1. Can I Prequalify for a Home?

Even if you haven't found the home you want, you can still be pre-qualified for a loan. After reviewing your application and credit report, we will let you know what amount you will qualify for. This way, you can concentrate on finding the home you want with the confidence of knowing your financing package is already in place.

2. What if I have bad credit?

Many people assume that they would not qualify for a mortgage loan because they have bad credit or don't make enough money. These factors do not automatically disqualify you from obtaining financing. If you are in doubt, we can help by determining if you pre-qualify. Many of the lenders we contract with specialize in sub-prime credit or low income borrowers.

3. What are the different types of mortgage loans?

There are three basic types of mortgage loans: Conventional, FHA and VA. People typically refer to FHA and VA loans as "government loans." Within these types of loans, there are both fixed rate (where the interest rate remains constant over the life of the mortgage) and adjustable rate mortgage loans (where the interest rate may change one or more times over the life of the mortgage). The term of a mortgage (how long before it pays off) varies from five to thirty years depending on the loan program.

Your loan officer will help you pick your way through the maze of products offered to select the best program for your situation.

4. What does it mean to "lock" an interest rate?

To lock an interest rate means to set a rate guaranteed for a certain number of days. For example, if 7.0 percent is the interest rate you choose on the day you lock and you choose a 30 day lock period. The mortgage company guarantees your rate will be 7.0 percent provided you close within the 30 day lock period.

5. Can my loan be sold?

Yes, normally an investor will purchase your loan. You receive a notice at closing which tells you where and when to make your payments. The company receiving your payments is the Servicer. If the Servicer changes after closing, you will receive notices from both your old servicer and the new servicer. You will receive a disclosure during the loan process explaining this in greater detail. If you have any questions after receiving the disclosure, be sure to discuss them with your loan officer.

6. Do I have to establish an escrow account?

Usually, yes. For conventional loans with a loan-to-value ratio less than 80.01 percent, most investors allow you to waive the escrow account by paying a fee of 1/4 percent at closing.

7. Other than the application, what do I need to provide for the loan approval?

A. All Loan Applicants

A check for the credit report and appraisal fees.
Your personal addresses for the previous two years.
If you own your current residence: lender's name, address, loan number, payment, and balance.
If you rent your current residence: landlord's name, address, and phone number.

B. Employment

A copy of all applicant's most recent pay stubs equal to at least one month's income.
A copy of the last two years W-2's and 1099's for all jobs worked during that time.
C. Self-Employed, Commissioned, or Contracted

A copy of your personal income tax returns for the last two years, including all schedules which you must re-sign and date.(Must be original signatures with the date of application. Use blue ink.)
A copy of the last two years partnership or corporate tax returns (as necessary), including all schedules which you must re-sign and date. (Must be original signatures with the date of application. Use blue ink.)
A copy of your current year-to-date profit & loss statement and balance sheet, signed and dated by borrower.

D. Real Estate Owned

Copy of Property Listing or Agreement of Sale on present residence, if applicable.
Copy of HUD-1/Settlement Statement on any real estate sold within the past year.
Copy of current leases on any real estate you have leased, or a signed statement from tenant indicating the property address, length of time tenant has leased property, and the rental amount.
Copy of the Deed and release of lien on any properties owned free and clear.
Copy of property tax statement and insurance premiums on any properties owned.
For properties with outstanding mortgages, lender's name, address, loan number, payment, and balance.

E. Credit

Name, address, account numbers, balances, and minimum required monthly payments of all creditors. Letters explaining any known poor credit history.

F. Assets

Copy of most recent three months consecutive bank statements (all pages) for all accounts.
Evidence of stocks and bonds (statements or copies of certificates.)
Copy of most recent retirement income statements (401k, Keogh, IRA, etc.)
Gifts for down payment or closing costs
Proof of donor's ability to give gift (i.e., bank statement)
Copy of cashiers check or proof of funds transferring from donor's account.
Copy of car title for any vehicle owned free and clear and less than five years old.
G. Miscellaneous (If necessary)

Divorce Decree signed by Judge.
Proof of child support (if used to qualify borrower).
Domestic relations printout confirming timely monthly payments, or copies of 12 months canceled checks.
Copy of complete bankruptcy and discharge order with letter explaining circumstances.
Letter explaining any gaps in employment.
A copy of the sales contract (if you buy a house) or builders construction agreement (if you build a house.)

CREDIT:
1. What is "good credit"?

Usually, good credit is a history of paying your financial obligations in a timely manner and as agreed for the past few years. In the past two years you have no unresolved bankruptcies, tax liens and/or judgments.

2. I have some credit problems. Can I still get a mortgage loan?

In most cases, yes. Because of the many differences in each individual situation, no single solution will work for all individuals. Your loan officer will help you select the best solution to your credit problems.

3. What is a FICO score?

The FICO score is one measure of a person's credit risk. The credit reporting repository uses a formula which considers past payment history, amount of available credit, current amount of debt, public records (bankruptcy, judgments, liens, law suits, etc.), and other factors. The formula results in a number called a credit score. Investors use the credit score along with other factors to help determine what loan programs to offer a particular borrower.

4. I'm retired. Will my age keep me from getting a mortgage loan?

No. Age is not a factor in determining who gets a mortgage loan. The only age requirement is to be of legal age to sign a contract.

INCOME:
1. I am self-employed, or most of my income is commissions and/or bonus.
Does that present any problems?

Not necessarily. Usually, you must have at least two years verifiable income with tax returns for self-employed and/or commissioned income. Some programs require less. Your loan officer will help you choose the best program for your situation.

2. Does my income have to be verified?

No, in some instances such as those listed above under "No Income Verification" and "No ratio" loans. Yes, under most other loan programs.

3. I am relocating, my spouse is going to get a job when we relocate. Can his/her
income be used to qualify for a mortgage loan?

In many cases, yes. Your loan officer has several programs which use "trailing spouse" income.

SERVICING:
1. Is it possible for my monthly payment to be drafted from my checking/savings
account?

Yes, it is possible to draft monthly payments from a bank account. An Automatic Payment Authorization Form must be completed and returned with bank information along with an unsigned, voided check. Processing of the completed drafting authorization takes from 45 to 60 days. You will be notified when the drafting will commence, but until you receive that notice, it will be necessary to make any payments that are due. All accounts with payments due on the 1st will be drafted on or about the 5th of the month. It is necessary for your loan to be current, including late charges, for the Auto Draft to be implemented.

2. Can my mortgage insurance be cancelled? If so, when?

The mortgage insurance can be cancelled if: (A) a new appraisal indicates that the LTV (Loan-to-Value) Ratio is 80% or lower, (B) a waiver is requested in writing by the borrower, (C) the loan type is conventional, (D) the borrower has not had any 30 day delinquencies in the last 12 months.

3. When is a late charge assessed on my loan?

Your mortgage loan payment is due on the 1st of each month, but if your payment is received and posted on or after the 16th of the month, a late charge is assessed.

4. Can I pay extra with my monthly payment?

You may pay extra with your monthly payment amount each month to reduce the principal balance.