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Refinance
Mortgage Questions:
What is a home equity line of credit?
A
home equity line of credit is a form of revolving credit in which
your home is used as collateral. Home equity lines of credit feature
a variable interest rate and a draw period.
How much can I borrow?
Your available equity is determined by taking a percentage
of your home's appraised value, and subtracting the balances of
any outstanding mortgages on the property.
Must I occupy the residence I'm using as collateral?
You can use a residence that you do not occupy as collateral
if the property's total existing mortgages and your requested home
equity line add up to no more than 70% of the home's appraised value.
What is the minimum draw amount on my home equity line of credit?
The minimum initial draw amount on a home equity line of credit
is $25,000 for lines over $25,000 and $10,000 for lines under $25,000.
How can I access my home equity line of credit?
Within a couple of weeks of your loan closing you will receive
a package that contains both payment information and checks that
will allow you to access your line of credit.
Why is an appraisal necessary?
Appraisals
compare your home to other homes in your area that have recently
sold. An appraisal is necessary for the lender to justify the loan
amount being requested.
What is a draw period?
The
draw period is the time frame during which you are allowed to use
the credit available on your home equity line. When you borrow funds
from your line of credit it is referred to as a draw.
General
Mortgage Questions -
How
much of a down-payment will I need?
The minimum down-payment required depends on the mortgage program
you select. There are many different types of loans with various
down-payment options, including no down-payment and low down-payment
programs. Ask your mortgage broker.
How much can I afford and when should I obtain a mortgage?
The best time to look for a mortgage is before you start looking
for a house. This helps you to determine how much house you can
afford.
Why do I need private mortgage insurance (PMI)?
Private mortgage insurance (PMI) is an actual insurance policy
that the lender takes out to protect themselves if you default on
the loan. This protects the lender and at the same time, enables
you to apply a minimal down-payment to purchase a home.
What is a Good Faith Estimate?
The Good Faith Estimate (GFE) discloses estimated costs associated
with your mortgage transaction.
What is a VA loan and who can qualify for it?
The Veterans Administration (VA) created a loan program to
help military veterans purchase homes. VA loans require no down-payment
Veterans, current military personnel and spouses of veterans who
died of service-related injuries may apply for VA loans.
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