FAQs / Questions & Answers

Yes, but there is a waiting period and the waiting period depends on the type of bankruptcy filed. Since conventional, FHA, and VA lending guidelines all have different rules regarding bankruptcies it is best to contact us with your specific situation.

Yes, but there is a waiting period. Since conventional, FHA, and VA lending guidelines all have different rules regarding foreclosures it is best to contact us with your specific situation

Yes, but there is a waiting period. Since conventional, FHA, and VA lending guidelines all have different rules regarding short sales it is best to contact us with your specific situation.

A loan discount point is a fee a lender may charge to a borrower to offer a lower than market interest rate. A loan discount point is considered prepaid interest. One loan discount point is equal to 1.000% of the loan amount on any given loan (i.e., $100,000 x 1.000% = $1,000). If a lender offers a borrower a 5.000% interest rate, but the borrower would prefer 4.750%, the lender will receive $250 per year less interest on the money they loan ($100,000 x 5.000% = $5,000 vs $100,000 x 4.750% = $4,750). The lender may charge the borrower a loan discount point of 1.000%, which is $1,000, and represents the first 4 years of interest the lender will lose ($250 x 4 = $1,000) if the borrower opts for the 4.750%.

Contrary to what the name implies, it is not a quick transaction. A Short Sale is a transaction where the lender holding the existing mortgage on the property being sold agrees to accept an amount that is less than what the seller actually owes the lender, thus being paid “short” of what is owed.

An earnest money deposit is an amount of money a buyer provides with an offer to purchase a seller’s house and is typically a personal check. The check is symbolic in nature until the offer is accepted, at which time the check will be deposited with the escrow company as a good faith deposit of the down payment. It is part of, and not in addition to, the actual down payment.

Equity is the difference between the total of the current outstanding liens (i.e., 1st mortgage, 2nd mortgage, home equity line of credit, etc…) on a property and the current value of that property. For example, if the mortgage balances total $240,000 and the current value of the property is $300,000, then there is $60,000 equity in the property.

Mortgage insurance is an insurance policy that a lender may require a homebuyer to purchase to protect the lender against the loss of principal when a homebuyer provides less than 20% of the purchase price of a house as a down payment. The lower the down payment provided by the homebuyer, the higher the mortgage insurance premium required by the lender. The lender is paid only if the borrower defaults on the mortgage. Mortgage insurance is not required when a homebuyer provides a down payment of 20% or more than the purchase price of the house.

Mortgage insurance is an insurance policy that pays a lender if the borrower defaults on the mortgage. It is for the benefit of the lender. Homeowners insurance, however, is an insurance policy that protects the owner of the house and the lender in the event of a fire.

Mortgage insurance is an insurance policy that pays a lender if the borrower defaults on the mortgage. It is for the benefit of the lender. However, mortgage life insurance, also known as mortgage protection insurance, is a life insurance policy that will pay off the outstanding mortgage balance if the insured dies prior to the final payment of the original loan term. It is for the benefit of the surviving borrower.

Prequalification is a mortgage originator’s opinion of what purchase price and loan amount a prospective homebuyer will qualify for and is based on the homebuyer’s answers to questions about their income, assets, liabilities, and credit history. It is not a commitment to lend and will vary depending on the level of experience of the mortgage originator conducting the qualification.

Pre-approval is a formal commitment to lend money issued by a lender for a specific purchase price and loan amount and is based on documentation provided by a prospective homebuyer, such as paychecks, tax returns, W-2s, asset statements, and a credit report, and has been verified and validated by that lender’s loan underwriter.

The minimum down payment for VA financing is 0% of the purchase price.

The minimum down payment for FHA financing is 3.5% of the purchase price.

The minimum down payment for conventional financing is 5% of the purchase price.

The purpose of a home inspection is to determine the current condition of a property. A licensed home inspector will look at all systems in the house including, but not limited to, all structural elements and electrical, heating, air conditioning, and plumbing systems. A home inspection should reveal any defects so they can be addressed and corrected before the transaction is closed.

The purpose of an appraisal is to determine the current market value of a property. A licensed appraiser will compare the property in question to other properties that have sold within 90 days of the date the appraisal was requested and will consider properties with similar characteristics and criteria such as location, square footage, number of bedrooms and bathrooms, amenities, etc… to arrive at the final estimate of value.