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.
    • 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 several indices, we will provide you with a disclosure that identifies the index that your loan is tied to.
  • 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 FHFA conforming 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 cost of credit expressed as a yearly rate.. 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.
  • What is DTI? 
    • Debt-to-income is the ratio of your monthly obligations, including your mortgage, to your monthly gross income expressed as a percentage
  • What are discount points? 
    • Discount points are fees paid upfront to get a lower interest rate. One-point equals one percent of the loan amount and generally buys down the interest rate 0.25 percent.
  • What is Private Mortgage Insurance (PMI)? 
    • PMI is a monthly insurance premium that is required if your down payment on a conventional loan is less than 20 percent. 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 a one-time fee that is charged on FHA loans.
  • 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, etc. They are fees that will recur throughout the duration of the loan.
  • Can I add closing costs to my loan? 
    • This may be possible with a refinance.
  • Why do you need to pull my credit?  
    • Your credit profile is an essential factor in determining the type of loan and your interest rate. We order a credit report which contains data from the three major credit bureaus. This report will result in a credit inquiry. Multiple credit inquiries can result in lower credit scores, however, credit scores ignore mortgage loan inquiries made in the 30 days prior to scoring.