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Peoples Home Equity Mortgage Lending

Frequently Asked Questions

Below you’ll find a selection of the most commonly asked questions, along with answers that our clients have asked during our many years of business. Don’t hesitate to contact us for immediate responses to questions you may have pertaining to your unique situation. We’re here to help.

General Questions

What is my first step in obtaining a home loan?

Getting pre-qualified is your very first step. You’ll provide information on your income, credit and bills, and I’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 I 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 home shopping.

Once we’ve decided how much home you can responsibly afford, this will make your home shopping easier (and less painful since you won’t waste time looking at — and falling in love with — houses that are out of your budget).

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 financial decision most people make in their lifetime. Let’s do it the right way.

Why should I buy vs. 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!

How much house can I afford?

When you come in to meet with me 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, and 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 homeowner’s insurance costs as well as the mortgage payment itself, as these are all factors in your housing costs.

Visit our Calculators page to try some different scenarios out. Then 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 my goal and my 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. 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 I provide.

Application Process

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 are 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?

I’m proud to say PHE has some of the fastest turn times in the industry. 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 I 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!

Closing & Funding

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:

  • Attorney’s or escrow fees
  • Property taxes
  • Interest
  • Loan origination fee
  • Recording fees
  • Survey fee
  • First premium of mortgage Insurance (if applicable)
  • Title Insurance (yours and lender’s)
  • Loan discount points
  • First payment to escrow account for future real estate taxes and insurance
  • Paid receipt for homeowners insurance policy (and fire and flood insurance if applicable)
  • Any documentation preparation fees

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 me. 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!

What you’ll receive at closing:

  • Settlement statement, HUD-1 form
  • Truth-in-Lending statement
  • Mortgage note
  • Mortgage or deed of trust
  • Binding sales contract
  • Keys to your new home

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

Refinancing

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. My Refinance Calculator can help you get an idea of how much you may save. 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. Call me today to learn more!

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