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FAQ's Getting a Loan

 

How can I decide what type of financing makes sense for my situation?

Many financing options are available, so a good way to determine which loan type best suits your unique needs is to talk with an experienced mortgage professional. Things to consider include details such as how long you plan to stay in the home, current and projected income and debts, credit history, and cash available to close, as well as property location and income characteristics that may make you eligible for specialty loan programs.

What is the difference between prequalification and preapproval?

Prequalification simply determines the maximum purchase price of a house that a buyer is qualified to purchase, based on the income and debt information provided verbally to a mortgage professional. This prequalifying step is not a commitment to borrow or lend money, as the information provided by the buyer must still be verified. Preapproval means the lender is willing to grant a loan based on an in-depth financial assessment, such as income and debt review, employment verification and review of tax returns.

Why should I get prequalified or preapproved?

Prequalification is a quick way to determine what types of homes are realistically in your price range. Preapproval can help facilitate the purchasing process by reducing the length of time it takes to close the transaction, as many sellers require buyers to be preapproved before accepting an offer.

Does it make sense to get prequalified if I'm refinancing?

Yes. Prequalifying helps you determine if your refinance amount is achievable, especially if you're trying to get cash back from your home equity.

Are there loan options available that do not require a down payment?

Yes, some loan programs offer a no-down-payment option. For more information on loan options, see the Loan Types section of our website or contact one of our mortgage professionals.

 Can closing costs be rolled into my loan if I refinance?

Yes, all closing costs can generally be included in the loan amount on a refinance. Exceptions include streamline refinances and cases in which the borrower's equity is not large enough to accommodate these costs. Talking with an experienced mortgage professional is a good way to understand available refinancing options.

How can equity in an existing home be used toward the purchase of a new home?

Home equity can be used to buy a new home in several ways, such as second mortgages, home equity lines of credit, bridge loans or trade equity. Each option has a different impact on borrower qualifications, and costs for each option vary. Talking with an experienced mortgage professional is the best way to understand available refinancing options.

What is an appraisal?

A real estate appraisal is a professional written analysis of a property's market value. It helps establish the likely sales price of the property in a competitive real estate market. Mortgage lenders require an appraisal when a property will be used as collateral for a loan, to make sure that the property could potentially be sold for at least the amount of the loan.

What is a home inspection?

A home inspection is a professional review of the condition of a home, and it helps the buyer uncover defects before a home is purchased. The results of an inspection can assist the buyer in negotiation of the final purchase price or terms. If the inspector finds problems with the home, the lender may require repairs to be made before the loan can close. It is important to note that an inspection is not the same thing as an appraisal.