Mortgage FAQs

Q: What documents do I need to apply for a Home Loan?
A: Some documents you should provide when you apply for your loan are:

• Social security numbers and residence addresses for the past 2 years
• Income documents such as employer, W-2s and payroll stubs from the last 30 days
• Assets verification such as all bank statements for the past 2 months and loan information on other real estate owned
• Obligations verification such as list of credit cards, monthly installment loans and any other debt
• Two years tax returns if self-employed

Q: What are closing costs and what does the cost contain?
A: Closing costs are paid by the borrower or seller for the closing of a mortgage loan. This usually includes title insurance, attorney's fees, and taxes and insurance escrow payments, recording fees, credit report, etc. Title insurance is a policy issued to lenders or buyers to protect against losses resulting from defects of title to a specifically described parcel of real estate. An escrow payment is a portion of your monthly payment that is held by the lender to pay for taxes and insurance.

Q: What are points?
A: Points are sometimes referred to as discount points and 1 point is 1% of the loan amount. Borrowers may choose to pay a point(s) up-front in order to save money over the life of the loan. Points are a one-time fee added to your closing costs and results in a lower interest rate on your loan.

Q: What will my monthly payment include?
A: Principal, interest, as well as insurance and taxes in some cases.

Q: What is mortgage insurance?
A: Insurance that protects a lender against loss in case the borrower defaults on the mortgage loan. This allows lenders to make loans with lower down payments. The insurance is necessary when the loan amount exceeds 80% of the homes value.

Q: When should I lock or float my rate?
A: You can lock a rate after your loan application and fee are received and you have identified the property you are purchasing. Once you lock your rate, there are a certain number of days, 60 days for example, you have to close your loan. Once you lock a rate, you may not change it.

Q: What is a Good Faith Estimate?
A: When you apply for a loan, the lender will give you a Good Faith Estimate of settlement service charges you will likely have to pay. This estimate will be mailed or delivered to you within three business days of your application. The Good Faith Estimate is not a guarantee of costs, but the lender's estimate of settlement costs.