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Most frequently asked questions about borrowing!
Q. Is there a fee to apply for a loan?
A. No - there are no application fees for any of our
loan programs.
Q. Can I apply over the phone?
A. Yes, you can apply over the phone in a call
lasting 15 minutes or less. Just call us at (214) 628-1362.
Q. Can I apply over the internet?
A. Absolutely, just complete the simple
no-obligation Loan
Application and one of our
Certified Loan Brokers will contact you within 24 hours to review your
situation and determine the best program for you.
Q. What if I have credit problems?
A. We help people all the time with late payments,
or even those with bankruptcy or foreclosure. Turn your credit
around - it's so easy to qualify.
Q. What secures the loan?
A. Because your loan is secured by your home, you can
receive all the benefits that go along with home loans.
Q. Are there tax benefits?
A. You bet! Unlike the interest you pay on
credit cards or installment loans, the interest paid on a home loan
could be fully tax-deductible. Talk to your local tax consultant
to find out how much you could save.
Q. Should we pay points?
A. A "point" is equal to 1% of the loan
amount. When a borrower pays a point, it can reduce the interest
rate by 1/8 to 1/4 of one percent. Borrowers who do not pay
points will reduce their "out of pocket" expense of getting a
mortgage. However this may cause the monthly payment to be
slightly higher since no effort was made to "buy down" the
interest rate.
Q. What is title insurance?
A. Title insurance protects you from any claim that
can be made against the ownership of your home form previous debts that
may have not been resolved with prior owners. Title insurance
protects you and your lender. When a lender grants credit they
are using your home as security for the loan amount. Title
insurance protects you today and tomorrow from events that may have
previously occurred. The need for a borrower to renew the
insurance only occurs when there is a change in a claim against the
ownership such as a new mortgage or change in ownership.
Q. What are closing costs?
A. Closing costs are the legitimate costs associated
with the processing and the closing of a loan. They include
underwriting, processing, tax service, title insurance, document
preparation and commitment. Fees may vary in amount and type form
lender to lender. Please note that you can negotiate some of
these fees from time to time. Ask us what your individual closing
costs will be and what they are for.
Q. Is it better to use a bank or a broker?
A. A borrower should compare product and price
between a broker and bank of their choice. Generally the broker
will be able to offer a better deal. Make sure you compare all
aspects including closing fees, application fees and term of the loan.
Q. After the loan application - what is next?
A. After the loan application has been completed, it
will be turned over to our loan processing department and then to the
underwriter, where decision to approve or reject the loan will be
made. Loan processors seek out the Verifications of Employment
and Deposit and order the credit report, property appraisal and other
documents. The time it takes to receive the documents affects the
length of time required for approval of the loan. If you are
transferring from out of the local community, it may take longer to
receive the credit and employment information. Processing times
vary from one lender to another, but our Certified Loan Broker should
be able to give you an idea of the processing time for your
application.
Within three business days after completing the
application, we will provide you with a "Good Faith
Estimate" of the anticipated closing costs. It will show
costs associated with the loan settlement, such as origination fees,
mortgage insurance, title insurance, escrow reserves and hazard
insurance.
Within the same three days you will also receive a
Truth-in-Lending Disclosure statement. This statement shows,
among other things, estimated monthly payment. The total cost of
all finance charges on your loan is also shown, stated as an annual
percentage rate (APR). The APR represents the dollar amount of
finance charges you pay either up front and over the life of the loan,
converted to an annual interest rate. Since the APR includes
origination fees and other charges as well as interest on the mortgage
loan, the APR is usually higher than the interest rate on the loan.
After our lender has approved the loan, you will usually
receive a commitment letter which sets out the terms of the loan and
the length of time for which those terms are offered. If the loan
does not close within a specified commitment period, the terms are
subject to change. You usually must accept the commitment by
returning a signed copy to the lender within five to ten days and may
have to pay part or all of the origination fees at that time. The
commitment may contain conditions that you will still have to satisfy,
so you should read it carefully. One of our Certified Loan
Brokers will be glad to answer any questions you might have.
Q. What can I do to help my mortgage loan to close?
A. For many home buyers, the period of time between
the submission of loan application and receipt of the commitment letter
is one of uncertainty and concern. Request for additional
information, unexpected delays and lack of communication all serve to
increase the time. There are a number of things that you can do
to reduce the stress.
Keep in mind that our lenders want to make the loan.
Loan underwriters are looking for ways to approve loans, not reject
them. If you are fully prepared and have provided good
documentation, you have done a great deal to assure prompt processing
of your application and approval of your loan.
We need to make sure that lines of communication are kept
open. Your contact person may be your Certified Loan Broker, but
often it might be someone in the lender's loan processing department
who can tell you the status of your application. Remember,
however, that it make take several weeks to process the application and
frequent inquiries from you prior to that time will not speed things
up.
You should be accessible if we need additional information
or documentation during processing. Use your real estate agent as
a contact if necessary. Quick response to our requests helps keep
the process on schedule. In order to protect both you and the
lender, mortgage loans require much more paperwork and legal
documentation than an automobile or other installment loan.
However, lenders do not ask for more than is absolutely necessary.
Obtaining a mortgage loan need not be an ordeal that
dampens the thrill of acquiring a new home. If you understand the
lending process and are prepared to do your part, it simply becomes a
key step in financing a home. As Certified Loan Brokers, we are
committed to making your borrowing experience a pleasant one.
Equal Lending Opportunity
Copyright © 2002 by The Loan Brokers
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