Mortgages FAQ

What information do I need when applying for a home loan?

You will need information regarding income, assets and liabilities, and property details. Specific information is based on your personal situation and the type of loan you request. Typical required information:

  • Proof of identity – a driver’s license or other government issued identification. Under the requirements of the USA PATRIOT Act, we must obtain your full legal name, physical address, social security number and date of birth.
  • Income
    • Prior year W-2
    • Current pay stub showing year-to-date earnings
    • Tax returns if self-employed
  • Financial statement – a list of all owned assets and list of liabilities showing company owed, balance owed, and monthly payment
  • Property information
    • If purchasing, a copy of the executed sales contract
    • If refinancing, a copy of the deed and information on existing mortgage.

All applicants (co-borrowers) must provide the above information.

How much house can I afford?

Many factors affect the home price that you can afford. We provide a pre-qualification to help you determine your borrowing capacity. You can also use our convenient mortgage rate calculators to provide a general idea of your financial situation. Our loan officers are happy to help determine how much house you can afford.

What key issues arise when buying a home?

Purchasing a home is likely the biggest investment you will make. Here are some important factors to consider:

  • Pre-approval makes the process smoother. As a pre-approved buyer your offer carries greater credibility with sellers and realtors. The entire loan process is simplified. Once a contract is negotiated, we need only review the property information to issue a final loan approval.
  • Review your Loan Estimate. Within three business days of receiving your loan application, we provide you a written estimate of fees and charges associated with the transaction. This lets you determine what you’ll pay for your loan.
  • Obtain a professional home inspection. Hire a reputable home inspection company to conduct an inspection and provide a report. This report will examine critical home elements including roof, structure, plumbing, and electrical systems. A pest inspection report or bond also protects you.
  • Homeowners insurance is required at closing. Homeowners insurance protects you against unexpected property damage.

 

Should I refinance?

Please consult the refinance calculator to see if refinancing is right for you.  For more information contact a loan officer for assistance.

How do I access the equity in my home?

  • Obtaining a Home Equity Loan/Line of Credit
    • Apply for only the amount of credit you need. Too large a credit line can reduce your credit score and limit your ability to obtain other loans. You may be able to borrow up to 85% of your home equity.
  • Typical uses for a home equity loan/line of credit:
    • Prepare for unexpected emergencies and future purchases.
    • Consolidate debts and reduce monthly payments.
    • Reduce your tax burden by exchanging non-deductible interest payments for payments that may be deductible (see your tax advisor).
    • Ready cash for your needs such as vacations, college education, or remodeling.
  • Understand the difference between an equity loan and an equity line.
    • An equity loan is a second mortgage. You receive all your money up front and make fixed payments until it is paid in full. Examples include home improvement, a new car purchase, and debt consolidation.
    • An equity line is a loan in which you access your money anytime and re-borrow up to your limit as it is paid back with flexible terms. Examples include events requiring the periodic need for money or money for a future event such as college tuition.
  • Consult with your tax professional for advice on the tax-deductibility of the interest on your loan. In many instances your home equity loan interest is tax deductible.

What is a credit score?

A credit score is a method of determining the likelihood that credit users will pay their bills; it’s become widely accepted by lenders as a reliable means of credit evaluation. A credit score attempts to condense a borrower’s credit history into a single number.

Credit scores analyze a borrower’s credit history considering factors such as:

  • Late payments.
  • The amount of time credit has been established.
  • The amount of credit used versus the amount of credit available.
  • Length of time at present residence.
  • Employment history.
  • Negative credit information such as bankruptcies, charge-offs, collections, etc.
  • Credit scores are computed by the three bureaus: Experian, Trans Union and Equifax.

How can I increase my score?

Increasing your score over the short run is difficult, but you can improve your score over a period of time by following these tips:

  • Pay bills on time. Late payments and collections have a serious impact on your score.
  • Do not apply for credit frequently. Previous inquiries on your credit report can reduce your score.
  • Reduce your credit card balances.
  • If you have limited credit, apply for additional credit. Insufficient credit history can negatively impact your score.

If you would like to know your credit score or to correct errors in your credit report, contact one of the three credit bureaus in the U.S.:

Equifax (1.800.685.1111)

Trans Union (1.800.916.8800)

Experian (1.888.397.3742)

How can I obtain my annual credit report?

Annual Credit Report

Obtaining an annual free credit report is determined by your state of residence based on the rollout schedule set by federal law.

Can my loan be sold?

Yes. We participate in the secondary mortgage market to assure a plentiful supply of mortgage funding. The purchaser of a loan assumes all terms and conditions of the original loan.

What is Private Mortgage Insurance (PMI)?

PMI is normally required when you buy a home with less than a 20 percent down payment. PMI protects lenders in case of a loan default and allows us to offer loans with lower down payments.

What are points?

A point is a fee paid to lenders. 1 point = 1 percent of the loan amount. On a $100,000 loan, 1 point is $1,000. Paying points at closing usually reduces the interest rate on the loan.

What is an annual percentage rate (APR)?

APR takes certain loan costs into consideration as financing costs and displays a rate that includes these costs. Your APR is shown on your Loan Estimate.