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The Process: Questions Typically Asked


Why do I need a preapproval or prequalification letter?

How do you use the personal information I enter on this site? Can you guarantee my privacy?

Why is an appraisal necessary? Can't I just use the tax value of the home?

How much of a downpayment will I need?

When should I start the mortgage process and how do I know what I can afford?

Do I need to sell my existing home before I apply for a new mortgage loan?

Do you offer first-time homebuyer programs?

Why is the Annual Percentage Rate (APR) different from the interest rate?

Why do I need private mortgage insurance (PMI)?

Who can tell me what my property taxes will be?

What is a Good Faith Estimate?

Can I apply for a loan before I've found a property?


 
How do you use the personal information I enter on this site? Can you guarantee my privacy?
We respect the fact that a mortgage loan application contains confidential information which needs to be treated responsibly and with care, just as we would treat private information entrusted to us by a close friend or relative. For that reason, we use the most advanced security system available in all of our Internet based communications, and in the management of personal records. For details on the information we collect and the reason we collect it, how we protect your information, and the security methods we use, visit the "privacy and security" link on our home page.

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Why is an appraisal necessary? Can't I just use the tax value of the home?
Appraisals compare your home to other homes in your area that have recently sold. Tax values obtained from your taxing authority can sometimes be higher or lower and may not reflect the actual appraised value of the home. An appraisal is necessary for the lender to justify the loan amount being requested, as required by secondary investors. You should not rely on the appraisal for assurance about the condition of your home.

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How much of a downpayment will I need?
The minimum downpayment required depends on the program you select. We offer loans with various downpayment options, including no downpayment and low downpayment programs.

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When should I start the mortgage process and how do I know what I can afford?
The best time to look for a mortgage is before you look for a house. This enables you to determine the amount of money you can borrow and how much house you can afford. The calculators on our site make it easy for you to determine how much you can afford and what your monthly payments may be. If you go into our Pre-Approval section you can request a pre-approval. If you are pre-approved, you will receive a letter that you can take with you as you shop for your home.

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Do I need to sell my existing home before I apply for a new mortgage loan?
No. You can apply for a new mortgage loan before you sell your current home. However, depending on your income and debt levels, you may be required to sell your current home before you can close on your new loan.

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Do you offer first-time homebuyer programs?
Absolutely! For many first time homeowners, the downpayment is the biggest obstacle to homeownership. If this is the case for you, we have many programs to assist you. When you are in the pre-qualification section of our site, select "no downpayment," "low downpayment," and "FHA" options to view these programs.

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Why is the Annual Percentage Rate (APR) different from the interest rate?
The annual percentage rate is a rate that reflects the total cost of your mortgage loan expressed in terms of an annual interest rate. The APR reflects factors including the interest rate on your mortgage loan, the term of the loan, and the other applicable costs of financing such as points, fees and certain closing costs. Your monthly payment is calculated based on the mortgage note rate, not the APR. The APR will be higher than your interest rate, especially if you are paying any points.

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Why do I need private mortgage insurance (PMI)?
Private mortgage insurance (PMI) is an actual insurance policy that the lender takes out to protect themselves if the borrower defaults on the loan. This protects the lender and at the same time, enables buyers with minimal downpayment the opportunity to purchase a home.
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Who can tell me what my property taxes will be?
The seller and/or your realtor should be able to provide you with the current property taxes for the property. Property taxes are reassessed from time to time so this amount may change.

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What is a Good Faith Estimate?
The Good Faith Estimate (GFE) discloses estimated costs associated with your mortgage transaction. The GFE, by Federal law, estimates the lender’s charges along with the local closing agent's charges and fees. The GFE also includes estimated amounts for real estate and property taxes and homeowner's insurance. You should receive this within 3 days of completing your loan application as stated by Federal law.

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Can I apply for a loan before I've found a property?
Yes! You have the opportunity to get pre-approved for a mortgage today. A pre-approval will take into consideration your personal information such as income, debt and credit history. If you receive a pre-approval, we will use this information to determine your maximum loan amount. Once you find a property we can complete the remaining pieces of the application.

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