Mortgage FAQ

 

An account your mortgage company sets up to collect funds to pay your real estate taxes, homeowner’s insurance, and private mortgage insurance (when required).  Your monthly mortgage payment will include the amount to be paid to Escrow.  If you meet the escrow waiver requirements and choose to waive escrow, you will be responsible for paying your real estate tax and homeowner’s insurance on your own.

Points are a percentage of a loan amount.  When applying for a home loan you can choose to pay points (offers lower interest rate in exchange for higher closing costs), choose a zero-point loan (market rate) or choose to receive lender credits towards your closing costs (higher interest rates in exchange for lower closing costs).    

Yes, we have many products from lenders that specialize in this type of financing.

Yes, if you have higher interest rate debt, we can help you determine if a consolidation loan is right for you. 

The amount of your down payment will depend on the loan program you choose.  We offer programs that could finance 100% of the purchase price.  However, generally the more you put down the easier it is, and the cost is often reduced.  Typically, a down payment is anywhere between 3.5% to 20% of the value of the home.  If you can put 20% down, you may avoid paying Private Mortgage Insurance.

Private Mortgage Insurance is insurance provided by a private company to protect the mortgage lender against losses that might be incurred if a loan defaults.  Private Mortgage Insurance is required on any home loan when the deposit amount is less than 20% of the value of the home.

A home inspection is typically not required by the lender to purchase a home.  However, it is in the best interest of the buyer to conduct a home inspection.  The home inspection will determine if there are any major issues or complications with the home that a potential buyer may not notice on their own.

An appraisal is often required by the lender.  The appraisal will determine the market value of the home.  This protects the lender and the buyer from getting a loan that is higher than what the home is worth.  In certain circumstances, the lender may agree to an appraisal waiver.

A prequalification determines how much money a potential homebuyer can spend on a new home.  Before searching for a new home, a pre-qualification is strongly recommended.  In some cases, a prequalification is required by the real estate agent before a showing can be scheduled.