Frequently Asked Questions (FAQs)
Below are some of the most frequently asked questions (FAQs) that we get. If you don’t see an answer to your questions, feel free to contact us!
1. What is the difference between a pre-qualification and a pre-approval?
A pre-qualification shows you what you can afford and a pre-approval is confirming with bank statements, pay stubs, and credit reports what you have provided verbally for the sake of achieving full loan approval.
2. How will I be updated on my loan?
Fairway will contact you with anything prior to the completion of your application and we will contact you after the application has been originated. Once your loan is approved and the appraisal is in, we will contact you regarding any pertinent information. Finally, you will be contacted 7-10 days prior to closing for confirmation of details and 3-5 days before closing to go over final figures.
3. What is the AMOUNT FINANCED?
The amount financed is the mortgage amount applied for MINUS prepaid finance charges and any required deposit balance. Prepaid finance charges include items such as loan origination fees, commitment or replacement fee (points), adjusted interest, and initial mortgage insurance premium. The Amount Financed represents a NET figure used to allow you to accurately assess the amount of credit actually provided.
4. What are Closing Costs?
Closing costs are those costs that include the loan origination fee, discount points, appraisal costs, and any other charges associated with the legal transfer of property. Typically, these costs will range between 2% and 3% of the mortgage amount.
5. Where will I be closing, how much do I bring to close and can I bring a personal check?
The contract will specify where you will be closing. 3-5 days prior to closing Fairway will contact you regarding how much to bring and to bring it in the form of a cashiers check made payable to the title company. You can have a check of up to $1000.00 for any difference in the amount you are told and the actual amount needed.
6. What is the TOTAL OF PAYMENTS?
This figure indicates the total amount you will have paid, including principal, interest, prepaid finance charges, and mortgage insurance if you make the minimum required payments for the entire term of the loan. This figure is ESTIMATED on the Disclosure Statement and is estimated in any adjustable rate transaction.
7. What is a target rate?
Your target rate is the rate we will discuss to be the original optimal rate of interest for your mortgage.
8. What is meant when locking my interest rate and when do I lock?
It means that a commitment has been made between my company and the investor on your behalf regarding the interest rate in your mortgage loan. Your loan officer watches the market on a daily basis to make sure that when we lock your interest rate, it is in the best interest for you and your loan.
9. What is the ANNUAL PERCENTAGE RATE?
The Annual Percentage Rate, or A.P.R., is the cost of your credit expressed in terms of an annual rate. Because you may be paying “points” and other closing costs, the A.P.R. can be compared to other loans for which you may have applied and give you a fair method of comparing price.
10. What is Private Mortgage Insurance (PMI)?
Private mortgage insurance is required on conventional loans and may allow you to purchase a home for as little as 5% down. This coverage requires a monthly insurance fee to be paid. PMI is only required if your loan-to-value is 80% and above.
11. Is it okay to use on-line bank statements?
Only if the statements have the bank logo, name and correctly reflect your account number.
12. Am I committed to you because I have signed or reviewed my loan application?
No. We would love for you to do business with Fairway and if there are any problems, please consult with your loan officer or our Sr. Vice President/Branch Manager, Joel Hammond. The only commitment you have is when you have completed the signatures on the closing documents and the loan funds.
