Q. What is a fixed rate mortgage?

A. It simply means that for the term of your mortgage the interest rate charged is a fixed amount and does not change during the term of your mortgage.

Q. What is a variable interest rate mortgage?

A. Compared to a fixed rate mortgage a variable interest rate ‘floats’.
Although the mortgage payment amount may stay the same the actual interest charged may change on a monthly basis. A drop in interest rates is great news for you and it will mean that more of your mortgage payment will go towards reducing your mortgage principle. If interest rates rise then less money will be used for reducing your principle and will instead be used for paying higher interest costs. If you think interest rates will fall over the next 3 to 5 years then purchasing a variable mortgage makes a lot of sense. With mortgages you pay a price for certainty. You generally pay more for a fixed rate mortgage because the lender is taking the risk as to what the rates will do by fixing the rate for you. You generally pay less for a variable rate mortgage because it is you that is taking the risk of uncertainty as to how interest rates will move- up or down. With low interest rates variable interest rate mortgages have become popular. Often it is possible to get a rate just over or under the bank prime rate!

Q. Is it possible to buy a home with no money down?

A. Yes, No down payment is one of the top two reasons most people continue renting. Well, with a “ No Money Down” program, the days of saving up for a large down payment could be over. If you have decent credit and fall into a certain income range, you could be on the road to owning a home with absolutely no down payment! Many people unfortunately get stuck in the “Rent Trap”. That being, you may be able to afford a home but coming up with a substantial down payment is difficult because of monthly rent. Several no money down programs are available these days, just ask us.

Q. What is Mortgage Insurance?

A. This insurance coverage protects the Lender from loss if the Borrower defaults. It is generally required when the down payment is less than 20% of the property value. It does not protect the Borrower though it may allow the borrower to qualify for a loan he/she could not otherwise receive.

Q Can Mortgage Insurance be canceled?

A. Yes, there are specific guidelines to canceling your Mortgage Insurance. Please contact our office for specific guidelines.

Q. When is my first payment due?

A. Generally your first payment is due at least 30 days from your closing date. For example a closing date of January 15th will mean that your first payment will be due on March 1st. All mortgage payments are paid in arrears meaning that your March 1st payment will pay the mortgage interest for February.

Q. What is an escrow account?

A. A mortgage escrow account is an account that is set up to hold money that will be used to pay for property taxes, fire and hazard insurance premiums, mortgage insurance premiums, and other escrow items. An escrow account ensures timely payments on these items. It is a guaranteed availability of funds to pay these bills when due, so homeowners can avoid risking lapsed insurance coverage or late tax payments.

Q. What is Title Insurance?

A. A title insurance policy is taken out between the insured and the insuring company that relates to the title of the land referred to in the policy, and protects the insured against losses due to reason of defects, liens or encumbrances of the insured title that exists at the date the policy is issued and which is not expressly excepted from its coverage. There is a complete examination of the public records and the policy shows the condition of the title on record, including outstanding monetary obligations, easements, or other matters that might affect the rights of ownership, possession, and use of the property.

Q. When do I need to provide evidence of homeowners insurance?

A.  Evidence of insurance is required before closing. Let us know at application if you have already spoken with an agent. Flood insurance if required is due 2 weeks before closing.

Q. How quick can I get a pre-approval?

A. A pre-approval is available within 24Hrs of your preliminary application.