What is Prequalification?
The process of determining how much money a prospective homebuyer will be eligible to borrow before a loan is applied for.
What is Preapproval?
This allows you the ability to get approved for a specific loan amount prior to finding the home you want to purchase. This can give you a great advantage with a homeowner or realtor. Also, if you’re thinking about refinancing, but not sure you would qualify, you can apply for preapproval and save on the cost of getting an appraisal on your home until you know you qualify. Citizens First Mortgage offers preapprovals in 24 hours or less.
What information do I need to provide when I apply?
When you’re ready to apply, you need the most current information on your monthly income and debt, a total of your assets, your social security number, and employment. Additionally, a copy of your most recent pay stub and bank statement is helpful.
Is there a cost to apply?
This varies from lender to lender, however, Citizens First Mortgage does not have an application fee.
How long will the loan process take?
Loan approval time frames vary depending on the loan program and the complexity of your application. The process takes, on average, anywhere from 14 to 30 days.
What is a lock-in?
The lock-in represents the interest rate you choose and will be the interest rate during the process of your loan approval as long as your loan is processed and closed prior to the rate expiration date. This date is given to you when you lock in the rate.
What is a float?
Floating allows you to watch interest rates during the procession of your loan. While you are floating, your interest rate is subject to both upward and downward movement.
When can I lock in my rate?
You can lock your interest rate at any time during the process of your loan as long as you have a valid property. The Loan Officer will discuss these options with you upon taking your loan application.
How long is my rate lock valid?
Depending on the type of transaction and the time you need, lock periods can be valid anywhere from 15 days up to 180 days. The standard lock period is usually 30 days.
Can I pay my loan off early? Can I pay extra each month?
Yes, you can make principal payments at anytime during your loan term or pay the loan in full. You can also pay a set amount each month above the normal payment due or make lump sum payments periodically.
What is an escrow account?
An account maintained by the lender to collect funds from the borrower in order to pay the taxes and property insurance.
What is PITI?
This represents the accounts your money is applied to when you make your monthly mortgage payment:
P-Principal
I-Interest
T-Taxes
I-Insurance
What is the difference between a fixed-rate and an adjustable-rate mortgage?
With a fixed-rate mortgage, the interest rate and payment remains constant over the life of the loan. Whereas, with an adjustable-rate mortgage, the payment can either increase or decrease based upon the terms of the loan.
What is a conventional loan?
A mortgage not guaranteed by VA, insured by FHA, and/or other governmental agencies.
What is a jumbo loan?
A conventional loan that exceeds the maximum mortgage amount guidelines for a loan, as set by Fannie Mae or Freddie Mac.
What is PMI?
Private Mortgage Insurance (PMI) is required if you borrow on conventional loans above 80% of your appraised value under certain conditions. PMI may be tax-deductible.
What is hazard insurance?
This represents the insurance that protects your investment in your home and provides compensation in case of property loss or damage.
What are points?
Points represent a fee charged by the lender in order to offer a below-modest interest rate.
What is an origination fee?
An origination fee is charged by the lender and is used to cover expense during the process of the loan. This fee is typically 1% of your loan amount.
