Q: What documentation do I need to provide?
The documentation required for each loan differs depending on the loan
program. While some programs require income, employment, and asset
verification, others require no documentation at all. Our mortgage Loan
Officer will provide you with a list of items needed.

Q: What is the difference between pre-qualification and pre-approval?
Pre-qualification is a lender’s judgment of your ability to make payments on
your mortgage, based on your verbal statement of income, assets, and
employment history. Pre-approval is the underwriting decision that you are
conditionally qualified and is subject to the lender’s review of your
completed application, verification of your income, assets, employment
history, credit check, appraisal and other determining factors.

Q: Once I’ve submitted my application online, how long will it take before I
know if I’ve been pre-qualified?
You will receive a phone call from one of our mortgage Loan Officers within
24 hours (during standard business days) of submitting your application.
Depending on the complexity of your loan scenario, the pre-qualification
process is fairly quick. A “pre qual” is a guide as you go through the home
buying process. It does not guarantee you will be approved for the mortgage.

Q: Is there a fee to submit my application online?
No, applying online is free.

Q: Are there any loan programs that don’t require a down-payment?
Yes, there are loan programs that do not require a down payment. If you
and/or the property you are purchasing meet certain credit, employment
history, location and other determining factors, a zero-downpayment loan may
be an option for you. Contact one of our mortgage loan officers to see if
this is an option for you.

Q: What is mortgage insurance and why is it required? Is there any way
around mortgage insurance?
Mortgage insurance protects the lender against taking a financial loss in
the event the mortgagor stops making payments. It is required on mortgage
programs that require little or no down payment and the lenders exposure is
greater than 80% of the purchase price or appraised value, whichever is

Mortgage insurance can be avoided by utilizing loan programs such as an
80/20, in which a 1st mortgage (80% LTV) and 2nd mortgage (20% LTV) are
taken on the property. No down payment is required. Or, there is Lender Paid
Mortgage Insurance (LPMI). With this option, the lender pays the mortgage
insurance, which is offset by a higher interest rate charged to the

Q: If I’ve filed bankruptcy in the past few years, will I still qualify for
a mortgage loan?
Yes, it’s possible to get approved for a mortgage loan after a bankruptcy
filing. Depending on the type of filing — Chapter 7 vs. Chapter 13 — and
other factors, you may have to wait anywhere from two to four years before
you can get another mortgage loan. Short sales and foreclosures are
different. Please give us a call to discuss your options.

Q: What are some of the benefits of Government loans (FHA, VA, USDA Rural
Government backed loans have become an increasingly attractive option for
borrowers. With the ease of qualification and enticing low interest rates,
these loans provide many borrowers with access to affordable mortgages.
There are FHA, VA, USDA Rural Housing programs that require little or no
down payments, no pre-payment penalties, and limited amounts of certain fees
and charges the borrower must pay to establish the loan. These programs also
have rates that are comparable to conventional loans.

Q: How is my ARM rate determined?
Adjusted Rate Mortgages (ARMs) have variable interest rates – interest rates
that change on monthly basis depending on market conditions. Rates are
determined by adding a margin to an index on a specific date.

Q: What is a balloon loan?
A balloon loan is a short term loan with payments amortized over a longer
period of time. These payments are not sufficient to pay off the loan in
full within the term of the loan. The remaining balance, known as the
balloon payment, is due in full at maturity of the note. Please give us a
call to discuss your options.

Q: How is my monthly mortgage payment applied to my mortgage loan?
Your monthly mortgage payment includes a payment to the principal balance,
interest, and escrow, otherwise known as P.I.T.I. (principal, interest,
taxes and insurance).

Q: What is the difference between the interest rate and the annual
percentage rate (APR)?
The interest rate is the rate you agree to pay for your mortgage loan. It is
used to determine the interest portion of your monthly payment. The annual
percentage rate (APR) includes your interest rate and prepaid finance
charges to give you an average yearly rate.

Q: What is a discount point?
A discount point is generally a percentage of the loan amount and is paid to
the lender to buy down or lower an interest rate.

Q: What is an escrow account?
An escrow account is set up to collect your payments for property taxes,
homeowners insurance and possibly other items, in equal amounts over a
12-month period, to be paid on your behalf when those bills come due.

Q: What is a rate lock?
A rate lock is a contractual agreement between the lender and buyer. There
are four components to a rate lock: loan program, interest rate, points, and
the length of the lock.

Q: What are points?
It is an upfront cash payment required by the lender as part of the charge
for the loan, expressed as a percent of the loan; e.g. ‘2 points’ means a
charge equal to 2% of the loan balance.