Mortgage Frequently Asked Questions

General Mortgage Questions:

Q:  Can customers apply for a mortgage loan via the telephone or this web site?

A:  Yes.  We are available anytime that is convenient for you to start your application.  Please contact us anytime!

Q:  What is a pre-qualification?

A:  A pre-qualification will estimate how much money you are eligible to borrow before you apply for a mortgage.  Be prepared to provide basic information such as income, debts and assets.  A pre-qualification is not a pre-approval or loan approval.

Q:  Can I apply for a loan before I have a home to purchase?

A:  Yes.  You may provide the required documentation for a loan pre-appoval to verify income, debts and assets prior to your purchase.  Once we obtain a credit report, we can make a credit only loan decision.  This process is called a pre-approval.  Since the property to be purchased is typically not known for a pre-approval, estimated sales price and loan amount are used to make a loan decision.

Q:  What is an appraisal?

A:  An appraisal is a report made by a certified appraiser who provides a professional opinion or estimate of property value.  When you apply for a mortgage loan with Peoples Choice Home Loans, we will initiate the process to get an appraisal ordered.

Q:  How important is my credit?

A:  Your credit is an important consideration for determining your creditworthiness.  Information in your credit report is prepared by a credit bureau or a consumer reporting agency.  Any late payments or other adverse information contained in your credit report will receive additional review during the underwriting of your loan application, and may require further written explanation(s) or documentation from you as we consider your loan request.

Q:  What are closing costs?

A:  Closing costs cover all the fees and expenses associated with a loan transaction.  Closing costs may include fees for an appraisal, credit report, loan origination & processing fees, application fee, discount points, survey, and title insurance to name a few.  Closing costs vary depending upon the loan product and third party requirements.

Q:  What are discount points and how are they calculated?

A:  Discount points are a one-time charge (or credit) by the lender.  Each point is equal to 1% of the principal loan amount and can be paid to buy down the applicable interest rate.  If you choose to pay points, they are typically paid at the time of closing.  Discount points may be negotiated in the purchase contract to be paid by either the seller or borrower.

Q:  What is title insurance and why do I need it?

A:  Title insurance protects the lender (lender's policy) and the home owner (owner's policy) against loss resulting from disputes over ownership of the property.

Q:  Who do I contact once my loan is in process and how would I update my application?

A:  You can access your account via this site at any time to view the status of your loan or you can contact me. 

Q:  What is private mortgage insurance (PMI)?

A:  PMI is insurance provided by non-government insurers that protect the lender against loss if a borrower defaults.  Typically PMI is required if your down payment is less than 20% of the purchase price. 

Q:  Will I always have to pay private mortgage insurance (PMI)?

A:  PMI will be canceled in accordance with federal law.  We recommend that you contact us to ask about your specific situation. 

Q:  What information do I need to apply for a loan?

A:  In all mortgage applications, I will ask for information regarding your employment, income, assets, debts, and the prospective property you intend to purchase.  Other information may be needed depending on your situation.  See the loan application information page for details.

Q:  What is the difference between a fixed rate mortgage and an adjustable rate mortgage?

A:  A fixed rate mortgage is a loan in which the interest rate does not change during the entire term of the loan.  With an adjustable rate mortgage (ARM) the interest rate may periodically adjust on the basis of changes in a specified index.  ARM loans can allow you to buy a more expensive home since the interest rate is usually lower than a fixed rate mortgage.  However, ARM loans are considered more risky as compared to fixed rate mortgages.  For additional information see mortgage loan products.

Q:  What is a jumbo loan?

A:  A jumbo loan is a mortgage that exceeds the maximum loan amount established by Fannie Mae and the Federal Home Loan Mortgage Corporation (Freddie Mac).  Jumbo loans are also referred to as "non-conforming" loans.

Q:  When can I lock my interest rate?

A:  Typically, you can lock your interest rate after submitting your application and providing a copy of your purchase agreement or sales contract.  Lock in periods may vary depending on the selected lender.  I will help you determine the best time to lock.  Also I invite you to see the daily rate lock advisory.

Q:  What term or length of loan is best for me?

A:  While the monthly payments on a 30-year mortgage are lower than those for a 10, 15, or 20 year mortgage, a shorter term can save you a considerable amount of money because of the way the mortgage amortizes.  In addition, many times a shorter term mortgage is available at a lower interest rate.

Q:  What are conforming and non-conforming loans?

A:  A "conforming" loan meets loan limits and requirements established by Fannie Mae and the Federal Home Loan Mortgage Corporation (Freddie Mac).  "Non-conforming" loans such as "jumbo" mortgages do not meet these limits and requirements.

Q:  What are Peoples Choice Home Loans products and how do I find them?

A:  Peoples Choice Home Loans products include a variety of programs designed to help a broad range of economic situations.  These products can be found here!

Refinance Questions:

Q:  Should I refinance my home?

A:  Although each situation is different, there are several reasons to refinance including:

• To lower your monthly principal and interest payment.
• To move to a secure, fixed rate loan.
• To lower your interest rate.
• To take cash out of the equity in your home, or to consolidate debt.

Q:  If I refinance, do I need a new appraisal and credit report?

A:  Generally, a new appraisal and credit report are necessary.

Q:  What is cash-out refinance?

A:  If you have held your mortgage for some time, you have probably reduced the outstanding principal on your loan and increased the amount of equity in your home.  You may be able to refinance your home for more than what you currently owe and take the extra loan proceeds in the form of cash.  On a cash-out refinance you may use the cash for home improvements, college costs, a new car, or other major purchases.

Q:  What are closing costs to refinance?

A:  Closing costs vary depending on you location and the purpose of the loan as well as differences in third party fees.  Some or all of these fees may be financed as part of your loan.  Your lender's program will specify what can be financed.

Q:  Do I have to qualify again?

A:  Yes, you will have to qualify for the refinance loan.  However, the process can often be streamlined and expedited.  Contact me anytime for assistance!