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Loan Application

  • Am I obligated to continue after I submit my loan for approval?

    There's absolutely no obligation to complete your application - even after you submit your loan for approval.

  • Are there any prepayment penalties charged for these loan programs?

    None of the loan programs we offer have penalties for prepayment. You can pay off your mortgage any time with no additional charges.

  • Can I apply for a loan before I find a property to purchase?

    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 an approval subject to you finding the perfect home. 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. You'll have an opportunity to lock in our great rates and fees then and we'll complete the processing of your request.

  • How do you decide what you need from me to process my loan?

    We take full advantage of an automated underwriting system that allows us to request as little information as possible to verify the data you provided during your loan application. Gone are the days when it was necessary to verify every piece of data collected during the application. The automated underwriting system compares your financial situation with statistical data from millions of other homeowners and uses that comparison to determine the level of verification needed. In many cases, a single W-2 or pay stub can be used to verify your income or a single bank statement can be used to verify the assets needed to close your loan.

  • I forgot my password. What do I do?

    If you can't remember your password, give us a call and we'll establish a new one.

  • I'm nervous about providing personal data online. Is this site secure?

    We use leading-edge technology to ensure that all customer information is 100% safe. We protect our customers by using a combination of security measures that are among the best in the e-commerce industry. All customer information is encrypted using Secured Socket Layer (SSL) technology supported with digital certificates provided by Starfield Technologies. This means that your loan application information is safe and secure as it travels over the Internet. We use leading firewall and network security technology to protect our internal computer systems from unauthorized access. Our customers can be confident that their personal information is completely safe and private after they apply.

  • Is there a fee charged or any other obligation if I complete the online application?

    There's no cost at all for completing our application. After your loan is approved, you can decide whether you wish to pay the application deposit to cover the cost of the appraisal and final credit report so that you can lock in an interest rate and we can begin to process your request.

  • What are some tips for completing our online application?

    Completing our online application is as easy as 1-2-3! We'll ask you questions about your personal finances and the home. You'll probably know all the answers off the top of your head. The application is broken down into sections and you can track your progress through each section at the top of each screen. It should take less than 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 questions below may change, disappear or new questions are added instantly. 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.

  • What can you expect when you apply for a mortgage?

    First, you'll complete our online application! The application will ask you questions about the home and your finances and takes less than 20 minutes to complete. As soon as you've finished the application we'll review your request for instant approval. If your application is approved online, we'll ask you for a deposit to cover the cost of the appraisal on your home so that we can begin to process your request immediately. This deposit will be credited towards your closing fees at closing. After completing your application, a Loan Officer will contact you to introduce himself or herself and to answer any questions you may have. Your Loan Officer is a mortgage expert and will provide help and guidance along the way. If your request wasn't approved online, he or she will ask you for any information required to make a decision about your loan. If you are purchasing a new home, the Loan Officer will also contact the Real Estate Broker or the seller so that they'll know whom to contact with questions.

    We'll send you an application package and prepare your loan for closing. The application package will be sent to you and will contain papers for you to sign and a list of items we'll need to verify the information you provided about your finances during the online application. We'll order the appraisal from a licensed appraiser who is familiar with home values in your area. Depending on your finances and the loan amount requested, different types of appraisals are used. Sometimes the appraiser will need to view the home. Sometimes they are able to do their evaluation from the street. Title insurance will be necessary. If you're purchasing a home, we'll work with the real estate broker or seller to ensure the title work is ordered as soon as possible. If you are refinancing, we'll take care of ordering the title work for you. We'll use the title insurance to confirm the legal status of your property and to prepare the closing documents.

    We'll contact you to coordinate your closing date. After we received the application package back from you and the appraisal and title work, we'll contact you to schedule your loan closing. If you are purchasing a home, we'll also schedule the closing with the real estate broker and the seller. The closing will take place at the office of a title company or attorney in your area who will act as our agent. A few days before closing, your Loan Officer will contact you to walk through the final information so that there won't be any surprises at closing.

    That's all there is to it! You're on your way to the most convenient home loan ever!

  • What types of disclosures will be provided online?

    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 and we'll also include copies in the application package will send to you if you decide to complete the application process.

Purchase

  • Can I really borrow funds to use towards my down payment?

    Yes, you can borrow funds to use as your down payment! However, any loans that you take out must be secured by an asset that you own. 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.

  • I am purchasing a home, why do you need the name of the real estate broker?

    One of the first things we'll do after your loan is approved is to contact the broker to discuss the items required for closing that the broker or seller might be responsible. Though there is some variance across the country, generally the broker is involved in ordering the title policy or scheduling the appraiser's inspection of the home. We'll make sure that everything necessary has been taken care of so that your closing happens as efficiently as possible. The broker 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.

  • I am selling my current home to purchase this home. What type of documentation will be required?

    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.

  • I'm getting a gift from someone else. Is this an acceptable source of my down payment?

    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 verify that the gift funds have been transferred to you by obtaining a copy of your bank receipt or deposit slip to verify that you have deposited the gift funds into your account.

  • If my property's appraised value is more than the purchase price can I use the difference towards my down payment?

    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.

  • What will be required if I withdraw money from a 401(K) account for my down payment?

    If you'll be withdrawing funds from a 401(K) or retirement account to fund your down payment, we'll probably ask you to provide evidence that you have the funds available by providing a recent statement. We may also need to verify whether or not repayment is required. If repayment is required, it's not a problem. We'll just consider that monthly payment when making your loan decision.

Refinance

  • I am refinancing. Why do you need to know when I purchased my home?

    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.

  • What is title insurance and why do I need it?

    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: 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.

  • What's the difference between a home equity loan and a refinance?

    A home equity loan is generally a second mortgage against your home, meaning it is a loan that you take out using your home as collateral without paying off your first mortgage. A refinance typically means that you'll be paying off your existing first mortgage and replacing it with a new first mortgage. Determining whether it's best to refinance or to obtain a home equity loan is very complicated and depends on many factors. You should consider contacting your tax advisor to determine what makes the most sense for you.

    In general, a home equity loan should be considered:

    • The lower the interest rate on your first mortgage is
    • The shorter the remaining term on your first mortgage is
    • The shorter the term is on the second mortgage you are considering
    • The higher the rate and points on a new first mortgage
    • The requirement of mortgage insurance for a new first mortgage

    Comparing monthly payments of your existing first mortgage and a new home equity loan as opposed to a new first mortgage should help. You should also keep in mind the term of each of your loans, especially if monthly payment is not a significant issue for you.

  • When should I refinance?

    It's generally a good time to refinance when mortgage rates are 1% lower than the current rate on your loan. It may be a viable option even if the interest rate difference is only 0.5% or less. Any reduction can trim your monthly mortgage payments. Example: Your payment, excluding taxes and insurance, would be about $770 on a $100,000 loan at 8.5%; if the rate were lowered to 7.5%, your payment would then be $700, now you're saving $70 per month. Your savings depends on your income, budget, loan amount, and interest rate changes. Your trusted lender can help you calculate your options.

Rates

  • How are interest rates determined?

    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.

  • How do I know if it is best to lock in my interest rate or to let it float?

    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.

  • How do we provide the lowest rates possible?

    We are a totally online lending service. Most traditional lenders employ loan officers who meet with borrowers in person to take loan applications and are generally paid on commissions. Since you will complete our online application, there's no need for a commissioned loan officer. We pass on those savings to you by providing the lowest rates and fees available! Instead of a loan officer, we'll assign your file to a Loan Officer who will be available by phone, e-mail, or online chat to answer any questions you may have and to guide you through the mortgage process.

  • Should I pay Discount Points in exchange for a lower interest rate?

    Discount 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 discount points, you should compare the cost of the discount points to the monthly payments savings created by the lower interest rate. Divide the total cost of the discount 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 discount points. If the number of months it will take to recoup the discount points is longer than you plan on having this mortgage, you should consider the loan program option that doesn't require discount points to be paid. If you'd prefer not to make this calculation the "old-fashioned way," we have a discount points calculator!

  • The interest rate you offer is just a little less than what I am paying now. How do I know if it makes sense to refinance?

    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.

  • What are points?

    A point is a percentage of the loan amount, or 1-point = 1% of the loan, so one point on a $100,000 loan is $1,000. Points are costs that need to be paid to a lender to get mortgage financing under specified terms. Discount points are fees used to lower the interest rate on a mortgage loan by paying some of this interest up-front. Lenders may refer to costs in terms of basic points in hundredths of a percent, 100 basis points = 1 point, or 1% of the loan amount.

  • What is an adjustable rate mortgage?

    An adjustable rate mortgage, or an "ARM" as they are commonly called, is a loan type that offers a lower initial interest rate than most fixed rate loans. The trade-off is that the interest rate can change periodically, usually in relation to an index, and the monthly payment will go up or down accordingly. Against the advantage of the lower payment at the beginning of the loan, you should weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. It's a trade-off. You get a lower rate with an ARM in exchange for assuming more risk. For many people in a variety of situations, an ARM is the right mortgage choice, particularly if your income is likely to increase in the future or if you only plan on being in the home for three to five years.

  • When can I lock in my interest rate and discount points?

    You can lock in your interest rate and discount points as soon as your loan is approved and you pay the application deposit to cover the cost of your appraisal and final credit report. The application deposit is not another fee, it's actually just the appraisal cost estimate and will be credited to the actual appraisal cost at your closing. If you complete your application today, and your request is approved online, you'll have the opportunity to pay the application deposit via credit card and can lock in your great rate immediately. If we need to review your information before providing your loan approval, a Loan Officer will contact you and you'll have the opportunity to lock your rate and fees then.

Credit Score

  • What can I do to improve my credit score?

    Credit scoring models are complex and often vary among creditors and for different types of credit. If one factor changes, your score may change -- but improvement generally depends on how that factor relates to other factors considered by the model. Only the creditor can explain what might improve your score under the particular model used to evaluate your credit application. Nevertheless, scoring models generally evaluate the following types of information in your credit report:

    • Have you paid your bills on time? Payment history typically is a significant factor. It is likely that your score will be affected negatively if you have paid bills late, had an account referred to collections, or declared bankruptcy, if that history is reflected on your credit report.
    • What is your outstanding debt? Many scoring models evaluate the amount of debt you have compared to your credit limits. If the amount you owe is close to your credit limit, that is likely to have a negative effect on your score.
    • How long is your credit history? Generally, models consider the length of your credit track record. An insufficient credit history may have an effect on your score, but that can be offset by other factors, such as timely payments and low balances.
    • Have you applied for new credit recently? Many scoring models consider whether you have applied for credit recently by looking at "inquiries" on your credit report when you apply for credit. If you have applied for too many new accounts recently, that may negatively affect your score. However, not all inquiries are counted. Inquiries by creditors who are monitoring your account or looking at credit reports to make "prescreened" credit offers are not counted.
    • How many and what types of credit accounts do you have? Although it is generally good to have established credit accounts, too many credit card accounts may have a negative effect on your score. In addition, many models consider the type of credit accounts you have. For example, under some scoring models, loans from finance companies may negatively affect your credit score.

    Scoring models may be based on more than just information in your credit report. For example, the model may consider information from your credit application as well: your job or occupation, length of employment, or whether you own a home. To improve your credit score under most models, concentrate on paying your bills on time, paying down outstanding balances, and not taking on new debt. It's likely to take some time to improve your score significantly.

  • What is a credit score and how will my credit score affect my application?

    A credit score is one of the pieces of information that we'll use to evaluate your application. Financial institutions have been using credit scores to evaluate credit card and auto applications for many years, but only recently have mortgage lenders begun to use credit scoring to assist with their loan decisions. 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.

  • Will I be charged any fees if I authorize my credit information to be accessed?

    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.

  • Will the inquiry about my credit affect my credit score?

    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.

Income

  • How will rental income be verified?

    If you own rental properties, we'll generally ask for the most recent year's federal tax return to verify your rental income. We'll review the Schedule E of the tax return to verify your rental income, after all expenses except depreciation. Since depreciation is only a paper loss, it won't be counted against your rental income. If you haven't owned the rental property for a complete tax year, we'll ask for a copy of any leases you've executed and we'll estimate the expenses of ownership.

  • I am relocating because I have accepted a new job that I haven't started yet. How should I complete the application?

    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.

  • I am retired and my income is from pension or social security. What will I need to provide?

    We will ask for copies of your recent pension check stubs, or bank statement 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.

  • I have income from dividends and/or interest. What documents will I need to provide?

    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.

  • I was in school before obtaining my current job. How do I complete the application?

    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 "length of employment" fields. You can enter a position of "student" and income of "0."

  • I'm self-employed. How will you verify my income?

    Generally, the income of self-employed borrowers is verified by obtaining copies of personal (and business, if applicable) federal tax returns for the most recent two-year period. However, based on your entire financial situation, we may not need full copies of your tax returns. 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. Typically, we'll need at least one, and sometimes a full two-year history of self-employment to verify that your self-employment income is stable.

  • I've had a few employers in the last few years. Will that affect my ability to get a new mortgage?

    Having changed 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 since we'll have a difficult time of predicting your earnings without a history with your new employer.

  • If I have income that's not reported on my tax return, can it be considered?

    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. Some lenders may offer a stated income program, which means that you can be qualified for a loan based on the income you state rather than that which can be verified. Usually these programs require larger down payments and offer interest rates that are substantially higher than regular mortgage rates.

  • Will my overtime, commission, or bonus income be considered when evaluating my application?

    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.

  • Will my second job income be considered?

    Typically, income from a second job will be considered if a one-year history of secondary employment can be verified.

Closing

  • If I apply, where will the closing take place?

    We use a nationwide network of closing agents and attorneys to conduct our loan closings. We'll schedule your closing to take place in a location that is located near your home for your convenience. We'll deliver our loan documents and wire transfer your loan funds to the closing agent or attorney prior to closing so that they'll have plenty of time to prepare for your closing.

  • Tell me more about closing fees and how they are determined.

    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 the city level - and that is no easy task!

  • Tell me more about closing fees and how they are determined.

    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 the city level - and that is no easy task! 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. You may also see that some lenders absorb minor third party fees such as the flood certification fee, the tax service fee, or courier/mailing fees.
    • 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. It probably means that the lender who doesn't tell you about the fee hasn't done the research necessary to provide accurate closing costs.
    • Lender Fees: Fees such as discount 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 "per diem 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 closing. For example, if the loan is closed on June 15, 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 or impound 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.
  • What happens at the loan closing?

    The closing will take place 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, but in some states, these two events actually happen separately. 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:

    • 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 Closing Disclosure 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.
    • 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 length of time to repay the loan. It also explains the penalties that you may incur if you fall behind in making your payments.
    • Mortgage / Deed of Trust: 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. In some states, the document is called a Deed of Trust instead of a Mortgage. 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.