Personal » Lending Solutions » Home Loans » Resource Center » FAQs FAQs Which mortgage program is the best for me? Since many different factors determine which mortgage program is best for you, it is best to consult with a mortgage originator. A mortgage originator will help you answer this question by considering some of the following: What are your current finances? How long do you plan on living in your new home? What are your future goals? What is a Pre-Qualification? A Pre-Qualification is the first step in determining which program best suits your personal financial situation and goals. A Mortgage Originator will ask you about your income, available funds for down payment and pull your credit report. Once this information is available, your mortgage loan originator will be able to assess your pre-qualification and present financing options to you. What are closing costs? Closing costs are fees charged for services performed in connection with your loan closing. These fees will generally (this is not an all-inclusive list) consist of the following: Title company fees (title search, title insurance, recording and escrow fees) Real Estate Agent commissions (most commonly paid by the seller) Lender Fees Courier Fees Document Preparation Fees What does it mean to Escrow? Your lender will set up an account to hold your monthly payment of taxes and insurance, which are included in your monthly mortgage note. Each month your escrow payments will be deposited into this non-interest bearing account, and funds will be withdrawn to pay the tax bill and insurance premiums when they become due each year. What is LTV? LTV is an abbreviation for the term Loan-To-Value. The LTV is the difference between your loan amount and the value or purchase price of the property. For example, if you are purchasing a home for $100,000 and are borrowing $90,000 your LTV is 90%. What is an Interest Rate? An interest rate is the rate at which interest is paid by a borrower for the use of money they borrow from a lender. What is an APR? The term APR (Annual Percentage Rate) is the interest on the loan annualized, and must include certain fees paid by the consumer to obtain the loan. What is an amortization schedule? An amortization schedule will give you a detailed table for each regular payment. The table will provide a breakdown of how much of your payment is going to principal vs. interest and then computes the balance for the life of the loan for each. What does it mean to Lock-In my Interest Rate? Whenever you decide to proceed with the chosen mortgage program and your loan application is completed, you will be given the opportunity to Lock-In the current Interest Rate. This will guarantee that Interest Rate for a length of time and you will not miss out on that rate if rates should rise. When should I Lock my rate? Once you have decided on a mortgage program and the amount (if any) of your down payment, you should consider a Rate Lock. How long can I Lock-In my rate for? Interest rates can be locked for as little as 15 days or as long as 60 days. It all depends on how long you and your mortgage loan originator feel is needed to get the necessary paperwork together. How long will the loan process take? Expect anywhere from a few weeks to 45 days for a typical mortgage transaction. The time needed to consummate a loan differs greatly depending on the program you are applying for. What is hazard insurance? Hazard insurance is also known as homeowners insurance. A typical Hazard insurance policy will also include coverage for “wind and hail”. Hazard insurance is required in order to obtain a mortgage loan on your home. A basic policy provides coverage for hazards such as, wind, hail, fire and other hazards that can cause damage to the home. What is private mortgage insurance? Private Mortgage Insurance is an insurance policy which is required when the equity or down payment is less than 20% of the value or purchase price. Mortgage Insurance provides some protection to the lender in the event of default or foreclosure. What is a Form 4506, 8821, and 9501? These are all IRS forms which allows lenders to obtain your income tax transcripts for verification purposes. Can I change the loan amount or program after I have applied for a loan? Absolutely! It is important to understand that these changes could affect the time needed to close, the amount of closing cost needed at closing, the interest rate and the APR.