Mortgage Questions!

This is a common mortgage question about PMI! Private mortgage insurance is required on Conventional loans and may allow you to purchase a home for as little as 3% down. This coverage requires a monthly insurance fee to be paid. PMI is only required if your loan-to-value ratio is 80% and above. 

Often times borrowers ask this mortgage question about closing costs. Closing costs are those costs that include the loan origination fee, discount points, appraisal costs, and any other charges associated with the legal transfer of property. Typically, these costs will range between 2% and 3% of the mortgage amount. 

Scott's Team will keep in contact with you throughout the completion of your application and after the loan has been originated. Once your loan is approved and the appraisal is in, we will contact you regarding any pertinent information. Finally you will be contacted seven to 10 days prior to closing for confirmation of details and three to five days before closing to go over final figures. 

The contract will specify where you will be closing. three to five days prior to closing, Scott's Team will contact you regarding how much to bring and how to bring it (usually in the form of a cashier's check made payable to the title company). You can use a personal check for up to $1,000.00 for any difference in the amount you are told and the actual amount needed.

Origination and discount points are percentages of the loan amount that you agree to pay your lender for their part in the loan transaction. One point typically equals one percent of the mortgage loan.

No, you are not committed to us because you've signed or reviewed a loan application. We would love for you to do business with Cornerstone First Mortgage and the Ridgeway Team, and if there are any challenges at all, please contact Scott at scott@ridgewayteam.com right away. The only commitment you have is when you have completed the signatures on the closing documents and the loan funds.

 Your target rate is the rate we will discuss to be the original optimal rate of interest for your mortgage.

Yes, we do sell off your mortgage loan. It is called transferring, and it is done at closing. Cornerstone First Mortgage will provide all the information about your investor. 

Mortgage rates are constantly changing and can even change throughout a single day, but on a typical day, rates do not move very much. This is why it is important to employ Scott at the Ridgeway Team to assist you in making the determination of when to lock your loan. Things that will affect the movement of interest rates are strong swings in the equity or stock market and indications from our economic position in not only the U.S. market but the world market as well. 

Locking a mortgage interest rate means that Cornerstone First Mortgage and the associated investor have committed to a specific interest rate on your behalf. Your loan officer watches the market on a daily basis to make sure that when we lock your interest rate, it is in your best interest. 

It's OK to use online bank statements only if the statements have the bank logo and name and correctly reflect your account number. 

This is one of the most popular mortgage questions we hear. Mortgage pre-qualification shows you what you can afford and mortgage pre-approval is confirming with bank statements, pay stubs and credit reports what you have provided verbally for the sake of achieving a full loan approval. It's great to reach out to your trusted Ridgeway Team mortgage advisor to secure either when house-hunting. 

Lenders are required by law to provide the information on this statement to you in a timely manner. Your signature merely indicates that you have received this information and does not obligate either you or the lender in any way. 

This means that you will be charged interest for the period of time in which you used the money loaned to you. Your prepaid finance charges are not refundable. Neither is any interest which has already been paid. If you pay the mortgage loan off early, you should not have to pay the full amount of the finance charges shown on the disclosure. This charge represents an estimate of the full amount the loan would cost you if the minimum required payments were made each month through the life of the loan. 

The total of payments figure indicates the total amount you will have paid, including principal, interest, prepaid finance charges, and mortgage insurance if you were to make the minimum required payments for the entire term of the loan. This figure is estimated on the disclosure statement. 

The finance charge is the cost of credit. It is the total amount of interest calculated at the interest rate over the life of the loan, plus prepaid finance charges and the total amount of mortgage insurance charged over the life of the mortgage loan. This figure is estimated on the disclosure statement. 

The disclosure statement only discloses your estimated mortgage payments. The interest rate determines what your monthly principal and interest payment will be. 

The amount financed is the mortgage amount applied for minus prepaid finance charges and any required deposit balance. Prepaid finance charges include items such as loan origination fees, commitment or replacement fee (points), adjusted interest, and initial mortgage insurance premium. The amount financed represents a net figure used to allow you to accurately assess the amount of credit actually provided. 

The amount financed is lower than the amount you applied for because it represents a net figure. If someone applied for a mortgage of $50,000 and their prepaid finance charges total $2,000, the amount financed would be shown as $48,000, or $50,000 minus $2,000. The APR is computed from this lower figure, based on what your proposed payments would be. In a $50,000 loan with $2,000 in prepaid finance charges, and an interest rate of 14%, the payments would be $592.44 (principal and interest) on a loan with a 30-year loan term. Since the APR is based on the net amount financed, rather than on the actual mortgage amount, and since the payment amount remains the same, the APR is higher than the interest rate. It would be 14.62%. If this applicant's loan were approved, he would still receive a $50,000 loan for 30 years with monthly payments at 14%, or $592.44 a month.