What is the minimum down payment required?
The minimum down payment for conventional loans is 5%. Programs such as VA and USDA Rural
Development may allow no down payment. Higher down payments may be required in situations
involving, but not limited to:
- Borrowers with some credit problems
- When purchasing investment properties
- Distressed markets
What is considered acceptable credit history?
Generally any payments that have been past due over thirty (30) days in the past two (2) years may require a detailed letter of explanation. Each situation will be reviewed on a case-by-case basis with the following being of importance: the number of times delinquent, the type of account that is or was delinquent, the reason for the delinquencies and a satisfactory explanation as to why these won’t occur again.
How long is required that I be employed with my employer?
Generally two years with the same employer or in the same line of work is considered stable work history. Also, schooling in a field related to your current employment is considered to be in the same line of work. Other situations will be reviewed on a case-by-case basis.
What is Private Mortgage Insurance (PMI)? Is it required for my loan?
Private Mortgage Insurance (PMI) is required for all mortgage loans with less than 20% down payment. This insurance is included in your monthly payment and protects the lender in the case of default.
What are closing costs?
Closing costs range from .5 – 4% of the loan amount. This estimate depends on numerous factors, such as whether your property is a purchase or refinance transaction, the amount of the loan, the location of the property, most importantly the default risk associated with your mortgage.
What is escrow? Is it required for my loan?
Escrow is where a portion of the real estate taxes, private mortgage insurance (if applicable) and homeowner’s insurance on your property is included in your monthly payment. They are held in an escrow account until they come due and the mortgage company pays them from this account.
To calculate how much this will add to your monthly payment, calculate the total amount due in a year for real estate taxes, private mortgage insurance (if applicable) and homeowners insurance and divide that number by twelve. You may waive the requirement to escrow for homeowners insurance for any loan. However there are requirements that must be met to waive escrow for real estate taxes on your primary residence. Investment properties are required to escrow real estate taxes.
How long does it generally take to complete the process and close?
The mortgage process generally takes between 15 – 30 days. Since we rely on the services of others and many different situations may arise beyond our control, it sometimes may take longer. Please be assured we process all loans as quickly as possible.
Is an appraisal required?
An appraisal is required for a purchase transaction or to refinance a mortgage.
Is an attorney required for this transaction?
An attorney is not a requirement for any residential mortgage transactions.