• What is Homeowner's insurance?

    Homeowners Insurance (also known as Hazard Insurance) insures the borrower against covered losses.  Lenders typically require a borrower to have coverage necessary to rebuild the dwelling or at least for the amount of the loan.  You may decide that you want more coverage than the lender requires.

    Consult with your loan officer for required coverages.

  • How much Homeowner's insurance coverage will I need?

    Experts typically advise consumers to insure the property at a level that would be required to replace it. Typically, this would be about 33% in excess of the purchase price. Consumers with excessive personal property, such as jewelry, farm equipment, etc., are usually advised to obtain an even higher level of coverage to replace those items in case of a total loss.

  • What is Flood insurance and do I need it?

    Flood insurance insures a property from damage in a flood. Typically, Homeowner insurances does not protect against floods, and so a separate Flood insurance policy may be required. During the mortgage process, the lender will request what’s called a Flood Report from a qualified agency. The Flood Report will indicate whether the home you are purchasing is in a “flood plain”. If it is, the lender will likely require Flood insurance as a prerequisite to lending to you.

  • What is a rate lock?

    A rate lock is a means for the borrower to lock in the lender's current interest rate. Typically, a rate lock will last 15, 30, 40 or 60 days, and during that time the borrower can shop for a new home knowing what they can afford at that interest rate.

  • What does it mean to “close” a mortgage loan?

    Real property in most jurisdictions is conveyed from the seller to the buyer through a real estate contract. The point in time at which the contract is actually executed and the title to the property is conveyed to the buyer is known as the "closing". During the closing process, you should expect to sit with a Settlement Agency in your area to review and sign the final documents, including the Deed of Trust, which will transfer ownership of the property to you.

  • What documentation will the lender typically require from me to process my loan?

    Typically you will be asked for the following information to document your income, assets and employment.

    • One month's current paystub's for all borrowers on the loan.
    • W-2 Statements for the last two years.
    • Copies of current checking, savings and investment account balances.
    • If you are self-employed, typically your personal tax returns will be required
  • What is mortgage insurance and am I required to have it?

    Private mortgage insurance, commonly referred to as simply PMI, is paid by the borrower to protect the lender against default on the mortgage. PMI is required only when the consumer is borrowing in excess of 80% of the property value.

    Governtment loans (FHA) have a different type of Mortgage Inurance not through a private company but from HUD.

    Note: lenders are required to terminate MI when, over the course of the consumer’s payment history, the loan’s balance reaches 78% of the original property value.  (You may be required to keep MI for one or two years regardless of the loan to value)

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