FAQ's

Q. What if I think I may have credit problems? Can I still qualify for a loan?

 A.  Yes.  Quit often, borrowers think their credit is bad, but after running a credit report their situation is not as bad as they thought.  Hometown Mortgage specializes in solving financing problems for those that have credit challenges and for those borrowers that do not fit the perfect mold.

Q.  How do I get and keep good credit?

 A.  Please click here to find out more about credit.

Q.  How much of a down payment will I need?
  A.  It is probably less than you think.  Many first-time buyers are surprised to learn down payments can range anywhere from twenty percent of the home's value to no down payment at all.

Q.  What does my mortgage payment include?
  A.  For most borrowers, the monthly mortgage payment includes three separate parts:  a payment on the principal of the loan (that is the amount borrowed); a payment on the interest; and payments into an escrow account that your lender maintains to pay for things like your hazard insurance and property taxes. These elements are called P.I.T.I. (Principal-Interest-Taxes-Insurance).

Q. Is my interest rate locked in as soon as I apply for a loan?

 A.  No, your interest rate is floating.  We have found that clients prefer watching the market before they commit to a specific rate.  You can request a rate lock after you have returned your package to Hometown Mortgage and we have reviewed your documents and credit information. We will notify you when you are able to request a lock.

Q. When will I have to pay for something?

 A.  There is never a charge unless the you decide to complete the loan process.  We believe saving you as much out-of-pocket money as possible.  When you return your loan package to Hometown Mortgage we ask you for a check in the amount of $400 to pay for the Appraisal.  Appraisals cost between $350-$400 generally.  The appraisal will be shown as a credit on the HUD1 at closing time (if paid before closing).

Q. Can I change the loan amounts or program after I’ve applied for a loan?

 A.  Of course.  One of the advantages of working with Hometown Mortgage is we process your loan from beginning to end.  We understand that you may want to make changes throughout the loan process.  Please remember that any changes that you make may extend the time that it takes to close your loan, or may increase the cost of closing.  Once documents have been drawn for closing there is a $150 redraw fee.

Q. After I apply, what can I expect?

 A..  Within 3 business days from the date of your application Hometown Mortgage will prepare and mail a copy of your application, the "Good Faith Estimate" (a detailed estimate of all closing costs), "Truth-in-Lending " and a list of documents that we need to close loan.  If you do not receive your package with five to six business days, please call our office and we will help you.  You can expect our Loan Processor to contact you regarding any additional information they may need and also be a source of information for you.

Q. How does Hometown Mortgage save me money?

 A.  Because we work with all major investors on a wholesale level, we can offer interest rates that are the best in the market.  In addition, because Hometown Mortgage works with many national and local investors, we have access to not only the lowest rates, but hundreds of financial programs. This guarantees you the best rate and the very best program that fits your specific needs.  Should one lender decline your loan application, Hometown Mortgage will seek other lenders until we have an approval.  Exceptional service saves you time and money.

Q. Why is it important to have access to many programs?

 A.  Not everybody has absolutely perfect credit and all the money they need for their particular situation.  Once Hometown Mortgage has the information we need from you, we will immediately talk with several different investors to determine how and under what conditions we can get your financing done.  You will typically be given several options as to how you can proceed.  You will be in control, instead of someone telling you what you must accept.

Q. My situation is different.  How can you help me?

 A.  Are you self-employed?  Is showing enough income a problem?  Have excess debts?  Short with down payment or no down payment?  Had a Bankruptcy recently?  All of these are special situations that can be solved.  That’s why having access to hundreds of financing programs makes it possible to solve your problem to your satisfaction!

Q. When should I lock my rate?

 A.  We recommend watching the market and consult with your Loan Officer.  Please note that a lock can not be changed once you select your product and rate, so we ask that you be certain of your request.

Q. What about the appraisal?

 A.  We will arrange for an appraisal of your property.  The appraisal must be paid to Hometown Mortgage prior to the time we order.  If you are purchasing a home you may not be responsible for this charge.  Sometimes the seller will agree to pay for the appraisal.  The appraiser will call you (if you are refinancing) or the appropriate Real Estate Agent to make an appointment.  You will be kept informed as to the outcome and it is our policy to make certain that you receive an original copy of the appraisal upon closing.

Q. Who handles my closing and where do I sign?

 A.  If you’re buying a home, your closing agent will be selected by your Realtor or you can pick one yourself.  If you’re refinancing a property, we will select a closing agent for you.  Either way, we will make arrangements for the loan documents to be delivered to the closing agent and will notify you when they’re ready for signing.

Q.  After closing, when do I receive my money?

 A.  If you are refinancing to get cash out of your property there is a 3 day right of rescission period that you must wait.  After the three day rescission period is complete the loan will fund on the following day.  You can choose to pick your check up from the title office which you closed or the title company can mail your check to you.

Q.  What about these ads for no-cost loans?

 A.  In many states, real estate regulatory agencies are cracking down on such advertising. The very term, "no-cost" loan, is misleading because borrowers are actually paying a higher interest rate in exchange for not having to pay fees or closing costs up front when the loan is secured.  Instead of the borrower paying the fees the lender will pay them for the borrower and receive their compensation from investor they send the loan to.

A "no-points" loan is one for which the lender does not charge points (one point is equal to 1 percent of the loan amount). But there are other fees involved in no-point loans, as with most loans.

Q.  What are some qualifying tips for a relocating buyer?

 A.  The number one tip is - do not pack your personal papers!  Mortgage loans are very precise and require documentation furnished by the borrower.  I suggest keeping your financial records with you until your new loan closes.  You may also be prepared by knowing the exact details of your relocation policy.  These are a few of the items your lender will want to know:

1. Will your company buy your present home or issue an equity advance?
2. If your home does not sell, will your company make the payments for you until it does sell?

Q.  What is an 80-10-10?

 A.  In mortgage slang it refers to a financing option you could choose to avoid Private Mortgage Insurance (PMI).  The 80 refers to an 80% percent first-lien mortgage. The first 10 refers to a 10% percent second-lien mortgage and the second 10 refers to the required down payment of 10% percent.  One of the advantages of using this type of financing is the income tax deductibility of the interest on the second lien versus the nondeductible insurance payment of PMI.  You will also have the guarantee that the second-lien financing will eventually be gone and you will have only the first lien to pay monthly. 

Most second liens have a shorter term of 10 to 15 years.  To remove PMI payments you must prove that your mortgage is at 75% percent of the total value of the home and this will take some work on your part.  This program does require an excellent credit history. 

Q.  How can we be sure to get the interest rate advertised by a lender?

 A.  Home loan interest rates change on a daily basis.  They can change more than once a day.  When you get a quote, it becomes your rate once you lock in with your selected lender.  A lock in is a promise (in writing) to close your loan at a certain interest rate and points.  You should have a lock-in agreement with clearly defined terms.  These terms include expiration date, interest rate, and points paid by buyer and seller, and they usually include the expectations you should have of your lender as well as those they have of you.  Be sure you understand all of the rules involved.  It is important that you know about your lender's strength and reputation.  The promise offered to you is made more valuable by these two.  Once you read this disclosure carefully and agree to the conditions, be sure you have a fully accepted and executed copy for your files.  This is your contract with your lender and protects your interest rate.

Q.  Why do mortgage interest rates go up and down so dramatically?

  A.  Many years ago, savings and loan institutions made the majority of home mortgage loans.  They would often set a rate for new home loans for long periods of time - up to a month or so.  As the lending industry has evolved, the buying and selling of mortgages has become very sophisticated and there are many different investors making new home mortgage loans.  The easiest indicator you can follow in watching the direction of interest rates is the bond market.  Although interest rates usually have long periods of decline or increase, there are many days when rates may jump up or down dramatically -just as the bond market can.  I call these "hiccups."  When rates begin to go higher permanently, it will be (as history has proven) a slow, steady increase.  It is the trend you will want to follow.  Is the overall trend up or down?  Don't let those daily "hiccups" alarm you.

Q.  Should we be pre-qualified before our house hunt?

  A.  Yes!  It is actually easier to buy a home if you know in advance that you will be approved.  You can make arrangements with most lenders to be "pre-qualified" for your purchase.  Here's how to do it: 

1. Make an appointment to see your lender.  Take your financial information, such as bank statements and W-2 forms, as well as paycheck stubs.
2. The mortgage company will run your credit report and review your documents.  At that time, you will be able to discuss different financing options and decide which type of loan is best for you.

Hometown Mortgage      -      1710 Westminster      -      Denton, TX  76205

Phone: 940-243-5000      -      Fax:  940-387-5043

© Copyright 2001, Hometown Mortgage.  All Rights Reserved.

TX Mortgage Brokers License# 15411

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