value) enough that your loan balance is less than 80%, or 3) a combination of the two.

You should verify that your loan agreement allows for PMI to be cancelled once you reach the 80% loan-to-value ratio. Sometimes, your PMI will be cancelled automatically once you have paid enough; however, we will not know if your house increases in value. You will need to provide us with a certified appraisal of your house in order to verify the current market value.

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Privacy and Security

How secure is the information I am supplying to you?
To protect your information from any possible misappropriation, our website secures your data with the Secure Sockets Layer (SSL) system, the latest in encryption technology. SSL creates a secure connection between you and our servers so that the data you transmit cannot be seen by anyone else.

Do you share my information with other companies?
The mortgage process involves communicating personal financial data, and we understand the need for a safe and secure environment in which to share this information. We respect the trust you are giving us, and we do not use your information for any purpose other than to underwrite and approve your loan. 

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