FREQUENTLY ASKED QUESTIONS

Can I buy a home if I have filed bankruptcy?
Depending on the type of loan, we can lend money as soon as 2 years after the discharge of a Chapter 7 bankruptcy and after 1 year of repayment of Chapter 13 reorganization.

What are allowable sources of down payment?
There are many forms of funds allowable to be used for your down payment. Some of which include, sale of stock, 401k withdrawals, IRS refund checks and gift funds from a family member. However, unsecured loans are not typically acceptable for your down payment.

What is mortgage insurance?
FHA loans carry Mortgage Insurance Premium or MIP. The MIP is collected in an upfront premium and typically financed into the loan and an additional amount is paid monthly. FHA MIP is removed from the loan when you have reached a 22% equity position. Conventional loans do not have Private Mortgage Insurance, PMI, if a 20% down payment is made.

What are discount points?
A discount point is equivalent to 1% of the loan amount. Example: $100,000 loan 1 point equals $1,000. Discount points can be used to reduce your interest rate. To determine if paying points is right for you be sure to look at the upfront costs versus the long-term benefits.

How long will the approval process take and what are the steps?
A pre-approval may be able to be completed quickly based on an on-line application or interview. Those loans with special circumstances would take longer. An actual loan approval (versus a prequalification or pre-approval) is based on verification of all the data reviewed at the interview and receipt of a property appraisal. The documents are then reviewed by an underwriter, who issues the formal approval decision. You may choose to start with a pre-approval to begin looking for a home and then complete the processes after a contract is pending. Talk with your loan officer about which method best suits your individual needs.

When do my payments begin?
Your mortgage payments are due on the first day of each month. The first payment begins at least 30 days from your loan closing or as much as 60 days. For example: You closed in January your first payment will be March 1. You closed in February your first payment will be April 1.

How much does additional down payment change my monthly payment?
Based on the loan amount, term of loan and interest rate, additional down payments may vary. However, one rule of thumb would be for every $1,000 of down payment you would reduce your payment $7.00 per month.