Home Financing FAQs

Purchasing a new home, or even refinancing a current home, can seem like a daunting task. Buying a home is one of the largest financial decisions people make in their lifetime, and you want to be sure you’re making the right decision for you, your family, your lifestyle and your financial goals. We can answer your questions, help you explore your options and provide guidance to assist you in selecting the financing that makes the most sense for your unique situation.

We hope you’ll think of us as a trusted lender who can help you navigate the path toward home financing quickly and efficiently. Our goal is to keep you informed, keep the stress low and help you achieve your financial goals!

Below are some of the most frequently asked questions regarding home financing. Need more information? Contact us for a free, no-obligation consultation.

FAQ Category:

General Mortgage Questions TOP

Why should I buy, instead of rent?

Paying rent is like lining your landlord’s pockets — you pay while they build equity, write off the interest on their mortgage and deduct their property taxes. When you own your home, it is an investment. Over the long term, the worth of a home generally increases, which means your home may make you some money when you decide to sell, or act as collateral for a loan that can pay for debt consolidation, medical bills, college tuition or a fabulous vacation. Plus, your home is yours, to paint, decorate and renovate any way you like!

What is the difference between a mortgage broker and a mortgage lender?
A mortgage broker is a middleman who acts as a go-between for the borrower and the lenders. CountryPlace Mortgage is a direct lender, so you’re dealing directly with the company that will actually lend you the money to purchase or refinance your home.

What is my first step in obtaining a home loan?

Getting pre-qualified is your very first step. You’ll give us information on your income, credit and bills, and we’ll tell you whether you may qualify for a loan and a general idea of how much it might be for. We’ll discuss any questions you have about mortgages and financing too. Once we determine that you should be able to secure financing from us, you can start interviewing a few real estate agents to find one you really connect with and who is familiar with the areas where you are interested in homeshopping. Next, you’ll gather some more information for us (view our Document Checklist) and we can get you pre-approved for a mortgage!

When you are pre-approved, you’ll know exactly how much home you can afford, which will make your homeshopping easier (and less painful since you won’t waste time looking at — and falling in love with — houses that are out of your range). Where pre-qualification is a sort of educated guess of the buyer’s purchasing power, pre-approval says you would definitely be approved for the loan.

It’s important that we look at your total financial situation and decide what payments you will be comfortable with. Buying a home is the biggest purchase most people make in their lifetime. Let’s do it the right way.

What is the difference between conforming and nonconforming loans?

A conforming loan follows the guidelines set forth by Fannie Mae and Freddie Mac and currently has a loan limit of $417,000 in the 48 contiguous states (these limits can change yearly).

A non-conforming mortgage may be for a higher amount than the limit set on conforming loans. In some instances the term may also refer to a loan where the borrower has credit issues or unusual documentation. Non-conforming loans generally have higher interest rates and you may need to put down more cash to secure your loan. Jumbo loans are non-conforming loans.

How much house can I afford?

When you come in to meet with us and bring the documentation we need to go over together, we’ll be on the road to determining how much money you are qualified to borrow. We look at your income and bills, then we plug those numbers into calculations called front-end and back-end ratios to determine the percentage of your income that can be devoted to your housing payment.

We’ll take a look at current interest rates, local property taxes and homeowners insurance costs as well as the mortgage payment itself, as these are all factors in your housing costs.

When you’re ready, we’ll get you pre-approved for a loan amount and you can begin looking at houses with your agent!

There are so many different types of mortgages out there — how do I know which one I should choose?

You’re right, there are a lot of choices. Each type of loan has different benefits and advantages, so it’s important to discuss your financial goals with me when we sit down to review your needs.

It is our goal and our duty to fully educate you on the options available to you and to ensure you fully understand the type of home financing that you choose to purchase. We’ll consider your current financial situation, your short- and long-term financial goals and what’s going on in your life when we discuss loan scenarios. This may be the biggest purchase you make in your lifetime and I want to be sure you are fully satisfied with the decision you make and the guidance we provide.

The Application and Processing Your Loan TOP

Our Loan Process page gives you a lot of detail on how your loan actually gets processed. Check there for more in-depth information about what happens to your loan application after you submit it to your Loan Officer.

What do I need to take with me when I apply for a mortgage?

Our Loan Documentation Checklist gives you a list of the basic documents we’ll need to review when we sit down to start the application process. As we continue through approval, our underwriters may request more information from you. This is perfectly normal and does not mean there is any problem with your application.

Do I need homeowner’s insurance?

You have to show proof of homeowners (or hazard) insurance at closing, so you must have insurance in place. Start shopping around early in the process to get the best deal. An experienced agent can give you some idea of how much insurance will be for different types of homes, which may influence where you choose to look for your new home or what type of home you want to buy.

I’m a first-time homebuyer. What about the special incentives for me?

We participate in several affordable mortgage programs which are designed to encourage homeownership across the country and to make buying a first home a low-stress process. Let’s talk about the programs available in our area and any federal programs you may qualify for.

What happens after I’ve applied for my loan?

We’re proud to say CountryPlace Mortgage has some of the fastest turn times in the industry, so we can usually move you from application to closing in four weeks. Once your application has been completed and submitted to the processors and underwriters, it is carefully reviewed and all your documentation is verified. We may need to ask you for more information, but that is not unusual. The sooner you can get that information back to us, the faster your application will be processed. Once your loan is approved, a closing date is set up and we will review what happens and what you’ll need to do to finalize the transaction. Then you’ll be ready to move into your new home!

For more details on the loan process, visit the Loan Process page.
Closing and Funding Your Mortgage TOP

What are closing costs?

On the day you actually buy your new home, in addition to your down payment, the prepaid property tax and homeowners insurance premiums, you’ll need cash for various fees associated with the purchase. These expenses are known as closing costs and are paid by both buyers and sellers.

Some closing costs you pay up-front when you apply for a mortgage loan. Those include the fees for a credit check on all applicants and an appraisal on the property.

Other closing costs may be necessary and should be considered when evaluating your financial situation. We will discuss them in advance so there are no surprises at closing. These may include, but are not limited to:

What actually happens at closing?

We hold a meeting with all parties involved: you, the seller, the seller’s agent, your real estate agent, a closing agent and us. The closing agent will have a stack of papers for you and the seller to sign. Take your time, look at each page and ask any questions you may have. Your agent will be able to answer most of your questions. This is a big step involving a lot of money, so you need to be sure you understand what you’re signing! You’ll need to provide proof of your homeowners insurance, while the seller will show proof of warranties and any inspections they paid for. The closing agent will go over the money you owe to the seller and the money the seller owes you, such as unpaid taxes.

After all the paperwork is signed, you’ll get the deed to your new home, stating you are the rightful owner, and your house keys. Congratulations, you are a home owner!

Documents you’ll receive at closing:

Visit our Glossary for more information on the terms listed above.

Refinancing Your Mortgage TOP

Is it a good idea to refinance my home?

Maybe you need to pay off some high-interest debt. Perhaps you have a second mortgage at a high rate and you want to roll your two mortgages together. With today’s interest rates, you may be interested in trying to lower your monthly payment. Or maybe your ARM loan is about to mature and your payments will begin to fluctuate with the market. These are all good reasons to refinance. We can discuss the pros and cons, and the costs involved, to see if refinancing your home loan is the best choice for you. You can also start the process by applying online with my easy application.

Is it worth refinancing if I only see a small change in my current rate?

A lower interest rate will save you money if you plan to stay in your home for more than a few years. Every person’s situation is unique, so your short- and long-term financial goals should also be factors in this decision. We can sit down together and review the numbers to see if refinancing makes sense for you.

I want to stop paying mortgage insurance. Can refinancing help with this?

It’s possible. If you have 20% equity in your home, either because your home has appreciated in value or because you’ve been paying down your principal, we may be able to help you eliminate this additional cost. Contact us today to learn more!
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