Loan Application/Process Questions


Do you have (insert the name of a loan product) loans?

The answer is; probably. We have literally hundreds of products and programs, and because we want to provide the best possible solutions for our customers, we are constantly looking for new ones. The better question is; what kind of loan is right for my circumstances. We want to help you answer that question first; then we’ll help you figure out the rest.

(top)

Where will rates be when my house is finished 6 months from now?

The truth is no one knows for sure. We encourage you to read our section on rates or talk to a loan officer about strategies for locking in on an interest rate. There are extended lock programs available that can provide some security for you during the construction process so you don’t have to worry about what rates will do.

(top)

Why do I need an appraisal?

An appraisal is an independent professional opinion of the value of the property you are purchasing. Lenders and the secondary market require this documentation to show that the home you are buying is good collateral for the loan you are asking for.

(top)

How much money do I need for closing costs and down payment?

It depends. There are loan programs that allow borrowers to finance 100% of the purchase price on a home and the transaction can often be structured to include closing costs into the transaction as well. The actual amount required at closing will depend on the loan program you choose from the ones available to you based on your qualifications.

(top)

When do I have to have all my money in place?

Generally speaking we will need to document that you have all of the funds you need to close on your transaction before closing. Ideally, the sooner we can document this, the better, although we realize you may be saving or selling another property to obtain the funds and they may not be available until the last minute.

(top)

How long will it take to get my loan approved?

Our goal is to issue you a Credit Approval (CA) on your loan (our written commitment to you that you will receive a loan when you satisfy certain conditions) within ten days of receipt of a completed loan application and all of the documents we have requested from you. It often happens much sooner than that.

(top)

Why is there so much paperwork involved?

Because most loans are sold into the secondary market, they must be standardized in terms of loan quality and documentation to facilitate that process. While the markets are constantly looking for ways to improve the process, unfortunately that means what seems like a large number of documents must be executed.

(top)

What is mortgage insurance?

Mortgage insurance is a product that lenders will often require as a condition of making a loan when the borrower is making a smaller (generally less than 20%) down payment. The insurance protects the lender in the event the borrower defaults so it enables them to make lower down payment loans with the same amount of risk as loans with larger down payments.

(top)

What is the difference between an inspection and an appraiser?

As described above, an appraisal is an independent third party opinion of a property’s value. Except as it relates to value, the appraiser generally will not make any comments as to the property’s condition. An inspection is an independent third party opinion of the property’s condition. A licensed inspector looks at and tests every aspect of the property and systems and prepares a detailed report as to its general condition.

(top)

What is acceptable credit?

“Acceptable” is a subjective word. Generally, the better your credit is, the more options you will have in terms of loan products, programs and terms. But there are a number of loan programs available that can allow people with challenged credit to be able to enjoy homeownership. If you have concerns about your credit; we encourage you to contact one of our loan officers so we can help you understand your options.

(top)

Do you do non-builder transactions?

Absolutely! In fact, a large and growing part of our business comes from past customers and referrals from them to friends and family. In addition, our reputation in the marketplace is such that a growing number of real estate professionals, builders, CPA’s and financial planners refer us to their clients as well.

(top)

Closing Questions


How long after closing before I get the keys to my house?

Laws on possession vary from state to state. In some states possession occurs as soon as both parties execute all agreements or as soon as the documents are recorded (usually the same day or the next day). In some states possession does not occur until a few days later. Your loan officer or settlement agent (title company or closing attorney) can advise you on local custom.

(top)

When/Where do I find out the exact amount of funds I need for closing?

We make every possible effort to deliver your closing documents to the settlement agent the day before your closing. Shortly after they receive these documents they will be able to provide you with an exact amount of funds needed for closing.

(top)

How do I bring the funds I need for closing?

Funds for closing must be certified funds. You may bring a cashiers check or money order or make arrangements to wire the funds directly into the settlement agents account.

(top)

When is the deed recorded and when do I get a copy?

The legal documents that represent the transfer of ownership and the mortgage on a property are generally filed as soon as possible after closing; usually the same day or the day after. The length of time it takes for you to receive a copy in the mail is generally a function of the turn around time for filing at the local government agency responsible for record keeping and could be several weeks. Your settlement agent can give you a good estimate.

(top)

Payment Questions


When/Where/How Do I make my a payment?

At closing you will receive a first payment letter which will detail the amount of your first payment which will be made to us, and an address where to send it. The payment can be made by check, cashiers check, or money order. Do not send cash.

(top)

If I have two mortgages will I make two separate payments?

Depending on your circumstances, your transaction may be structured with two mortgages. Sometimes both loans will be sold to the same investor, some times to two different investors. For your first payment and until you receive payment information from the investor, you should send two separate checks. If both of your loans end up being sold to the same investor, you can contact them directly about making a single payment; this is often possible.

(top)

When is the payment due? Past due?

Mortgage payments are generally due on the 1^st of each month and are considered past due after the 15^th of the month. If the lender doesn’t receive the payment until after the 15^th, a late payment will be due. Some home equity lines of credit (HELOC’s) will have different terms. It is important to make sure you understand at closing the payment schedule.

(top)

Are taxes and insurance included in my payment?

The majority of the loans we originate include an escrow account for taxes, insurance, and perhaps mortgage insurance. A portion of your payment goes towards the repayment of your loan and a portion of your payment goes into that escrow account to handle those items. In some circumstances, customers are allowed to request, for a fee, to not have to maintain an escrow account. In those instances they are responsible for paying property taxes and insurance on the home and providing the lender with proof of those payments.

(top)

What is the difference between improved and un-improved taxes?

Often municipalities only access property values for tax purposes once a year. When purchasing new construction, it is very possible that for the first year you live in it the property taxes will be based on the un-improved property (vacant lot) as opposed to improved property (with the finished house on it). The reassessment of the value will of course cause the tax bill to increase. We recommend escrowing for taxes at an estimate of the improved rate to limit the amount of increase the borrower will see in their payments once the property is reassessed.

(top)

What does “homestead exemption” mean?

Some states offer a lower property tax rate on your personal residence. To qualify for this lower rate you must file a homestead exemption with the taxing authorities. Rules will vary from state to state, your loan officer or local tax office can advise you on whether or not the option exists where you live.

(top)

Who do I ask questions about my escrow account to?

Up until the time your loan is sold to the investor, we can answer questions about your escrow account through our servicing department at 1-866-350-7746. After your loan is sold to the investor they will provide you with a customer service number to contact for any questions.

(top)

Explain what it means when you say you sell my loan?

The majority of mortgages that are originated in the U.S.today are sold in a secondary market. This facilitates the flow of funds back into the loan origination company’s hands to facilitate originating more loans. None of the terms of the loan change, only who holds the loan and where you send your payments.

To be more precise, when your loan is sold; there are actually two pieces sold. The loan itself, and the right to service the loan. The servicing lender and the investor purchasing the loan may or may not be the same company. The servicing lender will be the person you will make payments to going forward. Most loans are sold within 30-60 days of closing so you will generally make your first payment to us and subsequent payments to the servicing lender.

(top)

Equal Housing Opportunity / Stop Mortgage Fraud

Privacy Policy / Site Map / Contact Us / Home / MBA Member / drhorton.com