To determine the value of the property you are purchasing or refinancing, an appraisal will be required. An appraisal report is a written description and estimate of the value of the property. National standards govern not only the format for the appraisal; they also specify the appraiser's qualifications and credentials. In addition, most states now have licensing requirements for appraisers evaluating properties located within their states.
The appraiser will create a written report for us and you'll be given a copy at your loan closing. If you'd like to review it earlier, your Loan Officer would be happy to provide it to you.
The appraiser will inspect both the interior and exterior of the home.
After the appraiser inspects the property, they will compare the qualities of your home with other homes that have sold recently in the same neighborhood. These homes are called "comparables" and play a significant role in the appraisal process. Using industry guidelines, the appraiser will try to weigh the major components of these properties (i.e., design, square footage, number of rooms, lot size, age, etc.) to the components of your home to come up with an estimated value of your home. The appraiser adjusts the price of each comparable sale (up or down) depending on how it compares (better or worse) with your property.
As an additional check on the value of the property, the appraiser may also estimate the replacement cost for the property. Replacement cost is determined by valuing an empty lot and estimating the cost to build a house of similar size and construction. Finally, the appraiser reduces this cost by an age factor to compensate for depreciation and deterioration.
If your home is for investment purposes, or is a multi-unit home, the appraiser will also consider the rental income that will be generated by the property to help determine the value.
Using these three different methods, an appraiser will frequently come up with slightly different values for the property. The appraiser uses judgment and experience to reconcile these differences and then assigns a final appraised value. The comparable sales approach is the most important valuation method in the appraisal because a property is worth only what a buyer is willing to pay and a seller is willing to accept.
It is not uncommon for the appraised value of a property to be exactly the same as the amount stated on your sales contract. This is not a coincidence, nor does it question the competence of the appraiser. Your purchase contract is the most valid sales transaction there is. It represents what a buyer is willing to offer for the property and what the seller is willing to accept. Only when the comparable sales differ greatly from your sales contract will the appraised value be very different.
In addition to verifying that your home's value supports your loan request, we'll also verify that your home is as marketable as others in the area. We'll want to be confident that if you decide to sell your home, it will be as easy to market as other homes in the area.
We certainly don't expect that you'll default under the terms of your loan and that a forced sale will be necessary, but as the lender, we'll need to make sure that if a sale is necessary, it won't be difficult to find another buyer.
We'll review the features of your home and compare them to the features of other homes in the neighborhood. For example, if your home is on a 20-acre lot or has a large accessory building, we'll want to make sure that there are other homes in the area on similar size lots or with similar outbuildings. It is hard to place a value on such unique features if we can't see what other buyers are willing to pay for them. In some areas, additional acreage or outbuildings could actually be a detriment to a future sale. Finding comparable properties can be more challenging in rural areas where it is more difficult to find homes that have similar features.
We'll also make sure that the value of your home is in the same range as other homes in the area. If the value of your home is substantially more than other homes in the neighborhood, it could affect the market acceptance of the home if you decide to sell.
We'll also review the market statistics about your neighborhood. We'll look at the time on the market for homes that have sold recently and verify that values are steady or increasing.
As soon as we receive your appraisal, we'll update your loan with the estimated value of the home. As a standard practice we will provide a copy of your appraisal at closing.
Since the value and marketability of condominium properties is dependent on items that don't apply to single-family homes, there are some additional steps that must be taken to determine if condominiums meet our guidelines.
One of the most important factors is determining if the project that the condominium is located in is complete. In many cases, it will be necessary for the project, or at least the phase that your unit is located in, to be complete before we can provide financing. The main reason for this is, until the project is complete, we can't be certain that the remaining units will be of the same quality as the existing units. This could affect the marketability of your home.
In addition, we'll consider the ratio of non-owner occupied units to owner-occupied units. This could also affect future marketability since many people would prefer to live in a project that is occupied by owners rather than renters.
We'll also carefully review the appraisal to insure that it includes comparable sales of properties within the project, as well as some from outside the project. Our experience has found that using comparable sales from both the same project as well as other projects gives us a better idea of the condominium project's marketability.
Depending on the percentage of the property's value you'd like to finance, other items may also need to be reviewed.
Both a home inspection and an appraisal are designed to protect you against potential issues with your home. Although they have totally different purposes, it makes the most sense to rely on each to help confirm that you've found the perfect home.
The appraiser will make note of obvious construction problems such as termite damage, dry rot, or leaking roofs or basements. Other obvious interior or exterior damage that could affect the salability of the property will also be reported.
However, appraisers are not construction experts and won't find or report items that are not obvious. They won't turn on every light switch, run every faucet, or inspect the attic or mechanicals. That's where the home inspector comes in. They generally perform a detailed inspection and can educate you about possible concerns or defects with the home.
Accompany the inspector during the home inspection. This is your opportunity to gain knowledge of major systems, appliances and fixtures, learn maintenance schedules and tips, and to ask questions about the condition of the home.
Licensed appraisers who are familiar with home values in your area perform appraisals. Generally, it takes 10-14 days before the written report is sent to us. We follow up with the appraiser to insure that it is completed as soon as possible. If you are refinancing, the appraiser will contact you to schedule an appointment to look at the home. If you are purchasing a new home, the appraiser will contact the real estate agent or the seller to schedule an appointment to view the home.
Federal Law requires all lenders to investigate whether or not each home they finance is in a special flood hazard area as defined by FEMA, the Federal Emergency Management Agency. The law can't stop floods. Floods happen anytime, anywhere. But the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 help to ensure that you will be protected from financial losses caused by flooding.
We use a third party company who specializes in the reviewing of flood maps prepared by FEMA to determine if your home is located in a flood area. If it is, then flood insurance coverage will be required, since standard homeowner's insurance doesn't protect you against damages from flooding.
After your loan is approved, we will contact the realtor to discuss the items we need from them for closing. The realtor is generally responsible for ordering the title policy and scheduling the closing. We'll make sure that everything necessary has been taken care of so that your closing happens as efficiently as possible.
The realtor may also want to know that you have taken the steps to obtain financing and that your loan request has been approved. We'll only provide basic information about your loan approval. It's really up to you to decide what details you want to share.
If you are buying a secondary residence that's not a vacation home (such as a home that's closer to work for use during the week) you should complete the application indicating that you are buying a primary residence. Before you submit your application you'll have the opportunity to enter additional information. Please make a note of your situation there, so that your Loan Officer has all the details as they review your application.
We define manufactured housing as housing units that are factory built with a steel undercarriage that remains as a structural component and limits the structure to a single story. These types of manufactured homes are sometimes known as mobile homes. We do not consider other factory-built housing (not built on a permanent chassis), such as modular, prefabricated, panelized, or sectional housing, to be manufactured housing. If your home is one of these types, please complete the application indicating that your home is a single family home.
In order to qualify for our loan programs a manufactured home must meet the following requirements:
that application cannot be done online.)
In most cases we are able to offer financing for homes on large tracts. What's most important is to determine if the size of your property is common for the area. The appraiser must be able to provide detailed information about the recent sales of similar homes on similar lots that have occurred recently. If that's not possible, we may not be able to provide the financing that you are looking for.
It's also important that your property be residential in nature. If the property is a working farm or is used for any commercial purposes, we may have issues. Contact a Loan Officer if you have concerns about the acceptability of your property.
For properties that don't meet the criteria stated above, we may have other options available for you. Please contact your Loan Officer regarding these properties.
A pre-approval letter can be very comforting to any seller you might be negotiating with. It tells them that if they accept your offer, they won't have to worry that you won't qualify for the financing you need to buy their home. You may provide it to your real estate broker or to sellers - the decision is yours!
Points are considered a form of interest. Each point is equal to one percent of the loan amount. You pay them, up front, at your loan closing in exchange for a lower interest rate over the life of your loan. This means more money will be required at closing, however, you will have lower monthly payments over the term of your loan.
To determine whether it makes sense for you to pay points, you should compare the cost of the points to the monthly payments savings created by the lower interest rate. Divide the total cost of the points by the savings in each monthly payment. This calculation provides the number of payments you'll make before you actually begin to save money by paying points. If the number of months it will take to recoup the points is longer than you plan on having this mortgage, you should consider the loan program option that doesn't require points to be paid.
If you'd prefer not to make this calculation the "old-fashioned way," we have a points calculator!
Mortgage interest rate movements are as hard to predict as the stock market and no one can really know for certain whether they'll go up or down.
If you have a hunch that rates are on an upward trend then you'll want to consider locking the rate as soon as you are able. Before you decide to lock, make sure that your loan can close within the lock-in period. It won't do any good to lock your rate if you can't close during the rate lock period. If you're purchasing a home, review your contract for the estimated closing date to help you choose the right rate lock period. If you are refinancing, in most cases, your loan could close within 30 days. However, if you have any secondary financing on the home that won't be paid off, allow some extra time since we'll need to contact that lender to get their permission.
If you think rates might drop while your loan is being processed, take a risk and let your rate "float" instead of locking.
After you apply and all the necessary paperwork is in order, you can lock in by contacting your Loan Officer by telephone.
A 15-year fixed rate mortgage gives you the ability to own your home free and clear in 15 years. And while the monthly payments are somewhat higher than a 30-year loan, the interest rate on the 15-year mortgage is usually lower and more important, you'll pay less than half the total interest cost of the traditional 30-year mortgage.
However, if you can't afford the higher monthly payment of a 15-year mortgage don't feel alone. Many borrowers find the higher payment out of reach and choose a 30-year mortgage. It still makes sense to use a 30-year mortgage for most people.
Who Should Consider a 15-Year Mortgage?
The 15-year fixed rate mortgage is most popular among younger homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. They own more of their home faster with this kind of mortgage and can then begin to consider the cost of higher education for their children without having a mortgage payment to make as well. Other homebuyers, who are more established in their careers, have higher incomes and whose desire is to own their homes before they retire, may also prefer this mortgage.
The possible disadvantages associated with a 15-year fixed rate mortgage are:
Use the "How much can I save with a 15 year mortgage?" calculator in our Resource Center to help decide which loan term is best for you.
General Statement
The interest rate market is subject to movements without advance notice. Locking in a rate protects you from the time that your lock is confirmed to the day that your lock period expires.
Lock-In Agreement
A lock is an agreement by the borrower and the lender and specifies the number of days for which a loan’s interest rate and points are guaranteed. Should interest rates rise during that period, we are obligated to honor the committed rate. Should interest rates fall during that period, the borrower must honor the lock.
When Can I Lock?
We will notify you by telephone or email when you are able to request the lock.
Fees
We do not charge a fee for locking in your interest rate.
Lock Changes
Once we accept your lock, your loan is committed into a secondary market transaction. Therefore, we are not able to renegotiate lock commitments.
None of the loan programs we offer have penalties for prepayment. You can pay off your mortgage any time with no additional charges.
A home loan often involves many fees, such as the appraisal fee, title charges, closing fees, and state or local taxes. These fees vary from state to state and also from lender to lender. Any lender or broker should be able to give you an estimate of their fees, but it is more difficult to tell which lenders have done their homework and are providing a complete and accurate estimate. We take quotes very seriously. We've completed the research necessary to make sure that our fee quotes are accurate.
To assist you in evaluating our fees, we've grouped them as follows:
Third Party Fees
Fees that we consider third party fees include the appraisal fee, the credit report fee, the settlement or closing fee, the survey fee, tax service fees, title insurance fees, flood certification fees, and courier/mailing fees.
Third party fees are fees that we'll collect and pass on to the person who actually performed the service. For example, an appraiser is paid the appraisal fee, a credit bureau is paid the credit report fee, and a title company or an attorney is paid the title insurance fees.
Typically, you'll see some minor variances in third party fees from lender to lender since a lender may have negotiated a special charge from a provider they use often or chooses a provider that offers nationwide coverage at a flat rate.
Taxes and other unavoidables
Fees that we consider to be taxes and other unavoidables include: State/Local Taxes and recording fees. These fees will most likely have to be paid regardless of the lender you choose. If some lenders don't quote you fees that include taxes and other unavoidable fees, don't assume that you won't have to pay it.
Lender Fees
Fees such as points, document preparation fees, and loan processing fees are retained by the lender and are used to provide you with the lowest rates possible.
This is the category of fees that you should compare very closely from lender to lender before making a decision.
Required Advances
You may be asked to prepay some items at closing that will actually be due in the future. These fees are sometimes referred to as prepaid items.
One of the more common required advances is called "prepaid interest" or "interest due at closing." All of our mortgages have payment due dates of the 1st of the month. If your loan is closed on any day other than the first of the month, you'll pay interest from the date of closing through the end of the month at the closing. For example, if the loan is closed on June 15th, we'll collect interest from June 15 through June 30 at closing. This also means that you won't make your first mortgage payment until August 1. This type of charge should not vary from lender to lender and does not need to be considered when comparing lenders. All lenders will charge you interest beginning on the day the loan funds are disbursed. It is simply a matter of when it will be collected.
If an escrow account will be established, you will make an initial deposit into the escrow account at closing so that sufficient funds are available to pay the bills when they become due.
If your loan requires mortgage insurance, up to two months of the mortgage insurance will be collected at closing. Whether or not you must purchase mortgage insurance depends on the size of the down payment you make.
If your loan is a purchase, you'll also need to pay for your first year's homeowner's insurance premium prior to closing. We consider this to be a required advance.
If you've ever purchased a home before, you may already be familiar with the benefits and terms of title insurance. But if this is your first home loan or you are refinancing, you may be wondering why you need another insurance policy.
The answer is simple: The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and especially your mortgage lender, want to make sure the property is indeed yours and that no individual or government entity has any right, lien, claim, or encumbrance on your property.
The function of a title insurance company is to make sure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly, and that your interests as a homebuyer are fully protected.
Title insurance companies provide services to buyers, sellers, real estate developers, builders, mortgage lenders, and others who have an interest in real estate transfers. Title companies typically issue two types of title policies:
1) Owner's Policy - This policy covers you, the homebuyer.
2) Lender's Policy - This policy covers the lending institution over the life of the loan.
Both types of policies are issued at the time of closing for a one-time premium if the loan is a purchase. If you are refinancing your home, you probably already have an owner's policy that was issued when you purchased the property, so we'll only require that a lender's policy be issued.
Before issuing a policy, the title company performs an in-depth search of the public records to determine if anyone other than you has an interest in the property. The search may be performed by title company personnel using either public records or, more likely, the information contained in the company's own title plant.
After a thorough examination of the records, any title problems are usually found and can be cleared up prior to your purchase of the property. Once a title policy is issued, if any claim covered under your policy is ever filed against your property, the title company will pay the legal fees involved in the defense of your rights. They are also responsible to cover losses arising from a valid claim. This protection remains in effect as long as you or your heirs own the property.
The fact that title companies try to eliminate risks before they develop makes title insurance significantly different from other types of insurance. Most forms of insurance assume risks by providing financial protection through a pooling of premiums for losses arising from an unforeseen future event, say a fire, accident or theft. On the other hand, the purpose of title insurance is to eliminate risks and prevent losses caused by defects in title that may have happened in the past.
This risk elimination has benefits to both the homebuyer and the title company. It minimizes the chances that adverse claims might be raised, thereby reducing the number of claims that have to be defended or satisfied. This keeps costs down for the title company and the premiums low for the homebuyer.
Buying a home is a big step emotionally and financially. With title insurance you are assured that any valid claim against your property will be borne by the title company, and that the odds of a claim being filed are slim indeed.
You can contact your loan officer at 608-637-3133 or 608-269-2126.
The maximum percentage of your home's value that you can borrow depends on the purpose of your loan, how you use the property, and the loan type you choose, so the best way to determine what loan amount we can offer is to complete our online application!
Please note that we also offer Rural Development financing; however, we do not offer an online application for this program at this time. Please contact us at our Viroqua office 608-637-3133 or at our Sparta office 608-269-2126 for further details about this program.
Interest rates fluctuate based on a variety of factors, including inflation, the pace of economic growth, and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will almost always lead to low interest rates, while concerns about rising inflation normally cause interest rates to increase. Our nation's central bank, the Federal Reserve, implements policies designed to keep inflation and interest rates relatively low and stable.
First of all, let's make sure that we mean the same thing when we discuss "mortgage insurance." Mortgage insurance should not be confused with mortgage life insurance which is designed to pay off a mortgage in the event of a borrower's death. Mortgage insurance makes it possible for you to buy a home with less than a 20% down payment by protecting the lender against the additional risk associated with low down payment lending. Low down payment mortgages are becoming more and more popular and by purchasing mortgage insurance, lenders are comfortable with down payments as low as 5% of the home's value. It also provides you with the ability to buy a more expensive home than might be possible if a 20% down payment were required.
The mortgage insurance premium is based on loan to value ratio, type of loan, and amount of coverage required by the lender. The premium is included in your monthly payment and one month of the premium is collected as a required advance at closing.
It may be possible to cancel private mortgage insurance at some point, such as when your loan balance is reduced to a certain amount - below 75% to 80% of the property value. Recent Federal Legislation requires automatic termination of mortgage insurance for many borrowers when their loan balance has been amortized down to 78% of the original property value. If you have any questions about when your mortgage insurance could be cancelled, please contact your Loan Officer.
The Federal Truth in Lending law requires that all financial institutions disclose the APR when they advertise a rate. The APR is designed to present the actual cost of obtaining financing by requiring that some, but not all, closing fees are included in the APR calculation. These fees, in addition to the interest rate, determine the estimated cost of financing over the full term of the loan. Since most people do not keep the mortgage for the entire loan term, it may be misleading to spread the effect of some of these up front costs over the entire loan term.
Also, unfortunately, the APR doesn't include all the closing fees, and lenders are allowed to interpret which fees they include. Fees for things like appraisals, title work, and document preparation are not included even though you'll probably have to pay them.
For adjustable rate mortgages, the APR can be even more confusing. Since no one knows exactly what market conditions will be in the future, assumptions must be made regarding future rate adjustments.
You can use the APR as a guideline to shop for loans but you should not depend solely on the APR in choosing the loan program that's best for you. Look at total fees and consider the length of time that you plan on having the mortgage.
Don't forget that the APR is an effective interest rate - not the actual interest rate. Your monthly payments will be based on the actual interest rate, the amount you borrow, and the term of your loan.
The simple rule of thumb for determining if it makes sense to refinance is to analyze the amount that it will cost you to refinance compared to the monthly savings you'll have by reducing your payment. By dividing the cost of refinancing by the monthly savings, you can determine how many monthly payments you'll have to make before you've recaptured the initial refinance cost. If you plan on staying in your home longer than the recapture time, it may make sense for you to refinance.
To fully analyze whether it's the time to refinance you'll have to look deeper. The remaining term of your current loan must also be considered, as well as your tax bracket. Our refinance calculator can help you determine if it's the right time to refinance.
In our area, attorneys are normally not at a real estate closing. Please contact the closing agent if you have questions about attorney representation. By all means, we recommend that you have an attorney at the closing if it would make you more comfortable. If your attorney has any questions about your new mortgage, please refer them to your Loan Officer. We'd be happy to provide any information necessary.
Unfortunately, we'll need to gather some information about your new home before we can offer a rate lock, so we will need to have an accepted contract to purchase your new home and an appraisal before we can lock in your interest rate.
The VA charges a Funding Fee to most veterans who obtain VA mortgage loans to help sustain the program. Although the full amount can usually be financed as part of the loan amount or paid in cash, most people finance it as part of their mortgage. We’ve automatically assumed you will finance the maximum VA Funding Fee amount and have included it as part of your Total Loan Amount. If you choose to pay the VA Funding Fee instead of financing it, your loan amount will decrease and the amount of cash required at closing will increase.
A credit score is one of the pieces of information that we'll use to evaluate your application. Credit scores are based on information collected by credit bureaus and information reported each month by your creditors about the balances you owe and the timing of your payments. A credit score is a compilation of all this information converted into a number that helps a lender to determine the likelihood that you will repay the loan on schedule. The credit score is calculated by the credit bureau, not by the lender. Credit scores are calculated by comparing your credit history with millions of other consumers. They have proven to be a very effective way of determining credit worthiness.
Some of the things that affect your credit score include your payment history, your outstanding obligations, the length of time you have had outstanding credit, the types of credit you use, and the number of inquiries that have been made about your credit history in the recent past.
Credit scores used for mortgage loan decisions range from approximately 300 to 900. Generally, the higher your credit score, the lower the risk that your payments won't be paid as agreed.
Using credit scores to evaluate your credit history allows us to quickly and objectively evaluate your credit history when reviewing your loan application. However, there are many other factors when making a loan decision and we never evaluate an application without looking at the total financial picture of a customer.
An abundance of credit inquiries can sometimes affect your credit scores since it may indicate that your use of credit is increasing.
But don't overreact! The data used to calculate your credit score doesn't include any mortgage or auto loan credit inquiries that are made within the 30 days prior to the score being calculated. In addition, all mortgage inquiries made in any 14-day period are always considered one inquiry. Don't limit your mortgage shopping for fear of the effect on your credit score.
There is no charge to you for the credit information we'll access with your permission to evaluate your application online. You will only be charged for a credit report if you decide to complete the application process after your loan is approved.
Yes, you can borrow funds to use as your down payment! However, you must have 3% of your own funds and the remaining funds can be loans that you take out. If you own something of value that you could borrow funds against, such as a car or another home, it's a perfectly acceptable source of funds. If you are planning on obtaining a loan, make sure to include the details of this loan in the Expenses section of the application.
The income of self-employed borrowers is verified by obtaining copies of personal (and business, if applicable) federal tax returns for the past two years.
We'll review and average the net income from self-employment that's reported on your tax returns to determine the income that can be used to qualify. We won't be able to consider any income that hasn't been reported as such on your tax returns. We will need a full two-year history of self-employment to verify that your self-employment income is stable.
In order for bonus, overtime, or commission income to be considered, you must have a history of receiving it and it must be likely to continue. We'll usually need to obtain copies of W-2 statements for the previous two years and a recent pay stub to verify this type of income. If a major part of your income is commission earnings, we may need to obtain copies of recent tax returns to verify the amount of business-related expenses, if any. We'll average the amounts you have received over the past two years to calculate the amount that can be considered as a regular part of your income.
If you haven't been receiving bonus, overtime, or commission income for at least one year, it probably can't be given full value when your loan is reviewed for approval.
We will ask for copies of your recent pension check stubs or bank statements if your pension or retirement income is deposited directly in your bank account. Sometimes it will also be necessary to verify that this income will continue for at least three years since some pension or retirement plans do not provide income for life. This can usually be verified with a copy of your award letter. If you don't have an award letter, we can contact the source of this income directly for verification.
If you're receiving tax-free income, such as social security earnings in some cases, we'll consider the fact that taxes will not be deducted from this income when reviewing your request.
We ask for your daytime phone number so that we know the best way to reach you. If you can't take calls during the day, please don't answer the daytime phone question. We'll contact you after work hours or via mail or e-mail, if you prefer.
Generally, only income that is reported on your tax return can be considered when applying for a mortgage; unless, of course, the income is legally tax-free and isn't required to be reported.
Yes, applying for a mortgage loan before you find a home may be the best thing you could do! If you apply for your mortgage now, we'll issue a pre-approval letter online instantly. You can use the pre-approval letter to assure real estate brokers and sellers that you are a qualified buyer. Having a pre-approval for a mortgage may give more weight to any offer to purchase that you make.
When you find the perfect home, you'll simply call your Loan Officer to complete your application.
Completing our online application is as easy as 1-2-3! We'll ask you questions about your personal finances and the home.
The application is broken down into sections and you can track your progress through each section at the top of the screen. It should take about 20 minutes to complete the application.
Move through the application by using the back and next arrows at the bottom of each screen. Don't use the back and next button on your browser while you're completing the application.
We use exciting new technology in order to provide you with the most convenient online mortgage application ever! As you answer some of the questions, you'll note that the questions below may change. We don't ever want to waste your time asking for information that isn't important in your situation, so we evaluate the information we need based on your answers. Isn't that what amazing customer service is all about?
If you need additional help answering a question, click on the question mark at the end of the question for more information.
If you don't have time to complete the application right now or if you need to gather information before you finish, we'll save the information you have completed. When you're ready to finish, return to the site and enter your User ID and password to continue.
If you've moved frequently, it really has no affect on your application. We'll ask for your residence history for the last two years to insure that the proper credit records are considered when obtaining your credit report, but it certainly won't affect your ability to obtain a mortgage.
In most cases, we will need to contact your landlord. Please let us know if you would prefer that we wait until later in the process to contact your landlord.
Unfortunately, if you are purchasing a home, we'll have to use the lower of the appraised value or the sales price to determine your down payment requirement.
It's still a great benefit for your financial situation if you are able to purchase a home for less than the appraised value, but our investors don't allow us to use this "instant equity" when making our loan decision.
There's absolutely no obligation to complete your application - even after you submit your loan for approval.
Whether you're purchasing or refinancing, we're certain you'll find our service amazing!
If you'll be purchasing but haven't found the perfect home yet, complete our application and we'll issue a pre-approval for a mortgage loan now with no obligation!
Federal and State laws require that mortgage lenders provide certain disclosures at the time a customer completes an application. Those laws apply to online lenders as well as traditional lenders. Some of the most common disclosures include information about certain loan types and information about any application fees or deposits that may be required. We won't display any of these disclosures until you get to the end of our application, since the disclosures that must be displayed will vary depending on information you will provide during the application. You'll be able to print copies of the disclosures.
Unfortunately, we must have your approval to receive disclosures online so that you can continue to complete our application. Without that approval, it won't be possible for you to apply online with us. You can print copies of the disclosures from the web site, too.
You are never too old for a 30-year mortgage! Seriously, Federal law prohibits all lenders from discriminating based on age. You should apply for whatever mortgage you are comfortable with - no matter what your age.
The year you purchased your home and the price you paid for it are provided to the appraiser to assist them in finding data about your home through local public records. In addition, if you purchased your home in the last year, some of the loan programs we offer require us to compare the original purchase price to the current appraised value so that any large increases in value can be justified.
If you don't remember the exact year and purchase price of the property, an estimate will work just fine.
If you're not sure exactly how much the annual real estate taxes are for the property you are purchasing, an estimate will do. We'll be able to look up the amount on the county treasurer's web site.
If you have a second mortgage that you don't want to pay off with your new first mortgage we'll have a little extra work to do. We'll need to get the permission of your second mortgage lender to pay off your existing mortgage and replace it with your new mortgage. Generally, their major concern will be the relationship of your new loan amount to the value of the home.
Your second mortgage lender will probably ask us to provide some documentation, such as a copy of the mortgage note you'll be signing and the appraisal, before they provide their approval. We won't be able to schedule your loan closing until we receive their approval. You may want to consider a lock period of more than 30 days to insure we don't run out of time.
Some situations are just more complicated than others and require a "personal touch" before an approval can be provided. The fact that we weren't able to approve your request online doesn't mean that we can't provide the financing you are looking for. One of our experienced Loan Officers will be assigned to your file and will do a complete review of the information you provided.
We also know how difficult it is to wait for a decision and we will contact you as soon as we can.
If for any reason we aren't able to provide the financing you have applied for, part of the Loan Officer's job is to come up with other options you may want to consider. It's our goal to offer choices to all of our customers!
Some situations are just more complicated than others and require a personal touch before a pre-approval can be provided. The fact that we weren't able to approve your request online doesn't mean that we can't provide the financing you are looking for. One of our experienced Loan Officers will be assigned to your file and will do a complete review of the information you provided and will contact you as soon as possible.
The VA charges a Funding Fee to most veterans who obtain a VA mortgage loan to help sustain the VA home loan program. The VA Funding Fee is 2.15% of the loan amount. In most cases, the VA Funding Fee is financed rather than being paid in cash at closing.
Congratulations! We look forward to providing you with a new mortgage at a great rate!
A Loan Officer will contact you to introduce themselves and to answer any questions you may have. Your Loan Officer is a mortgage expert and will provide help and guidance along the way.
We will be sending you a packet of information showing you all of the specifics with regard to the loan and the closing costs. We'll need you to sign and return these documents. We will also send you a list of items we'll need from you to verify the information you provided during your online application. Please return those items as soon as possible.
Once all of this information has been returned, an appraisal of the home will be ordered from a licensed appraiser who is familiar with home values in your area, and we'll begin to get things in order for your loan closing.
Your Loan Officer will keep you up-to-date regarding the status of your application via e-mail. Getting a mortgage couldn't be easier!
The information we need about additional assets that you own does not have to be exact. Don't worry about providing exact values for your assets. Estimated values are all we'll need.
We need information about all the real estate you own to insure we have a reasonable estimate of your net worth. If you don't know the exact value of your real estate holdings, provide your best guess - in most cases that is all we will need to process your new mortgage request.
If you own rental properties, we'll need the last two years of federal income tax returns including all of the schedules. We'll review the Schedule E's of the tax returns to verify your rental income. Since depreciation is only a paper loss, it will be added back in to your net income.
Generally, two years personal tax returns are required to verify the amount of your dividend and/or interest income, so that an average of the amounts you receive can be calculated. In addition, we will need to verify your ownership of the assets that generate the income using copies of statements from your financial institution, brokerage statements, stock certificates or Promissory Notes.
Typically, income from dividends and/or interest must be expected to continue for at least three years to be considered for repayment.
Information about child support, alimony, or separate maintenance income does not need to be provided unless you wish to have it considered for repaying this mortgage loan.
Typically, income from a second job will be considered if a one-year history of secondary employment can be verified.
Changing employers frequently is typically not a hindrance to obtaining a new mortgage loan. This is particularly true if you made employment changes without having periods of time in between without employment. We'll also look at your income advancements as you have changed employment.
If you're paid on a commission basis, a recent job change may be an issue because we need two years of commission income to predict what your earnings will be.
If you were in school before your current job, enter the name of the school you attended and the length of time you were in school in the additional employment fields. You can enter a position of "student" and income of "0."
Gifts are an acceptable source of down payment if the gift giver is related to you or your co-borrower. We'll ask you for the name, address, and phone number of the gift giver, as well as the donor's relationship to you.
If your loan request is for more than 80% of the purchase price, we'll need to verify that you have at least 5% of the property's value in your own assets.
Prior to closing, we'll need to verify that the gift giver has the funds available and it is, indeed, a gift. This is done with a Verification of Gift form that we'll provide to you.
If you're selling your current home to purchase your new home, we'll ask you to provide a copy of the settlement or closing statement you'll receive at the closing to verify that your current mortgage has been paid in full and that you'll have sufficient funds for our closing. Often the closing of your current home is scheduled for the same day as the closing of your new home. If that's the case, we'll just ask you to bring your settlement statement with you to your new mortgage closing.
Congratulations on your new job! If you will be working for the same employer, complete the application as such, but enter the income you anticipate you'll be receiving at your new location.
If your employment is with a new employer, complete the application as if this were your current employer and indicate that you have been there for one month. The information about the employment you'll be leaving should be entered as a previous employer. We'll sort out the details after you submit your loan for approval.
Generally, a cosigned debt is considered when determining your qualifications for a mortgage. If the cosigned debt doesn't affect your ability to obtain a new mortgage we'll leave it at that. However, if it does make a difference, we can ignore the monthly payment of the cosigned debt if you can provide verification that the other person responsible for the debt has made the required payments by obtaining copies of their cancelled checks for the last twelve (12) months.
All student loan debt should be entered as an installment debt.
If the loans are in deferral, we will need verification of what the payment will be when the deferral period ends or you can enter 2% of the principal balance as the monthly payment.
If you've had a bankruptcy or foreclosure in the past, it may affect your ability to get a new mortgage. Unless the bankruptcy or foreclosure was caused by situations beyond your control, we will generally require that three to seven years have passed since the bankruptcy or foreclosure. It is also important that you've reestablished an acceptable credit history with new loans or credit cards.
An installment debt is a loan that you make payments on, such as an auto loan, a student loan or a debt consolidation loan. Do not include payments on other living expenses, such as insurance costs or medical bill payments. We'll include any installment debts that have more than 10 months remaining when determining your qualifications for this mortgage.
The closing will take place at one of our branch locations or at the office of a title company or attorney in your area who will act as our agent. If you are purchasing a new home, the seller may also be at the closing to transfer ownership to you.
During the closing you will be reviewing and signing several loan papers. The closing agent or attorney conducting the closing should be able to answer any questions you have or you can feel free to contact your Loan Officer if you prefer.
Just to make sure there are no surprises at closing, your Loan Officer will contact you a few days before closing to review your final fees, loan amount, first payment date, etc.
The most important documents you will be signing at the closing include:
HUD-1 Settlement Statement
This document provides an itemized listing of the final fees charged in connection with your loan. If your loan is a purchase, the settlement statement will also include a listing of any fees related to the transaction between you and the seller. If this loan will be a refinance, the settlement statement will show the payoff amounts of any mortgages that will be paid in full with your new loan. Most items on the statement are numbered according to a standardized system used by all lenders. These numbers will correspond to the numbers listed on the Good Faith Estimate that will be provided in your application package. This document is also commonly known as the closing statement and both the buyer and seller must sign this document.
Truth-in-Lending Statement (TIL)
This document provides full written disclosure of the terms and conditions of a mortgage, including the annual percentage rate (APR) and other fees. It is exactly the same as the TIL that you received immediately after your initial application, except it has been updated to reflect the final rate and fee information. Federal law requires that all lenders provide you with this document at closing.
Promissory Note
This is the document you sign to agree to repay your mortgage. The note will provide you with all of the details of your loan including the interest rate and the length of time to repay the loan. It also explains the penalties that you may incur if you fall behind in making your payments.
Real Estate Mortgage
This document pledges a property to the lender as security for repayment of a debt. Essentially this means that you will give your property up to the lender in the event that you cannot make the mortgage payments. The Mortgage restates the basic information contained in the note, as well as details the responsibilities of the borrower.
If your loan is a refinance, Federal Law requires that you have three days to decide positively that you want a new mortgage after you sign the documents. This means that the loan funds won't be disbursed until three business days have passed. The closing agent will provide more details at the closing.
The most important documents you will sign at closing are the note and mortgage. Unless there are special circumstances, these documents are usually prepared one to two days before your closing. Other documents are prepared by the closing agent the day before or the day of your closing. If you would like copies of the completed documents to be sent to you after they are prepared, please contact your Loan Officer.
If you won't be able to attend the loan closing, contact your Loan Officer to discuss other options. In some cases, we're able to mail you the documents in advance so that you can sign them and forward them to the closing agent. We're sure to have a solution that will work for you.
Automated monthly payments are available. At the loan closing an automated payment form can be provided. You may sign it at the closing or return it whenever you are ready to set up the automatic payment.
Our goal is to have your loan ready for closing as soon as possible! Generally the items that take the longest to receive are things such as the appraisal and the title work. We'll want to get those ordered as soon as possible to avoid any delays.
If you are purchasing a new home, we'll do our best to meet the date you and the seller have agreed upon. If you are refinancing or obtaining a home equity loan, it normally takes about 30 days to close. If you are refinancing and have a second mortgage that you don't want to pay off with your new loan, closing could take a little longer since we'll need the permission of your second mortgage holder before we can close.
In our area, attorneys are normally not at a real estate closing. Please contact the closing agent if you have questions about attorney representation. By all means, we recommend that you have an attorney at the closing if it would make you more comfortable. If your attorney has any questions about your new mortgage, please refer them to your Loan Officer. We'd be happy to provide any information necessary.