IWe are committed to easing the review and approval process starting from the moment you apply all the way through closing on your new home or property.

Assuming your financial situation meets the guidelines for the loan you want, you will be granted a letter of commitment which outlines the terms and conditions of the promised mortgage. This approval is subject to your financial conditions remaining stable until you close on your new home or property purchase. Because we may make one final check during the closing process on your various accounts, it’s wise to inform us as soon as possible of any major debts or windfalls occur and that could significantly affect your financial standing.

Your Total Mortgage Payment

Your monthly mortgage payment typically is made up of four components, some times referred to as PITI:

To learn about the elements that vary from ARM to ARM, read about ARM Features. Then take a look at the types of ARMs we offer.

Fixed Rate Mortgages

With a fixed rate mortgage, your interest rate--and consequently your monthly principal and interest payment--remains fixed over the life of the loan. This makes fixed rate mortgages very budget-friendly, since you can count on your monthly principal and interest payment remaining the same for years to come.

But don't forget: If your monthly payment includes property taxes and insurance, increases in these amounts will obviously affect your monthly payment. Fixed rate mortgages typically offer a choice of term, from 30 years to as few as 10 years.

Read more about the types of Fixed Rate Mortgages we offer.

Second Mortgages

If you own property or a home, you may want to take advantage of the equity that has accumulated. Equity in a home is the difference between what the fair market value of your home is minus the amount you still owe on your mortgage. Many people take out another loan against their home equity for a variety of financial reasons, including:

    • Principal – the part of the monthly payment that reduces the remaining balance of the mortgage
    • Interest – the fee charged for borrowing money
    • Taxes – levied by your community (state, county, city). Generally based on a percentage of the value of your home. We      typically collect 1/12th of the yearly property tax bill each month and place it in escrow so that funds are available when the      property tax is due.
    • Insurance – required to cover a minimum amount of home or property insurance against losses from fire, theft, bad weather      or other concerns.

For many loans, principal and interest comprise the bulk of your monthly payments in a process called amortization, which reduces your debt over a fixed period of time. You can determine the amount of principal and interest by using our Mortgage Payment Calculator.

Home Equity Credit Lines

These loans are also called HELOCs (pronounced: hee-lox) by bankers and brokers. Many of these programs offer the same convenience as having a credit card with the benefit of a lower interest rate than is typically available with credit accounts offered through banks. To qualify for this type of a loan, you put your house up as collateral. Your lender then reviews your application, taking in to account your credit history and remaining balance on your primary mortgage, to determine how much they will offer you for a line of credit and at what interest rate. Because you use your home or property as collateral to qualify, failing to pay on time has stiffer and more immediate consequences if you sign up for a HELOC.

Most HELOCs provide you with a credit card or a check book or both to allow you ready access to the full line of credit once you have been approved. Terms vary depending on the specific program, of course. As long as you make your payments on tdime and keep an eye on how much of your HELOC you have borrowed, having such funds available can make dealing with unexpected expenses easier.

Second Mortgages

A second mortgage has much in common with both a primary mortgage and a HELOC. Like your primary mortgage, many loan programs are available including both fixed and adjustable rate products. Individuals who explore second mortgages do so for similar financial reasons as those who look in to HELOCs.

Because a second mortgage provies a single large payment to you or the parties you designate during the loan process, funds from these notes tend to go towards a specific known or anticipated debt. Many use a second mortgage to cover costs of remodeling, paying off high interest accounts, or to make investments in projected to earn a higher interest rate than that associated with the loan. Payment periods on second mortgages tend to be a shorter than for primary mortgages but will fluctuate based only on the terms of the note. (Remember, with a HELOC, your monthly payment changes each time to use the line of credit to pay for something.)

For help understanding how your payments will vary for negative amortizing or adjustable rate loans, contact us.

Contact us or apply now if you want to hear more about our current home equity offerings.