Frequently Asked Questions

1. What is the advantage of Mortgage1Lending over other lenders?

We are both a bank and a broker. We can offer you financing through our own mortgage programs, or we can find you the best program on the market--whichever is the best for you. In other words, we can offer you the same programs and rates as other lenders...and then some.

2. What is the difference between “Cash to Close” and a “Down”?

A “Down” or "Down-Payment" is the amount you are paying up-front toward the principle or equity in your home. For example, 20% down on a $100,000 home would be a down-payment of $20,000.

“Cash to Close” is the amount needed to conclude an escrow. It includes the down-payment, and certain other up-front costs. In the above example of 20% down, the “Cash to Close” might be $25,000, with the additional $5,000 accounting for the cost of the loan and the reserves you might need for your taxes and insurance.

3. What is my Interest Rate?

Your interest rate will be based on the loan program that you choose (and qualify for). It also depends on your property value and down-payment. For example, if you only wish to make a small down-payment, you will probably not get the lowest available interest rate. We will help you obtain the best possible interest rate for your situation.

4. When will my first payment be due?

Your first payment will normally be due one to two months after the close of escrow. Most of our initial estimates are based on skipping two months of payments.

5. Why was my initial loan application somewhat inaccurate?

In many cases, the initial loan application is inaccurate. This is because there still may be some details to work out. As you progress through your escrow, the information is constantly updated, but please, notify us if any personal information is not correct.

6. What is this property tax bill I received in the mail?

This bill is for your county property taxes. If you have an Impound Account (also called reserves), this is paid for you. Normally you will receive a Supplemental Tax Bill if you just purchased your home. This bill is a one time bill that must be paid by you.

7. How much home can I afford?

Based on your financial position and the program you choose, this is determined with your loan officer by looking at your credit report, assets, income, and goals. Please make an appointment with us for a consultation.

8. Can the realtor that I work with show me all the houses, even the ones they aren’t selling?

Yes. It is best to develop a relationship with an agent you know and trust to help insure you will be represented properly and legally. Your agent likely has access to the “Multiple Listing Service” which allows them to see new houses just on the market as well as other homes that are available for you to purchase. They can then find the homes that fit your criteria and notify you.

You can also do an MLS search here on our website.

We have relationships with many of the top, trusted realtors in the area. Please refer to our list of preferred realtors.

9. Should I work with an agent and lender who know each other?

It is a very good idea. It is important to work with a lender-agent team that you trust and enjoy. Choosing an agent-lender team with past experience together gives you the best chance to close escrow efficiently and wisely with the fewest possible delays.

10. Why do I need a Pre-Approval?

Pre-Approval makes your offer far more appealing to the seller. Most people selling a house are aware that buyers who are not pre-approved may encounter problems obtaining financing, or may not be approved for their loan. This causes the house to "fall out of escrow", wasting the time and effort of the seller. Many sellers will simply not accept an offer that is not pre-approved.

11. How much will I need to put down?

Your down payment will depend on the loan program that you choose. Some programs offer up to 107% financing, but you must qualify and agree to the terms of the loan. Your loan officer will help you choose the best program based on your needs.

12. What are the most commonly made mistakes when buying or refinancing a house?

• Purchasing a home without proper representation.
• Obtaining a loan that doesn’t fit your long term and short term investment and financial needs.
• Not financially preparing for the transaction. This means ignoring current credit issues that can be fixed, excessively applying for new credit, moving assets or not documenting assets (cash), inconsistent income due to sick leave, unpaid vacations, etc.
• Not notifying your loan officer of any changes to your income, liabilities, or assets. It’s best to make sure your finances are consistent with the information given at the time of application.

13. What is the difference between pre-qualifying and pre-approval?

Pre-qualifying is a quick estimation of the loans you MIGHT qualify for. Pre-approval is more rigorous analysis of your financial position and the loans you really do qualify for.

14. Why do interest rates change?

Interest rates react to the economic conditions of the stock and bond markets. The buying and selling activities of traders change the values of various stocks or bonds. When the value changes, the yield back to the investors change, thus making your interest rate change. During your loan application process, your interest rate may change significantly until it is "locked" by your lender. This usually happens when you formally apply for the loan.

15. What is a rate lock?

A rate lock is simply reserving a desired rate for a specific amount of time (usually long enough to equal or surpass the time you will be in escrow).

16. What is “Private Mortgage Insurance” also known as “PMI”? Is it permanent?

PMI is an insurance premium that you pay on a monthly basis. It insures the investors in case your house goes into default (i.e., “foreclosure”). This insurance can normally be avoided by putting 20% down or having 20% in equity. Each program has different terms, but normally PMI can be removed by showing the servicing company (people you make your payments to) that you have 25% or more equity in your home and that you have not been late on any payments. You may also sometimes eliminate PMI by refinancing.

17. How does Mortgage1Lending get paid?

We earn our money as a commission from the lender. We do not get paid unless your loan closes. The commission that we get from closing your loan will come to us after the loan funds and records. The only reason we may ask for money before your loan closes is to pay for your appraisal, or any other direct expenses payable by you.