- What is today’s rate?
- What can I expect from the mortgage loan process?
- What documentation do I need to provide to obtain a mortgage?
- Do I need to obtain homeowner’s insurance?
- How do I lock my rate, and what does that mean?
- What does it cost to submit a loan application?
- Do I need to pick the property I want to buy before I fill out the application?
- What is Private Mortgage Insurance (PMI) and do I have to pay it?
- What are the different ratios when qualifying for a mortgage? What are front and back ratios?
- How do I refinance my existing mortgage?
What is today’s rate?
There are a variety of factors to determine an interest rate. Property type, down-payment, credit history, term of the loan, fixed vs. adjustable, etc. In addition, rates are dictated by “mortgage-backed securities” which are traded just like stocks and bonds on the open market. This means rates can change every day, and even several times throughout the day. We are able to track these rates minute-by-minute using the industry’s latest technology. Please talk with your loan officer about creating a customized loan program individually tailored for your needs so we can help you get the lowest available interest rate.
What can I expect from the mortgage loan process?
What documentation do I need to provide to obtain a mortgage?
Do I need to obtain homeowner’s insurance?
Yes, as the borrower you will need to obtain homeowner’s insurance for the subject property. You are free to shop around to different insurance providers to find the best option for you! Once you know who you will be going through it is a good idea to begin your application for insurance with them as they will also need to underwrite your policy. Please inform your loan officer who you have chosen for homeowner’s insurance so that we can work with them to finalize your policy. It is ideal to have your policy finalized at least two weeks prior to closing to ensure adequate time to process.
How do I lock my rate, and what does that mean?
Locking your rate insures you that your rate will not go up during the loan process. Generally you are able to lock in a rate no sooner than 60 days prior to closing.
Depending on your loan program, there may be an option to re-lock if the interest rate drops significantly up until the closing. Please talk with your loan officer for more details.
What does it cost to submit a loan application?
Nothing. You can submit your application and become pre-approved for a loan without incurring any charges. Later on, fees may be incurred for a property appraisal and eventually closing costs.
Do I need to pick the property I want to buy before I fill out the application?
No, you can fill out the application first, and once your loan is approved you can modify it up until the time that your loan rate is locked in.
What is Private Mortgage Insurance (PMI) and do I have to pay it?
Private Mortgage Insurance is an insurance required by most lenders when a borrower puts less than 20% down. It’s purpose is to protect the lender should you default.
If you decide to put less than 20% down you will be required to pay the additional monthly premium. The amount of the premium will depend upon the size of the loan, the percentage paid down, and credit scores.
What are the different ratios when qualifying for a mortgage? What are front and back ratios?
The ratios are basically your income divided by your liabilities. They determine how much you can afford based on your yearly salary.
Front Ratio is the total mortgage payment, including principal, interest, taxes and insurance as well as any Private Mortgage Insurance and/or Home Owners Association fees divided by your total GROSS income. For example, with a gross income of $4783 per month, a total mortgage payment (PITI) of $976.63 would give you a Front ratio of 28%.
Back Ratio is the total mortgage payment as stated above PLUS all other liabilities such as car payments, credit cards, student loans, etc. divided by your gross income.
How do I refinance my existing mortgage?
Set up a time to meet with our loan representative at our office or arrange a loan-by-phone appointment. We will take the time with you to see first of all if a re-finance would make sense and what kind of benefit you might realize from re-financing. If it is determined to be a good strategy, we will walk you through the process and help you get your new loan closed quickly and effectively.