Loan FAQ

Frequently Asked Questions

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 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.  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 mortgage 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 the adjustable-rate mortgage rates are typically lower than fixed-rate mortgages.

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 or opinions of the market value for the property used as collateral for the requested loan.  Written reports of appraisals are sometimes referred to as “appraisals”.

What is a comparable sale?

A comparable sale is a property that has recently sold and is similar to the subject property in most respects, including size, location and amenities.  The selection of comparable sales is an important determining factor in providing an opinion of market value.  It is the appraiser’s responsibility to adequately research the local real-estate market and to determine which comparable sales best represent the value characteristics of the subject property.

What are closing costs?

Closing costs include items like the insurance fees, attorney fees, pre-paid interest and documentation fees – to name a few.  These items vary for each customer due to the differences in the type of mortgage, the property location and other factors.

You’ll receive a Loan Estimate explaining your closing costs when you formally apply for your mortgage.  You’ll also receive a Closing Disclosure before closing that will list all of the costs, credits and fees needed to complete the purchase of the home.  It’s similar to the Loan Estimate however the costs have been finalized at this point.