While each loan is different it is important to view the FAQ’s listed below for general information. For a more detailed look at your specific loan requirements contact your lender directly.  If you don’t have one you are more than welcome to contact us for general information and a referral.


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What is the difference between pre-approved and pre-qualified?

Pre-qualified is when a prospective home owner has provided the lender with the basic information to determine which loan program the home buyer may qualify for. 

Pre-approved is when the lender has collected, verified and presented the information needed for underwriting and approval.  While it is a preliminary underwriting look at things, this is a more clear prospective on the actual ability to move forward.

What is the difference between interest rate and APR?

Interest Rate is the monthly cost you pay on the unpaid balance of your home loan.

Annual Percentage Rate (APR) includes both your interest rate and any additional cost or prepaid finance charges like the origination fee, points, private mortgage insurance, underwriting and processing fees (your actual fees may not include all of these items). 

Although the  interest rate is the rate you will make your monthly mortgage payments, the APR is a universal measurement that can assist you in comparing the cost of mortgage loans offered by different mortgage lenders.

What are the closing costs?

Closing costs include items like appraisal fees, title insurance fees, attorney fees, pre-paid interest and documentation fees. These items are usually different for each customer due to differences in the type of mortgage, the property location and other factors. You will receive a good faith estimate of your closing costs in advance of your closing date for your review. Both the seller and the buyer have their own respective closing cost to pay during the process.

Which amounts are included in my monthly payments?

Fully amortizing mortgage = portions of your monthly mortgage payment go toward loan principal and interest. If your mortgage carries mortgage insurance, a portion of your monthly mortgage payment will pay this also, unless the lender has paid your mortgage insurance or you have paid your mortgage insurance upfront.

Interest-only mortgage = payments include only the interest that is due on the outstanding principal balance.

If you have set up an escrow account for your mortgage, then portions also go toward your property taxes and homeowners insurance.

What is PMI?

Private Mortgage Insurance(PMI) is provided by a private mortgage insurance company to protect a lender against loss if a borrower defaults. Private Mortgage Insurance is usually required for a loan with a initial loan to value (LTV) in excess of 80%. In most cases, this will mean that you will have to pay Private Mortgage Insurance if your down payment is less than 20% of the value of the home you are purchasing or refinancing. The cost of the mortgage insurance is typically added to the monthly mortgage payment.

What will my rate be?

Rates are based on a variety of factors such as the loan purpose, your credit history, current liabilities and ability to repay, the value of the collateral and the loan amount. For this reason there are never any two loans that are alike even if they are the same type of program, such as VA or FHA.

What is an FHA mortgage?

FHA loans are government-insured loans through the U.S. Department of Housing and Urban Development, also called HUD. FHA loans offer an excellent start to first-time home buyers, with options such as a low down payment or a low closing cost option.  These loans can often be paired with several other types of assistance programs for those who are low to moderate income as well as provide lower down payments for those with larger loan amounts, therefore reducing the initial upfront cost of securing a loan.