Find the credit and lending answers you need.
Below you'll find links to some commonly asked questions regarding credit and lending, rates, fees, application processes, property appraisal and closing.
Credit and Lending Questions
The amount of mortgage loan you qualify for will vary depending on factors such as the particular loan program and applicable interest rate, the subject property, your credit history, income, job stability, debt-to-income ratio and assets. Your loan specialist can calculate a possible loan amount for you.
APR is an acronym for Annual Percentage Rate. This calculation is required by law and represents the cost of credit that includes interest and a portion of your closing costs. An estimated APR appears on the initial Truth in Lending Disclosure that is provided to you after you have applied for a loan. Because the APR shows the overall cost of the loan as a percentage, you can compare the relative costs of similar loans.
The APR is not used to calculate your monthly payments and should not be confused with your actual interest rate, which is used to calculate your monthly payments.
Private Mortgage Insurance (PMI) may be required if your down payment is less than 20% of the purchase price. This insurance is used as a safety net for the lender in the event that a borrower defaults on the loan. The percentage of required PMI each month depends upon the loan amount, the type of loan and the down payment. There is a loan alternative that does not require payment of PMI. Ask your loan specialist about this option.
As the name implies, this is a written estimate of settlement and/or closing costs. This estimate must be provided to you within three business days of submitting an application.
Closing costs are expenses incurred for financing the purchase of your new home. As part of the purchase agreement, you may negotiate with the seller regarding who will pay some of the closing costs which may include, but are not limited to:
Prepaid interest is interest on the loan charged to the borrower at closing to pay for the cost of borrowing for a partial month. For example, if a loan closes on the 15th of the month and the first payment is due 45 days later, the lender will charge 15 days of prepaid interest.
Escrows are funds collected by your lender to pay your property taxes, hazard/flood insurance and PMI (if applicable). These funds are collected in addition to your monthly principal and interest payments. The lender pays your property taxes and insurance premiums from your escrow account as they come due.
Underwriting conditions are outstanding requirements needed to finalize the application process. The conditions must be received, documented and accepted by the lender to obtain final approval for the loan.
This is the term used when referring to the monthly payment when the loan principal, interest, property taxes and property insurance are combined into a single payment.