Frequently Asked Questions
HOW DO I KNOW WHAT MORTGAGE I QUALIFY FOR?
There are many factors that impact what interest rate lenders will ultimately offer you. There’s no way to say what your exact interest rate will be until your application is complete, but we will always give you our best estimate based on the preliminary factors. Your final interest rate will be influenced by where the market is when you apply as well as factors such as individual qualifications such as the loan purpose (purchase or refinance), your credit history (FICO score), the value of the property and the loan amount, to name a few.
WHAT PAPERWORK DO I NEED TO APPLY FOR A LOAN?
All loans are different and require different levels of information. However, generally, when applying for any mortgage type upon purchasing a home or property, borrowers should always make certain to submit the following supporting information to begin:
- Copy of your Purchase Contract (if available)
- Copies of the last two years tax returns (all schedules)
- Copies of the last two years W-2's
- Copies of the last four weeks paystubs (last two if paid biweekly)
- Copies of the last two months of your bank statements (both checking and savings), Investment account, IRA, 401K, or retirement account
- Copy of a photo ID
A Fort Funding Loan Officer will request additional information should the lender considering your application require.
SHOULD I GET A FIXED-RATE OR ADJUSTABLE RATE MORTGAGE LOAN?
Choosing the right mortgage loan depends on a borrower’s personal situation and preferences. We've outlined the most important differences between fixed and adjustable rate mortgages but if you still need guidance deciding which is best, an FFC Loan Officer is ready to help.
A Fixed-Rate Mortgage maintains the same interest rate for the entire life of the loan. Your monthly principal and interest payments do not change. It is usually favored by homeowners who prefer unchanging, steady monthly payments and/or will not be moving within the next several years.
The initial interest rate on an Adjustable-Rate Mortgage is usually lower than fixed-rates. The rate begins as fixed for a specific number of years and eventually becomes variable. This means that it will increase/decrease annually based on an index (LIBOR) and predetermined margin. In order to ensure your rate doesn’t change too dramatically, there is a legal cap on how much the rate will flux each year. ARM’s are usually preferred by borrowers who would like a lower initial monthly payment, are comfortable with risk or may sell or refinance their property before the rate adjusts again.
HOW SOON WILL MY FUNDS BE AVAILABLE TO ME?
If you’re buying a home, the funds from your loan are available to you on the day of your closing.
When refinancing, the funds are normally disbursed on the fourth business day after signing the loan documents. Federal regulations require a three-day rescission period, during which you reserve the right to cancel your loan outright.
DO I NEED PERFECT CREDIT TO APPLY FOR A MORTGAGE?
While a higher credit score may help you to receive lower interest rates and more options, having some simple credit issues in the past won’t necessarily disqualify you from being approved for a mortgage.
While the FFC team will do everything in our professional power to help each applicant get the loan they desire, borrowers should understand that not everyone gets approved, and not everyone always gets approved for their ideal loan. Your credit history must demonstrate both a willingness and ability to repay on time and financial responsibility in order for any loan officer to help an applicant get approved.
HOW DO I ASSESS THE VALUE OF MY PROPERTY?
There are a lot of online sources that can help you determine the value of your home by telling you what other properties in your neighborhood sell for. As well, you can usually check with the local tax authority to find out the last tax assessment for the property.
However, we can help you verify the value of your home during loan processing by ordering an appraisal from the bank during the application phase of the mortgage process.
IS MY INTEREST RATE TAX-DEDUCTIBLE?
Any interest you pay on a loan secured by your primary residence may be tax deductible. We urge you to consult a tax advisor to learn whether your particular mortgage interest will be tax deductible.
SHOULD I REFINANCE?
There are tons of reasons for applicants to refinance on loans they’re already paying back. Sometimes, it’s to lower their monthly payments or interest rate or to switch from an adjustable rate mortgage to a fixed rate (or vice versa). Other times, borrowers would just like to change the remaining terms of the loan, or realize that refinancing for a lower rate can help them pay off other debts.
Whatever the reason, an FFC Loan officer can help you determine whether you can refinance and guide you in finding the perfect options.
IS PERFECT CREDIT IMPORTANT WHEN REFINANCING?
Much like a home mortgage, having a higher credit score may help you to receive lower interest rates and more options, but having some slight past credit issues won’t necessarily disqualify you from being able to refinance your property.
Contact an FFC Loan Officer to discuss the state of your credit and if refinancing is right for you.
HOW DO I LEARN EVEN MORE?
For more information about frequently updated rules and regulations concerning mortgage loans, feel free to visit the U.S. Department of Housing and Urban Development website.
If you’re still unsure, or have some questions about getting started, contact us to discuss which loan option may be right for you.