FAQ

ClickHeretoContactUs2We have compiled a list of commonly asked questions and answers. If you have questions that we haven’t addressed, please contact us. We look forward to working with you to meet your mortgage needs!

mortgages

Is our bank right for you?

We offer all the comprehensive mortgage services you need, from bankers you can trust…whether you’re purchasing, building or refinancing!

If you plan to purchase but haven’t found your dream home yet, please complete our application to get pre-qualified for a no obligation mortgage loan today!

Am I able to apply for a loan before I find a property to purchase?

One of the best things you can do is apply for a mortgage loan before you find a property to purchase! After applying for a mortgage, we will issue you a pre-qualification subject to you finding the perfect home and provide you with a pre-qualification letter. Having a pre-qualification may be a competitive advantage for you, it will prove to real estate brokers and sellers that you are indeed a qualified buyer, and may also give you more weight in a purchase offer that you make.

When you find a home that you want to call your own, simply call your Loan Officer to complete your application. You will then be able to lock in on our great rates and fees while we complete the processing of your request.

Do I have to provide information regarding my child support, alimony or separate maintenance income?

There is no need for you to submit information regarding your child support, alimony or separate maintenance income unless you would like it to be part of your consideration for repaying this mortgage loan.

If I have had a bankruptcy or foreclosure in the past, how will that affect my ability to obtain a new mortgage?

Your ability to obtain a new mortgage may be affected if you’ve had a bankruptcy or foreclosure in the past. We typically require that two to four years have passed since the bankruptcy or foreclosure, unless the circumstances leading up to the bankruptcy or foreclosure was beyond your control. Re-establishing a credit history with new loans or credit cards is also an important factor.

How will you verify my rental income?

We will typically ask for your most recent federal tax return as a way of verifying rental income if you own rental properties. On your tax return, we will review Schedule E after all expenses except depreciation. Depreciation does not count against your rental income, as it is only a paper loss.

I accepted a new job and am relocating; I haven’t started my new job yet. How should I fill out the application?

How exciting! If your new job is with your current employer, complete the application as such but list the amount of income that you anticipate to be making at your new location.    

If you’ve accepted a job with a new employer, complete the application as if you were currently employed there and indicate that you’ve been there for one month. Enter the information about the employer that you’ll be leaving as a previous employer. After submitting your loan for approval, we will be sure to work out all the minor details.

What will I need to provide if I’m retired and my income is from pension and social security?

If your income is from pension and social security, we will need you to provide us with your recent pension check stubs or bank statements if your pension or social security gets directly deposited in to your account. There is a possibility that we may need to verify that this income will continue for a minimum of three years, as income for life is not provided in some pension or retirement plans.

If the income you’re receiving is tax-free, we will factor in that taxes will not be deducted from this income when reviewing your request.

If I am selling my current home to purchase a new home, what type of documentation will I need?

When selling your current home to purchase your new home, we will need a copy of the settlement or closing statement verifying that you’ve paid in full on your current mortgage and that you will have sufficient funds available for our closing. The closing of your current home will often times be scheduled for the same day as the closing of your new home. If that happens, simply bring your settlement statement from your current closing to the closing of your new home.

What documents will I need to provide if I have income from dividends and/or interest?

In order to verify the amount of your dividend and/or interest income, we typically need two years of your most recent personal tax returns so that we can calculate an average of the amounts received. We will also need copies of your statements from your financial institution, stock certificates, promissory notes or brokerage statements for verification.

Dividends and/or interest income must be expected to continue for a minimum of three years to be included for consideration on your repayment.

How do I complete the application if I was a student before obtaining my current employment?

If you were a student prior to obtaining your current employment, complete the past employment fields as follows: Enter the name of your school and the length of time you were there. You will also want to enter “Student” as your position and “0” as your income.

Is receiving a gift from someone else an acceptable form of down payment?

If the gift giver is related to you or is your co-borrower, then yes, this is an acceptable form of a down payment. We ask that you provide us with the name, address and phone number of the gift giver, along with disclosing their relationship to you.

We will also have to verify that you have at least 5% of the property’s worth in your own assets if your loan request is for more than 80% of the purchase price of your new home.

In order to verify that you have deposited the gift funds into your account prior to closing, we will need to obtain a copy of your bank receipt or deposit slip.

How will you verify my income if I’m self-employed?

We will verify your self-employment income by obtaining copies of your federal tax returns for the most recent 2-year period. However, we may not need full copies of your tax returns based on your financial situation.

To determine the income that can be used to qualify for a mortgage loan, we will calculate the average of the net income reported on your tax returns. Income that hasn’t been reported on your tax returns won’t be able to be used for qualification. We may need a minimum of one or two years of history of self-employment as a way to verify that your self-employment income is indeed stable.

If I have co-signed a loan with someone else, do I need to include that debt?

Yes, when considering your qualifications for a mortgage, we do look at your co-signed debt. If for any reason your co-signed debt makes a difference on your qualifications, we do have the option to ignore the co-signed debt monthly payment if you can verify that the person responsible for the debt has made all of the required payments. For verification purposes, we will need copies of their cancelled checks for the past six months.

I’ve had multiple employers in the past few years, how will that affect my ability to obtain a mortgage?

There typically will not be a problem obtaining a mortgage if you’ve changed employers in the past few years, especially if you’ve changed employers without having gaps of unemployment in between.

An employment change where you are now paid on commission may be a problem, since it will be hard for us to predict your earnings without a past history with your new employer.

If I have income that’s not reported on my tax return, can I use it for qualification?

Income that is legally tax free and not required to be reported can be used for qualification. All other income must be reported on your tax return for consideration.

It’s possible that a lender may offer a stated income program, meaning you can qualify for a loan based on the income you state rather than income that can be verified. Programs like this typically require a larger down payment and offer higher interest rates. At this time, we do not offer any stated income programs.

If the appraised value of my property is greater than the purchase price, can I use the difference towards my down payment?

It is a great benefit for you if you’re able to purchase a home that is priced lower than the value it is appraised at; however, we are not allowed to use the difference towards your down payment. To determine your down payment requirement we will use the lower of either the appraised value or the sale price of the home.

What is a credit score and how will it affect my application?

A credit score is a compilation of information that creditors report each month regarding your balances and the timing of your payments and the information collected by credit bureaus. This information is then converted into a number that helps lenders determine the probability that you will be able to pay your loan back on time. Credit scores are calculated by comparing your credit history with millions of other consumers and have proven to be a very effective way of determining your credibility for repayment. It is important to understand that your credit score is calculated by the credit bureau and not by the lender.

Typically credit scores range from approximately 300-900 for mortgage loan decisions. Having a higher credit score usually puts you as a lower risk to a lender. Things that may affect your credit score include: Your history of payments, your outstanding obligations, the length of time you have had outstanding credit, the number of inquiries that have been made on your credit report recently and the types of credit that you use.

A credit score is just one piece of information that a lender will use to evaluate your application, there are many other factors when making a loan decision and we will never make a decision without looking at all of your financial aspects. Many financial institutions have been using credit scores for years to evaluate credit card and auto loan applications, however, only recently have mortgage lenders begun to use this tool to assist with their mortgage lending decisions.

What is installment debt?

Any loan that you currently make payments on is considered installment debt. Student loans, auto loans, or debt consolidation loans are all examples of installment debts. Living expenses such as insurance costs or medical bill payments do not need to be included on your application. Installment debts that have remaining payments of 10 months or less will not be included when determining your qualifications for this mortgage.

If I authorize access to my credit information, will I be charged any fees?

No, authorization allows us to access your credit information to evaluate your application online. If you decide to complete the application process after your loan is approved, then you will be charged for a credit report.

Will you consider my overtime, commission or bonus income when evaluating my application?

We will only consider your overtime, commission or bonus income when evaluating your application if you have a history of receiving it that is likely to continue. We typically need copies of your W-2 statements for the past two years, along with a recent pay stub, in order to verify this information. If commission earnings accounts for a large portion of your income, it is possible that we may need copies of your recent tax returns so that we can verify, if any, the amount of business-related expenses that tend to occur. In order to determine the amount that can be considered as part of your regular income, we will calculate the average of the amounts received over the past two years.

Please note that if you haven’t been receiving bonus, overtime, or commission income for a minimum of one year, it is likely that the full amount will not be able to be used for consideration when reviewing your application.

Will my second job income be considered?

Typically, if we can verify a one-year history of employment with your second job, we will consider the income when reviewing your application.

Will the inquiry about my credit affect my credit score?

If you have a number of recent inquiries, your credit score may be affected due to the possibility that your use of credit may have increased.

However, do not let this stop you from mortgage shopping! All mortgage inquiries that are made within a 14-day period are only considered one inquiry. It is also important to know that all mortgage and auto loan credit inquiries that are made within the 30 day time frame prior to the score being calculated also won’t be included in the report.

If you have additional questions, please contact us! We’re here to help you with all of your mortgage needs.

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