Frequently Asked Questions
- Can I apply for a loan before I've found my property?
- Why do I have to pay title insurance?
- What is APR?
- What are closing costs?
- When can I lock an interest rate?
- What does it mean to "buy down" the interest rate?
- Does my credit have to be perfect?
Can I apply for a loan before I've found my property?
Yes. You can obtain pre-approval for a maximum purchase price, loan amount and loan program. Once the loan has been approved, any of these variables can be changed to match the specifics of the actual transaction. However, an interest rate can not be locked until a property address has been specified.
Why do I have to pay title insurance?
Title insurance protects the lender and the homeowner against loss resulting from any defects in the title or claims against a property that were not uncovered in the title search and that are not specifically listed as exemptions to the coverage on the title insurance policy.
What is APR?
APR is abbreviated for Annual Percentage Rate. The APR is the annual cost of the mortgage expressed in the form of a yearly rate. The APR is generally higher than the note rate because the APR includes the interest rate plus related costs such as points, fees for processing the loan and other pre-paid charges. The APR can be used to compare the actual cost of different types of mortgages.
What are closing costs?
Closing costs cover all the charges associated with the transaction, including points, origination fee, appraisal fee, title insurance, survey, charges for credit reports, etc. Closing costs vary depending upon the loan product and the fees that are customary in your region.
When can I lock an interest rate?
It all depends on the loan product and the lender. We offer a wide range of lock-in periods depending on your needs.
What does it mean to "buy down" the interest rate?
Buying down the rate refers to the payment of discount points in exchange for a lower interest rate. A discount point is one percent of the loan amount. As an example, paying two discount points on a $100,000 loan requires $2,000.
Does my credit have to be perfect?
Your ability to purchase a home will depend, in part, on your credit history as profiled in a credit report. The information on the credit report is used to determine how responsible you are in meeting your obligations. You do not have to have perfect credit to be approved for a mortgage, but if you have a number of late payments, you may need to provide a letter explaining why those payments were late.
