Mortgage FAQs
What factors affect my mortgage rate?
- Credit history, home price and loan amount, down payment, loan term, loan program
How does my credit affect my interest rate?
- Lenders use your credit history to predict how reliable you’ll be in paying your loan. Late payments, judgements, and collections all make you a higher risk borrower.
What are the up-front costs?
- Home inspection fee (optional), earnest money deposited, Pest/well inspection (optional depending on program), appraisal fee
What is the difference between pre-qualified and pre-approved?
- Pre-qualified involves supplying a lender with your overall financial picture. No cost involved
- Pre-approved is more involved. You must complete an official mortgage application and must supply the lender with all the necessary documentation.
How long does it take to buy a house?
- 30-45 days depending on loan program
Is there a difference between an appraisal and an inspection?
- An appraisal is done to formulate an opinion of the property’s value
- A home inspection is to show the buyers what kind of condition the home is in.
What is private mortgage insurance?
- If your down payment is less than 20% you will need to have private mortgage insurance. PMI protects the mortgage lender in the event you default on the loan. PMI automatically comes off when your principal is 78%
What is an escrow?
- Escrow is calculated into your monthly payment. This amount is your property taxes and homeowners insurance. Each month a little is collected and put into an “escrow” account. Then when your insurance and taxes are due, the mortgage company pays those for you on your behalf.
What costs are included in “closing cost”?
- Underwriting, processing, and origination fees-charge associated with evaluating, verifying and processing the loan
- Appraisal-the professional estimate of the home’s value
- Credit report-the charge for pulling your credit report
- Flood certification-to show if your home is in a flood zone or not
- Attorney fees-fees charged by an attorney or title agent to do a title search and deed prep
- Recording Fees-government fees for entering new property records
- Homeowners insurance-the homeowners policy you take out on your home.
- Property taxes