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FAQ's
What are the qualification criteria for an FHA 203K Rehab Loan?
Credit Score of 620 and 3.5% Down Payment. The 3.5% down payment can come
from a Relative or 401K.
Can the Contractor put a lien against your property?
The Home Buyer Contractor Agreement protects the buyer from such liens and should
be enforced by an Attorney.
What are closing costs?
Closing costs are fees that you must pay in order to get a mortgage. Closing costs
can vary, but typically include: Appraisal fee, Credit report fee, Flood certification fee,
Flood certification fee, County Recording fee, Origination fee, Settlement or Closing
fee, Survey fee, etc...
What paperwork is needed to process an mortgage application?
Generally proof of employment and income in the form of pay stubs and/or tax
returns. Proof of assets in the form of bank statements also may be required.
After these documents and your credit report are reviewed, an appraisal of the
property and preliminary title report then will be required.
What is an appraisal?
An appraisal is a written analysis of the estimated value of your property. A qualified
appraiser who has knowledge, experience, and insight into the real estate marketplace
prepares the document. This ensures that you're paying fair market value when
purchasing a new home, and ensures that you get the most accurate market value in
determining equity for refinancing. Typically, an appraisal is required in order to close a
loan.
How much money do I need to bring to closing?
The amount of money that you must bring to your closing will depend on your
situation. Generally, you only need to bring money to the closing if you're purchasing a
new home. If you're refinancing your current home, you may choose to add all of your
closing fees into your loan. Because the amount of money required to close a loan
varies from borrower to borrower, your Loan Officer and/or title insurance company
representative will provide you with the total amount due prior to your closing.
What does it mean to "qualify" for a loan?
All lenders have guidelines that they use to determine whether a prospective borrower
has the ability to repay a loan and the necessary collateral to secure a loan. These
guidelines are based on such things as the amount of equity the borrower has in his
or her home, the borrower's income and credit history. To qualify for a loan, you need
to meet these requirements.
What is "equity?"
Equity is the difference between the value of a property and the amount of money that
is owed on the property. Equity is calculated by taking the fair market value of the
property and deducting the balance due on all debts secured against it. Those debts
can include first and second mortgages or home equity loans, as well as certain
judgements or other charges against the property that make it security for the
repayment of the debt.
What does "cash to close" mean?
"Cash to close" means the total amount of cash needed to complete a purchase
transaction. This would include the down payment on the purchase price of the home,
the transaction costs due from the borrower, and enough cash "left over" to make a
least two or three month's payments.
What is hazard insurance?
Hazard insurance is an insurance policy to protect homeowners against loss due to
property damage. Lenders require that you get a hazard insurance policy before you
buy or refinance a home. Hazard insurance provides compensation for losses due to
property damage caused by a fire, a severe storm, or other types of perils.
Generally, you have to pay for the first year of hazard insurance on the closing date.
Hazard insurance is also available as part of a more comprehensive homeowners policy.
What is Private Mortgage Insurance (PMI)?
Private Mortgage Insurance (PMI) is the insurance borrowers are required to pay if they
have less than 20% (in some cases 25%) equity in their homes. This insurance
protects the lender if the borrower defaults on the loan. The lender then uses the
money collected from PMI to offset any losses. AFFINITY Mortgage Corporation will let
you know if PMI is required for your loan.
What is title insurance and why do I need it?
Title insurance protects against any title dispute that may arise over a particular
property, like your home. Before your closing, a title company researches your
property's title to ensure it was legally passed from buyer to seller, each time it was
bought or sold. Title insurance further protects against illegal or fraudulent title
transfers that came to light (but remained undiscovered initially) during an
investigation. It also insures you against loss from easements of public record that
were not included in the title report, such as a utility easement across your property.
Title insurance is required to close a loan on any property.
How do I know if I need flood insurance?
The Federal Emergency Management Agency (FEMA) has divided most of the United
States into varying flood zones according to an area's likelihood of being flooded.
If your property is in a designated flood zone, then flood insurance is required.
A call to your municipal planning authority is probably the easiest way to determine
whether your home is in a flood zone.
What are the qualification criteria for an FHA 203K Rehab Loan?
Credit Score of 620 and 3.5% Down Payment. The 3.5% down payment can come
from a Relative or 401K.
Can the Contractor put a lien against your property?
The Home Buyer Contractor Agreement protects the buyer from such liens and should
be enforced by an Attorney.
What are closing costs?
Closing costs are fees that you must pay in order to get a mortgage. Closing costs
can vary, but typically include: Appraisal fee, Credit report fee, Flood certification fee,
Flood certification fee, County Recording fee, Origination fee, Settlement or Closing
fee, Survey fee, etc...
What paperwork is needed to process an mortgage application?
Generally proof of employment and income in the form of pay stubs and/or tax
returns. Proof of assets in the form of bank statements also may be required.
After these documents and your credit report are reviewed, an appraisal of the
property and preliminary title report then will be required.
What is an appraisal?
An appraisal is a written analysis of the estimated value of your property. A qualified
appraiser who has knowledge, experience, and insight into the real estate marketplace
prepares the document. This ensures that you're paying fair market value when
purchasing a new home, and ensures that you get the most accurate market value in
determining equity for refinancing. Typically, an appraisal is required in order to close a
loan.
How much money do I need to bring to closing?
The amount of money that you must bring to your closing will depend on your
situation. Generally, you only need to bring money to the closing if you're purchasing a
new home. If you're refinancing your current home, you may choose to add all of your
closing fees into your loan. Because the amount of money required to close a loan
varies from borrower to borrower, your Loan Officer and/or title insurance company
representative will provide you with the total amount due prior to your closing.
What does it mean to "qualify" for a loan?
All lenders have guidelines that they use to determine whether a prospective borrower
has the ability to repay a loan and the necessary collateral to secure a loan. These
guidelines are based on such things as the amount of equity the borrower has in his
or her home, the borrower's income and credit history. To qualify for a loan, you need
to meet these requirements.
What is "equity?"
Equity is the difference between the value of a property and the amount of money that
is owed on the property. Equity is calculated by taking the fair market value of the
property and deducting the balance due on all debts secured against it. Those debts
can include first and second mortgages or home equity loans, as well as certain
judgements or other charges against the property that make it security for the
repayment of the debt.
What does "cash to close" mean?
"Cash to close" means the total amount of cash needed to complete a purchase
transaction. This would include the down payment on the purchase price of the home,
the transaction costs due from the borrower, and enough cash "left over" to make a
least two or three month's payments.
What is hazard insurance?
Hazard insurance is an insurance policy to protect homeowners against loss due to
property damage. Lenders require that you get a hazard insurance policy before you
buy or refinance a home. Hazard insurance provides compensation for losses due to
property damage caused by a fire, a severe storm, or other types of perils.
Generally, you have to pay for the first year of hazard insurance on the closing date.
Hazard insurance is also available as part of a more comprehensive homeowners policy.
What is Private Mortgage Insurance (PMI)?
Private Mortgage Insurance (PMI) is the insurance borrowers are required to pay if they
have less than 20% (in some cases 25%) equity in their homes. This insurance
protects the lender if the borrower defaults on the loan. The lender then uses the
money collected from PMI to offset any losses. AFFINITY Mortgage Corporation will let
you know if PMI is required for your loan.
What is title insurance and why do I need it?
Title insurance protects against any title dispute that may arise over a particular
property, like your home. Before your closing, a title company researches your
property's title to ensure it was legally passed from buyer to seller, each time it was
bought or sold. Title insurance further protects against illegal or fraudulent title
transfers that came to light (but remained undiscovered initially) during an
investigation. It also insures you against loss from easements of public record that
were not included in the title report, such as a utility easement across your property.
Title insurance is required to close a loan on any property.
How do I know if I need flood insurance?
The Federal Emergency Management Agency (FEMA) has divided most of the United
States into varying flood zones according to an area's likelihood of being flooded.
If your property is in a designated flood zone, then flood insurance is required.
A call to your municipal planning authority is probably the easiest way to determine
whether your home is in a flood zone.
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