Resources

How are interest rates determined?
How do we provide the lowest rates possible?
What is an adjustable rate mortgage?
Is comparing APRs the best way to decide which lender has the lowest rates and fees?
How do I know if it's best to lock in my interest rate or to let it float?
How much money will I save by choosing a 15-year loan rather than a 30-year loan?
Is there a fee charged or any other obligation if I complete the online application?
When can I lock in my interest rate and points?
Are there any prepayment penalties charged for these loan programs?
What is your Rate Lock Policy?
Tell me more about closing fees and how they are determined.
What is title insurance and why do I need it?
What is mortgage insurance and when is it required?
What is the maximum percentage of my home's value that I can borrow?
What is an FHA loan and how do I know if I am eligible to apply?
What is a VA loan and how do I know if I am eligible to apply?
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Interest rates fluctuate based on a variety of factors, including inflation, the pace of economic growth, and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will almost always lead to low interest rates, while concerns about rising inflation normally cause interest rates to increase. Our nation's central bank, the Federal Reserve, implements policies designed to keep inflation and interest rates relatively low and stable.

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We are always offering low, competitive rates and fees available!

We'll assign your file to a Loan officer who will be available by appointment, phone or e-mail to answer any questions you may have and to guide you through the mortgage process.

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An adjustable rate mortgage, or an "ARM" as they are commonly called, is a loan type that offers a lower initial interest rate than most fixed rate loans. The trade off is that the interest rate can change periodically, usually in relation to an index, and the monthly payment will go up or down accordingly.

Against the advantage of the lower payment at the beginning of the loan, you should weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. It's a trade-off. You get a lower rate with an ARM in exchange for assuming more risk.

For many people in a variety of situations, an ARM is the right mortgage choice, particularly if your income is likely to increase in the future or if you only plan on being in the home for three to five years.

Here's some detailed information explaining how ARM's work.

Adjustment Period

With most ARMs, the interest rate and monthly payment are fixed for an initial time period such as one year, three years, five years, or seven years. After the initial fixed period, the interest rate can change every year. For example, one of our most popular adjustable rate mortgages is a five-year ARM. The interest rate will not change for the first five years (the initial adjustment period) but can change every year after the first five years.

Index

Our ARM interest rate changes are tied to changes in an index rate. Using an index to determine future rate adjustments provides you with assurance that rate adjustments will be based on actual market conditions at the time of the adjustment. The current value of most indices is published weekly in the Wall Street Journal. If the index rate moves up so does your mortgage interest rate, and you will probably have to make a higher monthly payment. On the other hand, if the index rate goes down your monthly payment may decrease.

Margin

To determine the interest rate on an ARM, we'll add a pre-disclosed amount to the index called the "margin." If you're still shopping, comparing one lender's margin to another's can be more important than comparing the initial interest rate, since it will be used to calculate the interest rate you will pay in the future.

Interest-Rate Caps

An interest-rate cap places a limit on the amount your interest rate can increase or decrease. There are two types of caps:

1. Periodic or adjustment caps, which limit the interest rate increase or decrease from one adjustment period to the next.

2. Overall or lifetime caps, which limit the interest rate increase over the life of the loan.

As you can imagine, interest rate caps are very important since no one knows what can happen in the future. All of the ARMs we offer have both adjustment and lifetime caps. Please see each product description for full details.

Negative Amortization

"Negative Amortization" occurs when your monthly payment changes to an amount less than the amount required to pay interest due. If a loan has negative amortization, you might end up owing more than you originally borrowed. None of the ARMs we offer allow for negative amortization.

Prepayment Penalties

Some lenders may require you to pay special fees or penalties if you pay off the ARM early. We never charge a penalty for prepayment.

Contact a Loan Officer

Selecting a mortgage may be the most important financial decision you will make and you are entitled to all the information you need to make the right decision. Don't hesitate to contact a Loan officer if you have questions about the features of our adjustable rate mortgages.

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The Federal Truth in Lending law requires that all financial institutions disclose the APR when they advertise a rate.  The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all, closing fees are included in the APR calculation.  These fees, in addition to the interest rate, determine the estimated cost of financing over the full term of the loan. Since most people do not keep the mortgage for the entire loan term, it may be misleading to spread the effect of some of these upfront costs over the entire loan term.

Also, unfortunately, the APR doesn't include all the closing fees and lenders are allowed to interpret which fees they include.  Fees for things like appraisals, title work, and document preparation may not be included, even though you'll probably have to pay them.

For adjustable rate mortgages, the APR can be even more confusing. Since no one knows exactly what market conditions will be in the future, assumptions must be made regarding future rate adjustments.

You can use the APR as a guideline to shop for loans, but you should not depend solely on the APR in choosing the loan program that's best for you.  Look at total fees, possible rate adjustments in the future if you're comparing adjustable rate mortgages, and consider the length of time that you plan on having the mortgage.

Don't forget that the APR is an effective interest rate--not the actual interest rate.  Your monthly payments will be based on the actual interest rate, the amount you borrow, and the term of your loan.

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Mortgage interest rate movements are as hard to predict as the stock market and no one can really know for certain whether they'll go up or down.

If you have a hunch that rates are on an upward trend, then you'll want to consider locking the rate as soon as you are able.  Before you decide to lock, make sure that your loan can close within the lock-in period.  It won't do any good to lock your rate if you can't close during the rate lock period.  If you're purchasing a home, review your contract for the estimated closing date to help you choose the right rate lock period.  If you are refinancing, in most cases, your loan could close within 30 days.  However, if you have any secondary financing on the home that won't be paid off, allow some extra time since we'll need to contact that lender to get their permission.

If you think rates might drop while your loan is being processed, take a risk and let your rate "float" instead of locking.  After you apply, you can lock in by contacting your Loan officer by phone.

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A 15-year fixed rate mortgage gives you the ability to own your home free and clear in 15 years. And, while the monthly payments are somewhat higher than a 30-year loan, the interest rate on the 15-year mortgage is usually a little lower, and more important - you'll pay less than half the total interest cost of the traditional 30-year mortgage.

However, if you can't afford the higher monthly payment of a 15-year mortgage don't feel alone. Many borrowers find the higher payment out of reach and choose a 30-year mortgage. It still makes sense to use a 30-year mortgage for most people.

Who Should Consider a 15-Year Mortgage?

The 15-year fixed rate mortgage is most popular among younger homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. They own more of their home faster with this kind of mortgage, and can then begin to consider the cost of higher education for their children without having a mortgage payment to make as well. Other homebuyers, who are more established in their careers, have higher incomes and whose desire is to own their homes before they retire, may also prefer this mortgage.

Advantages and Disadvantages of a 15-Year Mortgage

The 15-year fixed rate mortgage offers two big advantages for most borrowers:

  • You own your home in half the time it would take with a traditional 30-year mortgage.
  • You save more than half the amount of interest of a 30-year mortgage. Lenders usually offer this mortgage at a slightly lower interest rate than with 30-year loans - typically up to .5% lower. It is this lower interest rate added to the shorter loan life that creates real savings for 15-year fixed rate borrowers.

The possible disadvantages associated with a 15-year fixed rate mortgage are:

  • The monthly payments for this type of loan are roughly 10 percent to 15 percent higher per month than the payment for a 30-year.
  • Because you'll pay less total interest on the 15-year fixed rate mortgage, you won't have the maximum mortgage interest tax deduction possible.

Compare Them Yourself

Use the "How much can I save with a 15 year mortgage?" calculator in our Resource Center to help decide which loan term is best for you.

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There's no cost at all for completing our application. After your loan is approved, you can decide whether you wish to pay the application deposit to cover the cost of the appraisal and final credit report so that you can lock in an interest rate and we can begin to process your request.

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You can lock in your interest rate and points as soon as your loan is approved and you pay the application deposit to cover the cost of your appraisal and final credit report.  The application deposit is not another fee, it's actually just the appraisal cost estimate and will be credited to the actual appraisal cost at your closing.

We will review your information, and if we approval your application, a Loan officer will contact you about locking your rate and fees in.

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None of our loan products have penalties for prepayment.  You can pay off your mortgage any time.

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General Statement

The interest rate market is subject to movements without advance notice.  Locking in a rate protects you from the time that your lock is confirmed to the day that your lock period expires.

Lock-In Agreement

A lock is an agreement by the borrower and the lender and specifies the number of days for which a loan's interest rate is guaranteed.  Should interest rates rise during that period, we are obligated to honor the committed rate.  Should interest rates fall during that period, the borrower must honor the lock.

When Can I Lock?

You will be notified about locking in after we have reviewed your documentation and credit package.  You cannot lock in your rate online.

Fees

We do not charge a fee for locking in your interest rate.

Lock Period

Your loan must close and disburse within 60 days from the day your lock is confirmed by us.

Lock Changes

Once we accept your lock, your loan is committed into a secondary market transaction.  Therefore, we are not able to renegotiate lock commitments.

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A home loan involves many closing fees, such as the appraisal fee, title charges, closing fees, and state or local taxes. These fees vary from state to state and also from lender to lender. Any lender or broker can give you an estimate of their fees, but it is more difficult to tell which lenders have done their homework and are providing a complete and accurate estimate. Our Mission is to always provide you exemplary service, so we take our quotes very seriously.  We've completed the research necessary to ensure our fee quotes are accurate to the city level, which is no easy task!

To assist you in evaluating our fees, we've grouped them as follows:

Third Party Fees

Fees that we consider third party fees include the appraisal fee, the credit report fee, the settlement or closing fee, the survey fee, tax service fees, title insurance fees, flood certification fees, and courier/mailing fees.

Third party fees are fees that we'll collect and pass on to the person who actually performed the service. For example, an appraiser is paid the appraisal fee, a credit bureau is paid the credit report fee, and a title company or an attorney is paid the title insurance fees.

Typically, you'll see some minor variances in third party fees from lender to lender since a lender may have negotiated a special charge from a provider they use often or chooses a provider that offers nationwide coverage at a flat rate. You may also see that some lenders absorb minor third party fees, such as the flood certification fee, the tax service fee, or courier/mailing fees.

Taxes and Other Unavoidables

Fees that we consider to be taxes and other unavoidables include: state/local taxes and recording fees. These fees will most likely have to be paid regardless of the lender you choose. If some lenders don't quote you fees that include taxes and other unavoidable fees, don't assume that you are exempt from paying them. It probably means the lenders haven't done the research necessary to provide accurate closing costs.

Lender Fees

Fees such as points, document preparation fees, and loan processing fees are retained by the lender and are used to provide you with the lowest rates possible.

This is the category of fees that you should compare very closely from lender to lender before making a decision.

Required Advances

You may be asked to prepay some items at closing that will actually be due in the future. These fees are sometimes referred to as prepaid items.

One of the more common required advances is called "per diem interest" or "interest due at closing."  All of our mortgages have payment due dates of the 1st of the month. If your loan is closed on any day other than the first of the month, you'll pay interest, from the date of closing through the end of the month, at closing. For example, if the loan is closed on June 15, we'll collect interest from June 15 through June 30 at closing. This also means that you won't make your first mortgage payment until August 1. This type of charge should not vary from lender to lender, and does not need to be considered when comparing lenders. All lenders will charge you interest beginning on the day the loan funds are disbursed. It is simply a matter of when it will be collected.

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If you've ever purchased a home before, you may already be familiar with the benefits and terms of title insurance. But if this is your first home loan or you are refinancing, you may be wondering why you need another insurance policy.

The answer is simple: The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and especially your mortgage lender, want to make sure the property is indeed yours: That no individual or government entity has any right, lien, claim, or encumbrance on your property.

The function of a title insurance company is to make sure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly, and that your interests as a homebuyer are fully protected.

Title insurance companies provide services to buyers, sellers, real estate developers, builders, mortgage lenders, and others who have an interest in real estate transfer. Title companies typically issue two types of title policies:

1) Owner's Policy. This policy covers you, the homebuyer.  However, you may elect not to obtain an Owner’s Policy at your option.

2) Lender's Policy. This policy covers the lending institution over the life of the loan.  It is always required and issued at the time of closing for a one-time premium.

Before issuing a policy, the title company performs an in-depth search of the public records to determine if anyone other than you has an interest in the property. The search may be performed by title company personnel using either public records or, more likely, the information contained in the company's own title plant.

After a thorough examination of the records, any title problems are usually found and can be cleared up prior to your purchase of the property. Once a title policy is issued, if any claim covered under your policy is ever filed against your property, the title company will pay the legal fees involved in the defense of your rights. They are also responsible to cover losses arising from a valid claim. This protection remains in effect as long as you or your heirs own the property.

The fact that title companies try to eliminate risks before they develop makes title insurance significantly different from other types of insurance. Most forms of insurance assume risks by providing financial protection through a pooling of risks for losses arising from an unforeseen future event, say a fire, accident or theft. On the other hand, the purpose of title insurance is to eliminate risks and prevent losses caused by defects in title that may have happened in the past.

This risk elimination has benefits to both the homebuyer and the title company. It minimizes the chances that adverse claims might be raised, thereby reducing the number of claims that have to be defended or satisfied. This keeps costs down for the title company and the premiums low for the homebuyer.

Buying a home is a big step emotionally and financially. With title insurance you are assured that any valid claim against your property will be borne by the title company, and that the odds of a claim being filed are slim indeed.

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We currently do not offer mortgage insurance on our mortgage products, but if you shop around for your mortgage, many lenders do.  What we can do is explain the purpose of “mortgage insurance” and its distinction from other insurance products.  Mortgage insurance should not be confused with mortgage life insurance, which is designed to pay off a mortgage in the event of a borrower's death. Mortgage insurance makes it possible for you to buy a home with less than a 20% down payment by protecting the lender against the additional risk associated with low down payment lending.  Low down payment mortgages are becoming more and more popular, and by purchasing mortgage insurance, lenders are comfortable with down payments as low as 3 - 5% of the home's value.  It also provides you with the ability to buy a more expensive home than might be possible if a 20% down payment were required.

The mortgage insurance premium is based on the loan to value ratio, type of loan, and amount of coverage required by the lender. Usually, the premium is included in your monthly payment and one to two months of the premium is collected as a required advance at closing.

It may be possible to cancel private mortgage insurance at some point, such as when your loan balance is reduced to a certain amount - below 75% to 80% of the property value.  Recent Federal Legislation requires automatic termination of mortgage insurance for many borrowers when their loan balance has been amortized down to 78% of the original property value.

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The maximum percentage of your home's value depends on the purpose of your loan, how you use the property, and the loan type you choose, so the best way to determine what loan amount we can offer is to complete our online application!

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Unfortunately, we do not offer FHA loans at this time, but we can at least give you information about them.  FHA loans are mortgages issued by government-approved lenders and insured and administered by the U.S. Department of Housing and Urban Development HUD. FHA mortgage loans generally require less of a down payment and have less stringent qualification requirements than conventional loans. Any borrower of legal age is eligible to apply for an FHA mortgage loan regardless of income level, including non-U.S. citizens. However, FHA does limit the maximum amount an individual can borrow under this program based on the location of the property.

If you are looking for a loan that requires less of a down payment, you should compare both Conventional and FHA loan types to determine which financing type is best for you.

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Unfortunately, we do not offer VA loans at this time, but we can at least give you information about them.  VA loans are loans guaranteed and administered by the Department of Veterans Affairs and are offered as a benefit to qualified individuals who have served in the armed forces. The significant advantage of a VA loan is that a down payment is not required. If you are a qualified veteran and wish to purchase a home with little or no down payment, a VA loan may be your best bet. If you have funds that you wish to use for a down payment, it is wise to compare Conventional loans with VA loans to determine which financing type is best for you.

To officially determine if you are a qualified veteran, you must request a Certificate of Eligibility (COE) from the VA. This certificate indicates that the VA has determined you are eligible for a VA home loan and shows the amount of available entitlement or guaranty. To obtain a certificate of eligibility, complete the “Request for a Certificate of Eligibility for VA Home Loan Benefits (VA Form 26-1880)” form and submit it to the VA. This form, as well as additional information about VA home loan eligibility requirements, are available on the VA website at the following address:

www.homeloans.va.gov

In general, any veteran who served on continuous active duty during the timeframes and for the number of days listed below and has received an honorable release or discharge is eligible for a VA home loan:

World War II  (09/16/40 to 07/25/47) - 90 Days

Pre-Korean  (07/26/47 to 06/26/50) - 181 Days

Korean Conflict  (06/27/50 to 01/31/55) - 90 Days

Post Korean (02/01/55 to 08/04/64) - 181 Days

Vietnam Conflict (08/05/64 to 05/07/75) - 90 Days

Post Vietnam (05/08/75 to 09/07/80) - 181 Days (Enlisted)

Post Vietnam (05/08/75 to 10/16/81) - 181 Days (Officers)

Pre-Persian Gulf  (After 09/07/80) - 24 Months (Enlisted)

Pre-Persian Gulf  (After 10/16/81) - 24 Months (Officers)

Persian Gulf  (08/02/90 to TBD) 2 Years or period called to active duty (not less than 90 days)

In addition, the following individuals may also be eligible for a VA home loan.

  • Reservists or National Guard members who have served at least six years.
  • Veterans discharged due to service related disabilities, even if the timeframes above are not met.
  • Surviving spouses (not remarried) of veterans who died as a result of service connected injuries or diseases during service or after separation.
  • Commissioned Public Health Officers, National Oceanic and Atmospheric Administration Officers, Environmental Science Service Administration Officers, and Coast and Geodetic Survey Officers.