The Application Process

Do I need to pick the property I want to buy before I fill out the application?

No, you can fill out the application first, and once your loan is approved you can make changes to it up until the time that your loan rate is locked. So you can get the loan process started at any time, and we can help you tailor it to the property you end up picking.

What documents will I need to provide after I apply?

Basic income and asset documentation, as well as the hard copy application we send you after you decide on a loan program.

After I submit my loan, what happens next?

Your loan will be assigned to a dedicated, processing professional that will be responsible for guiding your loan through the process. The processor will submit your loan to underwriting so the bank can review your loan and approve it for closing. During that time, you will work hand-in-hand with your loan officer and processor to gather any additional info the bank and underwriter might require.

What if I don't want to send information over the Internet?

We can still help! Just call our toll-free number at 1-866-861-1249. Our friendly staff will be happy to assist you with locating the best loan for your circumstances.

What is the usual time frame to close a loan?

The majority of our loans close within 30 days, but we can close more quickly if necessary.

Home Purchases

Why should I buy, instead of rent?

A home is an investment, and it's something you can build equity in the entire time you live in it. When you rent, the monthly check you write will never be seen again. When you own your own home, you can deduct the cost of your mortgage loan interest from your federal income taxes and usually your state taxes — and that can save you a lot of money each year. Of course, another great reason to purchase a home is that you get to personally own a space that’s all yours. You can decorate it however you want...turn the yard into your own personal playground...and create a place you're thrilled to come home to.

How much money will I have to come up with to buy a home?

Typically you need to come up with enough money to cover three costs: earnest money, a down payment, and the closing costs (keep reading, there's a catch to that last one...and you're going to like it). Earnest money is the deposit you make on the home when you submit your offer to prove to the seller that you’re serious about purchasing the home. A down payment is a percentage of the cost of the home you must pay when you go to settlement. And closing costs are the fees associated with processing the paperwork to buy a house. But with us, when you qualify for the program you don't have to pay those closing costs, because we take care of them. So right off the bat you're saving money by choosing to work with Neighborhood Lender, and that's before we've even really gotten started.

How do I know which mortgage program is best for me?

There is no simple answer to this question, but we can promise that we will work with you until we find the solution that makes the most sense for you. For starters, as you begin comparing mortgage programs and weighing your options, take the following into consideration:

• How long you plan to own the home.
• Your prospects for job improvement and advances.
• Your current financial status
• Your family needs now and in the future

Don't I need to sign something to actually apply?

A mortgage consultant will send you a fully prepared loan application that has all the necessary forms, regulatory disclosures, and a list of all required documentation to process your loan request. It will come to you via email or Priority Mail, whatever is most convenient for you. You are under no obligation to any loan until the closing occurs at the attorney or title company's office. That means you can apply online, and even sign the loan application documents we send you in the mail, without being obligated to do anything more.

What do you look at when you approve my loan?

The lender is typically looking at the “Big Three” pieces of info: Your income/assets, credit rating, and the appraisal of the property. When they look at your income and assets, they are trying to ensure that your income and assets supports all of your monthly obligations and any down payments you have due at closing. In terms of your credit, the lender will have minimum requirements in terms of score and timeliness of payments. Lastly, the majority of loans require a home appraisal. The lender will look at the appraisal to make sure the house is in good repair and that the value of your home supports that amount of money you are attempting to borrow.

In addition to the mortgage payment, what other costs do I need to consider?

Well for starters you’ll have your monthly utilities. If your utilities have been covered in your rent, this may be new for you. Your real estate broker will be able to help you get information from the seller on how much those utilities normally cost. In addition, you might have homeowner association or condo association dues. You’ll definitely have property taxes, and you also may have city or county taxes. Taxes normally are rolled into your mortgage payment. Again, your broker will be able to help you anticipate these costs so you can plan the best way to handle them.

Can I use money in a 401(k) or employee savings plan towards a down payment on a home?

Most 401(k) plans will allow for a loan against the savings plan, but we recommend you check with your plan administrator for the details and availability of the loan and the repayment provisions. The mortgage lender will need to know the amount owed, the repayment term, and the monthly payment.

What will my mortgage cover?

Most loans have four parts:

1. The principle, which is the repayment of the amount actually borrowed.
2. The interest, which is the payment to the lender for the money you borrowed.
3. Homeowner’s insurance, which is a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders.
4. Property taxes, which are the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year.

Refinancing

What’s a mortgage refinance?

A mortgage refinance is a new loan that pays off and replaces an existing mortgage loan. Since loans are not typically amended, a refinance mortgage is the easiest way to restructure mortgage debt.

How do I know when I should refinance?

Many homeowners start thinking about refinancing when there’s some part of the existing mortgage loan that’s no longer appealing. Examples include:

• Your payment is too high
• Your interest rate is higher than what’s available on the market
• Your adjustable interest rate is too volatile
• You want to pay off your mortgage in 15 years instead of 30
• You want to cash out your home equity

A refinance calculator https://neighborhoodlender.com/mortgage-calculator can help you run the numbers, but the decision usually depends on how market mortgage rates compare to what you’re currently paying. If you can find a refinance mortgage that will save you money and help you achieve your financial goals, then the time is right.

How does refinancing work?

The application process for a mortgage refinance is very similar to what you may have experienced when you initially purchased your home. A consultation with a lender will occur, as well as a home appraisal. You'll need to complete a loan application and supply the required documentation to verify your income and assets. With the new refinance mortgage funds, the new lender pays off the old mortgage lender, including any prepayment penalties, and transfers any remaining funds to you.

Can I reduce my payment with a mortgage refinance?

Yes. You can reduce your payment by lowering the interest rate and/or by extending the maturity date.

When I refinance, will the finance charges I pay increase?

The total finance charges you pay may be higher over the life of the loan when refinancing your existing loan.

Is a home equity line of credit considered a second mortgage?

Yes, a line of credit is recorded as a lien against the property for the full amount of the credit line.

What’s a cash-out refinance?

If you have home equity, you may have the option of refinancing for more than what you owe on your old mortgage. This is a cash-out refinance, in which the amount leftover after the pay-off is transferred to you, and can be used as you wish. Your payment will reflect a higher loan balance, but you could possibly offset some (or all) of the increase with a lower interest rate or extended maturity date.

What is the Home Affordable Refinance Program (HARP)?

If you're not behind on your mortgage payments but have been unable to get traditional refinancing because the value of your home has declined, you may be eligible to refinance through the Home Affordable Refinance Program (HARP). HARP is designed to help you get a new, more affordable, more stable mortgage. HARP refinance loans require a loan application and underwriting process, and refinance fees will apply. Contact one of our friendly representatives and we can help determine if you may be eligible for HARP, and get more information on the program here