Frequently Asked Questions

Need answers to your mortgage questions. Here are some facts about the mortgage process.

Quick Links
What’s the best loan program for me?
Should I refinance?
What kind of property can be financed?
What is a rate lock?
How long will it take to close a mortgage loan?
Can I qualify for a loan if I am self employed?
What happens if my loan is sold to a different lender?
What is Equity?
What is the difference between a home equity loan and a line of credit?
Do I want a fixed or adjustable rate mortgage?


What’s the best loan program for me?
That depends on a number of factors, including:
– How long you’ll stay in the home?
– How much money you’ll put down?
– How you’ll finance the closing costs?


Should I refinance?
The most common reason to refinance is to save money. This can be done by either obtaining a lower interest rate or by reducing the term of the loan. Obtaining a lower interest rate will reduce the monthly payment made each month. Reducing the term of the loan, for example from a 30 year loan to a 15 year loan, may increase the monthly payment but the total interest paid during the life of the loan may be significantly reduced.
Another common reason to refinance is to convert an adjustable loan into a fixed loan. This provides stability and security in the interest rate and monthly payments for the entire life of the loan.

A third reason to refinance is to consolidate debt into one monthly payment each month. Consolidating debt, for example line of credits, credit cards, student loans etc. can result in a tax savings since most mortgage loans are tax deductible.


What kind of property can be financed?
– Primary Residence
– New Construction
– Second Home
– Investment Property
– Condominium/Duplex
– Manufactured Home
– Town Home


What is a rate lock?
A rate lock is a contractual agreement between the lender and buyer. There are four components to a rate lock: loan program, interest rate, points and the length of the lock.


How long will it take to close a mortgage loan?
On average it takes 30 days to close a mortgage loan. This of course may vary depending on the type of loan and the scenario behind the loan. For example a construction loan or a FHA loan can take about 45 days to close where as a conventional loan could close in 2 weeks depending on the scenario.


Can I qualify for a loan if I am self employed?
Yes. There are programs available for self employed borrowers.


What happens if my loan is sold to a different lender?
If your loan is sold to a different lender both the new lender and the old lender are obligated to inform you of the changes being made, usually via mail. The lender purchasing your loan is to assume all terms and conditions of the original loan. The only way this affects you is to whom you mail your payment to. The new lender should inform of you of where to mail your payments to within a reasonable time frame. In the event that you do not receive such information by the time your next loan payment is due continue making payments to your old lender until further notice.


What is Equity?
Equity is a homeowner’s financial interest in a property. It is the difference between the fair market value of the property and all amounts owed on the property. On a new mortgage purchase loan, the down payment represents the initial equity in the property.


What is the difference between a home equity loan and a line of credit?
An equity loan allows you to borrow a set amount of money at a fixed interest rate. If you need a large amount of cash, then this is a good option for you. The rate of interest is fixed so you always know what your monthly payments will be and you can use the money for a number of things including home improvements, debt consolidation or other major expenses.

An equity line of credit allows you to reserve a line of money that you can use only if you need it. You can borrow from that line at any time in the future so you have the security that if you need the money, you can access it. You will make no monthly payments until you actually draw on the money. An equity line enables you to be ready in case extra expenses arise such as medical bills, emergency home repairs, and college tuition. The interest rate on an equity line of credit is not fixed; it varies based on the prime rate.


Do I want a fixed or adjustable rate mortgage?
On a fixed rate mortgage the interest rate never changes and your payments remain the same throughout the life of the loan. With an adjustable-rate mortgage adjustments to the rate are periodically made throughout the life of the loan. Depending on the type of ARM program rate adjustments may begin after 3 months of closing the loan increasing your monthly mortgage payment. If you are planning on staying in your home for a long term usually a fixed rate is the best way to go especially when rates are relatively low. An ARM is best if you plan on moving out of the home before the rate adjustment begins or if you are buying at a time when rates are relatively high.