Financing Made Easy
we have answers to all your finance questions
Q. Why do I need a construction loan?
A construction loan finances the costs of constructing the home. Typically, payments made during the home construction period are interest-only payments based on the amount of money paid to contractors during this time.
Q. How soon do I have to return my loan disclosure package?
Please return the package as soon as possible. The loan cannot move forward until the signed disclosures are received, so getting the signed loan disclosure package back to the lender is key to moving forward with your loan for closing.
Q. What if I don’t have all of my documents together?
Send as many documents as possible with the disclosure package. Then follow up with the remaining documents as soon as you have them. But you must be aware that the loan cannot close and the approval process will be delayed until the lender receives all required documents.
Q. If I see missing or incorrect information on my application, can I make changes?
Absolutely. Draw one line though the incorrect information, write in the correct information above and initial the correction. Please don’t use white out or completely black out the incorrect information..
Q. What is a Good Faith Estimate?
A Good Faith Estimate is a disclosure the lender provides you with an estimated payment based on the loan amount and interest rate at the time of disclosure. It also includes an estimate of closing costs expected in association with the loan. Final closing costs will be shown on the Good Faith Estimate you receive from the title company.
Q. What is a Truth in Lending statement?
The Truth in Lending statement provides information about the finance charges you will incur on your loan. The cost of your loan is defined as the APR, or the amount of interest you will pay in dollars if you make the minimum monthly payment for the full term of the loan. This statement also provides the total of your payments (principal and interest) if you make the minimum monthly payment for the full term of the loan.
Q. Why is the Annual Percentage Rate (APR) different from my mortgage loan rate?
The annual percentage rate is a measure of the cost of your mortgage loan expressed as an annual rate. It includes two things: 1) the interest rate on a loan and 2) any applicable finance costs. Consequently, the APR will be higher than your interest rate, especially if you are paying points. However, your mortgage payment is based on the interest rate, not on the APR.
Q. What is Private Mortgage Insurance?
PMI is required on conventional loans when the loan to value is over 80%. Private Mortgage Insurance (PMI) protects the lender in case of default or foreclosure by the borrower. PMI does not protect the borrower; however, it is included in your monthly payment.
