FREQUENTLY ASKED
QUESTIONS
Can first-time homebuyers
get special mortgages?
Yes. We have several affordable mortgage programs that can help
first-time homebuyers overcome obstacles that have made purchasing
a home difficult in the past. We are able to help borrowers
that may not have a lot of money saved for the down payment
and closing costs, have no or a poor credit history, or have
experienced income irregularities.
What
is an earnest money deposit?
Earnest money is money you put down through your Realtor to
demonstrate your seriousness about buying a home. It must be
substantial enough to demonstrate good faith and can be anywhere
between 2-25% of the purchase price (though the amount can vary
with local customs and conditions).
How large of a down
payment do I need?
There are still some types of mortgages available that allow
you to borrow 100%.
How do I know what
I can afford?
Call, email or fill out the online pre-approval form.
What is included in
a monthly mortgage payment?
The monthly mortgage payment mainly pays off principal and interest.
Local real estate taxes, homeowner's insurance and mortgage
insurance (if applicable) may be included as well depending
on program and Loan to Value.
What is loan-to-value
(LTV)?
This is a ratio of the amount of money you wish to borrow in
comparison to the sales price or value of the home you want
to purchase. A 75% LTV on a $200,000 home would equal a $150,000
loan.
What is an origination
fee?
A fee collected by a lender to offset certain costs such as
processing and funding your loan. The fee, calculated as a percentage
of your total loan amount, is often referred to as "points".
What are points and
why pay them?
Discount points allow you to lower your interest rate. They
are essentially prepaid interest, with each point equaling 1%
of the total loan amount. Generally, for each point paid on
a 30-year mortgage, the interest rate is reduced by 1/4 (or
.25) of a percentage point. Discount points may be a good idea
if you plan to stay in a home for some time since they can lower
the monthly loan payment. Points may be tax deductible.
What are closing costs?
Closing costs (or settlement costs) are the expenses involved
in the transfer of real estate from one owner to another. They
are paid when the homebuyer and the seller meet to exchange
the necessary papers for the house to be legally transferred;
otherwise known as the closing.
What is a hazard insurance
binder?
This is a homeowner’s insurance policy to cover the property
being purchased. An insurance binder is an insurance company’s
written commitment to insure. This protects both the owner and
lender and must commence at least the day of closing.
What is PMI or MI?
This is Private Mortgage Insurance. This insurance is required
if you put less than 20% down payment or have less than 20%
equity in your home. It is additional insurance designed to
protect lenders from individuals that may default on their loans.
If you have less than 20% to put down, there are still other
options for avoiding PMI.
What is a good faith
estimate and how does it help me?
It's an estimate that lists all fees paid before closing, all
closing costs, and any escrow costs you will encounter when
obtaining a mortgage. We will supply it at the time of your
application so that you can make accurate judgments when shopping
for a loan program.
What is a FICO score?
A FICO
score is a credit score developed by Fair Isaac & Co.
Credit scoring is a method of determining the likelihood that
credit users will pay their bills. A credit score attempts
to condense a borrowers credit history into a single number.
Credit scores analyze a borrower's credit
history considering numerous factors such as:
