FAQ's
1. What's the difference between Pre-Qualification and Pre-Approval? Pre-Qualification is a lenders opinion of the applicant's ability to obtain financing to purchase a home, based on unconfirmed information at the time of application. Pre-Approval is similar, but is based on confirmed, documented information provided by the applicant. A Pre-Approval Letter is a much stronger vote of confidence that could be the determining factor in winning the contract on your new home!
2. I've started the lending process somewhere else. Am I legal bound to borrow money from that lender?
The loan application or pre-approval does not bind you contractually to complete the process with any particular lender.
3. What's my Interest Rate today?
It's very common to get this question first, even before the application. Interest rates vary from one person's financial scenario to the next and, even then it can vary day to day until the rate is locked. For this reason, a completed loan application packet is required before we can quote a specific interest rate for your financial scenario.
4. What is a "Rate Lock" and why is this necessary?
Locking your interest rate refers to guaranteeing a specific interest rate for a specific period of time. The lock period guarantees your quoted rate as long asyour loan closes and funds prior to the expiration date of your lock. If you closing is delayed beyond your lock expiration date, you could be exposed to higher market rates. Shorter lock periods provide you with a better interest rate. Longer lock periods reduce the risk of a volatile market.
5. What are Origination and Discount Points?
An origination point is a fee paid to the lender to compensate for evaluating, processing and approving your mortgage. Discount points are like prepaid interest; you reduce your interest rate by paying discount points up front. Points vary by lender. One pointequals 1% of the loan amount; one point for a $250,000 loan is $2,500.
6. Can I use digital versions or screenshots of bank statements, taxes and paystubs?
Digital, yes. If your digital documentation has your name, account number and all pages are included (even blanks if included in pages), we can accept digital documentation in PDF form. However, screenshots or photographs of your computer screen are not underwriter-approved formats. Many of our documentation requests can be fulfilled by our office directly. Your loan officer will work with you to get everything needed to satisfy processing and underwriting.
7. When, where & how do I pay my total for Closing?
Closing is the very last step in the process before you take possession of your new home. Closing will take place at the title company or attorney's office. We will call at least 3 days in advance to schedule closing and prepare you for the big day! Your funds can be wired directly from your bank or paid by bank cashier's check to the title company. We will inform you of your final total after it is determined that final week. If your bank does not have a local branch, they may require you to purchase the cashier's check in-person, which would require planning up front. Likewise, some banks without local branches will not allow you to request a wire online or by phone. Check with your out-of-town banking institution early in the process to determine their procedures.
8. Now that I'm becoming a homeowner, who do you recommend for home repairs/remodeling, lawn care, insurance, financial advice, painting, etc?
Your loan officer has a list of highly recommended vendors in many different areas of business, several being home-related. We are happy to provide the contact information of these trusted vendors to you.
