pagetop.jpg
  Untitled Document
       
   
  Everyone has questions about a new home mortgage.  You can be buying a new home in Houston or a beautiful home in clear lake the mortgage process can be confusing.    Whenever you have a mortgage question feel free to contact New Home Mortgage Corp to have them answered.  Below you will find the most common mortgage questions.  If your home loan question is not covered here please call us or click on the Ask a Mortgage Question above to receive a quick response to your home loan question.  
 
       
       
  Ditech Alternative When should I apply for a loan?
It is always a good idea to get pre-approved letter prior to looking for the property. This allows you to present a pre-approval letter to the sellers when you make an offer; making you just like a cash buyer by letting the seller know you already have financing in place. A seller is more likely to accept an offer from a buyer who has been pre-approved. If you are still several months away from looking for a home, feel that you may have credit issues, or if you are unsure of how much you qualify for, it may be advised to apply now. Having these questions answered will provide ample time to make any improvements to credit or other aspects of your qualification potential. 		 
       
  Ditech Alternative What is the difference between the APR and the Note rate?
The Annual Percentage Rate (APR) is defined as 'the cost of obtaining mortgage financing expressed as a percentage rate'. The rate is a combination of the first year's interest and the closing costs together, telling you the true cost of taking out a loan. You will receive a Federal Truth-in-Lending Disclosure from us that that will show the APR. The APR differs from the actual rate of interest. The APR is not used to calculate your monthly payments. The Note Rate is the rate at which you lock in and will be used to calculate your monthly Principal and Interest payments. The APR has no bearing on your monthly payments; it is only to be used as a means of lender comparison.
  
       
  Ditech Alternative What are points?
Points are fees to be paid to a lender formortgage financing under specified terms. A point is a percentage of the loan amount (one point = one percent of the loan). One point on a $100,000 loan would be $1,000. Discount points are fees that are used to lower the interest rate on a mortgage loan (you are discounting the interest rate by paying some of this interest up-front). Lenders may express other loan-related fees in terms of points. Some lenders may express their costs in terms of basis points (hundredths of a percent). 100 basis points = 1 point (or 1 percent of the loan amount).		  
       
  Ditech Alternative When do I lock in my mortgage loan rate?
You are able to lock in at any point after you have an accepted Earnest Money Contract. A lock is specific to a property address and closing date. Therefore, if you cancel a Contract to purchase another property, your rate lock will be subject to change to current market rates. Generally, most buyers will lock in within 30-45 days of closing. When locking in over 60 days, you may be subject to a higher interest rate to secure a longer-term lock. We will require that you lock, however, at least one week prior to closing. This will allow ample time to ensure your closing papers will be sent to the attorney's office to draw legal papers in time for your closing.		  
       
  Ditech Alternative How long is my approval good for?
Generally, an approval is good for up to six months. This does not mean, however, that you will need to re-apply. After six months, a new credit report will be obtained and you may be asked to supply current bank statements and updated pay stubs. It is always a good idea to maintain a good credit standing if you have been approved and wish to wait awhile before buying a home. This will help prevent any changes in your approval status.		  
       
  Ditech Alternative What is PMI?
Private Mortgage Insurance, commonly called PMI, is an insurance paid by the borrower protecting the lender against default on the loan. PMI has no benefit to the buyer, and is a form of insurance that protects the mortgage company. Although subordinate financing can be used to avoid PMI, a buyer generally must have a down payment of 20% to avoid PMI payments. PMI should not be confused with 'mortgage insurance', which is a separate insurance policy unassociated with a mortgage, which will pay off the remaining balance in the event of the death of a homeowner. This type of insurance can be obtained through most agents who offer life insurance policies, and can sometimes be included in conjunction with a life insurance policy.		  
       
  Ditech Alternative I've had credit problems in the past. How does this impact my chances of getting a home loan?
Obtaining a home loan is possible even with extremely poor credit. If you have had credit problems in the past, a lender will consider you to be a risky borrower. To compensate for this added risk, the lender will charge a higher interest rate and usually expect you to pay a higher down payment on your home purchase. The worse your credit is, the more you can expect to pay for an interest rate and a down payment. NHM has many programs available for "Credit Challenged Client."		  
       
  Ditech Alternative I've only been late a couple of times on my credit card bills. Does this mean I will have to pay an extremely high interest rate?
Not necessarily. If you have been late less than three times in the past year, and the payments were no more than 30 days late, you probably have a pretty good chance at getting a home loan at a competitive interest rate. Lenders guidelines will vary, but most lenders will excuse a couple of minor 'late-pays' as long as the borrower can provide a reasonable excuse explaining them (i.e. job transition, illness). 		 
       
  Ditech Alternative How can I tell who has the best deal on financing?
When comparison shopping among lenders, remember that a lender can structure financing for a borrower several different ways. A lender can charge higher fees and offer a low interest rate while another may charge a slightly higher interest rate with lower fees. In order to make an 'apples to apples' comparison between lenders, ask each lender what their interest rate is for a zero discount point loan (based on a 30 or 60 day lock period). Then ask each lender what they charge for an origination fee, as well as any other fees they typically charge for a loan, (i.e. broker, processing, underwriting). A reputable lender will not hesitate in answering these questions.		  
       
New Home Mortgages