faq
The most common home loan and mortgage questions
Frequently Asked Questions
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What Does Conditional Approval Mean In The Mortgage Process
Conditional approval means the lender's underwriting team is satisfied with your loan application but needs you to provide additional information before you can be fully approved. Being conditionally approved doesn't mean you're loan is approved. It means the lender is willing to loan you the money if you satisfy their list of conditions.
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What’s the next steps after receiving a quote?
The next steps after receiving a quote is to complete a loan application. This provides the opportunity for us to conduct a complete assessment of your financial situation so that we can determine with higher certainty of what mortgage products best matches with you. A complete loan application includes filling out the application, uploading all necessary documents and pulling credit. Once the assessment is complete, the overall strategy discussed with the borrower and if both mutually agree to move forward, we start the process of sending disclosures and submitting your loan to underwriting.
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What’s the overall mortgage process?
- Needs - Borrower discusses their situation and needs
- Options - Mortgage Advisor provides various mortgage options
- Application - Borrower completes a loan application
- Assessment - Mortgage Advisor conducts a complete assessment of the borrower’s application and situation
- Paperwork - Disclosures sent to the borrower(s)
- Underwriting - Full loan application submitted to underwriting
- Conditions - Underwriter provides any conditions that must be worked through to clear the application
- Clear to Close - Schedule for Closing
- Settlement - Close the loan
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How do I get an Appraisal Waiver?
An appraisal waiver is determined by either FannieMae or FreddieMac's automated technology. No lender or loan officer alone can determine if a property will receive an appraisal waiver.
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What is Broker Compensation?
Broker Compensation is the form of revenue a Mortgage Broker earns for advising a client through the mortgage loan process. When brokering a mortgage, the investor lender or the borrower pays for the compensation.
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What are the Closing Cost?
Closing costs are broken into two categories: loan costs and other costs.
Loan costs can consist of some or all of the following: appraisal fee, title fees, credit report fee, administrative fees, and underwriting fees. Ask your loan advisor about closing cost for your unique situation.
Other costs typically will consist of taxes and prepaids. If the borrower is escrowing their homeowner's insurance and property tax, this will be part of the Other costs.
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Why are Closing Costs so high?
Depending on the objective of the borrower, Closing Cost can vary in cost. If the borrower decides to buy down the rate with points, this will drive up the closing cost. On the other hand, if the borrower decides to receive lender credit in exchange for a higher rate, this will offset some or all of their Closing Cost. However, the majority of the time, the high Closing Cost is due to taxes and escrow.
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What’s the difference between a Mortgage Broker and Mortgage Lender?
A mortgage lender is a financial institution that provides loans directly to you. However, a mortgage broker does not lend money. They match the lender with the borrower based on the borrower's specific situation and needs. The advantages of using a mortgage broker is a broker may work with many lenders in order to find the best deals.
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How quickly can I close (settle)?
We typically receive Clear to Close/Settle within 15 days. Settlement can occur much sooner but typically our speed is restricted by the responsiveness of the borrower, waiting for title work to be completed and/or appraisal to be completed.
For purchases, this will also depend on the flexibility of the seller and their timeline.
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Can I get the lowest rate and pay zero out of pocket?
Depending on the loan product or if the home has enough equity, the borrower may have the option to "roll-in" the closing cost and finance the cost to obtain the mortgage. Other than this, there is no way for a borrower to receive the lowest rate available and not pay the services for the lender, title, taxes to the county and state, and various other fees.
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Does zero closing cost exist?
Yes it may. If the client’s scenario is eligible and they decide to receive lender assistance to offset closing cost in exchange for a higher rate. However, there is no absolute zero fees loan. All services assisting the mortgage process are For-Profit business and as such, must earn revenue to continue to provide services to our clients. Additionally, if tax is required during the process, it must be paid.
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What are Pre-Paids?
Pre-Paids can vary from prepaying your homeowner’s insurance to property taxes. If you are skipping a month in your first mortgage payment after obtaining your new mortgage loan, you will pre-pay your mortgage interest.
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Why do I need to pay for an appraisal for a refinance when I already had one done when I purchased the home?
The appraisal is required for a refinance because the lender must validate the estimate value of the property.
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What’s the difference between an interest rate and an APR?
The interest rate is the cost you will pay each year to borrow the money, in the form of a percentage rate. It does not include fees or any other charges you may have to pay for the loan.
An annual percentage rate (APR) is the cost of the loan in the form of a rate. The APR includes the interest rate, any points, mortgage broker fees, and other charges that you pay to get the loan. For this reason, the APR is usually higher than the interest rate. The APR does not include taxes, pre-paids or escrow.
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What’s the difference between a Loan Cost and Closing Cost?
Closing costs are broken into two categories: loan costs and other costs.
Loan costs can consist of some or all of the following: appraisal fee, title fees, credit report fee, administrative fees, and underwriting fees. Ask your loan advisor about closing cost for your unique situation.
Other costs typically will consist of taxes and prepaids. If the borrower is escrowing their homeowner's insurance and property tax, this will be part of the Other costs.
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Is Closing Cost the same as Cash to Close?
This depends on if the borrower can and will be financing the Closing Cost.
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Why is the mortgage payoff different than the balance I see on my mortgage statement?
The balance on the mortgage statement is the balance of the mortgage at a specific point in time. From that time until the mortgage is "paid off," interest for the loan is accruing daily. The official mortgage payoff includes the balance plus the daily interest that's been accruing until settlement date.
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How do you Pronounced the name of your company? 1 Rate? Rate 1? L RATE?
Pronounced “One Rate.”
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What is Lender Credit?
Lender credit or Lender assistance is money provided to the borrower to pay for third-party fees that’s associated with the mortgage loan. This is sometimes referred to as reverse points.
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What’s a conventional mortgage?
Conventional loans are the most common in the mortgage industry. They’re funded by private financial investors and then sold to Government-Sponsored Enterprises (GSE) like Fannie Mae and Freddie Mac.
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What’s the difference between Conventional, VA and FHA mortgages?
Conventional loans are the most common in the mortgage industry. They’re funded by private financial investors and then sold to Government-Sponsored Enterprises (GSE) like Fannie Mae and Freddie Mac.
A VA Loan is a mortgage provided by private investors and partially backed, or guaranteed, by the Department of Veterans Affairs. These offer military veterans flexible $0 down options and some of the most competitive rates and programs.
An FHA loan is a home loan backed by the Federal Housing Administration, a government agency created to help home buyers qualify for a mortgage. The FHA provides mortgage insurance on loans made by FHA-approved lenders, protecting them from the risk of borrower default.