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Home
 Residential
Tools
& Tips FAQs
General
Pre-Approval and Pre-Qualification
Applying
Refinancing
Insurance
Loan Programs
More
General
| Q: |
How can I find your current interest rates? |
| A: |
Our current
rates are listed on our website in the Find
the Best Loan section. |
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| Q: |
What does it mean to “lock in” or “float”
a rate? |
| A: |
“Locking-in” a rate is a process in which
a lender guarantees a borrower a specific rate for a certain
period of time, even if rates fluctuate during that period.
At Gershman Mortgage, you can “lock-in” a
rate for up to 270 days.
When “floating” a rate, the borrower chooses
to allow their rate to fluctuate with the market from
the time of the application until the closing. |
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| Q: |
What will my closing costs be? |
| A: |
Your closing costs will vary based on the type of loan
you’ve applied for and the number of points (Gershman
Mortgage offers most loans with no points). In general,
plan for 2-3% of the purchase price. Remember that you’ll
also have to pay the down payment at the closing as well
as any prepaid items such as insurance. Gershman Mortgage
will provide you with a Good Faith Estimate of the closing
costs within three days of your application. |
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| Q: |
What are points? |
| A: |
Points, often called discount points, are premiums paid
to reduce the interest rate. Each point is equivalent
to 1% of the loan amount. |
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| Q: |
How much will I need for a down payment? |
| A: |
Traditionally, down payments were equivalent to 20%
of the purchase price. Today, there are a variety of programs
that allow down payments as low as 3-5% as well as programs
that completely eliminate the need for a down payment. |
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| Q: |
What is an APR? |
| A: |
APR stands for Annual Percentage Rate. The APR takes
into account points, fees, and the interest rate, making
it a good tool for comparing loans. |
Pre-Approval and
Pre-Qualification
| Q: |
What is the difference between pre-approval
and pre-qualification? |
| A: |
Pre-qualification
generally involves a less thorough review of an applicant’s
credit history and gives a general idea of how much they
can borrow. Pre-approval involves a more extensive review
and gives a specific amount that can be borrowed. The
pre-qualification process can often be completed
on-line or over the telephone. |
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| Q: |
Once I’m pre-qualified or
pre-approved, what do I need to do to finalize my loan? |
| A: |
In both cases, you’ll need to provide information
on your chosen property to finalize your loan. If you’re
pre-qualified, you’ll need to provide additional
financial information and Gershman Mortgage will need
to run a credit check. |
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| Q: |
Can I apply for a loan before I’ve
decided which home to purchase? |
| A: |
Yes, to apply
for a loan before you’ve chosen a house, ask to
be pre-approved. Gershman Mortgage will run a credit check
and give you a specific amount you can borrow. Once you’ve
chosen a home, they will finalize the loan. At Gershman
Mortgage, you can lock in rates for up to 270 days, allowing
plenty of time to find the perfect home. |
Applying
| Q: |
How long does the application process
take? |
| A: |
The time required for the application process will vary
based on the type of loan and whether you are pre-approved.
Typically it will take one to six weeks from application
to closing. |
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| Q: |
What information do I need to apply? |
| A: |
You will need to provide Gershman Mortgage with information
on your assets and debts, employment history, and residential
history. Visit our Tools
and Tips section for a printable
checklist of items you’ll need to fill out your
application. |
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| Q: |
Can I start my application on-line
at Gershman.com and finish it later? |
| A: |
Yes! Once you have registered, you can easily save your
application at any time by clicking on the “Save
Progress” button at the bottom of the screen. In
addition, each time you move to the next page, your work
will be saved, protecting you from unexpected power outages
or Internet connection failures. To access your application,
login on the My Gershman
page.
Gershman Mortgage also gives you the option of starting
your application on-line
and then finishing it over the phone or in person. Call
1-800-GERSHMAN. |
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| Q: |
What factors are used to determine
if I’ll be approved for a mortgage? |
| A: |
Lenders look at a number of factors when considering
a mortgage application. The main areas are your credit
history, savings, earnings, and the property itself. Call
or
e-mail Gershman Mortgage if you have any questions
about being approved. |
Refinancing
| Q: |
What is a cash-out refinance? |
| A: |
In a cash-out refinance, the borrower refinances their
home for an amount larger than is necessary to pay off
the first mortgage. The borrower can use the remaining
funds at their discretion. Some popular uses are remodeling,
funding a child’s education, higher-yield investments,
or a vacation. |
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| Q: |
When I refinance, will I need to
get a new appraisal? What else is required? |
| A: |
In most circumstances, you will need to have your home
appraised when refinancing. If you have had the home appraised
within the last six months by an approved appraiser, Gershman
Mortgage may waive the appraisal requirement. |
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| Q: |
What are closing costs to refinance? |
| A: |
When your refinance with Gershman Mortgage, there are
no closing costs. Closing costs at other lenders vary.
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Insurance
| Q: |
What is Private Mortgage Insurance (PMI)? What is the
difference between mortgage insurance and mortgage life
insurance? |
| A: |
Mortgage insurance protects the lender if the borrower
defaults on the loan. It is typically offered through
private companies and referred to as private mortgage
insurance or PMI. PMI is typically required on loans with
less than 20% down. Government-insured
loan programs offer an alternative to PMI.
Mortgage life insurance pays off the balance of the mortgage
note in the event of the borrower’s death, protecting
the family from costly mortgage payments. |
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| Q: |
Can I cancel my PMI? |
| A: |
You may be able to cancel your PMI before your loan
is fully amortized depending on the type of loan, conditions
in the loan note, the loan to value ratio, and other factors.
Some loans require PMI for the life of the loan, while
others can be cancelled earlier. Contact the company that
is servicing your loan to request a waiver of PMI. |
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| Q: |
What is title insurance? |
| A: |
Title insurance protects the lender from liens, defects,
and inconsistencies in the title that did not show up
in the title search. |
Loan Programs
| Q: |
Are there benefits to choosing a
shorter term over a longer term? |
| A: |
A shorter term loan accumulates less interest, costing
you less over the course of a loan. The trade-off is that
the monthly payments are higher than for a longer term
loan. |
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| Q: |
Does Gershman Mortgage offer any special programs for
first-time buyers? |
| A: |
Yes, certain government
programs offer first-time
homebuyers low down payment loans. FHA loans, insured
by the Federal Housing Administration, are popular among
first-time buyers and anyone can apply for an FHA loan.
VA loans, guaranteed by the Veterans Administration, are
available only to qualified veterans. Both programs offer
low and no down payment options.
First-time
buyers in Missouri may also be eligible for Missouri
Housing Development Commission’s (MHDC) Mortgage
Revenue Bond Program. |
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| Q: |
What are "conforming"
and "non-conforming" loans? |
| A: |
A conforming loan meets the requirements for purchase
by FNMA (Fannie Mae) or FHLMC (Freddie Mac), whereas a
non-conforming loan exceeds these limits. Loan limits
change annually, based on average sale prices. |
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| Q: |
What is a jumbo loan? |
| A: |
A jumbo loan is another name for a “non-conforming”
loan. |
More
| Q: |
Who will service my loan? |
| A: |
Your loan may be sold to a third party. If this is the
case, the loan amount, payments, and interest rate will
remain the same. You will receive a notice regarding the
change as well as a new coupon book. If your loan is sold,
you will not be required to pay any additional fees. |
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| Q: |
What is included in my monthly mortgage
payment? |
| A: |
Mortgage payments generally include four basic components-
principal, interest, taxes, and insurance (referred to
as PITI). While principal and interest are paid directly
to the lender, taxes and insurance are directed into an
escrow account, which the lender uses to pay the annual
insurance premium and taxes. |
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