Frequently Asked Questions
- What are the benefits of homeownership?
- Homeowners get tax benefits and can deduct mortgage interest and real estate property taxes on their income tax returns. Owning a home helps grow the customer’s assets. As the home builds equity, the homeowner’s property value increases. Owning a home also helps build a strong credit history. Additionally, homeowners get to avoid rent increases and all of the hassle that renting comes with.
- What is a mortgage?
- A mortgage is an agreement between you and a lender that gives the lender the right to take your property if you fail to repay the money you’ve borrowed plus interest.
- Can I qualify for a home loan if I have less-than-perfect credit?
- Yes, depending on your credit score and income, we may be able to provide you with a loan solution. We don’t simply look at your credit history but take into consideration your ability to pay in the future.
- What’s the difference between a mortgage pre-qualification letter and a mortgage pre-approval letter?
- A mortgage pre-qualification letter is an estimate of how much you might qualify to borrow and the rates you may be eligible for (as determined using today’s rates), based on a preliminary review of your credit report and information you provided to your lender. A mortgage pre-approval letter means that the lender has checked and verified your credit, along with your income, assets, debts, employment history, etc. A mortgage pre-approval letter means that you are likely to be approved for a mortgage and also states the amount for which you may be approved.
- What’s the difference between a mortgage interest rate and an APR?
- The mortgage interest rate is the interest rate expressed as a percentage rate and can be either fixed or variable. It does not include fees or any other charges that you may have to pay for the loan. APR stands for Annual Percentage Rate and reflects not only the interest rate, but also such fees as mortgage broker fees, points, closing costs and other charges that you have to pay to get the loan.
- Is a home appraisal required before I process my loan?
- Yes, as part of the loan process, lenders will require a home appraisal to be performed. The appraisal will be ordered by the lender and processed through an appraisal management company and then completed by a licensed appraiser. Customers are required to pay for the appraisal.
- What are the typical third-party closing costs?
- Typical closing costs include fees for appraisal, title insurance, title search, transfer taxes, settlement services, property taxes, hazard insurance premiums and government recording fees. These fees vary on the transaction type and the geographic location of the property.
- How long does the refinance process take?
- Typically, we close our loans within 30-60 days from the date of the completed application (and after all required loan docs have been submitted). We try to move as swiftly and efficiently through the process as possible and will help create milestones and reminders to make sure we get all the necessary documents from you to be able to complete the transaction.
- What’s the difference between a mortgage interest rate and an APR?
- The mortgage interest rate is the interest rate expressed as a percentage rate and can be either fixed or variable. It does not include fees or any other charges that you may have to pay for incur into the total cost of the loan. APR stands for Annual Percentage Rate and reflects not only the interest rate, but also such fees as mortgage broker fees, points, closing costs and other charges that you have to pay to get the loan. By law the APR must include the finance charge, the amount financed, the brokerage fees, points and the schedule for paying back the loan.
- Can I refinance my house if it is up for sale?
- If your property is currently up for sale, your lender cannot refinance your home. The only way a lender can refinance your home is if it has been off the market for at least one day.
- Why should I refinance?
- Refinancing your home could be the best option to secure a lower interest rate on your mortgage, as well as, save money on your monthly payments. With this loan option, you have the chance to re-evaluate your mortgage terms, including changing the length of your loan or changing the type of rate (adjustable or fixed). If you are in need of extra cash, you can choose cash-out refinancing by borrowing more money from your home equity.
- How do I know I qualify for mortgage refinancing?
- To be best suited for a refinance loan you should fit the following criteria: 20% or more equity in your home, a good credit score, no jumbo loans, and a risk-free first mortgage.
- When is refinancing a bad idea?
- If borrowers plan on moving in the immediate future, have begun the amortization process of their current mortgage, or have a prepayment penalty; they should reconsider a refinance plan.
- Will I need a home appraisal?
- Typically an appraisal is needed to determine the current value of your home.
- How do I find out how much equity I have in my home?
- Your home’s equity is the appraised value of your home minus your current mortgage balance(s) and liens.
- Who can apply for a reverse mortgage?
- You can apply for a reverse mortgage if you are at least 62 years old, the home is your primary residence and most, if not all of your traditional mortgage has been paid.
- When will the loan payment be due?
- In a reverse mortgage, interest is added to the loan balance each month, and the balance grows over time. The loan must be repaid when the last borrower, co-borrower or eligible spouse sells the home, moves out of the home or passes away.
- Who inherits the home?
- When both you and any eligible spouse have passed away, heirs wanting to retain the home must pay off the loan. But they will not have to pay back more than the house is worth.
- Are there monthly payments?
- No. One of the benefits of taking out a reverse mortgage is not having to make monthly mortgage payments as long as you, a co-borrower or eligible spouse live in the home. However you are still responsible to pay property taxes, insurance and maintain the home.
- Can reverse mortgage borrowers live in their home?
- Absolutely! You can remain in the home until you move out or die, so long as you keep current on your property taxes, insurance, and home repairs. If you are a co-borrower or eligible spouse, you have the same right.
- What are the benefits of a reverse mortgage?
- A reverse mortgage allows homeowners to access a portion of their home equity as cash as while living in your home.
ARE YOU READY TO CHANGE YOUR LIFE?
Talk to one of our 1st Reliant loan specialists and find out which loan is right for you. We’re here to answer any questions you may have, so reach out and let us know how we can help.