Mortgage FAQ

The APR, or Annual Percentage Rate, is often higher than the quoted interest rate, or note rate. This is because the APR includes, in addition to interest, some of the additional costs of obtaining your financing. Simply stated, if there were no costs in obtaining financing, your note rate and your APR would be the same.

Your APR will be noted on your Truth-in-Lending disclosure that you receive after application

A point equals one percent of the loan and is usually paid at closing.

For example, if your loan amount is $100,000…then one point would equal $1,000 OR one percent.

Discount Points are fees paid by the buyer to the lender to reduce the loan's interest rate. If you plan to keep your residence for five or more years, it may be worthwhile to pay discount points to reduce your monthly payment and achieve greater savings over the life of the mortgage.

The number of discount points required to buy down your interest rate will vary based on the loan type.

Generally speaking, points are tax deductible when you are buying a primary residence. Consult your tax advisor for more information on tax deductions.

An appraisal is the estimate of the value of the home you are purchasing and is provided by a professional appraiser, trained in estimating the value of real or personal property.

A copy of the appraisal is provided to you at closing.

Surveys determine whether there has been an encroachment on the property lines, building lines or easements. If your home is new construction, the builder may order the survey just after completion or just before closing. Although we recommend that all buyers purchase a survey, they are not required on some mortgage products in certain states. In Florida and North Carolina, they are required on all mortgage products

Closing will typically take place at an escrow agent's or an attorney office. The escrow agent or attorney can represent the lender and the real estate agent or you the buyer.

Your Realtor will give you instructions on where the closing will be conducted, along with a phone number and a fax number for the closing attorney or agent in case you have any questions.

All borrowers associated with the loan transaction will be required to bring a government issued photo ID such as a driver's license or passport to closing.

Here's what you can expect to happen at the closing table:

• The closing agent reviews the HUD-1 Settlement Statement with both you and the seller. Next...
• Evidence of required insurance and inspections are presented. Then...
• Signatures are collected for loan documents including the HUD-1, mortgage or deed note and the Truth-in-Lending statement. Next...
• You submit a certified or cashier's check to cover your down payment and closing costs. Or, in some proceedings, money is drawn from an escrow account established for your home purchase. Then...
• The Lender provides a check to the closing agent to cover the home loan amount. If your monthly payments may to include property taxes and insurance, a new escrow account (or reserve) is established.
• Finally, you receive the keys to your new home!