Home Loan

A home loan is a very critical piece in your financial portfolio. It is always important to do your homework and choose a lender and product that meets your needs. The sole purpose of this blog is to help educate our customers or potential customers. Even people who will never use Professional Mortgage Group (PMG) can take advantage of the information we provide!

Here is a quick list of some frequently asked questions and answers that we hope will help you when it comes time to shop for your Home Loan!

F.A.Q.

What is Pre-qualification?

The process of determining how much money a prospective homebuyer will be eligible to borrow before a loan is applied for.

What is a Pre-approval?

This allows you the ability to get approved for a specific loan amount prior to finding the home you want to purchase. The loan is underwritten and the lender commits to a specific loan amount. This can give you a great advantage with a homeowner or realtor if someone else is interested in the same home at the same time. Also, if you're thinking about refinancing and want to payoff creditors or take cash out, but not sure you would qualify – you can apply for a pre-approval and could save on the cost of getting an appraisal on your home until you know if you qualify.

What information do I need to provide when I apply?
When you're ready to apply, you need the most current information on your monthly income and debt, a total of your assets, your social security number, and employment information. For a complete list, see our Documents Requested list.

Is there a cost to apply? If so, how much?

No, there is no cost to apply for either a pre-qualification or a pre-approval.

Where do I close and sign for my loan?

Typically your closing will take place at a title agent’s office. When all parties agree upon a closing date, we will provide you with the exact location and time of your loan closing. Please note that this is typically specified in the purchase agreement.

What documents will I receive at closing?

At closing you will sign and receive copies of all legal documents that will be recorded and placed on record regarding the property that you are purchasing or refinancing. Also, you receive all pertinent information regarding your mortgage payment and servicing information for your new loan.

How long will the loan process take?

Loan approval and funding time frames vary depending on the type of transaction and the complexity of your personal finances. The process can take, on average, anywhere from 7–30 days.

What is a lock-in?

The lock-in represents the interest rate you choose and will be the interest rate used to factor your monthly payment. The lock-in secures the interest rate during the process of your loan approval as long as your loan is processed and closed prior to the rate expiration date. This date is given to you when you lock-in the rate. Typical lock-in periods are from 7 to 30 days, however longer options are available that stretch to 180 days, some fees apply with the longer lock periods.

When can I lock-in my rate?

You can lock or float your interest rate at any time during the process of your loan. The Mortgage Broker will discuss these options with you upon taking your loan application. If you are submitting your loan application via the Internet, a broker will be contacting you to discuss your interest rate lock or float options. Please note that an address is sometimes necessary in order to process a rate lock.

How long is my rate lock valid?

Depending on the type of transaction and the time you need, lock periods can be valid anywhere from 7 days up to 180 days.

Can I pay my loan off early; can I pay extra each month?

Yes, you can make principal payments at anytime during your loan term or pay the loan in full. You can also pay a set amount each month above the normal payment due or make lump sum payments periodically. Please note that some loans contain a pre-payment penalty. Terms of the penalty vary depending on the lender and product.

What is an escrow account?

An account maintained by the lender to collect funds from the borrower in order to pay the taxes and property insurance due on the loan.

What is PITI?

This represents the accounts your money is applied to when you make your monthly mortgage payment: P – Principal I – Interest T – Taxes I – Insurance

How do I know what loan is best for me?

Review your current situation and future goals, and then answer the following questions to help determine the direction you may wish to take. Also, discuss these questions with your mortgage professional to help determine the type of loan you need.
How long do you expect to stay in the house?
Which is more important, low monthly payments or low closing costs?
Will my income increase or decrease in the next three years?
How comfortable are you with your monthly payment potentially increasing?

These FAQ's are the first in a 3 part series. Check back the next 2 Tuesdays to complete the list or visit PMG online at www.pmg-inc.net to view the entire list under the FAQ tab. We also have this list in our "Buyers Guide" that we provide to our Realtor referral partners.

I hope this will come in handy when it comes time to find your Home Loan!

Brought to you by:

Professional Mortgage Group, Inc.

Your Columbia, MO Mortgage Broker!