What is an adjustable rate mortgage?
Should I pay points in exchange for a lower interest rate?
Is comparing APRs the best way to decide which lender has the lowest rates and fees?
How do I know if it is best to lock in my interest rate or to let it float?
How much money will I save by choosing a 15-year loan rather than a 30-year loan?
Is there a fee charged or any other obligation if I complete the online application?
When can I lock in my interest rate and points?
What is your Rate Lock Policy?
Are there any prepayment penalties charged for these loan programs?
Tell me more about closing fees and how they are determined.
What is title insurance and why do I need it?
What is mortgage insurance and when is it required?
How do I lock my rate?
What is the maximum percentage of my home's value that I can borrow?
Top

Adustable Rate Mortgages, or ARMs, have a specified period in which the interest rate cannot change. At the end of that period, the interest rate will be subject to an annual adjustment.

At the time of each annual adjustment, the interest rate may remain the same, or it may increase or decrease, within agreed limits.

For more information, call us at 1-888-868-7068.

Top

Points are considered a form of interest. Each point is equal to one percent of the loan amount. You typically pay them at your loan closing in exchange for a slightly lower interest rate over the life of your loan. Not all programs offer the option to pay points to reduce the interest rate, and limitations may apply.

Paying one point does not mean a one perecent reduction in interest rate.

Paying points will require that you bring more money to closing. However, the reduced interest rate will mean slightly lower monthly payments over the term of your loan.

To determine if paying points is right for your situation, please go to the Mortgage Calulators link on our website and select the calculator titled, “Does it make sense to pay points to get a lower interest rate?”, or call us at 1-888-868-7068.

Top

Federal law requires that all financial institutions disclsose a corresponding annual percentage rate (APR) each time they advertise an interest rate for a loan product. Comparing APR’s is a reasonably reliable way to evaluate loan products but not an absolute, foolproof method. This is because each financial institution may use different criteria in determinig certain fees and also because not all fees you will pay are included in the computation of an APR.

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.

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.

Top

Mortgage interest rate movements are as hard to predict as the stock market and no one can really know for certain whether, or when, they'll go up or down.

If you believe that rates are on an upward trend then you may want to consider locking in the rate. However, if you lock in your rate, and rates go down, you won’t be able to “unlock” and take advantage of the lower rate.

If you think rates might drop while your loan is being processed, take a risk and let your rate "float" instead of locking. However, if rates go up, you risk locking in at a higher rate since you can’t go back to a previous day’s lower rate.

Before you decide to lock, make sure that your loan can close within the lock in period. It won't do any good to lock your rate if you can't close before the rate lock expires.

If you're purchasing a home, review your sales contract for the closing date to make sure you will have enough time to close before the end of the rate lock period.

If you are refinancing, and you have a second lien on the property that won’t be closed, allow some extra time since the other lender will need to review the new loan and provide a subordination agreement.

Either way, the choice of whether to lock or float the interest rate is strictly up to you.

Top

We offer a number of tools to help you determine which loan product may be best for your unique sitation.

On our website, use the "How much can I save with a 15 year mortgage?" calculator, or call us at 1-888-868-7068

Top

There is no upfront fee charged for starting a loan request online. However, if you receive a conditional approval online, and decide to proceed with the application, an Application Fee will be collected online.

The amount of the fee will depend on the details of your loan request. Generally, if you are financing a single family home or condo as your principal residence, the fee is $375. For Single Family or condo Investment properties, the fee is $500. If the property has more than one unit, the fee is $575.

Top

You can lock in your interest rate as soon as your loan is approved online and you pay the application fee.

If you complete your application today, and your request is approved online, you'll have the opportunity to pay the application fee with a credit card and can lock in your rate immediately.

If your loan information needs to be reviewed before a loan approval can be provided, a Loan Officer will contact you and you'll have the opportunity to lock your rate and fees then.

Top

Initial Rate Lock:

At the time of application, you will have the choice whether to lock in your rate, or let it float and lock in at a later time.

When you choose to lock your rate, the rate lock period will be provided to you. Generally rate locks are for 60 calendar days from the date of lock.

The rate on your loan is typically determined, in part, by the terms of the loan, such as: your credit score, the product chosen, the amount of the loan in relation to the home’s value (called Loan to Value, or LTV), the purpose of the loan and other factors.

After your rate is locked, if these terms change, your rate could be impacted.

Rate Lock Extensions:

Rate locks may be extended beyond the original lock expiration date, subject to review and approval of the extension request.

Extensions must be made prior to the original expiration date of the rate lock and will be subject to the following fees:

15 day extension – 0.500% of the loan amount

30 day extension – 1.000% of the loan amount

A rate lock may only be extended once. If the loan does not close by the end of the extension period, the rate will be subject to the Rate Lock Expiration policy below.

Rate Lock Expirations:

If your initial rate lock has expired and your loan is moved to a floating status, your loan rate will be subject to the current market rate or the locked-in rate, whichever is higher at the time your loan is relocked. Re-locks are subject to review and approval and the following fees will be applied:

30 day re-lock – 0.500% of the loan amount

60 day re-lock – 1.000% of the loan amount

Top

None of the 1-4 family loan programs offered online have penalties for prepayment. You can pay off your mortgage any time with no additional charges. Prepayment penalties may apply for properties greater than 4 units.

Top

After application, you will be given a Good Faith Estimate, GFE, that shows the estimated amounts of fees and charges for completing your loan.

At loan closing, you will receive a Settlement Statement, also called a HUD-1, that details all of the fees actually charged, and who is responsible for paying them.

The closing fees and costs shown on the GFE and the HUD-1 can be broken down into four basic categories:

Bank fees:

These are the fees charged by the bank in order to cover the costs of originating, processing, underwriting, closing and servicing your loan. These fees include any points you may choose to pay, as well as other fees that are retained by the bank.

Service Providers:

In order to complete your mortgage loan, the bank must use the services of outside providers, including: Appraisers, Title Companies, Credit Reporting Agencies, and others. Each of these providers charges a fee for their services, which are included in your closing costs at the actual amount charged by the provider.

Governmental Agencies:

The state, county and local municipality may collect fees and taxes on mortgage loans. Those charges may include: property taxes due at the time of closing; fees to record documents associated with your mortgage; taxes for the transfer of ownership on a purchase transaction; and other fees that may be charged by the state, county, municipality or other Governmental agencies. These fees are included in your closing costs at the actual amount charged by the agency.

Escrow Setup:

On most loans, your annual property taxes and homeowner’s insurance premiums will be divided into monthly amounts that are included in your mortgage payment. As you make monthly payments, that portion of the payment is set aside in an escrow account. When your taxes and insurance come due, the bank will pay them on your behalf with the funds from the escrow account.

At closing, the bank will collect a few months of reserves of both the property taxes and the homeowner’s insurance premiums. This will ensure that when they are due, the bank will have enough money in the escrow account to pay them on your behalf.

Each year, the bank will analyze the escrow account to make sure that there is enough money to make your tax and insurance payments. If taxes go down and there is too much in the escrow account, the bank will refund the overage. If insurance premiums have gone up and there is not enough money to pay the premium, the bank will contact you to make arrangements for making up the shortage.

For more information, call us at 1-888-906-6210.

Top

The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and Liberty Bank, want to make sure the property is indeed yours and that no individual, company or government entity has any right, lien, claim, or encumbrance on your property.

The function of a title insurance company is to make sure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly, and that your interests as a homebuyer are fully protected.

Title insurance companies provide services to buyers, sellers, real estate developers, builders, mortgage lenders, and others who have an interest in real estate transfer. Title companies typically issue two types of title policies:

1) Owner's Policy. This policy covers you, the homebuyer.

2) Lender's Policy. This policy covers the lending institution over the life of the loan.

Both types of policies are issued at the time of closing for a one-time premium, if the loan is a purchase. If you are refinancing your home, you probably already have an owner's policy that was issued when you purchased the property, so we'll only require that a lender's policy be issued.

Before issuing a policy, the title company performs an in-depth search of the public records to determine if anyone other than you has an interest in the property. The search may be performed by title company personnel using either public records or the information contained in the company's own title records.

After a thorough examination of the records, any title problems are usually found and can be cleared up prior to your purchase of the property. Once a title policy is issued, if any claim covered under your policy is ever filed against your property, the title company will pay the legal fees involved in the defense of your rights. They are also responsible to cover losses arising from a valid claim. This protection remains in effect as long as you or your heirs own the property.

The fact that title companies try to eliminate risks before they develop makes title insurance significantly different from other types of insurance. Most forms of insurance assume risks by providing financial protection through a pooling of risks for losses arising from an unforeseen future event, say a fire, accident or theft. On the other hand, the purpose of title insurance is to eliminate risks and prevent losses caused by defects in title that may have happened in the past.

This risk elimination has benefits to the homebuyer, the title company and the lender. It minimizes the chances that adverse claims might be raised, thereby reducing the number of claims that have to be defended or satisfied. This keeps costs down for the title company and the premiums low for the homebuyer.

Top

There are several different types of mortgage insurance. Usually, mortgage insurance refers Private Mortgage Insurance (PMI).

Mortgage insurance makes it possible for you to buy a home with less than a 20% down payment by protecting the lender against the additional risk associated with low down payment lending.

The mortgage insurance premium is based on loan to value ratio (LTV), the type of loan requested and the amount of coverage required by the lender.

Usually, the premium is included in your monthly payment and one to two months of the premium is collected as a required advance at closing.

It may be possible to cancel mortgage insurance at some point, such as when your loan balance is reduced to a certain amount. Federal Legislation requires automatic termination of mortgage insurance for many borrowers when their loan balance has been amortized down to 78% of the original property value.

Top

You can lock your rate online at the time of application, or you can float the rate and lock in at a later date.

If you choose to lock in later, you can go to the Loan Status section of our website and lock your rate there.

If you prefer, you can contact us at 888-906-6210 to lock your rate.

If locking through the online application, you may be requested to sign a lock disclosure.

Top

The maximum percentage of your home's value that you can borrow depends on the purpose of your loan, how you use the property, and the loan type you choose.

The best way to determine what loan amount we can offer is to complete our online application or call us at 1-888-868-7068.

Contact Us


Loan Officers 847.986.8881

Loan Processing 1.888.906.6210

mortgages@libertybank.com

FAQs

FAQs