Frequently Asked Questions
How do I know which mortgage program is right for me?
The right type of mortgage for you depends on many different factors including, but not limited to, your current financial situation, expectations, objectives and comfort level. Our mortgage consultants will work with you to find the mortgage that best suits your needs.
How much do I need for a down payment?
The down payment required varies based on what program you qualify for and what mortgage arrangement you choose. Currently, FHA loans will allow as little as 3.5% down and VA loans allow 0% down. Other loan arrangements that include Private Mortgage Insurance (PMI) or subordinate financing can also greatly reduce the down payment required. Cambria Mortgage consultants can discuss all these options with you.
What are closing costs?
Closing costs usually include an appraisal fee, title and recording fees and other costs associated with preparing and closing the loan. These costs can sometimes be financed within the loan.
What are conforming loans?
Conforming loans are fixed-rate or adjustable-rate mortgages that meet Fannie Mae and Freddie Mac loan limits as well as property and borrower guidelines. The current limit on these loans is $453,100.
What are discount points?
Discount points are prepaid interest, which you can pay to your lender at closing in exchange for a lower interest rate on your mortgage. Paying discount points is often called “buying down” your rate.
What is a cash-out refinance?
If you have enough equity in your property, you can refinance with a loan amount greater than your current mortgage and keep the difference in cash. You can use the money for home improvement, debt consolidation or any other need you may have.
What is a good faith estimate?
A good faith estimate is the list of charges that the lender is obliged to provide the borrower within three business days of receiving the loan application. These mortgage charges, also called settlement costs or closing costs, cover every expense associated with a home loan that a buyer will encounter, including inspections, title insurance, taxes and other charges. A good faith estimate is a standard form that is intended to be used to compare different offers. The good faith estimate is only an estimate. The final closing costs may differ from the estimate.
What is a jumbo mortgage?
A mortgage that exceeds eligible conforming loan limits (currently $453,100) is a jumbo loan. The interest rates on jumbo mortgages are typically higher than conforming mortgages, and vary depending on property types and mortgage amount.
What is a rate lock?
In order to close a mortgage you must lock in a rate and loan program. Locking your interest rate means your lender guarantees the rate on your loan even if market rates change. Typically, the longer the lock on your mortgage, the higher the points or the interest rate of the loan. This is because the longer the lock, the greater the risk for the rates to increase prior to closing.
What is a reverse mortgage?
Eliminate those “what if” feelings / Make the most of retirement A reverse mortgage is a special type of home loan allows you to borrow against the equity you’ve established in your home. The “reverse” part of a reverse mortgage is that instead of making monthly payments you receive them. A reverse mortgage can help:
- Eliminate an existing mortgage
- Supplement your income
- Avoid foreclosure
- Cover medical expenses
- Update your home
- Pay off existing debt
What is a VA loan?
VA loans are guaranteed against default by the U.S. Department of Veteran Affairs. VA loans require no down payment and are offered exclusively to United States military personnel who are active, discharged or retired. VA loans often carry lower interest rates than conventional loans.
What is an FHA loan?
The Federal Housing Administration (FHA) was established to advance opportunities for Americans to own homes. By providing private lenders with mortgage insurance, the FHA gives them the security they need to lend to buyers who might not be able to qualify for conventional loans. Some FHA loans are available with as little as 3.5% down payment.
What is PMI?
Private mortgage insurance (PMI) insures the lender in case the buyer defaults on the loan. The lender requires PMI when the buyer’s down payment is less than 20% of the purchase price of the home. A Cambria mortgage consultant can discuss this option with you.
Why would I want to refinance my current loan?
Many homeowners look to refinance when the interest rates decline or they have a change in financial circumstances. Refinancing is done to save money by obtaining a lower interest rate or reducing the term of the loan. Refinancing can also be done to convert an adjustable-rate loan to a fixed-rate loan or to consolidate debts. Our experienced mortgage consultants can help you make an informed decision.
Will the lender require an appraisal of the property? If so, will I receive a copy?
The property is the collateral for the mortgage, therefore an appraisal is almost always required before a mortgage is given. If a borrower pays for the appraisal he or she is entitled to receive a copy of it.