What should I know before buying a home?
Here are some tips that could save you a lot of time, money and trouble.

Plan ahead. Establish good credit and save as much as you can for the down payment and closing costs.

Get pre-approved online before you start looking. Not only do real estate agents prefer working with pre-qualified buyers; you will have more negotiating power and an edge over homebuyers who are not pre-approved.

Set a budget and stick to it. Our Online Calculator can help you determine a comfortable price range.

Know what you really want in a home. How long will you live there? Is your family growing? What are the schools like? How long is your commute? Consider every angle before diving in.

Make a reasonable offer. To determine a fair value on the home, ask your real estate agent for a comparative market analysis listing all the sales prices of other houses in the neighborhood.

Choose your loan carefully. For some tips, see the question in this section about comparing loans.

Consult with your lender before paying off debts. You may qualify even with your existing debt, especially if it frees up more cash for a down payment.

Keep your day job. If there is a career move in your future, make the move after your loan is approved. Lenders tend to favor a stable employment history.

Do not shift money around. A lender needs to verify all sources of funds. By leaving everything where it is, the process is a lot easier on everyone involved.

Do not add to your debt. If you increase your debt by financing a new car, boat, furniture or other large purchase, it could prevent you from
qualifying.

Timing is everything. If you already own a home, you may need to sell your current home to qualify for a new one. If you are renting, simply time the move to the end of the lease.

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How Much House Can I Afford?
How much house you can afford depends on how much cash you can put down and how much a creditor will lend you. There are two rules of thumb:

• You can afford a home that's up to 2 1/2 times your annual gross income.
• Your monthly payments (principal and interest) should be 1/4 of your gross pay, or 1/3 of your take-home pay.

The down payment and closing costs - how much cash will you need? Generally speaking, the more money you put down, the lower your mortgage. You can put as little as 3% down, depending on the loan, but you'll have a higher interest rate. Furthermore, anything less than 20% down may require you to pay Private Mortgage Insurance (PMI) which protects the lender if you can't make the payments. Also, expect to pay 3% to 6% of the loan amount in closing costs. These are fees required to close the loan including points, insurance, inspections and title fees. To save on closing costs you may ask the seller to pay some of them, in which case the lender simply adds that amount to the price of the house and you finance them with the mortgage. A lender may also ask you to have two months' mortgage payments in savings when applying for a loan.

The mortgage - how much can you borrow? A lender will look at your income and your existing debt when evaluating your loan
application. They use two ratios as guidelines:

• Housing expense ratio. Your monthly PITI payment (Principal, Interest, Taxes and Insurance) should not exceed 28% of your monthly gross income.
• Debt-to-income ratio. Your long-term debt (any debt that will take over 10 months to pay off - mortgages, car loans, student loans, alimony, child support, credit cards) shouldn't exceed 36% of your monthly gross income.

Lenders aren't inflexible, however. These are just guidelines. If you can make a large down payment or if you've been paying rent that's close to the same amount as your proposed mortgage, the lender may bend a little. Use our calculator to see how you fit into these guidelines and to find out how much home you can afford.

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What Kinds of Mortgages Are Available?

• Fixed-Rate Mortgage - interest rates and monthly payments remain unchanged for the life of the loan
  
• Adjustable-Rate Mortgage - interest rates and monthly payments can go up or down, depending on the market
  
• Hybrid Loans - a combination of fixed and adjustable mortgages
  

How do you decide which loan is best?

These questions may help.

• How much cash do you have for a downpayment?
  
• What can you afford in monthly payments?
• How might your financial situation change in the near future and beyond?
• How long do you intend to keep this house?
• How comfortable would you be with the possibility of your monthly payments increasing?
  

Discuss these with your lender so they can help you decide which loan would best suit you.

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What is a Fixed Rate Mortgage?
This is the most common loan arrangement in the U.S. With a fixed-rate mortgage the loan's principal and interest are amortized, or spread out evenly, over the life of the loan, giving you a predictable monthly payment. The upside is, if rates are low, you can lock in for as long as 30 years and protect yourself against rising rates. However, if rates fall you can't change your rate without refinancing the loan, and that could cost money.

The 30-year Fixed-Rate Mortgage, the most popular and easiest to qualify for, will give you the lowest payment. But you can also get a 20-, 15- and even a 10-year fixed-rate mortgage if you wish to save interest and pay your home off sooner.

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What is an Adjustable Rate Mortgage?
With Adjustable-Rate Mortgages (ARMs) interest rates are tied directly to the economy so your monthly payment could rise or fall. Because you're essentially sharing the market risks with the lender, you are compensated with an introductory rate that is lower than the going fixed rate.

How often does the interest rate change?
That depends on the loan. Changes can occur every six months, annually, once every three years or whenever the mortgage dictates.
How much can my rate change? Your ARM will stipulate a percentage cap for each adjustment period, which means your interest may not increase beyond that percentage point. If the market holds steady, there may be no increase at all. You may even see your payment decrease if interest rates fall.

How are the changes determined?
Every ARM loan is tied to a financial market index, such as CDs, T-Bills or LIBOR rates. Your rate is determined by adding an additional percentage (known as a margin) to that index's rate. When the index rises or falls, your rate rises or falls with it.

Is there a limit to how much interest I'll be charged?
Yes. It's called a ceiling, or lifetime cap. This is a guarantee that your
interest rate will never exceed a designated percentage. For instance, if your introductory rate was 5% and you have a lifetime rate cap of 6% (meaning that your interest rate can never increase more than 6% during the life of the loan) then your ceiling would be 11%.

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What are the benefits of an ARM?

• With a lower initial interest rate (usually 2% to 3% lower than fixed-rate mortgages), qualifying is easier and the payments are more manageable at first.
  
• You may qualify for a larger loan than you would with a fixed-rate mortgage.
  
• If you're only planning to stay a short time the interest rate is likely to stay lower than that of a fixed-rate mortgage.
• If you expect regular pay increases that would cover the increase in your interest, or if you believe interest rates will fall, an ARM might be the wiser choice.
  

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What is a VA Loan?
Administered by the Department of Veterans Affairs, these special loans make housing affordable for U.S. veterans. To qualify you must be a veteran, reservist, on active duty, or a surviving spouse of a veteran with 100% entitlement.

A VA loan is simply a fixed-rate mortgage with a very competitive interest rate. Qualified buyers can also use a VA loan to purchase a home with no money down, no cash reserves, no application fee and reduced closing costs. Some states allow a VA loan for refinancing as well.

Many lenders are approved to handle VA loans. Your VA regional office can tell you if you're qualified.

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What is a FHA Loan?
FHA loans are designed to make housing more affordable for first-time homebuyers and those with low to moderate income.
Both fixed- and adjustable-rate FHA loans are available, and in most states, an FHA loan can be used for refinancing. The difference is, they're insured by the U.S. Department of Housing and Urban Development (HUD). With FHA Insurance, eligible buyers can put down as little as 3% of the FHA appraisal value or the purchase price, whichever is lower. Qualifying standards are not as strict and the rates are slightly better than with conventional loans

Convertible ARMs
Some adjustable-rate mortgages allow you to convert to a fixed rate at certain specified times. This mitigates some of the risk of fluctuating interest rates, but there will be a substantial fee to do it. And your new fixed rate may be higher than the going fixed rate.

Convertible Loans
Another ARM choice, the convertible loan offers a fixed rate for the first three, five or seven years, then switches to a traditional ARM that
fluctuates with the market.

Balloon Mortgages
These short-term loans begin with low, fixed payments. Then, in five, seven or ten years a single large payment (balloon) for all remaining principal is due. This will require you to move or refinance at the end of your term. These are for conforming loans only (under $275,000)

Graduated Payment Mortgage (GPM)
With a GPM you pay smaller payments that gradually increase and level off after about five years. Lower payments can make it possible for you to afford a bigger home, but they'll be interest-only payments, adding nothing to the principal. This could put you in a negative amortization situation.

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How Can I save on a Fixed Rate Mortgage?
Short Term Mortgages
You don't have to finance your home for 30 years. Granted, the payments will be lower, but you'll be paying them longer. You could, instead, opt for a period of 20, 15 or even 10 years, pay your home off sooner and save in interest.
Furthermore, lenders offer much more attractive interest rates with
short-term loans, so your payments may not be as much as you'd think.
The table below shows you the interest savings on a $100,000 loan at 8.5%
interest:
Term Monthly Payment Total Interest Accrued
30 yr $768.91 $176,808.95
20 yr $867.83 $108,277.58
15 yr $984.74 $ 77,253.12
By paying $215.83 more a month on a 15-year mortgage, you'd save $99,555.83 in interest over a 30-year loan - and own the house in half the time.

Bi-Weekly Payments Instead of paying 12 monthly payments you can choose to make 26 bi-weekly payments. Here's how it works. Each bi-weekly payment is the equivalent of half a monthly payment, but at the end of the year, it totals 13 months instead of 12. A 30-year mortgage could be paid off in 22 years. If you only qualify for a 30-year loan, this is a fabulous way to increase your equity sooner and save on interest.

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What Determines the Cost of a Mortgage?
There are five factors that determine the ultimate cost of a mortgage.

The principal, or amount of the loan, is the total amount you borrow (the purchase price minus your down payment).

The interest rate adds significantly to the cost of your mortgage.Fixed or adjustable, the interest paid at the end of the loan can exceed the original cost of the home itself. For instance, a $100,000 loan balance at 8.5% for 30 years will cost you $277,000 by the time the loan is retired.

The term of the loan is the length of time until the loan is paid off. A
longer term means more interest and higher cost.

Points are interest paid on the loan and they're purely optional. You pay points at closing if you want to reduce the interest rate and make your monthly payments smaller. One point equals one percent of the loan amount.

Fees are paid to the lender at closing to cover the costs of preparing the mortgage. They can vary according to where you live and what type of loan you're securing.

While points and fees are not financed, they still contribute to the cost of the mortgage.

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What is Private Mortgage Insurance?
Private Mortgage Insurance, or PMI, is insurance purchased by the buyer to protect the lender in case the buyer defaults on the loan. PMI is generally applied when you put down less than 20% of the home's purchase price. The reason is this:

With 20% down, you are considered a low risk. Even if you default the lender will probably come out ahead because they've only loaned 80% of the home's value and they can probably recoup at least that amount when they sell the foreclosed property.

But with 5% or 10% down, the lender has a lot more invested in the loan and if you default, they will almost surely lose money. This is why lenders require buyers to purchase PMI if they put down less than 20%. It's insurance that, no matter what happens, the lender will recoup its investment.

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How does PMI increase your buying power?
In simplest terms, PMI allows you to put less money down, and the benefits are as follows:

• If you have good credit but are short on cash for a down payment you canput as little as 5% down.
  
• It doesn't take as long to accumulate a 5% or 10% down payment so you could buy a home much sooner than you anticipated.
  
• A smaller down payment allows you to purchase a larger or nicer home.
  
• For repeat buyers, a smaller down payment on the new home can free up cash from the sale of their previous home to use for other debts or expenses.
  
• Your interest will be higher if you put down less than 20%, but that
  interest is tax-deductible.

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What does PMI cost?
A Good Faith Estimate will be provided to you within a few days after we received your loan application. This disclosure will provide you with an estimate of your monthly PMI premium as well as the initial premium you'll need to pay at closing. Additionally, we will be providing you a disclosure on your rights (if applicable) to cancel the PMI. PMI can be avoided by utilizing a purchase money second mortgage. Let you executive loan team calculate which option is best for you.

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What Should I Ask My Lender?
What type of loan is best for me?
If you've done some groundwork you should have a pretty good idea of what type of loan you need. But your lender may offer options you hadn't considered or even something you haven't yet heard about.

What will my closing costs be?
At closing, you'll be required to pay a number of fees such as transfer of title, origination and appraisal, attorney services, credit report, title insurance and inspections. Your lender is required to provide an estimate of these costs within a few days after your application is received, but you can always ask for an estimate sooner.

Will I be charged points?
Sometimes you'll have to pay points (one point = 1% of the loan amount) in order to get the interest rate the lender has quoted you. Before proceeding with your loan application find out if there are any points attached to your
loan.

What items must be prepaid?
Some expenses, such as first year's property taxes and insurance, must be paid at closing. Your lender will let you know what's required.

How long will I be guaranteed the quoted interest rate?
This is called "locking in" a rate and most lenders provide this service. When you apply for your loan, the lender will lock in the agreed interest rate for an agreed period of time. But there may be a fee for this, so ask.

How long will it take to get approval?
It varies, so make sure you get an estimate of how long approval will take, especially if you have a deadline for closing on a new home.

Does the loan have a pre-payment penalty?
If you even think there's a possibility you may pay off your loan early (this includes refinancing) find out if there's a penalty for doing so.

Is there a call option attached?
A call option allows the lender to require you to pay off your loan balance before it's due. You don't want this, so make sure it's not in the contract.

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What Documents Will I Need for My Loan Application?
When preparing a loan, the lender will ask for substantial documentation.

Here's a list of what is usually required.

Personal Information

• Address and telephone numbers of each borrower
  
• Previous address(es) over the last seven years
  
• Social Security number(s) of applicants
  
• Age of applicant(s) and dependent(s)
  
• Name and address of landlord(s) or lender(s) for the past two years
  
• Current housing expense details (rent, mortgage payments, taxes, insurance)
  

Employment/Income

• Name and address of employer(s) for the past two years
  
• Pay stubs for the past 30 days · W-2 forms for the past two years
  
• A written explanation of any employment gaps
  
• If you're self-employed you'll need:
  
• Complete, signed Federal Income Tax Returns for the past two years (personal and corporate) ·
  
• Year-to-date Profit and Loss Statement and Balance Sheet
  

Other Income

• If you receive Social Security, a pension, disability or VA benefits
  you'll need:
  
• A copy of your awards letter (or tax returns for the past two years)
  
• A copy of your most recent check
  

Child Support
If you pay child support you'll need:

• A copy of the divorce or separation agreement
  
• Evidence of payment for the last 6-12 months (cancelled checks of pay history from the courts)
  

Rental Income
If you receive rental income you'll need:

• A copy of the lease
  

Debt Disclosure - Credit Cards, Loans and/or Current Mortgages

• Name of each creditor
  
• Account number, monthly payment and outstanding balance for each
  
• Proof of recent payment or current statement for each
  
• Documentation of alimony or child support you are required to pay
  
• Written explanation of any past credit problems
  

Loan Application for Home Purchase

• A complete, signed copy of sales contract · Mailing address and property description (if it's not in the contract)
  

Evidence of Funds for Down payment

• If the down payment is a gift you'll need a signed gift letter
  
• If you have any recent large deposits or new accounts you'll need to show an explanation in documentation
  

Other

• If there's a bankruptcy in your financial history you'll need complete documentation
  

Fees

• Appraisal fee (approximately $350)
  
• Credit report fee (approximately $50)
  
• In some areas, a flood determination fee (approximately $20)

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What's Involved in the Closing Meeting?
Preparing for Closing
Many things must be taken care of before you come to the closing meeting. Ask your lender for a list of your responsibilities so you can arrive fully prepared.

Set a Closing Date
When choosing a closing date give yourself time to gather all your information and free up any necessary funds. The lender will need time to prepare and deliver loan documents (usually 3-5 days), home inspections must be scheduled and if any repairs are needed allow enough time for them to be completed. Also, if your rate is locked in, make sure you close before the deadline so you'll be guaranteed the quoted interest rate.

Final Walk-Through
A day or two before closing it's a good idea to take one last look at the home to make sure repairs have been made, there's no new damage, and anything meant to be sold with the property is still there. You can do this on your own or with your real estate agent.

Closing Costs
One business day before closing your lender and your escrow company will allow you to review your closing statement.

Settlement Statement
This is the final exact amount you'll owe at closing and it must be brought in the form of a certified cashier's check or wired funds.

The Closing Meeting
The legal sale and purchase of your home happens at the closing meeting which is attended by the buyer (you), the loan officer, the seller and any real estate agents or attorneys involved. (In some areas, closing is done by an agent without a meeting.)

Examination and Signing of Documents
At the closing meeting, the closing agent will review the settlement sheet with you and the seller and ask you both to sign it. This is also when you'll present evidence of insurance and inspections and sign all other loan documents.

Payment of Closing Costs
Once all papers are signed and in order you'll hand over the check for closing costs (the down payment is included in check) and the lender provides the remaining funds to purchase the house.

Transfer of Property
Congratulations! You now own your new home. After the meeting, the closing agent will record the mortgage and deed in your name with local government records and all funds will be disbursed.

Documents
During closing you'll sign stacks of important paperwork, including the following:

HUD-1 Settlement Sheet - This is the itemized list of closing costs your lender gave you the day before closing. After the closing agent completes it you and the seller both sign it.

Truth-in-Lending Statement - Given to you soon after you applied for your loan, it outlines the cost of the loan, gives you the APR (annual percentage rate) and defines the loan terms and number of payments.

The Mortgage Note - The mortgage (or promissory) note is legal evidence of your promise to repay the loan according to the agreed terms which this document outlines.

The Mortgage - This is the legal document that gives the lender a claim against your house if you fail to uphold the terms of the mortgage note. Although you have possession of the house the lender shares ownership until you pay off the loan, and can demand full payment or foreclosure if you default. Some states use a deed of trust instead that conveys title to a trustee until the loan is repaid.

The Deed - This document transfers ownership to your name and is signed by the seller at closing. You'll get a copy at closing and the original will be sent to you after it's recorded.

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What Costs Will I Pay at Closing?
Closing costs vary according to lender, location and even from sale to sale. Some costs can be negotiated, reduced or even waived and some may be paid by the seller. When you're doing your research, use this checklist to get a rough idea of what you'll pay at closing. The lender or closing agent will provide you with an exact total a day or two before closing.
Closing Costs Checklist
$______Down payment
$______Lender's points
$______Prepaid interest
$______Loan origination fee
$______Mortgage insurance
$______Credit reports
$______Appraisal(s)
$______Survey of property
$______Inspections
$______Homeowner's insurance
$______Attorneys' fees
$______Title search
$______Title insurance
$______Prorated property taxes
$______Recording fees
$______Closing taxes
$______Escrow account for and insurance
$______Other costs specified in purchase agreement
$______Other costs

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How Do Lenders Decide Loan Approval?
The Four "Cs" of Loan Approval
1. Capacity
2. Credit
3. Collateral
4. Character

Capacity
A lender will weigh your housing expenses and total debt against your monthly income to determine your ability to repay a loan.

Monthly Income - Your net monthly income. If you're self-employed or receive commissions or bonuses, the lender averages your monthly income over the last two years.

Housing Expenses - This is the monthly payment you'll have with the new loan, along with the monthly cost of insurance, property taxes and any homeowner's fees or other costs.

Total debt - Add up any current mortgages, credit card balances, child support or alimony payments, tuition, car loans or other installment loans that will take longer than 10 months to pay off and this is your total debt. If your monthly mortgage payment is less than 33% of your net monthly income, a lender will typically consider you qualified to repay the loan. That figure can even go as high as 36% depending on the buyer. For instance, many lenders will allow a first-time buyer's housing expenses to take up more of their income.

Credit
To find out what kind of credit risk you represent, your lender will
investigate your:

• Previous mortgage payment history
  
• Rent payment history
  
• Credit card use
  
• Installment debt payment history
  

A few late payments on a credit card may not hurt you all that much. But collections, repossessions, foreclosures and bankruptcies can be serious problems. If you have a good explanation you may still be able to repair your credit rating and get approval.

Collateral
When you ask for a home loan, you're putting the home itself up as
collateral. Naturally, the lender will want to know that the home is worth at least as much as the loan amount, which is why an appraisal is required.

But they'll also want proof that you have the cash necessary for the down payment and closing costs. They'll seek verification of funds from sources including bank accounts, stocks, bonds, mutual funds, the sale of an existing property or any gifts from family members that will not have to be repaid.

Other Compensating Factors
Many factors can sway a lender in your favor. The bottom line is that the lender wants to feel secure in loaning you money. Even if there are a few dings in your credit, if you appear to be a safe credit risk overall you should be confident your loan will be approved.

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What Decisions Do Credit Lenders Make?
There are three major decisions that a credit lender is empowered to make.

1. Loan Approval
Approval is often given with conditions, such as the sale of current property, that require documentation for final approval.

2. Loan Suspension
A loan is suspended when information is incomplete or questions remain unanswered in the loan application. The buyer must supply the needed information before a final decision can be made.

1. Loan Denial
There are a number of reasons why your loan may be denied, and you're entitled to know those reasons. If denial is based on your credit you're entitled to a free copy of that report.

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What is my down payment?
This is simply the amount of money you choose to invest in your new home. The down payment and the loan amount make up the purchase price of the home. We offer many loan programs that require only a 5% or 10% down payment. We even offer some zero down payment options.

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What are the advantages of making a higher down payment?
A higher down payment will reduce the size of the loan, as well as provide added strength to your ability to borrow. The higher your down payment, the lower your monthly mortgage payment will be. In addition, your financing costs will be reduced because you will pay less interest over the term of the loan. It will also be much easier for you to qualify for a loan at the terms you select. Down payments meeting or exceeding 20% will generally remove the need for costly mortgage insurance, thereby lowering your payment even further. However, if you wish to maximize your homeownership tax advantage, consider making a smaller down payment. Either way we can help!

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What is a Good Faith Estimate (GFE)?
A Good Faith Estimate (GFE) details the costs you will incur during the mortgage process. Some of these sources are title insurance companies, credit bureaus and government entities. This is supplied to you at or soon after you make loan application. While we endeavor to be precise, it is important to confirm your costs.

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Do I have a choice of points or no points? How do I determine whether or not to pay points?
Yes, you do have a choice. The primary idea of points is to pay a fee at closing in order to lower your interest rate. Depending upon how long you keep your loan, you may save substantially more money over the life of the loan. Points are a good idea if you plan to keep your loan for a long time.

What are the pros and cons of getting an adjustable rate mortgage?
When interest rates are high, many borrowers choose an adjustable rate mortgage. This option will keep your monthly payment lower as you start out in your new home. When interest rates are low, fixed rate mortgages will lock in that low rate over the life of the loan. Other pros and cons:

• Adjustable rate mortgages may be assumable, conventional fixed rate mortgages usually are not.
  
• If you plan to sell in the near future, an adjustable rate mortgage is usually best because you pay a lower rate at the beginning of an adjustable loan. Therefore, you'll incur less interest expense for the short time you own the house.
  
• This decision should be thought out carefully. If interest rates rise you may have higher monthly payments for a significant period with an adjustable loan.

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When is an adjustable rate mortgage right for me?
Generally, if you plan to keep your loan for a short period of time (1-10 years) or if fixed rates are high, an adjustable rate mortgage may be right for you. Westminster Mortgage offers a variety of ARMs including 1-year Treasury ARM, 3-year Treasury ARM, 3/1 Treasury ARM, 5/1 Treasury ARM, 7/1 Treasure ARM and 10/1 Treasury ARM.

Other advantages of an ARM include:

• An ARM will usually offer a lower starting interest rate than a fixed rate loan.
  
• An ARM can be less expensive than a fixed rate loan if interest rates remain steady or decline.

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What is credit scoring?
A credit score is derived by analyzing a number of variables to determine the likelihood that a person will repay the loan on time. The scoring system was developed from a statistical analysis of variables that predict loan repayment patterns. Variables include late payments, delinquencies and credit history. A higher score is better.

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What constitutes a loan approval?
Most lenders base their decision on three factors: credit, collateral and capacity. Credit refers to the quality of your current credit rating. Capacity is your ability to repay the loan based on job stability, current income and other factors. Collateral is the amount of equity in your home, and the likelihood of appreciation. Once everything checks out, you're approved!

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Should I pre-qualify or get pre-approval before I begin searching for a home?
Real Estate agents and home sellers will generally consider you a more serious buyer if you receive a pre-approval from a reliable source. Not only does it allow you to narrow your price range, it also assures the seller that you qualify when you do find the home of your dreams.

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Why should I choose you?
If there's one thing that's true about buying a home, or even refinancing one, it's that you'll always have questions. That's why the most important thing you should look for in a mortgage lender is the knowledge and helpfulness of its people.

We're here to answer your questions, recommend the right program, and help you understand the process every step of the way. We have dozens of Conventional and FHA programs, including fixed rates, adjustable rates, balloons, first-time buyer programs and more. We even offer programs that make it easier to get started with low down payments and relaxed qualifying guidelines. All of our programs offer competitive rates.

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When should I lock in my interest rate?
To be an informed buyer, you'll want to be aware of recent interest rate movements. Have they been falling or rising? Depending on the market, you may want to wait before locking in an interest rate, or may want to lock in as soon as possible. We offer lots of flexibility but the decision to lock or float can only be made by you.

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Once I apply, how long will it take before I receive an approval?
It generally takes only 48 hours after we receive your completed application to obtain a loan decision. Some programs may require additional documentation, so approval may take a little longer. Check with your Mortgage Loan Officer for an estimate of the time that it will take to receive your approval. Once approved, you will receive a written commitment letter, which will outline your rate (if locked), terms, approval conditions and any additional documentation needed to close. Depending on your situation, some loans can be approved in hours.

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How much money will I need at closing?
Your closing costs will depend upon the sale price, the amount of your down payment and the various fees connected with the purchase of your home. Generally, conventional loans require a minimum of 5% to 10% of the sales price in down payment. FHA loans require at least 3% to 5% down. Closing costs and escrow items include mortgage insurance, prepaid taxes, title insurance, etc.

Shortly after you apply for a loan, we will provide you with a Good Faith Estimate of all closing costs and escrow items. (See Good Faith Estimate above)

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What are discount points?
A discount point is a fee that you can pay to reduce your interest rate. One"point" equals 1% of the loan amount. For example, one point on a $100,000 loan would equal $1000. If you're going to be in your home for a relatively short period, it may not be worth it to you to pay discount points. If you would like to lower your monthly payments by lowering your interest rate, then paying points up front may be the best way to accomplish this.

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Will one late credit card payment or loan default disqualify me from getting a mortgage?
If you have less than perfect credit, we have programs to meet your needs. Late payments should by no means automatically disqualify you from getting a mortgage. We understand that almost everyone has forgotten to pay a bill on time, or has had trouble making a payment. Many people find themselves in difficult financial situations. These often result from illness, divorce, or temporary unemployment.

If you can demonstrate that a problem is in the past, and you have been able to reestablish a good track record for a sufficient amount of time, you may be in a good position to get a mortgage loan. There may be a reasonable explanation, so speak to us honestly and openly about the situation. It's important to remember that lenders don't just look at your past history, but also at your ability and willingness to pay in the future.

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