Answer: Usually the best thing to do is make a call to one of our loan officers and find out exactly how much home you can comfortably afford and which loan program would best meet your needs. We will ask you questions about your income, employment history and available assets. We will probably want to check your credit to make sure there isn’t anything on your report that needs to be taken care of before you find a home. In most cases, we will be able to advise you about what your maximum sales price/monthly payment can be and approximately how much money you will need all together to buy a home. You should have most of your questions answered after just 10 -15 minutes of your time over the phone. We are always available for face-to-face consultations as well.
Answer: Good question. There are many factors that help us to determine which loan program is best for a particular client. Available funds for closing, credit scores, anticipated purchase price, current underwriting guidelines and long term financial goals are all taken into consideration.
Answer: Tell your agent that you will need evidence of guaranteed replacement cost. The maximum deductible is 1%.
Answer: Absolutely. One of the advantages to working with loan officers who have been in the business as long as we have is that we have relationships with most of the best agents in town. We’ll be happy to put you in touch with a Realtor who specializes in the area of town that you’re interested in after our initial conversation. It makes our job much easier when you are working with a team of proven professionals.
Answer: Typically, borrowers making a down payment of less than 20 percent of the purchase price of the home will need to pay for mortgage insurance. Mortgage insurance also is typically required on FHA and USDA loans. Mortgage insurance is insurance for the lender, paid for by the borrower which insures against default of the loan. If the borrower defaults on the loan, the lender will be compensated by the mortgage insurance company for a percentage of the loan amount.
Answer: As a general rule, you should allow 30 days from the effective date of the contract to closing. If you take longer to get requested documentation to us, it may take longer. Always make it a priority to return requested information/documentation to us to avoid delays.
Answer: Closing is when the seller and buyer meet to sign the documents which will transfer property from one party to the other. The buyer signs loan documents and the seller signs a Warranty Deed and a few other documents. Closing usually takes place at a title company because several of the documents need to be notarized and recorded.
Answer: Although it is common in some states, we rarely see pre-payment penalties in Texas. A pre-payment penalty is an agreement between the lender and the borrower that if the borrower pays off the loan early for some reason he/she agrees to pay the lender a pre-determined amount of interest. The idea is that the lender wants to be compensated for some of the return on his/her investment as originally agreed.
Answer: “APR” is an abbreviation for “Annual Percentage Rate”. The APR is not the Note Rate (interest rate) for which the borrower applied. The APR is the cost of the loan in percentage terms when you take into account the closing costs plus the interest rate. Charges which are used in calculation of the APR are Private Mortgage Insurance, FHA Mortgage Insurance Premium (when applicable), loan discount, origination fees, etc. The APR is calculated by spreading these charges over the life of the loan which results in a rate higher than the interest rate shown on the Mortgage/Deed of Trust Note. If interest paid was the ONLY Finance Charge, the interest rate and the APR would be the same.
Answer: When we “lock” in an interest rate, we are guaranteeing to our client that even if interest rates go higher, their interest rate will not be any higher than the agreed upon rate as long as they close by the agreed upon closing date.As soon as you have a fully executed contract and a definite closing date, your loan officer will discuss locking in your interest rate with you.
Note: A rate lock does not mean you have loan approval.
Answer: Title insurance guarantees that the “title” to the property you are buying is free of any liens, judgments, encroachments or prior claims from third parties. Because a lender is co-invested in your home, they want to make sure that if any unexpected title issues arise that the title company will take care of any resulting expenses. Title companies research all recorded documents pertaining to a particular property before they will insure title. This is to protect you and the lender.
Answer: An appraisal is a professional opinion of value which is prepared by a licensed appraiser to make sure the home you want to buy is worth what you are willing to pay for it. The current federal law requires that the lender order the appraisal through a third-party service which randomly assigns the appraisal to an appraiser from a pre-selected panel. The appraiser will check for comparable sales in the area of your home to determine current market value.
Answer: Yes. Your loan processor will e-mail you a copy of the appraisal as soon as it has been reviewed for accuracy. You should keep it in a safe place for future reference.
Answer: A survey is a “footprint” of your house as it sits on your lot/land. It is prepared by a licensed civil engineer and is done to make sure there aren’t any easements or encroachments which might affect title or future marketability or title of your home. In most cases, lenders and title companies will accept prior surveys if the seller is willing to warrant its accuracy.
Answer: We will only require a home inspection if the contract calls for it. This is something you should discuss with your Realtor.
a) If you are getting a VA loan, the VA requires a “clear” termite certificate. The certificate must say that there is no active infestation of wood destroying insects and that treatment for wood destroying insects is not recommended. Please provide us with a copy of the certificate prior to closing.
b) If you are getting an FHA or Conventional loan, we will only require a termite certificate if the contract calls for it. If the contract requires it, it must follow the same as above. Note: If a termite certificate is called for, please provide us with a copy prior to closing.
Answer: The listing and selling agents (Realtors) will usually schedule an appointment with the title company at a time which is amenable to all parties. They should let you know exactly when and where to be.
Answer: Although the preliminary Loan Estimate you received from us will give you a good estimate of what you need, it is not possible to get you an exact figure until the title company prepares a Final Closing Disclosure. The Closing Disclosure is required to be signed by you 3 days prior to closing. The statement will give you an itemized list of all fees charged and an exact amount you will need for closing. You will need to wire money directly to the title company or get a cashier’s check from your bank payable to the title company. If you prefer to wire your money, please call your title company and NEVER rely on emailed wiring instructions you have may have received. As always, contact your loan officer or loan processor with questions about your particular transaction.
Answer: We rarely ask for a document that we don’t absolutely have to have. After you’ve exhausted all avenues, if you still can’t find something, please call your loan officer or loan processor. There may or may not be a document that we can accept in lieu of what we requested but we need to have a conversation about it – the sooner, the better.