Can I get my loan approved before I start shopping for a home?
Yes, you can get approved before you find that perfect home.
Our pre-approval service provides more than a loan pre-qualification. It’s a convenient way to get the paperwork done sooner, so you can focus on the enjoyment of shopping for a home. It can also help you buy in areas where there are more homebuyers than sellers, and competition for properties is hot.
How our pre-qualification and pre-approval service works:
- Discuss your requirements with a mortgage loan officer and provide detailed information about your employment, assets and credit history. If you’ve requested a pre-qualification, this is all you’ll need to provide.
- If you prefer a pre-approval, your mortgage loan officer will help you identify the documents required to evaluate your loan application.
- Once we receive your documents, our underwriter will review your information and determine whether we can approve your loan. Your loan approval will be based on many factors, including an estimated sales price that you provide, and will be subject to an appraisal once you find your new home.
- After the underwriting process is complete, you will be free to take your time shopping for a home with confidence. When you find the perfect house you can focus on making your offer, interior decor and moving, instead of hunting for the documents to obtain your loan.
- When you find the right home, we’ll order an appraisal and a review of the title.
These services are designed to help you buy the house you really want with nominal delays. Contact your mortgage loan officer for more information.
How do I decide if a fixed- or adjustable-rate mortgage is better for me?
When choosing between a fixed- or adjustable-rate mortgage, there are several factors to consider. An adjustable-rate mortgage (ARM) may be a good choice if:
- You plan to sell the home before the loan adjusts.
- You prefer to buy a slightly more expensive property than a fixed-rate loan will finance. However, you should keep in mind that interest rates are not predictable, and if you do not refinance before a rate adjustment, your rate may adjust upwards and increase your monthly payments.
What is mortgage insurance, and how does it work?
Before mortgage insurance (MI) was created, home ownership was much more difficult to achieve – for example, your great-grandparents would probably have needed to put 50% down! MI was created so lenders could offer loan products with low down payments.
Different types of MI are required for conventional and FHA loans. For conventional loans, MI may enable you to buy a home with a down payment under 20%. After your equity reaches 20 – 22%, you may be able to stop paying MI. We offer several MI products for conventional loans.
FHA loans are partially government-insured, and they require mortgage insurance to be paid for a longer period of time than for a conventional loan. FHA MI has two components: (i) upfront MI of 1.75% of the loan amount; and (ii) annual MI payments that is one-half percent of the total loan value, and is payable each month.
What’s the difference between a conventional and FHA loan?
FHA loans are partially insured by the federal government, so mortgage lenders can offer borrowers lower down payment options and easier credit requirements. However, FHA loans generally charge a slightly higher interest rate than conventional loans. You may also be required to pay mortgage insurance until your FHA loan is almost totally repaid.
Are there any loans that don’t require a down payment?
Currently, VA and USDA rural mortgages offer options with no down payment. However, depending on certain factors such as your location, you may qualify for down payment assistance even for a loan program other than VA or USDA. In some cases, this assistance is a grant that does not have to be repaid.
What is a Truth-in-Lending disclosure statement?
This federally required statement provides you with information about your loan. Its purpose is to help you compare our loan products and their pricing to those offered by other lenders.
Why must I sign the Disclosure Statement?
Lenders are required by law to provide the information on this statement to you in a timely manner. Your signature merely indicates that you have received this information, and does not obligate you or the lender in any way.
What is the finance charge for a mortgage?
The Finance Charge is the cost of credit. It is the total amount of interest calculated at the interest rate over the life of the loan, plus prepaid finance charges and the total amount of mortgage insurance charged over the life of the loan. This figure is estimated on the Truth in Lending Disclosure Statement. For adjustable rate transactions, the figure is estimated. This is because there is no way to determine what the interest rate will be throughout the life of the loan (after the initial fixed period).
Is it okay to use on-line bank statements when applying for a mortgage?
Yes, if the statements have the bank logo and name printed on them, and correctly reflect your account number.
What does locking my interest rate mean, and when do I lock?
It means that a commitment has been made between you and the lender regarding your loan’s interest rate.
How do rates change?
Rates can change multiple times a day – this is why it’s important to discuss locking your loan’s interest rate with your loan officer. Factors that will affect when and how much the interest rate changes include swings in the equity or stock markets, and indicators from the U.S. and world financial markets.
Will KBHS Home Loans sell my mortgage after closing?
KBHS Home Loans is a correspondent lender and we do not service the loans we originate. You will be notified by mail any information regarding changes in the lender that will service your loan, including the date of transfer. The repayment terms of your loan, including the amount of your monthly payments, will not change.
Where will I be closing, how much do I bring to close and can I bring a personal check?
Your loan contract will specify where you will be closing. Closings typically occur at a Title company with a notary public. Three to five days prior to closing, KBHS home loans will contact you regarding how much money you will need to bring (often called “cash to close”). You will need to bring a cashier’s check made payable to the title company. Personal checks are not allowed.
How often will I receive updates during my loan application’s processing?
Your loan officer will contact you at regular intervals and tell you how your loan is progressing. You’ll also be contacted if additional information is required. Of course, you can contact your loan officer at any time throughout the process with any questions or concerns.
What are points, and how do they affect my loan?
Points, sometimes also called discount points, are a form of pre-paid interest. One point equals 1% of the loan amount. Depending on your loan product, you may have the option to pay points to reduce your interest rate. If you intend to stay in your home for an extended period of time and not refinancing your loan, it may be worthwhile to pay points. If you prefer to keep your closing costs as low as possible, choosing the zero points option will help, but then the interest rate may be increased to cover those costs.