Downloadable Homebuyer Guides (PDF)
Frequently Asked Questions
How much should I save for a down payment?
A typical down payment ranges from 3% to 20% of the home's price. If you qualify, there may be programs available to first-time homebuyers or homebuyers in the low-to-moderate income bracket that may be available for down payment assistance. Consult your mortgage professional to see if you are eligible.
What credit score do I need to get approved?
Many lenders look for a credit score of 620 or higher, but better rates are usually available to those with scores above 740.
What are closing costs?
Closing costs include fees like lender fees like an origination fee and appraisal, title insurance fees like title title insurance, survey, and taxes insurance. They typically range from 2% to 5% of the purchase price. When you apply for a motgage loan, you will be given a detailed estimate of your total cost.
Should I get pre-approved before house hunting?
Yes! Getting pre-approved shows sellers you're serious and gives you a clear budget for your home search.
I've applied for a mortgage loan, what happens next?
After you apply for your mortgage loan, the Lender or Bank will prepare your loan for an underwriter to review and approve. In most cases, your loan will be approved within 72 hours. Once your loan is approved, the loan processor or the loan officer will call to notify you of the approval. At the same time, the Lender order certain items needed before we can close your loan, including the appraisal, flood certification, and title commitment.
Does the lender require a home inspection?
Lenders or Banks do not require home inspections. However, most contracts require a home inspection during the option period. This inspection is a detailed examination of the home you're about to purchase. The inspector will test appliances and plumbing, check for termites, examine the foundation, and more. While not required, it's highly recommend getting one. Your real estate agent should assist you with this.
What is an annual percentage rate (APR), and how is it different from my interest rate?
This is one of the most common questions Lenders get. The APR is disclosed on the Truth in Lending Statement and is a complex calculation of interest and other costs. Simply put, the APR is not your interest rate, and your payment is not calculated by the APR. Instead, the APR includes the interest rate, closing costs, and some other fees — all calculated into a single number. It's a measure of your total cost. Your payment and actual interest are based on your interest rate.
Who orders the appraisal?
The lender or bank is responsible for ordering the appraisal. Lenders typically do not accept appraisals ordered by other parties. The appraiser will inspect the property and produce a comprehensive valuation report. This process usually takes 7 to 10 days.
Who is the loan processor, and why are they calling me?
The loan processor is assigned once your loan is approved. They help collect any remaining documents needed before closing and follow up on the appraisal and title commitment. If they call you, it's usually to introduce themselves or request documentation.
What can I do to ensure a smooth process and closing?
Delays often stem from homeowners insurance. Many customers wait too long to secure it. Lender of Bank won't send closing documents until they have an insurance binder. Please begin this process early. Also, provide any requested documents quickly. Underwriters may need items not collected at application. Even though closing typically takes about 30 days, the Lender will need everything required including proof of insurance 7 days in advance of the closing date.
When will I know how much money I need to close?
Final figures come from the title company in a document called the Closing Disclosure Statement, also referred as the HUD-1 Settlement Statement. They can only prepare this once they receive our closing papers. Your lender will provide you with an estimated figure beforehand which includes your closing costs, taxes, insurance, and down payment. This estimate helps if you need to liquidate assets. Title companies require certified funds via cashier’s check or wire transfer. Please contact your title company for their preference.
After my loan closes, when and where do I make my first payment?
You may not make your first payment for 30 to 60 days after closing. Mortgage interest is paid in arrears, meaning you pay for the prior month. For example, if you close on May 15, you’ll pay interest from May 15 to May 31 at closing. Your first payment would be due July 1, covering June’s interest. You’ll receive monthly statements or coupons which will direct you where to make your payments. The first payment details will be in your closing package.