Your Mortgage Questions Answered
Mortgages can seem complex and intimidating, but they don’t have to be. The first step in finding and securing the best mortgage is educating yourself. At Homeseed, we believe in empowering borrowers with accurate and timely knowledge so you understand all of your available options when it comes to home lending.
The following are frequently asked questions about mortgages. Whether you’re a first-time homebuyer or interested in the best option for refinancing, if you have questions not addressed here, reach out to a Homeseed loan advisor and our advisors will help you navigate the home lending waters and answer any questions you have!
What type of loan is best for me?
Your loan advisor will work with you closely during a complimentary mortgage planning meeting to learn more about your financial situation and home buying goals. The loan advisor will then explain the loan options available and help determine which is best for you.
How much of a down payment is required?
Most people think 20% because that tends to provide the best loan terms for borrowers. However, 20% is not always mandatory especially if you are well qualified. There are some loan programs that require 0% down payment while conventional loans require as little as 3%.
Do I qualify for any down payment assistance programs?
Homeseed is approved to originate loans through the Washington State Housing Finance Commission’s down payment assistance programs. For more information, please contact us to learn more!
What is the difference between a pre-qualification and a pre-approval?
A pre-qualification provides an estimate of what you can afford based on information you supply to Homeseed including income, assets, debts, and credit score. A pre-approval is similar, but requires documentation verifying the income, assets, debts, and credit score. A pre-approval provides you with a more accurate estimate of what you will be approved for.
What is private mortgage insurance (PMI)?
Private mortgage insurance is required on a conventional loan when borrowers make a down payment of less than 20%. The PMI allows you to purchase a home for as little as 3% down with the conventional loan program.
What are closing costs?
Closing costs are expenses that are paid in order to complete the transaction. On a home purchase, closing costs are paid in addition to the down payment (if the loan program requires one). Closing costs may include discount points, appraisal fees, title insurance, credit report charges, etc. On refinances and down payment assistance programs you could finance the closing costs within your loan.
What are discount points?
Discount points are a form of prepaid interest that allow the borrower to lower the interest rate of the mortgage at closing.
What is my interest rate?
Your interest rate is determined by a combination of factors including location, credit scores, loan amount, down payment, loan term, and loan type.
How do mortgage interest rates move?
Rates tend to move daily, but on a typical day to day basis they do not move much. Factors such as the state of the US and world economy, bond market, and housing market all have an impact on where rates head.
What is the Loan Estimate (LE)?
The Loan Estimate (LE) is a three-page form that you receive after applying for a mortgage. The form provides you with important information including the estimated interest rate, monthly payment, and total closing costs for the loan.
Why do I need to sign the disclosure statements?
Lenders are required by law to provide you the information stated on this statement in a timely manner. Your acknowledgement and signature indicate you have received this information, but it does not obligate either you or the lender in any way.
What is a Conventional Home Loan?
A conventional loan is available in a variety of loan term options and is advantageous for those coming in with a strong down payment and good credit history. By far the most popular type of home loan, conventional home loans are loans that are not insured or guaranteed by any government program like the VA, USDA, or FHA. Conventional loans can be deemed as either conforming and nonconforming. Learn More
What is an FHA loan?
A Federal Housing Administration (FHA) loan is insured by a government agency called the Federal Housing Administration, and offers financing to borrowers who may not be able to qualify for traditional loans. This loan is popular among first-time home buyers and those with less-than-perfect credit, as it requires smaller down payments and feature more flexible terms. Learn More
Are loans handled in-house?
We handle our clients’ loans in-house from start to finish, helping make their loan experience as quick and hassle-free as possible.
Do I need a high credit score to get a mortgage?
No, you don’t necessarily need a high credit score to purchase a home. However, as a general rule, the higher your credit score the better the loan terms. Credit score requirements for loan products can sometimes change, so contact us today to learn more!
Do you offer stick-built construction lending?
Homeseed is proud to offer stick-built contruction loans, which gives borrowers a better option for building the home of their dreams. With a Homeseed construction loan, you’ll gain access to our collaborative, cloud-based construction loan software which simplifies communication between you, the builder, 3rd-party inspectors, title companies and Homeseed. You also get full-time support and real-time tracking through the entire building process, ensuring you stay on-budget and on-time with your construction loan. Learn More
Do you offer rehab lending for renovations?
Homeseed is proud to offer renovation loans, which gives borrowers options to renovate and remodel an existing home or one that will be purchased. With a Homeseed renovation loan, you’ll gain access to our collaborative, cloud-based construction loan software which simplifies communication between you, the builder, 3rd-party inspectors, title companies and Homeseed. You also get full-time support and real-time tracking through the entire building process, ensuring you stay on-budget and on-time with your renovation loan.
Can I get a home loan for a manufactured home?
Homeseed offers loans for certain types of manufactured homes. Please consult with a loan advisor for more information regarding financing on these types of properties.