Can I apply for a loan before I find a property to purchase?
Yes. If you apply for your mortgage now, we’ll issue a pre-qualification subject to you finding the perfect home. You can use the pre-qualification to assure real estate brokers and sellers that you are a qualified buyer; giving more weight to any offer that you make. When you find the perfect home, simply call your Loan Officer to complete your application. You’ll have an opportunity to lock in our great rates and we’ll complete the processing of your request.
Can I borrow funds to use towards my down payment?
Yes. However, any loans that you take out must be secured by an asset that you own. If you own something of value that you could borrow funds against, such as a car or another home, it’s a perfectly acceptable source of funds. If you are planning on obtaining a loan, make sure to include the details of this loan in the expenses section of the application.
Do I get a tax advantage from having a mortgage?
Consult a tax attorney or accountant for specific details, but interest on a mortgage is usually tax deductible.
I am purchasing a home; do I need a home inspection and an appraisal?
It is not required, but highly recommended as both a home inspection and an appraisal are designed to protect you against potential issues with your new home. An appraisal will find obvious construction problems such as termite damage, dry rot or leaking roofs or basements. A home inspection will provide a detailed assessment and will educate you about possible concerns or defects with the home.
Is there a fee charged or any other obligation if I complete the online application?
No, there is no cost for completing our application online. After your loan is approved, you can decide whether you wish to pay the application deposit to cover the cost of the appraisal and final credit report so that you can lock in an interest rate and we can begin to process your request. A Mortgage Loan Originator can assist you in making application deposit arrangements in order to complete your application. Please be advised that while we can process your loan request and provide you with a response, your application is not considered complete until an application deposit has been made.
I am working with, or have been referred to, one of GenoaBank’s Mortgage Loan Originators. Can I still use the online process?
Yes. Applying online allows you to start your transaction immediately and at your own pace. You can also complete your application in one visit or multiple visits. Simply use the user name and password that is selected during your first session. We have made the online process easier than ever. Take advantage of this unique technology and apply online today!
How do you decide what you need from me to process my loan and what documents are required to process my loan?
We take full advantage of an automated underwriting system that allows us to request as little information as possible to verify the data you provided during your loan application. It is no longer necessary to verify every piece of data collected during the application. The automated underwriting system compares your financial situation with statistical data from millions of other homeowners and uses that comparison to determine the level of verification needed. In many cases, a single W-2 or pay stub can be used to verify your income or a single bank statement can be used to verify the assets needed to close your loan. The following items are needed at the time of application:
- W-2's for the most recent two years.
- Most recent one month's pay stubs.
- Bank statements from the most recent three months.
- Most recent statement of other assets (i.e., IRA, 401(k), Mutual Funds, etc.).
- Survey and Title Policy for current home (only on refinances) OR Purchase Agreement (only on new purchase).
- Name, address and account # of present mortgage.
- Homeowner's insurance policy # and agent's phone #.
- If self-employed, most recent two years of federal tax returns.
- Divorce decree. Child support documentation. Discharge of bankruptcy.
- Check for application fee for $325.
- Copy of Driver’s License.
I am self-employed. How will you verify my income?
Generally, the income of self-employed borrowers is verified by obtaining copies of personal (and business, if applicable) federal tax returns for the most recent two-year period. We’ll review and average the net income from self-employment that’s reported on your tax returns to determine the income that can be used to qualify. We won’t be able to consider any income that hasn’t been reported as such on your tax returns. Typically, we’ll need at least one, and sometimes a full two-year history of self-employment to verify that your self-employment income is stable.
If I have income that’s not reported on my tax return, can it be considered?
Generally, only income that is reported on your tax return can be considered when applying for a mortgage unless, of course, the income is legally tax-free and isn’t required to be reported. If need be, there may be other ways of verifying your income and a bank representative will make that determination upon reviewing the details of your application. Information about child support, alimony, or separate maintenance income does not need to be provided unless you wish to have it considered for repaying this mortgage loan.
If my property’s appraised value is more than the purchase price can I use the difference towards my down payment?
If you are purchasing a home, we’ll have to use the lower of the appraised value or the sales price to determine your down payment requirement. It’s still a great benefit for your financial situation if you are able to purchase a home for less than the appraised value, but unfortunately we cannot use this “instant equity” when making our loan decision.
I am getting a gift from someone else. Is this an acceptable source of my down payment?
Gifts are an acceptable source of down payment. If the gift giver is related to you or your co-borrower, we’ll ask for their name, address, and phone number, as well as their relationship to you.
I am selling my current home to purchase this home. What type of documentation will be required?
If you’re selling your current home to purchase your new home, we’ll ask you to provide a copy of the settlement or closing statement you’ll receive at the closing to verify that your current mortgage has been paid in full and that you’ll have sufficient funds for our closing. Often the closing of your current home is scheduled for the same day as the closing of your new home. If that’s the case, we’ll just ask you to bring your settlement statement with you to your new mortgage closing.
How will a past bankruptcy or foreclosure affect my ability to obtain a new mortgage?
If you’ve had a bankruptcy or foreclosure in the past, it may affect your ability to get a new mortgage. Unless the bankruptcy or foreclosure was caused by situations beyond your control, we will generally require that two to four years have passed since the bankruptcy or foreclosure. It is also important that you’ve re-established an acceptable credit history with new loans or credit cards.
I have heard that some lenders require flood insurance on properties. Will you?
Federal Law requires all lenders to investigate whether or not each home they finance is in a special flood hazard area as defined by FEMA, the Federal Emergency Management Agency. The law can’t stop floods. Floods happen anytime, anywhere. But the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 help to ensure that you will be protected from financial losses caused by flooding.
Should I refinance?
Whether or not it is worthwhile to refinance depends on many variables. The questions you need to ask yourself are:
- How long will you be in your home?
- How does the interest rate you're paying today compare with market rates?
The most common reason for refinancing is to save money. Saving money through refinancing can be achieved in two ways:
- By obtaining a lower interest rate that causes one's monthly mortgage payment to be reduced.
- By reducing the term of the loan, thus saving money over the life of the loan.
What is PMI?
Private mortgage insurance, or PMI, insures the lender against a default. It is required when the borrower is making a cash down payment of less than 20 percent of the purchase price. PMI costs vary from one mortgage insurance firm to another.
What is a FICO credit score and how will my credit score affect my application?
A FICO credit score (developed by Fair Isaac & Co. Credit) is one of the pieces of information used to evaluate your application. Credit scores are based on information collected and calculated by credit bureaus and information reported each month by your creditors about the balances you owe and the timing of your payments. Things that affect your credit score include your payment history, your outstanding obligations, the length of time you have had outstanding credit, the types of credit you use, and the number of recent inquiries that have been made about your credit history. In general, the higher your credit score, the lower the risk that your payments won’t be paid as agreed. Using credit scores to evaluate your credit history allows us to quickly and objectively evaluate your credit history when reviewing your loan application.
Will the inquiry about my credit affect my credit score?
An abundance of credit inquiries can sometimes affect your credit scores since it may indicate that your use of credit is increasing. But don’t limit your mortgage shopping for fear of the effect on your credit score.