Frequently Asked Questions
If you do not see your question here, feel free to contact us directly at 913-381-5702.
- Is my information safe to submit online to the Bank?
- Is comparing APR’s the best way to decide which lender has the lowest rates and fees?
- The interest rate you offer is just a little less than what I am paying now. How do I know if it makes sense to refinance?
- How much money will I save by choosing a 15-year loan rather than a 30-year loan?
- Should I pay discount points in exchange for a lower interest rate?
- What is your rate lock policy?
- What is a Fixed-rate mortgage?
- What is an adjustable rate mortgage?
- Are there any prepayment penalties?
- Can I apply for a loan before I find a property to purchase?
- What is an appraisal and who completes it?
- Will I get a copy of the appraisal?
- How long does it take for the property appraisal to be completed?
- I am purchasing a home, do I need a home inspection AND an appraisal?
- When is flood insurance required?
- Once my mortgage is approved, where will the closing take place?
Is my information safe to submit online to the Bank?
Information About Our Site Security:
We use leading-edge technology to ensure that all customer information is 100% safe. We protect our customers by using a combination of security measures that are among the best in the e-commerce industry.
Encryption:
All customer information is encrypted using Secured Socket Layer (SSL) technology supported with digital certificates provided by Starfield Technologies. This means that your loan application information is safe and secure as it travels over the Internet.
Firewall Security:
We use leading firewall and network security technology to protect our internal computer systems from unauthorized access. Our customers can be confident that their personal information is completely safe and private after they apply.
The Federal Truth in Lending law requires that all financial institutions disclose the APR when they advertise a rate. The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all,
closing fees are included in the APR calculation. These fees in addition to the interest rate determine the estimated cost of financing over the full term of the loan. Since most people do not keep the mortgage for the entire
loan term, it may be misleading to spread the effect of some of these up front costs over the entire loan term.
Also, unfortunately, the APR doesn't include all the closing fees and lenders are allowed to interpret which fees they include. Fees for things like appraisals, title work, and document preparation are not included even though
you'll probably have to pay them.
For adjustable rate mortgages, the APR can be even more confusing. Since no one knows exactly what market conditions will be in the future, assumptions must be made regarding future rate adjustments.
You can use the APR as a guideline to shop for loans but you should not depend solely on the APR in choosing the loan program that's best for you. Look at total fees, possible rate adjustments in the future if you're comparing adjustable rate mortgages, and consider the length of time that you plan on having the mortgage.
Don't forget that the APR is an effective interest rate--not the actual interest rate. Your monthly payments will be based on the actual interest rate, the amount you borrow, and the term of your loan.
The simple rule of thumb for determining if it makes sense to refinance is to analyze the amount that it will cost you to refinance compared to the monthly savings you'll have by reducing your payment. By dividing the cost of refinancing by the monthly savings you can determine how many monthly payments you'll have to make before you've recaptured the initial refinance cost. If you plan on staying in your home longer than the recapture time it may make sense for you to refinance.
To fully analyze whether it's the time to refinance you'll have to look deeper. The remaining term of your current loan must also be considered, as well as your tax bracket. Our refinance calculator can help you determine if it's the right time to refinance.
A 15-year fixed rate mortgage gives you the ability to own your home free and clear in 15 years. And, while the monthly payments are somewhat higher than a 30-year loan, the interest rate on the 15-year mortgage is usually a little lower, and more important - you'll pay less than half the total interest cost of the traditional 30-year mortgage.
However, if you can't afford the higher monthly payment of a 15-year mortgage don't feel alone. Many borrowers find the higher payment out of reach and choose a 30-year mortgage. It still makes sense to use a 30-year mortgage for most people.
Who Should Consider a 15-Year Mortgage?
The 15-year fixed rate mortgage is most popular among younger homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. They own more of their home faster with this kind of mortgage, and can then begin to consider the cost of higher education for their children without having a mortgage payment to make as well. Other homebuyers, who are more established in their careers, have higher incomes and whose desire is to own their homes before they retire, may also prefer this mortgage.
Advantages and Disadvantages of a 15-Year Mortgage.
Advantages of a 15-year fixed rate mortgage:
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You build Equity faster in your home by paying more toward your principle each month than you would on a 30-year mortgage.
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You own your home in half the time it would take with a traditional 30-year mortgage.
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You may save more than half the amount of interest of a 30-year mortgage. Lenders usually offer this mortgage at a slightly lower interest rate than with 30-year loans - typically up to .50% lower. It is this lower interest rate added to the shorter loan life that creates real savings for 15-year fixed rate borrowers.
Disadvantages of a 15-year fixed rate mortgage:
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The monthly payments for this type of loan are higher than the payment for a 30-year.
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Using more of your money for a higher mortgage payment means you will have less disposible income.
Discount points are considered a form of interest. Each point is equal to one percent of the loan amount. You pay them, up front, at your loan closing in exchange for a lower interest rate over the life of your loan. This means more money will be required at closing, however, you will have lower monthly payments over the term of your loan.
To determine whether it makes sense for you to pay discount points, you should compare the cost of the discount points to the monthly payments savings created by the lower interest rate. Divide the total cost of the discount points by the savings in each monthly payment. This calculation provides the number of payments you'll make before you actually begin to save money by paying discount points. If the number of months it will take to recoup the discount points is longer than you plan on having this mortgage, you should consider the loan program option that doesn't require discount points to be paid.
If you'd prefer not to make this calculation the "old-fashioned way," we have a discount points calculator!
General Statement
The interest rate market is subject to movements without advance notice. Locking in a rate protects you from the time that your lock is confirmed to the day that your lock period expires.
Lock-In Agreement
A lock is an agreement by the borrower and the lender and specifies the number of days for which a loan’s interest rate and discount points are guaranteed. Should interest rates rise during that period, we are obligated to honor the committed rate. Should interest rates fall during that period, the borrower must honor the lock.
When Can I Lock?
Once you have submitted your online application a loan officer will contact you to discuss locking in your interest rate
Lock Period
We currently offer rate quotes for 30 and 45 day lock-in periods on our site. For rate quotes other than 30 or 45 days, please contact us 913-652-4950. This means your loan must close and disburse within this number of days from the day your lock is confirmed by us.
Fees
We do not charge a fee for locking in your interest rate for a 30 and 45 day period.
Lock Confirmation
Once your interest rate has been locked we will send you a Lock Confirmation.
Lock Changes
Once we accept your lock, your loan is committed into a secondary market transaction. Therefore, we are not able to renegotiate lock commitments.
What is a Fixed-rate Mortgage?
A fixed-rate mortgage has an interest rate that remains the same for the life of the loan. In other words, your total monthly payment of principal and interest will remain the same over time. (Note: Your mortgage payments can fluctuate, though, if your property taxes or homeowners insurance rates fluctuate.)
A fixed-rate mortgage is the most popular type of financing because it offers the most predictability and stability for your budget.
An adjustable rate mortgage, or an "ARM" as they are commonly called, is a loan type that offers a lower initial interest rate than most fixed rate loans. The trade off is that the interest rate can change periodically, usually in relation to an index, and the monthly payment will go up or down accordingly.
Against the advantage of the lower payment at the beginning of the loan, you should weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. It's a trade-off. You get a lower rate with an ARM in exchange for assuming more risk.
For many people in a variety of situations, an ARM is the right mortgage choice, particularly if your income is likely to increase in the future or if you only plan on being in the home for a few years.
Here's some detailed information explaining how ARM's work.
Adjustment Period
With most ARMs, the interest rate and monthly payment are fixed for an initial time period such as three, five, seven, or ten years. After the initial fixed period, the interest rate can change every year. Using the 5-year ARM as an example, the interest rate will not change for the first five years (the initial adjustment period) but can change every year after the first five years.
Index
Our ARM interest rate changes are tied to changes in an index rate. Using an index to determine future rate adjustments provides you with assurance that rate adjustments will be based on actual market conditions at the time of the adjustment. The current value of most indices is published weekly in the Wall Street Journal. If the index rate moves up so does your mortgage interest rate, and you will probably have to make a higher monthly payment. On the other hand, if the index rate goes down your monthly payment may decrease.
Margin
To determine the interest rate on an ARM, we'll add a pre-disclosed amount to the index called the "margin." If you're still shopping, comparing one lender's margin to another's can be more important than comparing the initial interest rate, since it will be used to calculate the interest rate you will pay in the future.
Interest-Rate Caps
An interest-rate cap places a limit on the amount your interest rate can increase or decrease. There are two types of caps:
1. Periodic or adjustment caps, which limit the interest rate increase or decrease from one adjustment period to the next.
2. Overall or lifetime caps, which limit the interest rate increase over the life of the loan.
Interest rate caps are very important since no one knows what can happen in the future. All of the ARMs we offer have both periodic adjustments and lifetime caps. Please see each product description for full details.
Negative Amortization
"Negative Amortization" occurs when your monthly payment changes to an amount less than the amount required to pay interest due. If a loan has negative amortization, you might end up owing more than you originally borrowed. None of the ARMs we offer allow for negative amortization.
Contact a Loan Officer
Selecting a mortgage may be the most important financial decision you will make. There are many ARM loan options available and we want you to have all the information you need to make the right decision for you. So if you have questions, please call us at (913) 381-5702 and ask for a loan officer.
Some lenders may require you to pay a fee or penalty if you pay off your mortgage early. Our consumer mortgages do not include any penalty for prepayment.
Yes, getting prequalified for a mortgage loan before you find a property may be the best thing you could do! it is possible that you can recieve a prequalification approval in under 30 minutes, subject to selecting a property and the Bank verifying the information you provided. A prequalification letter will help assure real estate brokers and sellers that you are a qualified buyer. Having a pre-qualification letter may even encourage a seller to select your offer over another buyer's offer.
What is an appraisal and who completes it?
An appraisal is a report prepared by a professional who is often licensed or certified according to state and industry standards. The report is prepared in a standard format as required by national standards.
An appraisal is often required for a mortgage loan. The appraiser may need to inspect both the interior and exterior of the property. As part of the process the appraiser will identify similar properties (called comparables)
which have recently sold (generally in the last six months). The home being appraised is compared to the similar properties to help determine the market value of the home. If you are buying a home, it is not unusual for
the appraised value to match the value of the sales contract.
As soon as we receive your appraisal, we will promptly give you a copy, even if your loan does not close.
Licensed appraisers who are familiar with home values in your area perform appraisals. Generally, it takes a week to 10 days before the written report is sent to us. We follow up with the appraiser to insure that it is completed as soon as possible. If you are refinancing, the appraiser should contact you to schedule a viewing appointment. If you don't hear from the appraiser within a few days of the order date, please inform your Loan Officer. If you are purchasing a new home, the appraiser will contact the real estate agent, if you are using one, or the seller to schedule an appointment to view the home. We will promptly give you a copy of any appraisal, even if your loan does not close.
A home inspection and appraisal serve two very different and very important purposes.
An appraiser determines the value of the home. The appraiser assumes all equipment, plumbing and electrical items work as designed. While the appraiser may consider the age of some equipment to determine the home’s value, she/he does NOT test equipment, plumbing or electrical fixtures.
A home inspector tests the structure and equipment to ensure functionality. Often an inspection is completed shortly after a sales contract is signed. The inspector will provide a report of the items tested and any repairs he/she may feel are warranted. With the report you can decide if you wish to renegotiate with the seller or if you would like to cancel the sales contract. You can often accompany the inspector to learn more about the location of significant equipment such as the furnace, hot water heater, etc.
Federal law requires lenders to identify if a home is located within a special flood hazard area (SFHA). If your home is located within a SFHA federal law requires the Bank to provide you notice and we require you purchase flood insurance before we give you a loan.
The mortgage loan closing will take place at a title company.