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How do I know what type of mortgage is best for me?
The best answer to this question can be answered
by your loan specialist, however here are items for
you to consider:
- Your current financial picture
- How long you intend to keep your house.
- Do you expect your finances to change?
For example, If you, the borrower, plan to keep
the property for only two years, you may want to
choose an ARM loan. With the ARM loan, the rate
adjusts after a specific period of time, normally
two years.
How do I know what my loan rate will be?
Mortgage rates vary based on the type and purpose of
the loan, your credit history, income, loan amount,
and value of the property.
How do I
qualify for a loan?
Lenders use specific criteria to determine if you
qualify and the loan amount for which you qualify.
For example, credit scores, income, employment
history, assets, debt to income ratio, etc. With
Mortgage Investors of Knoxville, we have made it
easy for you. You can apply quickly online or by
calling us at 865-588-4473. Simply complete the
online application and receive a pre-approval within
24 hours.
How much can
I borrow?
Income, debt, and mortgage payments are the
primary factors that affect whether you qualify for
a loan. Your loan specialist will be able to tell
you the amount you are pre-qualified for after
having you complete the loan application. You may
complete an online application or give us a call at
865-588-4473, and we can take your application by
phone.
How
do I refinance my existing loan?
You may want to refinance your loan to obtain a
lower interest rate or to receive cash-out to pay
off debt, home improvement, or any other large
expense. It’s so simple… just apply online or call
865-588-4473, and we will get a better rate or get the cash you need for
those extra major expenses.
What are closing costs?
Closing Costs are payable by both seller and
buyer at the time of loan settlement (close of
escrow), when the purchase or refinance of a
property is finalized.
These costs usually include but are not limited
to the following:
- Title search and insurance, escrow fees
- Sales commissions (Realtor)
- Origination fee
- Discount points
- Recording fees
- Courier charges
- Processing and document preparation fees
What is a Credit Score?
Credit scores are numeric representations of your
credit profile. The higher the score the better
credit risk you are, from a lender’s point of view.
You can be denied a mortgage loan if your score is
too low.
These scores have been around for several years
but started to be used in the mortgage lending
business in 1995.
- They are based on years of computer
"modeling" aimed at predicting who might be a
good or bad credit risk.
- Their purpose is to reduce the cost of
examining a credit report and speed mortgage
approvals.
- Important negative factors are:
bankruptcies, delinquencies, credit lates,
collections, "too much" credit, or too little
credit history.
What is a buy-down?
A “buy-down” is where the buyer, seller or lender
pays additional discount points in return for a
below market interest rate. During times of high
interest rates, buy-downs may induce buyers to
purchase property they may not otherwise have
purchased.
What is the origination fee?
The amount charged to originate and close a
mortgage loan. Origination fees are usually
expressed in points, however, some companies may
state a portion of the fees as origination fees plus
points.
What is an escrow account - or - an impound
account?
When borrowers make their monthly mortgage
payments, they usually also make a payment towards
the anticipated annual amount needed to pay taxes
and insurance premiums. These funds are placed in an
escrow account (also known as Impound account),
until the lender pays the taxes and insurance as
they become due.
What is the APR?
APR is an acronym for Annual Percentage Rate. It
is the actual interest rate, taking into account
points and other finance charges, for the projected
life of a mortgage. Disclosure of the APR is
required by the Truth-In-Lending Law and allows
borrowers to compare the actual costs of different
mortgage loans.
What is amortization?
An amortization is the reduction of a debt by
regular, usually monthly, installments of principal
and interest.
Lock-in, what is that?
A lock-in is the guarantee of a specific interest
rate for a specific period of time. An interest rate
can be "locked in" for a set amount of time - the
shorter length of time for the lock in, the lower
the cost in points - our loan specialists can help
you determine the optimal amount of time based on
your needs and goals.
When can I Lock-in the interest rate?
Generally, as soon as you complete your loan
application. You should notify your loan agent that
you would like to lock or float. Remember, the
shorter the time of the lock in - the lower the
points.
How long are lock-ins valid?
The lock-in should be long enough to allow for
the loan to close escrow. Some examples of lock-in
terms are for 10, 15, 30, or 45 days; locks are
available for longer terms as well, but again, at a
higher cost for the amount of time forward.
How long will the loan process take?
Once you apply, we will begin to verify all the
information you provided. Time delays can occur if
you or outside sources do not provide documents to
the lender in a timely manner. Be sure to respond
promptly to requests for information while
processing is taking place.
Where do I go to sign up for my loan - close
my escrow?
This service is usually provided by a third
party; such as a title/escrow company, or an
attorney. Funds taken to escrow by the borrower
usually need to be in the form of a cashier's check.
This can be discussed once the closing date has been
established. Most lenders will handle all of the
details for you.
What is PITI?
An abbreviation for principal, interest (on the
mortgage loan), property taxes and insurance - the
total amount of those items.
What is hazard insurance?
A form of insurance that protects the insured
property against physical damage such as fire.
Mortgage lenders often require a borrower to
maintain an amount of hazard insurance on the
property that is equal to at least the amount of the
mortgage loan.
Is there a prepayment penalty if I pay the
loan in advance?
Check with your loan specialist, most allow you
to pay off the entire loan or make additional
payments any time without penalty.
What does LTV stand for?
LTV is an acronym for Loan-to-Value. This is the
relationship, expressed as a percentage, between the
amount of a loan and a property's value or sales
price. For example, a $75,000 loan on a property
appraised at $100,000 is a 75% LTV.
What is the difference between a fixed-rate
and an adjustable-rate mortgage?
A fixed rate mortgage is a mortgage that has an
interest rate that stays fixed for the life of the
loan. On an adjustable rate mortgage the interest
rate changes based upon a specific financial index
(such as Government Treasury bill rates) and
payments may go up or down based on the movement of
that index.
What is private mortgage insurance?
This insurance protects lenders against loss due
to foreclosure or loan default. Mortgage insurance
is required on conventional loans with less than a
20 percent down payment or equity at closing of less
than 80% loan-to-value.
Private mortgage insurance, who pays for it?
It is typically paid monthly by the borrower as
part of their monthly mortgage payment. Some lenders
have programs in which they pay for the private
mortgage insurance; however, your interest rate will
generally be higher for these programs.
Why do interest rates go up and down?
Because lenders pool loans into securities and
then sell them in "the secondary market" they are
competing with the entire pool of worldwide
investment opportunities like treasury bonds,
stocks, etc.
Any inflationary news can trigger investor moves
that trigger smaller values for fixed-rate
securities. This would cause a rise in mortgage
interest rates. Many additional factors, too
numerous to mention here, can also affect interest
rates. Markets move on emotions, thus no one can
really tell what will happen on a day to day basis.
After I send my paperwork back, what happens?
Your loan will be reviewed or pre-underwritten.
Once it's submitted to the final lender, there may
be additional needs. We will, of course, try to
anticipate those and make the process easy for you.
What about the appraisal?
We'll arrange for an appraisal of your property
and will use your estimated value as a guideline.
The appraisal must be paid COD. |
