Home loans made easy.

Buying or refinancing a home isn’t always a simple process. That’s why we created a resources library to make every step as understandable as possible.

  • Before you buy
    The Process
    • What is the difference between interest rate & APR?

      The interest rate refers to the annual cost of a loan to a borrower and is expressed as a percentage. The interest rate does not include fees charged for the loan. The APR is the annual cost of a loan to a borrower — including fees. Like an interest rate, the APR is expressed as a percentage.

    • What documents are needed to apply for a mortgage?

      To help you get started, here are some of the most common documents you will give to your lender. Having these ready could help your mortgage application go as quickly and smoothly as possible.

      • Copies of pay stubs for each applicant, reflecting a minimum of 30 days of income
      • Names/addresses of employers for two years
      • W-2s for two years
      • One to two years of tax returns
      • A completed and signed Form 4506-T or 4506T-EZ, provided by your Mortgage Banker
      • Bank statements for two to three months
      • If self-employed, year-to-date profit and loss statement, plus signed returns for last two years
      • Proof of pension income, if applicable
      • Social Security and Disability payments, if applicable
      • Dividend earnings
      • Bonuses
      • Child support or alimony payments (optional for you to disclose)
      • Information on debts such as car loans, student loans, and credit cards
      • Security accounts (stocks, bonds, life insurance)
    • What does pre-approval mean?

      When you are pre-approved for a mortgage, it means a lender has looked closely at your credit reports, your employment history, and your income — and has then determined which loan programs you qualify for, the maximum amount you can borrow and the interest rates you will be offered.

    • How can I get pre-qualified?

      Use our online application to get started with your mortgage pre-qualification. We’ll get some preliminary information from you, review it and determine whether you might qualify for a loan. Once you get your mortgage pre-qualification, you’ll know how much you could borrow and can look for a new home with confidence. Sellers will also feel more comfortable knowing that they have a serious buyer.

    • Should I get a fixed rate or an adjustable rate?

      On a fixed-rate loan, the interest rate doesn’t change over the life of the loan. An adjustable-rate mortgage (ARM) has an interest rate that is fixed for a set number of years and then afterwards will go up or down based on a market index such as the LIBOR. Consider factors such as the length of time you plan to stay in your home. If you plan to stay in your home for a long period of time, a fixed-rate may be better for you. Otherwise, an adjustable-rate might be better if you plan to sell your home before the rate becomes variable, since initial ARM rates are typically lower than fixed-rate mortgages.

    • Can I become a homebuyer even if I have I've had bad credit, and don't have much for a down-payment?

      The short answer is yes, you can become a homebuyer with stains on your credit history and if you can’t put down a sizable down payment. However, you’re going to have to find a program that supports your unique situation. For instance, you may be a good candidate for one of the federal mortgage programs. Start by contacting one of the HUD-funded housing counseling agencies that can help you sort through your options. Also, contact your local government to see if there are any local homebuying programs that might work for you.

    • Why get a VA loan over other loan options?

      VA loans are easily the best option for Veterans. You may qualify to purchase a home with no down payment and no monthly private mortgage insurance (PMI) premiums to pay. All you need is the minimum credit score of 640.

    • What if I've used a VA Home Loan Before?

      You can have previously-used entitlement restored one time only in order to purchase another home with a VA loan if the borrower has paid off the prior loan but still owns the property and wants to use his entitlement to purchase a second home.

    • What service is NOT eligible for a VA Home Loan?

      You are not eligible for VA financing solely based upon Active Duty for Training in the Reserves or National Guard.

      Guard and Reservists are eligible if they were “activated” under the authority of title 10 U.S. Code as was the case for the Iraq/Afghanistan.

    • Do all local lenders offer VA Loans?

      Not necessarily. Semper Home Loans is a VA-approved lending institution that can handle your home loan. We can help you review your credit history and determine how much of a loan you can qualify for.

    • What is the maximum VA loan?

      Although there is no maximum VA loan (limited only by the reasonable value or the purchase price), lenders generally limit the maximum VA loan to $417,000.

    • If I was discharged years ago and want to qualify for a VA loan, what forms or other documents will I need?

      Everyone is required to obtain a Certificate of Eligibility. If you do not have this Certificate, you will need to apply using VA Form 26-1880 and this will require a copy of DD-214 (Certificate of Release or Discharge from Active Duty) showing character of service. Along with the Certificate of Eligibility, loan applicants will need to document their credit, savings and employment information.

    • Does a veteran's home loan entitlement expire?

      No. Home loan entitlement is generally good until used if a person is on active duty. Once discharged or released from active duty before using an entitlement, a new determination of their eligibility must be made based on the length of service and the type of discharge received.

    • Can I build a home with a VA Home Loan?

      Yes. But there are several clauses that may make this difficult to accomplish. Many veterans use their VA Home Loan Certificate of Eligibility to negotiate in good faith a private home construction loan and then refinance the completed home using VA Home Loans.

  • When you buy
    The Process
    • What is an appraisal?

      An appraisal is a type of valuation developed by an independent, unbiased, qualified, and licensed or certified professional. Appraisals and valuations are opinions of the market value for the property used as collateral for the requested loan. Written reports of appraisals are sometimes referred to simply as “appraisals.”

    • Will I need a home appraisal?

      In almost every situation, a home appraisal will be needed. The appraisal helps a lender determine the market value of the home you would like to purchase. Since the property will be used as collateral against the mortgage, lenders want to make sure the home is worth at least as much as the loan amount you’re seeking.

    • What is "market value"?

      Market value is the likely selling price of a home with a willing buyer and a willing seller on the open market.

    • How fast can I get my money?

      This is one of the most important mortgage questions. When you’re buying a home, the funds are available on the day you close your loan. On a refinance, funds are normally disbursed on the fourth business day after you sign your loan documents. This is because federal regulations require a three-day rescission period, during which you have the right to cancel your loan outright.

    • How much money will be required at closing?

      The amount you’ll need to close your loan includes your down payment, closing costs, and prepaid amounts for property taxes, and insurance escrow accounts. Prior to closing, you’ll be informed of the final amount.

    Rates and Terms
    • How are interest rates determined?

      As with stock and bond markets, prices and yields on the secondary market move up and down. When the economy is on an upswing, investors demand higher yields on mortgage bonds, forcing lenders to raise mortgage rates. In a market downturn, interest rates tend to drop for consumers

    • What is rate lock?

      A rate lock gives you protection from financial market fluctuations that could affect your interest rate range.

      You can choose to lock or not lock your interest rate range. On the date and time you lock, that interest rate range remains available to you for a set period of time.

      If there are no subsequent changes to your loan and your interest rate range is locked, the interest rate range on your application generally remains the same.

      If there are changes to your loan, your final interest rate at closing may be different.

    • Will homeowners insurance be required at closing?

      Proof of homeowners insurance will be required before you can close your loan. Typically, you will need to present an insurance binder and pay for one year’s worth of insurance coverage.

    • What is the difference between mortgage insurance and homeowners insurance?

      Mortgage insurance is required if you have less than 20% equity (or down payment) in your home and protects the mortgage lender from losses if a customer is unable to make payments and defaults on the loan. There are two types of mortgage insurance, Private Mortgage Insurance (PMI) and Mortgage Insurance Premium (MIP).

      A homeowners insurance (or hazard insurance) policy covers loss from damages to your home, your belongings and accidents as outlined in your policy.

    • What's mortgage insurance premium (MIP) and private mortgage insurance (PMI)?

      MIP and PMI are 2 types of mortgage insurance. They add a premium to your monthly mortgage payment but allow you to borrow a larger percentage of your home’s value. The type of mortgage insurance you have depends on the type of loan you have.

    • How do I know if I have MIP or PMI?

      You have MIP if you have an FHA loan, which is a type of government loan.

      You have PMI if you have a loan that isn’t under a government program and your down payment was less than 20%.

    • When can my MIP be removed?

      Depending on when you either applied for or closed on your loan, your MIP may be automatically removed after a certain amount of time.

    • When can my PMI be removed?

      You may have options to cancel your PMI based on the original value (Either the price you paid for your home or the appraised value at closing, whichever is less.) of your home or by ordering a new appraisal.

    • What is title insurance?

      An insurance policy protects a lender and/or homebuyer (only if homebuyer purchases a separate policy, called owner’s coverage) against any loss resulting from a title error or dispute.

    • Is purchasing title insurance mandatory?

      All mortgage lenders require lender’s coverage for an amount equal to the loan. It lasts until the loan is repaid. As with mortgage insurance, it protects the lender but the borrower pays the premium at closing.

  • After you buy
    The Process
    • Can I have my mortgage payment deducted automatically from my checking or savings account each month?

      Typically, after closing your mortgage loan, you will have the option of enrolling in an automatic mortgage payment program. You may be asked to provide an authorization form with a voided check or savings account slip attached to set up the draft. The payment is typically debited on a preset day each month.

    • Can I pay my mortgage with my credit card?

      Although you can’t pay your mortgage with a credit card, you can set up automatic mortgage payments so that your monthly payment can be withdrawn automatically from your checking account each month.

    • How does my escrow account work?

      An escrow account is a separate account that holds funds for the purpose of paying bills such as homeowner’s insurance and property taxes. The lender collects the funds to be deposited into the account each month along with your monthly payment and then pays the bills for you when they come due. By taking the annual amounts charged for homeowner’s insurance, property taxes and other annually paid items and dividing them by 12, a payment amount is determined and is added to your monthly principal and interest payment. Spreading the cost of these expenses over 12 months makes it easier for you to budget those expenses and you won’t have to come up with additional cash when bills are due. For some loans, escrow accounts are a requirement.

    • When is my due date?

      Your mortgage payment due date is listed on your monthly billing statement or coupon. A late charge is assessed if the payment has not been received and processed by the date noted. It is very important that you establish and maintain good credit by making sure your payment reaches us by the due date each month. Late payments can affect your credit record.

    • What types of repayment options are available?

      The guarantees thirty-year loans with a choice of repayment plans: Traditional fixed payment (constant principal and interest); Graduated Payment Mortgage, or GPM (low initial payments which gradually rise to a level payment starting in the sixth year); and in some areas, Growing Equity Mortgages, or GEMs (gradually increasing payments with all of the increase applied to principal, resulting in an early payoff of the loan). There is no prepayment penalty.

  • Refinance
    • What are the benefits of refinancing?

      You may want to consider refinancing if you are interested in paying off high-interest-rate debt, shortening the length of your repayment term for your mortgage or lowering your monthly mortgage payment.

    • When does it make sense to refinance?

      Refinancing is a great way to collect money that’s left on the table. Generally speaking, one or more of the following conditions needs to be present before you should consider refinancing your mortgage:

      • Mortgage interest rates are falling – if you can reduce your current interest rate by 0.75% – 1%
      • Your home has significantly appreciated in market value
      • You’ve been making payments on your original 30-year mortgage for less than ten years
    • Can I refinance to take cash out of my house?

      You can! With cash-out refinancing, you refinance your mortgage for more than you currently owe, then pocket the difference.

      Here’s an example: Let’s say you still owe $80,000 on a $150,000 house, and you want a lower interest rate. You also want $20,000 cash, maybe to spend on your child’s first semester at Princeton. You can refinance the mortgage for $100,000. Ideally, you get a better rate on the $80,000 that you owe on the house and you get a check for $20,000 to spend as you wish.

    • How can I consolidate debt when refinancing my mortgage?

      Cash-out refinancing can help homeowners who want to consolidate high-interest, non tax-deductible debt. Because your mortgage interest rate is likely to be lower than rates on credit cards or other types of bank loans, consolidating debt may reduce your overall monthly debt payments. In addition, your mortgage interest may be tax-deductible, while your credit card interest is not.

    • Do I need to have my house appraised in order to refinance?

      Yes, in most cases. However, depending on the circumstances, an appraisal may not be required.

    • How fast can I get my money?

      On a refinance, funds are normally disbursed on the fourth business day after you sign your loan documents. This is because federal regulations require a three-day rescission period, during which you have the right to cancel your loan outright.

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