Frequently Asked Questions

  • What information/paperwork is needed when I apply? 
    • Pay stubs for all borrowers indicating year-to-date income for the last 30 days
    • Asset statements (i.e. retirement accounts, stocks, bonds, 401k, savings, and checking accounts) for the last 2 month
    • *Note: We will need ALL PAGES, even if they are numbered blanks.
    • W-2 forms for the last two (2) years.
    • Name, phone number, and address of someone who can verify your employment (HR).
    • Residence history for the past two years.
    • Sales contract for the purchase of a new home.
    • Homeowner’s Association (HOA) contact information if the property is a condo or part of a homeowner’s association.
    • Our AMC Disclosure Forms Set (Credit Authorization, Appraisal Authorization, Legal Disclosures)
    • Self-Employed applicants only: Tax returns (personal and corporate) from the past two (2) years.
  • Why do you require so much paperwork?
    • Since the mortgage meltdown of 2008, by law, these documents are required to prove a borrower qualifies for a loan. Leading up to the meltdown, many people “qualified” for home loans they were not financially able to pay back. As a result, banks became responsible for the millions of foreclosed homes. Now, we must be stringent in our qualification process.
  • What is an FHA loan? 
    • FHA mortgages are home loans that are insured by the Federal Housing Administration. FHA mortgages provide more flexibility in income and credit, which make them easier to qualify for. Buyers are able to put down as little as 3.5%. However, since they are more lenient, they are seen as “higher risk loans”, which require mortgage insurance.
  • What is a conventional loan? 
    • A conventional loan is a mortgage that is not insured or guaranteed by any government agency (i.e. FHA or VA).
  • What is an Adjustable Rate Mortgage (ARM)? 
    • An ARM is a mortgage with an interest rate that changes during the life of the loan according to a preselected index.The index is an interest rate set by market forces and published by a neutral party. There are many indexes, and the loan paperwork identifies which particular ARM follows.
  • What is a Fixed Rate Mortgage? 
    • A mortgage that is characterized by an interest rate that does not change over the life of the loan.
  • What is a Jumbo loan? 
    • A jumbo loan is a mortgage that exceeds a county’s loan limits. Jumbo loans typically have stricter guidelines since they are held by banks and private funds instead of Fannie Mae or Freddie Mac.
  • What is a VA loan? 
    • A VA loan is restricted to individuals qualified by military service. It is guaranteed by the U.S. Department of Veteran Affairs. One of the most appealing features of a VA loan is zero down payment required.
  • What is an APR?
    • The APR (annual percentage rate) is the rate of your loan that includes interest and all loan fees. The Truth-In-Lending Act requires the disclosure of the APR which allows borrowers to compare loans.
  • Should I refinance? 
    • Refinancing is often used to lower your interest rate, monthly payment, or eliminate mortgage insurance. If mortgage interest rates are lower than your current rate or if your home has significantly appreciated in value, you may want to consider refinancing. Speak with a loan officer today to see if refinancing is for you.
  • What is LTV? 
    • Loan-to-Value (LTV) is a ratio between the amount of a loan and the lower of the sale price or appraised value expressed as a percentage. Loan amount/Sales price of home or appraised value (whichever is less)
  • What is DTI? 
    • Debt-to-income is a ratio that expresses how much you pay in monthly obligations compared to your gross income. This is also expressed as a percentage. Monthly obligations/gross income.
  • What are discount points? 
    • Discount points are fees paid upfront to get a lower interest rate. Usually, one-point equals one percent of the loan amount and buys down the interest rate 0.25 percent.
  • What is Private Mortgage Insurance (PMI)? 
    • PMI is required if your down payment for a conventional mortgage is less than 20 percent. PMI is meant to protect the lender in case there is a default on the loan. Once 20 percent of the principal has been paid, you can contact your lender to remove PMI.
  • What is Mortgage Insurance Premium (MIP)? 
    • Mortgage Insurance Premium is required to close on an FHA loan. It’s usually paid as an upfront cost and as an annual premium. If your down payment is less than 10 percent, then you will have Mortgage Insurance for the life of the loan.
  • What is PITI? 
    • PITI refers to Principal, Interest, Taxes, and Insurance. These are the four components of a monthly mortgage payment.
  • What is Underwriting? 
    • Underwriting is the process of evaluating a loan application to assess the risk involved for the lender. This involves analyzing a borrower’s credit, employment, assets, and debts.
  • What are closing costs? 
    • Closing costs are the fees associated with the close of your loan. These can be both recurring and non-recurring.
      • Non-recurring fees include escrow fees, title insurance, appraisal fees, underwriting fees, notary fees, recording fees, and the transfer taxes.
      • Recurring costs include prepaid interest, property taxes, insurance, HOA fees, etc. They are fees that will recur throughout the duration of the loan.
  • Can I add closing costs to my loan? 
    • Not necessarily. You can, however, put less money down and use some of the money you saved to pay your closing costs. Be aware, this may result in a higher interest rate or required mortgage insurance.
  • Why do you need to pull my credit?  
    • Your credit profile is an essential factor in the loan process. Your credit score will determine the type of loan you will be approved for and the rate you could get.  We pull a hard credit report, which means we pull from the three major bureaus to determine the most accurate score. Often, we find borrowers are concerned about the hit to their credit a hard pull incurs, however, if you are shopping around for rates you will only get dinged once in the span of 30 days.