Frequently
asked
questions.
On this Frequently Asked Questions (FAQs) page, you'll find a comprehensive collection of answers to common queries related to mortgages, refinancing, and loan process. Whether you have questions about down payments, interest rates, or the timeline for closing, this resource is designed to provide clear and concise information to help you navigate your home financing journey with confidence. Please contact us for additional information.
What is a mortgage?
A mortgage is a loan specifically used to purchase a home, where the property serves as collateral. The borrower agrees to repay the loan over a set period, typically 15 to 30 years, with interest.
How do I choose a lender?
How do I qualify for a mortgage?
Lenders assess your credit score, income, debt-to-income ratio, employment history, and savings for a down payment to determine your eligibility for a mortgage.
When selecting a mortgage, the interest rate is not always the most crucial factor. It’s essential to partner with a reliable and reputable lender. A trustworthy lender will provide all loan details, including pre-approval, in clear, written documentation.
As you explore mortgage providers, consider seeking recommendations from friends and family. While online reviews can be helpful, personal feedback from those you know often offers more depth and insight. If your close contacts had positive experiences, it’s likely that you will, too.
Additionally, ensure you fully understand the total cost of the loan and feel comfortable with all its terms. Factors such as pre-payment penalties, substantial down payment requirements, or higher monthly payments can significantly impact the overall suitability of the loan, regardless of the interest rate.
What are closing costs?
Closing costs are fees associated with finalizing a mortgage, including loan origination fees, appraisal fees, title insurance, and attorney fees. They typically range from 2% to 5% of the loan amount.
What is an escrow account?
An escrow account is used to hold funds for property taxes and insurance premiums. Monthly mortgage payments often include a portion that goes into this account to ensure these bills are paid on time.
Can I change jobs before closing?
Consult your loan officer if there are any changes to your employment status. Maintaining steady employment for at least two years, along with verifiable income, is crucial when applying for a loan.
Can I make a purchase before my closing?
It's advisable to consult with your loan officer prior to making any significant purchases. Altering your financial accounts or increasing your debt-to-income ratio could impact your loan approval process.
What is a FICO score and how does it affect you?
FICO, which stands for Fair Isaac Corporation, is a pioneer and leading authority in credit scoring. Your FICO score serves as a numerical representation of your creditworthiness, indicating to creditors how likely you are to repay your debts. While FICO and the credit bureaus do not disclose the specific algorithms they use, credit scores are typically calculated using models that assign points to various factors in your credit history. These factors are analyzed to predict future credit performance and may include:
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Payment History: Timeliness of payments on existing debts.
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Employment History: Stability and duration of employment.
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Credit History Length: The duration you’ve held credit accounts.
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Credit Utilization: The ratio of credit used compared to available credit.
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Residential Stability: How long you’ve lived at your current address.
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Negative Financial Events: Impact of events such as collections, bankruptcies, or charge-offs.
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Understanding these factors can help you manage and improve your credit score effectively.
Can my mortgage be sold?
Yes, an active secondary mortgage market exists where lenders and investors buy and sell pools of mortgages. If your mortgage is purchased by another company, that company assumes all the original terms and conditions. The new lender cannot alter the interest rate, payment amounts, or any other terms of the agreement. You will simply need to send your payments to the new loan servicer.
