Fixed Rate Loans FAQ

What information do I need to provide when I apply for a fixed-rate home loan?

When you’re ready to apply, you need the most current information on your monthly income and debt, a total of your assets, your Social Security Number and employment information. If you are refinancing, you will need to provide a copy of your homeowner’s insurance policy and your last property tax bill. For a complete list, please contact a loan officer.

How long will the fixed-rate loan process take?

Loan approval and closing times vary depending on the type of transaction and the complexity of your personal finances. The process can take, on average, anywhere from 14 to 60 days. After you and your loan officer review your application together, the loan officer can give you a better idea of the timeline.

What is a rate lock-in?

The lock-in represents the interest rate you choose at the time of your application and will be the interest rate used to calculate your monthly payment at the time of your loan closing. The lock-in secures the interest rate during the process of your loan approval as long as your loan is processed and closed prior to the rate expiration date. Most rates are locked-in for 30 days, but others can be locked-in for up to 180 days, depending on the loan program. If you expect interest rates to rise, then it is a good idea to lock in a rate ahead of time.

May I pay off my loan early and/or may I pay extra each month?

Yes, you may make principal payments at anytime during your loan term. You may also pay a set amount each month above the normal payment due or make lump sum payments periodically.

What is an escrow account?

An escrow account is an account maintained by the lender to collect funds from the borrower in order to pay the taxes and property insurance due on the loan.

What is PITI?

PITI represents how your loan payment is distributed when you make your mortgage payment:

P – Principal

I – Interest

T – Taxes

I – Insurance

What is a conventional loan?

A conventional loan is a mortgage not guaranteed by VA or insured by FHA, FMHA or State Bond Agencies.

What is a jumbo loan?

A jumbo loan is a conventional loan that exceeds the maximum agency (Fannie Mae, Freddie Mac) mortgage amount guidelines for a conventional loan. This amount is currently set at $417,000.

What is PMI?

This stands for Private Mortgage Insurance. PMI is required if you borrow over 80.0% of your appraised value/sale price (lender must use the lower of the two values). This protects the lender against financial loss if the loan is defaulted. Some loan programs do not require mortgage insurance. Your loan officer will review all the possible loan programs that fit your individual situation, and you may qualify for one of the no-mortgage insurance loans.

What documents will I receive at my fixed-rate loan closing?

At closing you will sign and receive copies of all legal documents that will be recorded and placed on record regarding the property that you are purchasing or refinancing. Also, you receive all pertinent information regarding your mortgage payment (including a copy of your appraisal) and servicing information for your new loan. If you have questions before the loan closing, don’t hesitate to ask your loan officer or a member of our lending staff.

What is an origination fee (or points)?

A loan origination fee is sometimes called a “point” or “points.” It covers the lender’s administrative costs in processing the loan. Often expressed as a percentage of the loan, the fee will vary among lenders. Generally, the buyer pays the fee, unless otherwise negotiated.