Mortgage FAQs

When it comes to finding the right loan or program for your real estate needs, you need all the information and resources you can find. The market is always changing, as are regulatory and lender guidelines. Staying up to speed with these developments will be crucial, whether you’re a first-time homebuyer or a seasoned investor.

At Legacy Park Mortgage, we not only offer the most honest and accurate expertise in the industry, but empower our clients with the knowledge they need to make an informed decision. That’s why we’re happy to share our up-to-date insights on developments in mortgage lending and the various mortgage loan programs and products that may suit your personal and business needs. Please make use of these free resources, and don’t hesitate to contact us for further information or assistance.

What is the difference between a mortgage broker and a mortgage lender?

The role of the mortgage broker is to provide advice and assistance on the different home loans that are available from various lenders. They will then compile and process all the necessary information about your finances, employment, etc. along with your application and submit it to the lender. Once it is assessed and completed, the lender will decide whether or not you qualify for their loan (a.k.a. “underwrite” the loan). In essence, a mortgage broker serves as a crucial facilitator between you and the wider mortgage market because they will give you access to a wider range of options and loan programs, based on your own needs and goals.

What sort of mortgage can I get?

There are a wide variety of lenders and loan programs that we can present to you depending on your specific situation. First-time homebuyers can get a mortgage that is insured by the FHA, which has a low down payment and minimal credit requirements. Those purchasing a home in need of repair can apply for a 203k “Rehab” loan that will wrap up in the renovation cost into their mortgage loan.

What would I need to apply for a mortgage?

Most loans will require documentation of your employment, income, assets, and other relevant financial details. You’ll typically have to provide a signed contract of the home you are purchasing, your social security number, pay stubs and bank statements from the past two or three months, one or two years of income tax returns, and information on current debts owed. Here at Legacy Park Mortgage, we also have other loan programs available with less stringent requirements and can advise you on which loan product is best suited for you based on your specific personal and business goals.

What is private mortgage insurance (PMI)?

Private mortgage insurance (PMI) is designed to protect lenders from any loss resulting from a borrower defaulting on their mortgage. It generally applies only to conventional home loans, although loans from the Federal Housing Administration also have their own form of mortgage insurance. PMI is often required for mortgages that have a loan-to-value (LTV) percentage of 80 percent or more (LTV is the basically the amount of the mortgage compared to the appraised value of the home). Private mortgage insurance fees vary based on factors such as the size of the down payment and your credit score, and can range from around 0.3% to about 1.5% of the original loan amount per year. Once a borrower is no longer considered a high enough risk – usually after garnering enough equity in their home – PMI payments will cease.

Is being pre-qualified the same as pre-approved?

No. The key distinction is that pre-qualification has a lower bar to pass, usually entailing some general and basic information about your finances, followed by an estimate of what amount you can expect your home loan to be. Pre-approval is the next step, in which your financial background, such as your creditworthiness, is examined more thoroughly and you are offered a more finalized loan amount.

How much is the down payment?

Down payments vary wildly depending on the type of loan or program you are utilizing. First-time homebuyers applying for a federally-backed mortgage may put down as little as 3.5 percent down. Legacy Park Mortgage has a wide variety of loan programs available with various down payment requirements, and can advise you on which loan program is best suited for you based on your specific financial circumstances.

When should I refinance?

The most common reason to refinance is to save money, usually through a lower and/or fixed interest rate and a reduced loan term. Refinancing can also be used to get needed funds for paying off debt, fixing up your property, or making other investments. There are many types of refinancing options out there, each suited to a particular situation; for example, the HARP program is specifically designed to help distressed homeowners, while a reverse mortgage is provided to older homeowners seeking to maximize equity in their real estate.

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