FAQ

The Loan Estimate replaced the old Good Faith Estimate and the initial Truth in Lending disclosure. It gives you easy to understand info on your loan terms and estimated closing costs, so you can compare offers apples to apples. You will get it within 3 business days of submitting your application.

APR is your predicted interest rate stated as a yearly rate, and it can include fees like origination charges. It is a useful number because it gives you a fuller picture of what a loan will actually cost you, beyond just the interest rate.

The amount financed is the actual amount of credit made available to you. It is used to calculate the installment payments you will make over the life of the loan.

No. If your loan is approved for the amount you applied for, that full amount is what gets credited toward your home purchase or refinance at settlement.

The amount financed is a net figure, calculated after subtracting prepaid finance charges from your loan amount. Because the APR is calculated from that lower net figure rather than your actual loan amount, it ends up higher than your stated interest rate, even though your loan amount and monthly payment do not change.

The Disclosure Statement lays out your estimated payments. Your interest rate is what determines your combined monthly principal and interest payment.

The finance charge is the total amount of interest and loan charges you would pay over the entire life of the loan, assuming you keep it through the full term. It includes all prepaid loan charges such as origination charges, discount points, and mortgage insurance.

This is the total amount you will have paid, including principal, interest, prepaid finance charges, and mortgage insurance if applicable, assuming you make the minimum required payment every month for the full term of the loan.

It means you are charged interest only for the time you actually used the money. Prepaid finance charges and interest already paid are not refundable, but you will not pay the full original finance charge estimate either, since that number assumed you would keep the loan for its entire term.

Lenders are required by law to give you this information in a timely manner. Signing it just confirms you received it. It does not obligate you or the lender to anything.

Both are letters from a lender estimating how much you may be able to borrow, based on certain assumptions, and neither is a guaranteed loan offer. They are useful for house hunting because they show sellers you are a serious, financeable buyer.

Yes, as long as they show the bank logo and name and correctly reflect your account number.

Locking means we have secured a commitment on your interest rate with the investor. I keep an eye on the market daily so that when we lock, it is at the right time for your situation.

Mortgage rates can change daily, even hourly. Once your rate is locked, it will not change between the lock and closing, as long as you close within the lock period and nothing changes on your application. If your rate is not locked, it can move at any time. Locks are typically available for 30, 45, or 60 days, sometimes longer.

Sometimes, yes. It is called transferring, and it happens at closing. You will get all the information about your new investor, and I am always available to help make sure your first payment goes smoothly.

Your target rate is the interest rate we discuss together as the best fit for your mortgage, based on your current situation and goals.

No, you are not. If any issues come up along the way, just reach out to me directly. You are only fully committed once you sign your closing documents and your loan funds.

These are percentages of your loan amount that we discuss together, and they affect your rate and the total cost of originating your mortgage.

Your contract will specify the closing location. About 3 to 5 days before closing, I will let you know exactly how much you need to bring, which should be a cashier's check made payable to the title company. You can bring up to $1,000 as a personal check to cover any small difference, and any extra is refunded to you at closing.

I will be in touch throughout, before your application is even complete, after it is submitted, once your appraisal is in, and again 7 to 10 days before closing and 3 to 5 days before closing to confirm final numbers. Ask me anything along the way. There is no such thing as a dumb question.

Closing costs are the expenses beyond the price of the property that buyers and sellers typically pay to complete a real estate transaction, things like loan origination fees, discount points, appraisal fees, title search and insurance, surveys, taxes, recording fees, and credit report charges. By law, I have to give you a good faith estimate of these within three days of your application. They typically run 2 to 3 percent of your loan amount.

PMI is a type of insurance you may need on a conventional loan that protects the lender, not you, if you stop making payments. It is usually required when your down payment is under 20 percent, or when refinancing with less than 20 percent equity.