FAQs Related to Loan StatusFAQ: Status

 

Questions About The Status of
Your Loan Application


What does it mean to have a floating rate and what does it mean to lock-in a rate?

What is rate protection and how does it work?

When can I lock my rate?

Can I change my mind and decide against taking the mortgage loan after I've locked in my interest rate?

What if interest rates fall after I lock my rate?

How much title insurance do I need?

Where do we go to close the loan?

Who chooses the Title company?

When will the appraiser complete the appraisal?

Are the fees that are collected at the time of application refundable?

Can I bring a personal check to the closing?

Do we need a termite inspection?

I completed my application form online and received your application package in the mail. Some of the information in the application package is incorrect. Do I need to have a whole new package sent out?

What is a 4506 form?

What is a VA Funding Fee?

If I can finance 100% of the sales price, why can't I finance the closing costs on a VA loan?

I already put earnest money down on the property. Is this included on the good faith estimate?

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

Why do I need private mortgage insurance (PMI)?

Who can tell me what my property taxes will be?

How often do rates change?

Are discount points tax deductible?

What happens if my loan does not close before the lock expiration date?

What are points?

Why is the number of points associated with a rate sometimes a negative number?

What is a balloon mortgage?

Can I change the loan amount or program after I've applied for a loan?

What is a Truth in Lending statement?

What homeowner's insurance is required?

Do I need flood insurance?

How often do interest rates change?

How do I know if I need flood insurance?


 
What does it mean to have a floating rate and what does it mean to lock-in a rate?
Due to market fluctuations, interest rates are subject to change daily. In order to obtain a specific rate/point combination you must "lock in" your rate by speaking to your loan consultant or loan counselor. When you choose to lock-in the interest rate, you select the current rate and point combination for a particular product. You are locked into that rate as long as your loan closes by the predetermined expiration date. Your monthly mortgage payments will be calculated based on your locked in interest rate.

Until you lock in your interest rate you can monitor the current floating rates displayed on this site. The rates displayed on this site are for loans that are locked in and will close in 21 days. The earliest date you can lock in varies from program to program. However, with all programs you must lock-in at least five days prior to closing.

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What is rate protection and how does it work?
When you select a loan program that has a rate protection program, the lender set an interest rate and guarantees your rate will not rise above that capped rate. If the rates go down, your interest rate "floats down" with them. Usually your interest rate must be locked no later than five days prior to your scheduled closing date in order for you to take advantage of the lower rate. For purchases, you have a one-time option to "float down" to a lower interest rate. If rates increase, you will close at the capped rate therefore you are protected from the increase. Until you lock in your interest rate you can monitor the current floating rates displayed on this site. The rates displayed on this site are for loans that are locked in and will close within 60 days. The length of protection offered varies from program to program.

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When can I lock my rate?
The earliest date you can lock in varies from program to program, but a majority of our programs allow you to lock in the day you receive a quote. However, with all programs you must lock-in at least five days prior to closing. In accordance with state laws, in some states you need to lock 7 days prior to closing.

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Can I change my mind and decide against taking the mortgage loan after I've locked in my interest rate?
You have the option to withdraw your loan application at any time, even after locking an interest rate. Fees you have paid to the lender for conventional loans are not refundable. Some of the fees paid for government loans may be refundable.

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What if interest rates fall after I lock my rate?
Once you lock the rate, it can't be changed. For that reason, it's important to consider carefully the timing of your rate lock, study the market and be sure you're comfortable with the trends you see before you lock.

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How much title insurance do I need?
The amount of title insurance needed is based on the value of your home and the amount of your mortgage. Title insurance guarantees the lender and/or the owner against the possibility that there may be an unknown lien or discrepancies in ownership on the property they are purchasing. Lenders need to be covered for the full value of the mortgage; this policy is required and will vary from state to state. There is a one-time fee for the policy that is paid at closing. You can obtain a separate owner's insurance policy to cover the full value of your home. However, this additional policy is not required.

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Where do we go to close the loan?
You will go to a local title company or attorney who will perform the closing. All your mortgage documents will be waiting for you at closing.

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Who chooses the Title company?
We have a network of title companies that we work closely with. We can select one from that list or you can choose one yourself. In some states, the seller selects the title company.

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When will the appraiser complete the appraisal?
We will arrange a date and time for the property appraisal after receiving your deposit. If you are refinancing your home, the appraiser will contact you directly in order to gain access to your house. If you are purchasing a home the appraiser will contact the real estate agent to gain access to the home. Once the appraisal is complete, the appraiser will send us the results, and your loan counselor will contact you. This generally happens 7-10 days after the appraisal date.

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Are the fees that are collected at the time of application refundable?
Typically no deposits are required by Associate Mortgage.

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Can I bring a personal check to the closing?
You will need a cashier’s check or certified check for closing.

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Do we need a termite inspection?
For conventional loans, the investor or lender will require a termite inspection if there are visual signs of infestation.

All government loans require a pest inspection on any structure that is ground level or of total wood construction (including condos). The following locations are exceptions to this rule: Ark., Colo., Idaho, Maine, Northern Mich., Minn., N.M., Mont., Northern N.Y., Ore., S.D., Wash., Wis., Wyo. In some cases, the appraiser may still request an inspection in the above areas if there is a possibility of infestation.

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I completed my application form online and received your application package in the mail. Some of the information in the application package is incorrect. Do I need to have a whole new package sent out?
No, you can make any necessary changes right on the application itself. We will update our records and provide you with a corrected copy of the application at closing.

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What is a 4506 form?
A 4506 form is an IRS form that authorizes the mortgage lender to obtain copies of tax returns directly from the IRS on the borrower.

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What is a VA Funding Fee?
It is the fee the Veteran’s Administration charges to fund the program and guarantee the loan.

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If I can finance 100% of the sales price, why can't I finance the closing costs on a VA loan?
The Veteran’s Administration does not permit the loan amount to exceed the value of the home. Therefore, 100% of the sales price can be financed, but all other costs must be paid at closing.

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I already put earnest money down on the property. Is this included on the good faith estimate (GFE)?
Yes. Any earnest money paid is listed under "Prepaid deposit for property" on the GFE. If you notice any discrepancies between the amount you paid and the amount showing, notify your loan counselor, who can make any necessary adjustments.

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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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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. You may also contact the assessment office or find this information online. Property taxes are reassessed every year so this amount may change.

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How often do rates change?
Due to market fluctuations, interest rates are subject to change daily. The interest rates shown on this site are not updated daily at this time. But rates are updated by 2 p.m. most days and requests to lock rates can be made up until 6:00 p.m. with a mortgage loan consultant via telephone, these rates are typically for 21 days but can be given for longer lock periods. Please call us to inquire about interest rates on loans that will close more than 21 days from now. Rates on loans closing more than 21 to 35 days from now may be higher. By submitting your loan information to us via this Internet site, you are not selecting and locking-in to a specific interest rate.

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Are discount points tax deductible?
In many cases they are. We recommend that you contact your tax preparer or the IRS to obtain a qualified opinion on the deductibility of points.

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What happens if my loan does not close before the lock expiration date?
When you lock-in your interest rate, you are guaranteed to receive that interest rate as long as you close your loan by the specified expiration date. If your loan closes after the specified expiration date, you are no longer guaranteed your locked-in interest rate. Instead, you will receive the higher of the current market rate or your locked-in rate. Note that you can not receive a lower rate by allowing your lock to expire.

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What are points?
One point is one percent of the loan amount (for example, on a $100,000 loan, 1 point = $1,000).

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Why is the number of points associated with a rate sometimes a negative number?
If the number of points associated with a rate is negative, this means that the lender will pay those points to the borrower at closing instead of the borrower paying points to the lender. These funds are applied toward closing costs and offered in exchange for a slightly higher interest rate.

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What is a balloon mortgage?
A balloon mortgage is a mortgage that is amortized over the full term of the loan repayment period but at the end of a specified period the balance of the mortgage comes due. Thus, a balloon payment needs to be made. For example, with a 7-year balloon you would make monthly payments for seven years that have been calculated based on a 30-year mortgage payment. At the end of the 7 years, the remaining principal balance would be due and payable in full.

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Can I change the loan amount or program after I've applied for a loan?
Yes as long as you meet the criteria for the new loan amount or new program you’ve selected. Your loan consultant can help you determine if you meet the requirements.

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What is a Truth in Lending statement?
The Truth in Lending statement provides detailed information about the interest charges that you will incur. It defines the cost of your loan expressed as the APR, the amount of interest you’ll pay in dollars, and the total of your payments if you make the minimum payment required over the life of the loan.

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What homeowner's insurance is required?
Your homeowner’s insurance policy should cover the cost to rebuild the home as well as the cost to replace the internal contents. This insured amount may be higher or lower than the actual purchase price as long as it meets the program requirements. The insurance company you choose can give you an actual quote based on specific information about the property.

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Do I need flood insurance?
Most standard homeowner’s insurance policies do not cover loss due to flood. Loan programs require that if your home is located in a flood hazard area you must purchase flood insurance. If you choose, you can obtain flood insurance coverage even if you are not required to do so by the lender.

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How often do interest rates change?
Due to market fluctuations, interest rates are subject to change daily. The interest rates shown on this site are not updated daily at this time. But rates are updated by 2 p.m. most days and requests to lock rates can be made up until 6:00 p.m. with a mortgage loan consultant via telephone, these rates are typically for 21 days but can be given for longer lock periods. Please call us to inquire about interest rates on loans that will close more than 21 days from now. Rates on loans closing more than 21 to 35 days from now may be higher. By submitting your loan information to us via this Internet site, you are not selecting and locking-in to a specific interest rate.

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How do I know if I need flood insurance?
Most standard homeowner’s insurance policies do not cover loss due to flood. The law requires that if your home is located in a Flood Hazard Area you must purchase flood insurance. If you choose, you can obtain flood insurance coverage even if you are not required to do so by the lender. The law requires lenders to do a flood hazard determination on all properties securing a mortgage.

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