Frequently Asked Questions
Questions & Answers
- What information do I need to apply for a mortgage loan?
- What is the difference between pre-qualifying and a pre-approval?
- Is it possible to borrow additional funds when I refinance my house?
- How long does the mortgage loan process take?
- How do I know how much my closing cost will be?
- What is the difference between loan origination fee and discount points?
- How do I determine if I should pay discount points?
- Will I be able to include my insurance and property taxes in my payment amount?
- Can I have my mortgage payment automatically taken out of my checking account?
- Am I allowed to make a lump-sum payment on my mortgage loan?
- If I pay my loan off early is there a penalty?
- Are not all secondary market rates and closing costs the same?
- Can I ask the seller for assistance in paying closing costs and pre-paid fees?
- Does Whitaker Mortgage offer government mortgage loans?
- Can I get a secondary market loan on investment property?
- What is PMI?
- How can I avoid private mortgage insurance?
- Will Whitaker Mortgage service my loan?
Q. What information do I need to apply for a mortgage loan?
A. To apply for a mortgage loan, you will need to provide copies of the following items: tax returns, current pay stubs, bank statements, and the deed or purchase contract. Additional documents may also be required.
Q. What is the difference between pre-qualifying and a pre-approval?
A. Pre-qualifying is an informal process of determining a loan amount you qualify for. You cannot lock in a rate at this stage.
Pre-approval is a formal process in which you are issued a letter of approval after you have completed a loan application and provided the loan officer with documents that are needed for the final approval and after your credit report has been obtained. The pre-approval letter will state the loan amount and terms you have qualified for.
Q. Is it possible to borrow additional funds when I refinance my house?
A. Yes. This is known as a cash-out refinance. If the new mortgage amount is 90% or less of the house’s appraised value, additional funds may be borrowed. Certain cash-out refinances may have higher loan rates. Special terms apply in instances where the loan-to-value is greater than 80%.
Q. How do I know how much my closing cost will be?
A. At the time of application you will be given a Good Faith Estimate which shows an estimate of all fees & charges related to the mortgage loan. Remember, this document is an estimate of costs and may not account for unforeseen fees & charges that may arise.
Q. What is the difference between loan origination fee and discount points?
A. The loan origination fee is a charge for the work involved in the evaluation, preparation, and submission of the loan application to the investor. This fee is normally a percentage of the loan amount.
Discount points are charged to lower your rate. The more points you pay, the lower your rate will be. Like the origination fee, discount points are based on the loan amount.
Q. How do I determine if I should pay discount points?
A. Although there are several factors to consider, the principal determining factor is the length of time you plan to keep the property. The longer you own a property the higher the desire for a low rate, and in turn the greater the benefit of paying up front discount points. Contact us for a comparison of the savings on these two options.
Q. Will I be able to include my insurance and property taxes in my payment amount?
A. Inclusion of taxes and insurance in a loan payment is called escrowing. All government loans and loans with an LTV above 80% require a borrower to escrow taxes and insurance. Conventional loans with a LTV of 80% or less can waive escrow, for a one-time fee.
Q. Aren’t all secondary market rates and closing costs the same?
A. No. When comparing rates and closing costs, watch out for hidden costs and make sure you are comparing “oranges to oranges.” Review the Good Faith Estimate, which shows all charges and was given to you at the time of application. Check to make sure you aren’t paying higher origination and/or discount fees to obtain a lower rate.
Q. Can I ask the seller for assistance in paying closing costs and pre-paid fees?
A. Yes, however, there are limits on the percentage that the seller can contribute on a conventional loan. Contact us directly for further explanation.
Q. Does Whitaker Mortgage offer government mortgage loans?
A. Yes. We offer Federal Housing Administration (FHA) loans, which have low rates and reasonable terms, and Veterans Administration (VA) loans, which allow most qualified Veterans to obtain special financing terms. Both loan programs require certain closing costs and prepaid fees.
Q. What is PMI?
A. PMI stands for private mortgage insurance. PMI is a fee charged on mortgage loans financed at greater than 80% LTV. PMI adds protection to financial institutions in the event of default.
- One way is to keep your LTV at 80% or less.
- The second is to be approved for an 80/10/10 or 80/20 conventional loan program. You may contact our offices for more details.