FAQHow will I know how much I can qualify for?We can work with you to get you pre-approved BEFORE you look for a home. Based upon information you present to us on the loan application and a credit report, we will determine the approximate amount of money that you will be allowed to borrow. You will be "pre-approved" for that loan amount. This will allow you to make an offer on a home, if you desire.Then what's the process?Once you have a ratified sales contract, let us know and we will begin the processing of your loan. This will involve requesting the necessary documentation from you verifying your income and assets and, necessary disclosure forms. We will order the appraisal for the property and submit all the information to an underwriter for a full approval. Once approved, we will coordinate your settlement with your title company and realtor and you will be a new home owner!If you are refinancing, the process remains much the same – we will take an application, run a credit report and request the documentation to verify your information. Most programs require an appraisal and we will coordinate with your selected title company to schedule your closing. What are income and debt ratios?The Income Ratio is your total monthly housing expense divided by your gross monthly income (before taxes). The Debt Ratio is your total monthly housing expense PLUS any recurring debts (i.e. monthly credit card minimum payment, car payments, or other loan payments) divided by your income. Standard underwriting suggests a maximum guideline of 28% on the Income Ratio and 36% on the Debt Ratio, but these ratios can vary based on the loan program, the financial strength of the borrower, and the down payment.Can I qualify for a VA Loan?VA loans, guaranteed by the Veteran's Administration, are for veterans who meet certain criteria. VA loans do not require any down payment and in some cases the seller may be willing to pay all or part of the closing costs. This allows the veteran to purchase a home with little or no money down.To find out if you qualify for a VA loan, ask your loan officer for an 1880 form for you to complete. After you have completed this form, take it and your discharge papers (or DD214) to your local VA office to determine your eligibility. Active military personnel may also be eligible for a VA loan. What does "loan to value" mean?Loan to value (LTV) is the loan amount divided by the lesser of the sales price or appraised value. For example, if you are paying 15% of the total cost of the home as a down payment, you would only be borrowing 85% of the total sales price from the lender. Therefore your LTV would be 85%.What is the Annual Percentage Rate on my Truth in Lending Document?The Annual Percentage Rate (APR) is the cost of your credit expressed as an annual interest rate. Points and other prepaid finance charges are factored into the APR to show the true yield on the loan, which is why the APR is often higher than your note rate. The APR can be compared to the APR on other loan programs to give you a consistent means of comparing rates and programs.What is a discount point?A discount point is paid to the lender to permanently buy down or lower an interest rate. It is usually a percentage of the loan amount.What is prepaid interest?This is the interim interest that accrues on the mortgage loan from the date of the loan closing to the beginning of the period covered by the first monthly payment. For example, if your closing date is scheduled for June 15, the first mortgage payment is due August 1st. The lender will calculate a per-day interest amount that is collected at the time of closing. This amount covers the interest accrued from June 15 to July 1.What is an Adjustable Rate Mortgage (ARMs)?An adjustable rate mortgage is considerably different from a fixed rate mortgage. ARMs have only been around since the early 1980s. They were created to provide affordable mortgage financing in a changing economic environment.An ARM is a mortgage where the interest rate changes at preset intervals, according to rising and falling interest rates and the economy in general. In most cases, the initial interest rate of an ARM is lower than a fixed rate mortgage. However, the interest rate on an ARM is based on a specific index (such as U.S. Treasury Securities or LIBOR). This index reflects the level of interest rates and allows the lender to match the income from your ARM payment against their costs. It is often selected because it is a reliable, familiar financial indicator. Monthly payments are adjusted up or down in relation to the index. Most ARMs have caps-limits the lender puts on the amount that the interest rate or payment may change at each adjustment, as well as during the life of the mortgage. With an ARM, you typically have the benefit of lower initial rates for the first year of the loan. Plus, if interest rates drop and you want to take advantage of a lower rate, you may not have to refinance as you would with a fixed rate mortgage. An ARM may be especially advantageous if you plan to move after a short period of time. What is a FICO score?A FICO score is a credit score developed by Fair, Isaac & Co. Credit scoring is a method of determining the likelihood that credit users will pay their bills. Fair, Isaac & Co. began its pioneering work with credit scoring in the late 1950s and, since then, scoring has 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. What is the difference between First Savings Mortgage and a Bank? First Savings Mortgage is considered a private mortgage banking firm. We have funded over $31 Billion in closed loans to date and we offer top notch personal service with in house pricing, processing, underwriting, and closing. We are a lender, not a mortgage broker. Our loan officers are the most experienced and productive in the industry. By specializing only in residential lending, our sole focus is your loan.What is the difference between First Savings Mortgage and a Bank?First Savings Mortgage is considered a private mortgage banking firm. We have funded over $31 Billion in closed loans to date and we offer top notch personal service with in house pricing, processing, underwriting, and closing. We are a lender, not a mortgage broker. Our loan officers are the most experienced and productive in the industry. By specializing only in residential lending, our sole focus is your loan. |