What do I need to bring with me for my loan application?

Please bring the following when filling out a Loan Application.

  • Drivers License or Picture ID
  • Social Security Card
  • Money for Credit Report and Appraisal Fee
  • Residence Address - Past 2 Years (Include Landlord's Name and Address)
  • All Employers - Past 2 Years (Names and Addresses)
  • Most Recent 30 Days Pay Stubs
  • Fed Tax Returns and W2's - Past 2 Years (If self employed see Loan Officer)
  • Most Recent 3 Months Statements on Checking, Savings. Investments Accts.
  • Names, Addresses, Account Numbers, Balances and Payments on all open loans
  • Addresses and Loan Information on any Real Estate Owned
  • Recorded Divorce Decree (If Applicable)
  • VA-Certificate of Eligibility & DD214
  • Statement of Service (Active Duty ONLY)

What is the difference between a fixed-rate and an adjustable-rate mortgage?
A fixed rate mortgage is a mortgage that has an interest rate that stays the same for the life of the loan (usually 15 to 30 years). Therefore, payments stay the same for the life of the loan as well. An adjustable rate mortgage, however, is a mortgage for which the interest rate changes based upon a predetermined time interval, usually in relation to an index, and payments may go up or down accordingly.

What is an APR?
An APR, or Annual Percentage Rate, is the cost of credit expressed as an annual rate. In other words, this rate includes a combination of the interest rate, points and other fees paid to a lender when acquiring a mortgage. The APR is the most meaningful measure for comparing the cost of mortgage loans offered by different lenders.

What is an LTV?
An LTV, or Loan-to-Value, is a ratio of the amount of the mortgage to the value of the home. For example, if your home is worth $100,000 and your mortgage is $80,000, your loan-to-value ratio is 80% (your loan is 80% of the value of your home).

What are points?
Points, also called origination fees, are fees imposed by a lender to cover certain processing expenses in connection with making a real estate loan. A point is one percent of the amount of the loan.

I want to look for a new house, but haven't begun my search yet. What are the benefits of getting a pre-approval?
There are several benefits to being pre-approved before you find a home. First, it gives you the comfort of knowing how much home you can afford. This way, you save time by targeting only those homes that are within your price range. Second, a pre-approval tells sellers you're a serious buyer, and gives you bargaining power. Third, a pre-approval should help speed along the final approval process, because most of the work is already done!

I often hear about Freddie Mac and Fannie Mae. Who are they and what do they do?
Freddie Mac is short for the Federal Home Loan Mortgage Corporation (FHLMC). Freddie Mac is a federal agency which purchases first mortgages, both conventional and federally insured, from members of the Federal Reserve System and the Federal Loan Bank System. Fannie Mae is short for the Federal National Mortgage Association (FNMA). Fannie Mae is a private corporation that deals in the purchase of first mortgages, at discounts.

What are debt ratios?
Debt ratios are guidelines used by lenders to ensure a borrower is not exceeding what he/she can afford. There are two ratios : the Housing Ratio, also called Payment-to-Income ratio or Front-End ratio, and the Total Debt Ratio, also called the Obligations-to-Income ratio or Back-End ratio. The Housing Ratio is the monthly housing payment (PITI - Principal, Interest, Taxes, Insurance) divided by total gross monthly income. The Total Debt Ratio is the housing payment plus other monthly debt, divided by gross monthly income.

What is the difference between Mortgage Insurance, Mortgage Disability Insurance and Mortgage Life Insurance?

Mortgage Insurance (MI) is insurance written by an independent mortgage insurance company (MIC) protecting the lender against loss incurred by a mortgage default. Often, MI is required by lenders when the Loan-to-Value ratio (the amount of the loan divided by the value of the home) is greater than 80%. Mortgage Disability Insurance is a disability insurance policy which will pay the monthly mortgage payment in the event of a covered disability of an insured borrower for a specified period of time. Mortgage Life Insurance is a term life insurance policy that covers the declining balance of a loan secured by a mortgage, and is payable upon death of a covered borrower.

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