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FAQ

1.	What does it cost to submit a loan application? Answer
2.	Do I need to pick the property I want to buy before I fill out the application? Answer
3.	How do I refinance my existing mortgage? Answer
4.	What are the different ratios when qualifying for a mortgage? What are front and back ratios? Answer
5.	What is Private Mortgage Insurance (PMI) and do I have to pay it? Answer
6.	How do I lock my rate, and what does that mean? Answer

Q :	What does it cost to submit a loan application?
A :	Nothing. You can submit your application and become pre-approved for a loan without incurring any charges. Later on, fees may be incurred for a property appraisal and eventually closing costs.

Q :	Do I need to pick the property I want to buy before I fill out the application?
A :	No, you can fill out the application first, and once your loan is approved you can modify it up until the time that your loan rate is locked in.

Q :	How do I refinance my existing mortgage?
A :	Set up a time to meet with our loan representative at our office or arrange a loan-by-phone appointment. We will take the time with you to see first of all if a re-finance would make sense and what kind of benefit you might realize from re-financing. If it is determined to be a good strategy, we will walk you through the process and help you get your new loan closed quickly and effectively.

Q :	What are the different ratios when qualifying for a mortgage? What are front and back ratios?
A :	The ratios are basically your income divided by your liabilities. They determine how much you can afford based on your yearly salary. Front Ratio is the total mortgage payment, including principal, interest, taxes and insurance as well as any Private Mortgage Insurance and/or Home Owners Association fees divided by your total GROSS income. For example, with a gross income of $4783 per month, a total mortgage payment (PITI) of $976.63 would give you a Front ratio of 28%. Back Ratio is the total mortgage payment as stated above PLUS all other liabilities such as car payments, credit cards, student loans, etc. divided by your gross income.

Q :	What is Private Mortgage Insurance (PMI) and do I have to pay it?
A :	Private Mortgage Insurance is an insurance required by most lenders when a borrower puts less than 20% down. It's purpose is to protect the lender should you default. If you decide to put less than 20% down you will be required to pay the additional monthly premium. The amount of the premium will depend upon the size of the loan, the percentage paid down, and credit scores. Talk with your loan officer about alternative ways to structure your mortgage to avoid having to pay PMI. Options like a "Combo-Loan" or a "Lender-Paid PMI" loan could save you hundreds each month compared to the traditional PMI option.

Q :	How do I lock my rate, and what does that mean?
A :	Locking your rate insures you that your rate will not go up during the loan process. Generally you are able to lock in a rate no sooner than 60 days prior to closing. Once you are locked you are set on the rate- that also means that you cannot change your rate if rates drop. Please talk to your loan officer about your options.