MORTGAGE FAQ

What does my mortgage payment include?
Your loan has an amortized payment.  This means each month your payment will apply the interest that is due and an amount to the principal.  If you elect to escrow, then the payment will include collected amounts for homeowner’s insurance, flood insurance if required, property taxes and mortgage insurance if required. This is sometimes referred to as you PITI payment which is principal, interest, taxes and insurances.

How long does the mortgage process take?
There are a lot of variables that go into the loan process.  In most scenarios you should allow for at least 30 days from the application to your closing date.  Depending on the type of loan you choose and if you are getting down payment assistance, this timeline could be longer. 

What is the Loan to Value Ratio?
All loan programs come with a maximum loan to value.  This is the loan amount you requested divided by the appraised value or selling price of the property.   Refer to the individual loan types to determine your maximum loan to value.

How do I calculate my Debt to Income Ratio?
Your debt to income ratio is determined by your current monthly obligations plus the total proposed new home payment, divided by your GROSS monthly income.  Gross monthly income is your income before taxes and discretionary amounts are taken out as deductions.  You only include current recurring monthly debts that you owe to creditors or court ordered payments.  Rent, food, utilities, insurance payments, telephone and other types of payments are not included in your monthly obligations to determine the debt to income ratio.  Most programs have a guideline ratio of 36%-41% for debt to income.

Do I have to escrow?
This is dependent upon a number of factors.  For government loans such as FHA, VA and Rural Development, we require that you escrow for all taxes and insurances.  For a Conventional loan, we will normally require you to escrow if your loan to value ratio exceeds 80%.

How much cash do I need to purchase a home?
The amount of cash needed depends upon the type of loan you have selected and several other variables.  In general, you will need to supply the following:
Earnest Money:  This is the deposit that you put down at the time you sign your contract to purchase.  This amount will be deducted from your overall down payment and/or closing costs at the time of closing
Down Payment:  This is the difference between your sales price and the loan amount
Closing Costs:  These are the costs associated with the process and closing of the loan.  This will include lender charges, third party vendor charges and attorney/title company charges

Do we finance manufactured housing?
Depending on the loan program selected, we can finance new and existing manufactured housing.  This includes singlewide and double/triple wide homes.  We require that the home be permanently affixed to the land it is placed on and the property will have to be titled in the borrower (s) name.  If it is an existing home, the home has to have been placed on the land by the dealership where originally purchased and not been moved afterwards. 

Does deferred student loan debt have to be counted in my debt to income ratio?
Yes, all deferred debts will have to be included in the debt ratio.  If a payment plan has not been established at the time of the loan request, then a minimum payment will be calculated depending on the loan program selected.  This normally ranges from .50% to 1.00% of the outstanding balance on each loan.

If I have filed bankruptcy can I still purchase a home?
There are a number of factors that affect whether you can purchase a home if you are currently in or have filed bankruptcy in the past.  It will be dependent upon the circumstances of the bankruptcy and the type of bankruptcy filed.  It is also dependent upon the loan program selected.  In general, you will need to have been discharged from bankruptcy for at least 12 months for a Chapter 13 bankruptcy up to a maximum of 4 years if a Chapter 7 bankruptcy.  There could be longer time limits that apply if a foreclosure was involved.

Can I have a co-signor?
For mortgage transactions they do not allow for a co-signor. There are circumstances that will allow for a non-occupying co-borrower.  This would be an individual that will not live in the home and is applying to help with credit or debt to income ratio issues.  They would be an obligated borrower on the note and hold title to the property.