FREQUENTLY ASKED QUESTIONS

Why is important to make my mortgage payment on time?

Your payment is normally due on the first of every month and considered late by the 16^th of each month. If a missed payment goes beyond 30 days or the end of a month, it can be reported to the credit agencies which can negatively affect your credit score as well as the ability to obtain a mortgage soon. Setting up an automatic payment can help keep you from any late payments.

What is a Conventional Loan?

 A Conventional loan provides flexibility with your down payment along with a fixed or variable rate. A Conventional loan offers several different terms to help you manage both your monthly payment and the amount of principal being applied to your loan each month. A benefit of a Conventional loan is that if you put down 20% or more, than you are not required to pay Mortgage Insurance. Although Mortgage insurance is a factor with a down payment of less than 20%, the terms remain flexible. Conventional loans can be used by both first-time homebuyers as well as the experienced buyer. Gifts are acceptable when qualifying for a Conventional loan. Typically, the rate on a Conventional loan is lower than Government loan products. As with most mortgage products, your credit score and debt-to-income ratios are considered in the qualifying process. A second mortgage (HELOC or HELOAN) can be used with a Conventional loan to help reduce your down payment and at times, avoid paying Mortgage Insurance.

What is an FHA Loan?

 An FHA loan is tailored more toward a borrower that is looking for a lower down payment as well as flexibility with credit score and debt-to-income ratio requirements. An FHA loan is popular with the first-time homebuyer. This loan is backed by the Federal Housing Administration which provides the lender the opportunity to assist more borrowers in the home buying process. A popular feature with this loan is the ability to qualify with only 3.5% down. Gift funds are acceptable to help towards your down payment and closing costs.

What is a VA loan?

 A VA loan is a terrific benefit to eligible veterans, active-duty members, and active-duty reservist. First and foremost, we want to thank you for your service and sacrifice for our country. This loan product features 100% financing which means no down payment! Gift funds can be used toward closing cost as well. This loan is backed by the Department of Veteran Affairs.  A VA loan is different from other government loans because there is no monthly or annual mortgage insurance. Flexible credit score and debt-to-income requirements provides the opportunity for more service members to qualify. A Certificate of Eligibility is required to qualify for this loan.

What is a USDA Loan?

Most commonly known as an RD loan, this loan is also backed by the government. This loan also provides 100% financing which means no down payment for those that qualify. Gift funds can be used toward down payment or closing cost. The upfront mortgage insurance rate is typically lower than that of FHA or VA. It also has on the lowest annual mortgage insurance fees. The up-front fee can be rolled into the loan which reduces your out-of-pocket cost at closing. To qualify for this loan, the property you are purchasing must be in a USDA designated area. The USDA Mortgage Eligible Map will show you all the areas where you can use this loan. It’s important to note that there are income eligibility requirements for this loan. These income eligibility requirements vary based on location. Please contact one of our Loan Officers to determine overall eligibility.

What are Renovation loans?

There are different types of Conventional and Government backed renovation loans. These loans allow you to improve a property in many ways, whether it be remodeling, repairs, structural changes, landscape, upgrading utilities, and much more. A renovation loan allows you to roll the cost of all permitted renovations and improvements into a one-time closing. This closing takes place before any of the actual work begins. A repair escrow is established, and the funds are dispersed to the contractor upon completion and inspection. A renovation loan can be used on an existing property that you own or on a purchase of a property that needs repair. Credit score and debt-to-income requirements apply.

What is a Jumbo Loan?

You may have heard these loans referenced as non-conforming loans. A Jumbo loan exceeds the conforming limits set by the Federal Housing Finance Agency. Credit and debt-to-income ratio requirements tend to be more stringent when qualifying for this type of loan.

What are Assets?

Assets are personal items of value. The most common assets are cash in a checking or savings account, an IRA, stocks, bonds, pension, and 401K. Physical assets can include real estate, boats, cars, and jewelry. These types of assets may be requested when completing your mortgage loan application.

What is a Bridge Loan?

A Bridge Loan is typically a temporary loan tied to another piece of real estate that you own. This temporary loan can be used to help purchase a new home while retaining the other real estate.

What are Discount Points?

Typically, a discount point is a fee that you pay for a lower rate.

What are Seller Concessions?

Seller Concessions are borrower closing costs that the seller agrees to pay at closing. This amount is typically agreed during contract negotiations.