Frequently asked questions
Why work with us?
We strive to set ourselves apart with service. We are hands on meaning you work with one individual throughout the entire loan process. This keeps you informed every step of the way.
We provide great rates and loan pricing to be competitive. Along with the great service we want you to feel like you received a great deal.
We are a small business and do not operate like a big company or a call center. We are almost always available by phone, text, email.
What are closing costs?
Closing costs are costs associated with purchasing a home with a mortgage loan. This is separate from down payment.
We like to break closing costs down in three parts: Lender charges, third party attorney charges, prepaid expenses.
Lender charges are fees charged by the lender to close: This can be discount points, miscellaneous lender fees, credit reports, appraisal (3rd party fee but required by lender).
Attorney charges and title insurance are fees charge by the attorney to close the loan and title insurance to make sure there are no title issues. Attorneys conduct the closing and that is where you sign the paper work, their fee is paid to conduct this process. Title insurance protects the lender and you from title defects in the property.
We work with attorneys that can close at your home, office or location of choice to make the process easier for you.
Prepaid expenses include prepaid interest and escrow accounts. Mortgage loan interest is paid in arrears, for example if you make a July payment, you are paying for interest in June. The day you close, you will owe interest to the end of that month based on the number of days remaining.
Escrow accounts are set up to pay taxes and insurance when they are due. More on escrow FAQ section.
For all total costs estimates, reach out to us for a free quote!
How much down payment do I need?
Down payment amounts affect the total monthly payment and mortgage insurance. The more down payment = lower payment. Typical down payment options for primary residences range from 3% for first time home buyers to 20%. Less than 20% down payment requires mortgage insurance.
The more money down = less amount for monthly mortgage insurance and the less time you have to pay mortgage insurance.
What is an escrow account?
Escrow accounts pay your taxes and insurance when they are due.
For example; in Charlotte, NC tax bills are usually paid every year in December. Insurance due dates are based on when you open the policy. If both are due in December, you will need one total years worth of taxes and insurance premium at this time. Starting January every monthly mortgage payment will include 1/12th of the annual tax bill and insurance premium. When December arrives you will have the entire years taxes and insurance amounts paid in the escrow account. The loan servicer will issue the payment to the tax office and insurance holder. This repeats every year.
How much can I afford?
The amount you can afford on a mortgage payment is based on your total income and debts. This is called the debt to income ratio.
To be safe you want the maximum total debts to not exceed 43% of your gross income. However, this number can go up and down based on other factors.
If you make $100,000 annually that = $8333 per month x 43% = $3583.33. $3583 is what can be spend on total debts including new mortgage payment, student loans, credit cards, car payments, any debts that are obligations for you to pay.
Give us a call to go over your scenario and how much you can afford.