What Information is Required When I Apply?

1. Valid identification and Social Security card
2. Last two paycheck stubs
3. Last two years W-2's
4. If Self Employed, last two years federal income tax returns with all schedules 5. and a year-to-date Profit & Loss Statement
6. Most recent two months bank and other asset account statements
7. Loan account information for all open loans
8. Employer Name and Addresses (last two years)
9. Address of residences for last two years with Landlord Address (if applicable)
10. Signed Purchase Contract
11. Inquire About Fees (Application, Appraisal and Credit Report - if applicable)
A copy of divorce decree or separation agreement (if applicable)

What is the difference between pre-qualifying and pre-approval?

     A pre-qualification is normally issued by a loan officer, who, after interviewing you, determines the dollar value of a loan you may be approved for. But,  loan officers don't make the final approval, so a pre-qualification is not a commitment to lend. After the loan officer determines that you pre-qualify, he/she then issues you a pre-qualification letter. This pre-qualification letter is used when you are making an offer on a property. The pre-qualification letter indicates to the seller that you are qualified to purchase the house you are making an offer on.
     Pre-approval is a step above pre-qualification. Pre-approval involves verifying your credit, down payment, employment history, etc. Your loan application is submitted to an underwriter and a decision is made regarding your loan application. If your loan is pre-approved, you will be issued a pre-approval certificate. Getting your loan pre-approved allows you to close very quickly when you do find a house. A pre-approval can help you negotiate a better price with the seller, since being pre-approved is very close to having cash in the bank to pay for the house!

What is LTV?

     Loan-to-Value (LTV) is a ratio between the amount of a loan and the lower of the sale price or appraised value. A loan with an 80% LTV would be for $80,000 on a property valued at $100,000.

What is Amortization?

     Amortization is the payment of a debt in regular, periodic installments of both principal and interest. Currently loans are amortized for up to a 30 year period. Please use our Loan Calculator to determine the payments on your loan when amortized over a specific term.

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What is PMI ? 

     PMI or Private Mortgage Insurance is usually required when you buy a house with less than 20% money down. Mortgage insurance is a type of guarantee that helps protect lenders against the costs of foreclosure. It enables lenders to accept lower down payments than they would normally accept. In effect, mortgage insurance provides what the equity of a higher down payment would provide to cover a lender's losses in the unfortunate event of foreclosure. So, without mortgage insurance, you might not be able to buy a home without a 20% down payment.

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What is APR?

     The annual percentage rate (APR) is an interest rate that is different from the note rate. It is usually used to compare loan programs from different lenders. The Federal Truth in Lending law mandates mortgage companies to disclose the APR when they advertise a rate. Generally the APR is found next to the rate.

What is a Rate Lock?

     You can't close a mortgage loan without locking in an interest rate. There are four components to a rate lock: Loan program, Interest rate, Points, and Length of the lock.
     The longer the length of the lock, the higher the points or the interest rate. This is because the longer the lock, the greater the risk for the lender offering that lock.
     After a lock expires, most lenders will let you re-lock at the higher of the current market rate/points or the originally locked rate/points. In most cases you will not get a lower rate if rates drop. In some cases, you may be able to negotiate a rate lock extension at the original price, but this must be done with the lender prior to the rate lock expiration date. An additional fee may be charged for this extension
     Lenders can lose money if your lock expires. This is because they are taking a risk by letting you lock in advance. If rates move higher, they are forced to give you the original rate at which you locked.
 

Closing Costs

     Closing costs, also called settlement costs, are funds paid in connection with the closing of a mortgage. They may involve the costs for some or all of the following: loan origination or administration, discount points purchased, appraisal, credit report, title insurance, flood certification, attorney services, property survey, and prepaid items such as taxes and insurance escrow payments. You will receive an estimate of the closing costs within three days of your application for a mortgage. Please ask your loan officer for the specifics of your loan.

Escrow Account

     Escrow payments are made by a borrower for the purpose of paying the taxes, insurance and other payments associated with home ownership. The lender collects the additional funds with the periodic payments of principal and interest and places them into an escrow account. When the bills are due, the funds are disbursed.

Recision 

     The recision period is the time during which you have an opportunity to review the documents and legal disclosures we provide to you at closing. All loans secured by primary residences allow for this review time. During this time, you have the right to cancel this transaction at no cost to you. You may exercise this right until midnight of the third business day after loan closing or delivery of the required disclosures (whichever is later); therefore Tri City National Bank is not able to fund the loan until the rescission period has expired. You will receive a detailed notice of your rights regarding rescission with your closing documents.