Frequently Asked Questions

Have some questions? Not sure where to start? This is a great place to find answers to some of the most common mortgage questions you may be facing.

Have a question about mortgages? Click the questions below to find the answers!

Pre-qualification is when your mortgage loan officer asks you a series of questions regarding your income, assets and credit. Based on this information your loan officer verbally advises you of the amount of loan on which you are pre-qualified. Pre-approval is when your lender gives you a written commitment for a loan (subject to verification of your income and employment).

A mortgage broker arranges a home loan transaction between a borrower and a particular lender. This match can be based on a series of factors such as type of loan desired or qualification of a borrower's credit or employment. Mortgage brokers arrange a large share of the loan transactions between borrowers and lenders. The mortgage banker actually funds the loan transaction.

This is a legal contract between a borrower and lender using the property as collateral to secure the loan. The lender has the right to take possession of the property if the borrower fails to pay the home loan payments.

This is a home loan with a fixed rate of interest that does not change throughout the life of the loan.

These types of home loans have interest rates and payments that can change periodically due to fluctuations in market interest rates. Many times there are interest rate caps that limit the amount a payment can change.

This type of loan requires monthly payments of principle and interest and is paid off over a fixed period of time.

Home equity lines of credit (HELOCs) give homeowners access to an open line of credit, where only the outstanding balance accrues interest.

This type of mortgage allows a borrower to acquire a second loan on their home in addition to their first home loan.

This is when a borrower pays off an existing home loan with a new (refinanced) loan. Borrowers may do this type of financing to extend their home loan period, get a lower rate and/or payment or consolidate debt.

Closing fees normally range between 3 to 5 percent and may include (but are not limited to) things such as appraisal or credit reports, attorney fees, title insurance, loan origination fee, survey and document preparation.

Annual Percentage Rate factors interest plus certain closing costs, any points and other finance charges over the term of the loan. The APR must be disclosed to a borrower according to federal Truth-In-Lending laws within three business days of application.

You will carry PMI (private mortgage insurance) if you put less than 20% down on most Conventional loans. This insurance protects the lender by ensuring that the debt is repaid if you default on the loan. FHA mortgages also charge for mortgage insurance premiums (MIP) in return for lower down payments.

An escrow account holds a borrower's escrow amount to pay property expenses such as homeowner's insurance or property taxes.

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