Learning Center offers various content to help you get familiarized with the mortgage process and to help you proceed through all stages of an application process.
I'm buying my first home:
What can I
afford to buy?
Each buyer is unique —
and we'll help you find out just what you can afford. Your income
and your debts will typically play the biggest roles in
determining your price range. It's simple to make an estimate,
just run the numbers for yourself using our Resource Center.
Do I have
enough money to buy my first home?
We offer a range of mortgage programs, and we'll help you
determine which can work for you — some of our loans require
little money down. You'll also need to consider closing costs and
the escrow account for taxes and insurance. But don’t get
overwhelmed: it's a snap to figure out how much money you'll
need, using our handy Resource Center. What about my
less-than-perfect credit report?
Our special
solutions program can help!
We offer loan options ideal for those who have a few "dings"
on their credit report. We try to work with every customer to
develop an individual mortgage program - we call it your
personalized rate, because no two are alike. So we try to develop
a custom program based on your credit worthiness.
What's the
best loan program for me?
- That depends on a number of factors, including:
- How much money you’ll put down;
- How you’ll finance the closing costs.
- For information on the loan programs and rates available, just visit our Resource Center
What are the tax
benefits to owning a home?
You may be able to deduct the interest you pay on the mortgage
loan and some of the financing costs of the home, such as points.
And your property taxes could be deductible. You should consult
your tax advisor for more information. If you're renting right
now, you may want to take a look at our Resource Center.
What do I need
to know about the mortgage loan process?
Just this place for a loan process that's fast, clear, and even
fun! We've worked — you've come to the right hard to
simplify the process and provide the best loan experience
anywhere, online or off. Too good to be true? Not at all. Visit
our Resource Center.
I'm buying my next home:
I want to move
up to a better home. What can I afford?
Each buyer is unique — and we'll help you find out just what
you can afford. You already know that monthly income and
financial obligations are most important in determining your
price range. It's simple to make an estimate: just run the
numbers for yourself using our Resource Center.
I'm buying a
second home. Is it a different process?
No. Whether you need to be near the water or in the mountains, a
vacation home offers an opportunity for fun and relaxation —
and we make it just as easy to obtain a mortgage. But keep in
mind you'll need to identify sources for your down payment, since
you're not selling your current house and using the proceeds, and
you'll need to expect a larger monthly obligation for housing
expenses. We’ll work with you to create a customized loan
program with the best combination of rate, points, and closing
costs for your needs — we call it our personalized rate
because no two are alike!
What about my
less-than-perfect credit?
We offer loan options ideal for those who have a few "dings"
on their credit report. We try to work with every customer to
develop an individual mortgage program - we call it your
personalized rate, because no two are alike. So we try to develop
a custom program based on your credit worthiness. Our special
solutions program can help!
Will I need an
appraisal on my new home?
Not necessarily. You may qualify for a more streamlined loan
process. We can look at your credit history and consult our
property assessment model to determine if we can complete your
loan application without an appraisal.
Do I have to
pay private mortgage insurance (PMI)?
Our loan programs for down payments of 20% or less do not require
you to purchase Private Mortgage Insurance (PMI). Instead, we
have a Low Down Payment Rate Adjustment that is added to the
interest rate. In most cases, it will cost less than PMI and, if
you itemize deductions on your taxes, this may provide you with
an additional tax deduction opportunity. Please consult your tax
advisor.
What if I
don't sell my current house?
You may qualify for a new loan without even selling your current
home. We'll help you determine what might work for you. It's
simple to run the numbers for yourself on our handy Resource Center. You may also want to discuss a bridge
loan — contact us.
What if I'm
building a home?
If you are working with a builder within a sub-division or
development and just making carpeting, lighting and appliance
selections for a brand-new home, you can probably obtain a
standard mortgage loan. But if you're hiring contractors,
electricians, plumbers, and painters, you probably need a
construction loan, which provides funds to pay subcontractors as
work progresses. For more information on construction loans, contact us or Visit our Resource Center.
I'm refinancing my home.
We offer a range of mortgage programs, and we'll help you
determine which can work for you — some of our loans require
little money down. You'll also need to consider closing costs and
the escrow account for taxes and insurance. But don’t get
overwhelmed: it's a snap to figure out how much money you'll
need, using our handy Resource Center. What about my
less-than-perfect credit report?
Our special
solutions program can help!
We offer loan options ideal for those who have a few "dings"
on their credit report. We try to work with every customer to
develop an individual mortgage program - we call it your
personalized rate, because no two are alike. So we try to develop
a custom program based on your credit worthiness.
Is now
the time to refinance?
Each homeowner is unique — and we'll help you determine if
it's the right time for you to refinance. Effective refinancing
typically means lowering your current mortgage loan rate by at
least one percent. You might also want to consider changing the
length of your loan or receiving cash from the equity in your
house. It's simple to see what will work for you, just let us run
the numbers.
Is refinancing
the best choice for my financial goals?
If you want to increase cash flow, refinancing to lower your
monthly payment could help.
Can I reduce
my monthly payment if I refinance?
Quite possibly. To get a good idea of what your new monthly
payment would be, we can help calculate the numers for you.
Can I shorten
my loan term if I refinance?
Yes, as long as you qualify. For instance, you may be able to
reduce your mortgage loan term from 30 years to 15 years.
Can I
refinance and use the cash for an addition to my home?
Absolutely. Many people borrow against the equity in their homes
to make improvements.
How much of my
home equity can I use?
Up to 90 percent of the appraised value of your home can be used
to make home improvements. The equity you can use is based on the
value of the home and what you currently owe, subject to
applicable state laws.
Can I still
refinance even if I don't have much equity?
Yes, up to 90 percent loan-to-value (LTV) if you want to
refinance your house for a new rate and term. A reappraisal of
your property may be required.
What will it
cost me to refinance?
You will have closing costs associated with refinancing your
loan, including points and processing fees. You may have the
option of rolling these costs into the loan amount to reduce your
cash out of pocket. To evaluate your options, use our Resource Center.
Your credit guide:
Our
special solutions program can help!
We offer loan options ideal for those who have a few "dings"
on their credit report. We try to work with every customer to
develop an individual mortgage program - we call it your
personalized rate, because no two are alike. So we try to develop
a custom program based on your credit worthiness.
What You
Should Know About Credit!
For generations, owning a home has been a big part of the
"American dream." One critical element you need to
realize this dream is developing and maintaining good credit. Our
mission is to treat our customers — and potential customers
— like members of our own family. In doing so, we want to
help you understand why having good credit is so important —
especially when pursuing the American dream of home ownership.
What is credit?
When you borrow money, you are given credit. Credit simply
means you are using someone else’s money to pay for things.
Getting credit also means you are making a promise to pay the
money back, usually with interest. Interest is additional money
you pay for the privilege of borrowing money.
Why is having good
credit so important?
Establishing and maintaining a good credit history helps you
get a loan when you want one. In addition, it also gives you more
control when shopping for loans. When you have good credit, you
are more likely to receive favorable loan terms and pay less
interest than someone who does not have a good credit history.
Why not pay with
cash?
Paying cash for things such as clothes and household items is
generally a good idea. However, using credit cards for larger
purchases, such as an appliance, can help you establish credit.
Making monthly payments and paying off balances in a timely
manner will provide you with a good credit history that will help
when making larger purchases, such as cars and homes.
Does it matter how
many credit cards I have?
Yes. Every credit card company allows you a specific amount
of money to spend. This is called a credit limit. Having numerous
credit card accounts open, however, may affect your ability to
get a loan. Although the accounts may have low or no balances, a
potential lender considers all available credit limits when
deciding if you would be a good credit risk.
What happens if I
don’t make payments on time?
Making payments late costs you money. Each time you pay after
your due date, you may have to pay penalties or late fees. In
addition, a history of making late payments may ultimately cost
you by having to pay higher interest rates on subsequent loans.
For example, someone with good credit may get a mortgage with an
8 percent interest rate, while someone with poor credit past may
have to pay 15 percent or more. If each borrows $100,000 over 30
years, the 8 percent borrower will pay $164,155 in interest and
the 15 percent borrower will pay $355,200. That’s a
difference of $191,045.
How are late
payments defined?
Generally, a payment is considered delinquent if it’s
received 30 days past its due date. A mortgage payment, however,
is considered late when it’s received 15 days after its due
date. If an account is 60 or 90 days late, it’s considered a
serious delinquency. When applying for a mortgage, it is
preferable not have any late rent or mortgage payments in the
past 12 months since that could affect your interest rate.
How does a
potential lender know if I have good credit?
The primary source a potential lender uses to evaluate your
credit is a credit report. When you open a new credit account or
borrow money, the company you do business with may report
information about your repayment history to one or more credit-reporting
agencies. The credit-reporting agencies, in turn, make this
information available to potential lenders.
What appears on my credit report?
- The typical credit report includes four types of information: personal information, credit information, public record information, and inquiries.
- The personal information includes your name, current and previous addresses, telephone number, Social Security number, date of birth, and current and previous employers.
- Credit information includes the date opened, credit limit or loan amount, balance, and monthly payment amount for all loans and lines of credit. The report also shows your payment history during the past several years and the names of anyone else responsible for paying the account, such as a spouse or a co-signer.
- Public record information includes any bankruptcy records, foreclosures, tax liens for unpaid taxes, and monetary court judgments (such as lawsuits).
- Inquiries show when someone has obtained a copy of your credit report and every time you have applied for credit in the past two years. The number of inquiries on your report is important to your potential lender, particularly if you have had several recent inquiries. A lot of inquiries might indicate a danger of becoming overextended on your credit.
Can I get a copy of my credit report?
- Yes. In fact, you should request a copy of your credit report at least once a year to verify that all the information is correct because reporting mistakes might occur.
Get All Your Credit Info in One Easy Report!.
- The information on your credit report may vary from one credit-reporting agency to another because not all creditors report information to each agency. For this reason, you may want to get a report from each agency. Depending on where you live and your circumstances, you may have to pay a small fee for a copy of your credit report.
How does a
potential creditor evaluate the information on my credit report?
Most creditors, including mortgage lenders, use a credit
score generated from information on your credit report. A credit
score is a statistical measurement used to predict how likely you
are to repay a loan based on experience with millions of
consumers. As a result, it provides a fast and objective way to
evaluate your credit history.
What factors
influence my credit score?
Any action you take regarding your credit practices
influences your credit score. For example, if you regularly make
payments on time every month, that will positively influence your
score. Conversely, if you tend to maintain maximum balances on
your credit cards, and make minimum payments, that will
negatively influence your score. At any given time, your credit
score is calculated by weighing all positive and negative points.
What is a "good"
credit score?
Generally speaking, when you have a high score, you are
considered a better credit risk. The specific range of scores
depends on the credit scoring software used and the guidelines
established by the lender. A typical range of credit scores,
however, usually falls between 500 and 800. A credit score that
falls between 650 and 800 is more favorable.
Can I change my
credit score?
Yes, in fact you are the only person who can change your
credit score. If you have scored poorly, you can make a concerted
effort to improve your score by paying off loans, reducing credit
card balances and making monthly payments on time. After a period
of time, generally a year or two, such positive practices will be
reflected in your credit score.
Does a lender take
anything else into consideration when I apply for a loan?
Yes, although lenders rely heavily on credit scores, other
factors are taken into consideration. Included in your evaluation
may be your job history, income, savings and checking accounts,
the types of loans you currently have, and the type of mortgage
loan you want.
What can I do if I
don’t have credit?
If you don’t have credit as reported by the credit-reporting
agencies, most lenders will accept other sources of credit. Other
sources or "alternative credit" includes bills that you
have paid on a regular basis, such as rent, utility payments,
cable TV, or monthly insurance payments. Any of these creditors
should be able to provide you with a "credit reference"
to document your payment history.
Can I "start
over" by declaring bankruptcy and clearing away all my old
debt?
Declaring bankruptcy does not automatically allow you to
"start over." If you have declared bankruptcy, had a
car repossessed, had a house foreclosed on, or have not paid a
loan, it will likely have a major effect on your ability to get a
new loan. Information about a foreclosure or repossession can
stay on your credit report for seven years and a bankruptcy for
up to 10 years.
Can someone help me "fix"
my credit?
Credit Repair-with Cdrom
If you are having problems paying
your debts, you may want to seek help from a not-for-profit
credit counseling organization. Such organizations can work with
you and your creditors to set up repayment plans at little or no
cost.
When seeking advice, however, you may want to stay away from "credit repair" or "credit consolidation" companies that offer to "fix" your credit history for a fee. It can be done. Only you can repair a bad credit history by repaying your debts and ’t making your monthly payments on time.
We hope this information has
helped you gain a better understanding of how to start and keep a
good credit history. It’s important to remember that your
credit history will follow you throughout your life. Making good
decisions along the way will help a great deal when you’re
ready to realize the American dream of home ownership.
Buying a house Loan Programs
Fixed-Rate
Mortgages: A fixed-rate
mortgage means the interest rate and principal payments remain
the same for the entire life of the loan. (Taxes, of course, may
change.)
Advantages: Consistent principal and interest
payments make this loan stable. Your rate won’t change, so
you don’t need to worry about market fluctuations. This is a
good choice if you’re likely to stay in this house for a
long time.
Disadvantages: May cost you more — these loans are
usually priced higher than an adjustable-rate mortgage. Keep in
mind that, on average, most people move or refinance within seven
years. If rates in the current market are high, you’re
likely to get a better price with an adjustable-rate loan.
Types
of FixedMortgages-Rate:
30 Year Fixed-Rate Mortgage
20 Year Fixed-Rate Mortgage
15 Year Fixed-Rate Mortgage
Start the loan Process!
Adjustable-Rate
Mortgages: An adjustable-rate
mortgage (ARM) means that the interest rate changes over the life
of the loan — according to the terms specified in advance.
With ARMs:
The initial interest rate is usually lower than with a
fixed-rate mortgage. The monthly repayment would also be lower.
The interest rate may be adjusted (up or down) at predetermined
times. The monthly payment will then increase or decrease. Most
ARM programs do offer "rate cap" protection, which
limits the amount the rate can be increased, both each year and
over the life of the loan. All ARMs are amortized over 30 years.
Advantages: ARMs are usually priced lower than fixed-rate
mortgages so you can increase your buying power and lower your
initial monthly payments. If interest rates go down, you’ll
enjoy lower payments. Usually an ARM is the best choice for
homeowners who plan to relocate (for example, with their company
or the military), or for those who are purchasing their first
home and plan to be in the property only for three to five years.
Remember that, on average, most people move or refinance within
seven years.
Disadvantages: Your monthly payments can increase if
interest rates go up. Keep in mind that ARMs are best for
homeowners who aren't planning on staying with a property for a
long period. If you’re on a fixed income, an ARM (especially
a short-term ARM) may not be your best choice.
Types
of Adjustable-Rate Mortgages:
10/1 Adjustable-Rate Mortgage
7/1 Adjustable-Rate Mortgage
5/1 Adjustable-Rate Mortgage
3/1 Adjustable-Rate Mortgage
Start the loan Process!
Other Mortgage
Programs: 7 Year Balloon Mortgage:
With a balloon mortgage, you start by making payments as
you would with a full-term loan, but after a certain period the
balance of the mortgage comes due.
With
7 Year Balloons:
Your mortgage is amortized over the full term of the
loan repayment period. At the end of a specified period, the
balance comes due — a balloon payment needs to be made. So
with a 7 year balloon, you would make monthly payments for seven
years that have been calculated based on a 30 year mortgage
payment plan. At the end of those seven years, the remaining
principal balance is due and payable in full.
Advantages: You’ll get a lower
price on the loan, which will increase your buying power —
and remember that your payments will be calculated as if the term
were 30 years. You’ll also usually have a conditional right
to refinance after seven years, though on average most owners
will have already made a change. If you know you have a lump sum
of money on the way (such as an inheritance, bonus, or dividend
payment), if you expect to relocate in a short period of time, or
if you simply think you’ll be in a better position to
refinance later, this may be a choice worth your consideration.
Disadvantages: If you plan on keeping this property for
longer than seven years, a longer-term loan may be a stronger
choice.
Start the loan Process!