Answers To Questions About

Applying, Purchasing And Refinancing

How do I start the application process for a mortgage?

Submitting an application is easy – email apply now or by calling us at phone 281-789-8975 or if you rather have some call you fill out your contact information, and an mortgage originator will get back to you within 24 hours.

Can I buy a home if I have less-than-perfect credit?

Yes. Keep in mind that lenders don’t just look at your credit history, but also at your ability and willingness to pay in the future. At FCG, we may be able to help you buy a home, even if your credit isn’t perfect.

If I’ve filed bankruptcy in the past few years, will I still qualify for a mortgage loan?

Yes, it’s possible to get approved for a mortgage loan after a bankruptcy filing. Depending on the type of filing — Chapter 7 vs. Chapter 13 — and other factors, you may have to wait anywhere from two to four years before you can get another mortgage loan. Short sales and foreclosures are different. Give us a call to discuss your options.

How much do I need for down payment?

There is no set amount. In fact, you might be surprised to learn that many first-time home buyer programs require as little as 3% down. Today, there are many loan programs that can be tailored to fit your needs and financial resources. Keep in mind that for down payments of less than 20% on conventional loans, private mortgage insurance (PMI) will be required.

What is the difference between interest rate and APR?

The interest rate is the rate you agree to pay for your mortgage loan. It is used to determine the interest portion of your monthly payment. The annual percentage rate (APR) includes your interest rate and prepaid finance charges to give you an average yearly rate.

What is an FHA mortgage?

FHA loans are government-insured loans through the U.S. Department of Housing and Urban Development, also call HUD. FHA loans offer an excellent start to first –time home buyers, with options such as low down payment or a low closing cost option.

What is a Conventional mortgage?

A conventional loan is not insured or guaranteed by the federal government. This means that, unlike federally insured loans, conventional loans carry no guarantees for the lender if you fail to repay the loan. For this reason, if you make less than a 20% down payment on the property, you’ll have to pay for private mortgage insurance (PMI) when you get a conventional loan. Conventional mortgage loans must adhere to guidelines set by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) and are available to everyone but they are more difficult to qualify for than VA and FHA loans.

What is a VA mortgage?

Veteran Administration loans, also known as VA Loans, is a type of financing for Veteran buyers who meet specific qualifications. One of the primary reasons why a Veteran buyer obtains a VA Loan is because a buyer is able to finance 100% of the homes appraised value. VA loans also allow a buyer to receive seller concessions to help cover the costs associated with buying a home.

What is USDA mortgage?

From farmsteads to emerging neighborhoods on city outskirts, a USDA Loan provides many benefits to rural property owners. Insured by the U.S. Department of Agriculture, First Class Mortgage is proud to offer USDA mortgage loans to home buyers and refinancers in eligible areas. USDA Loans are not just for farm properties. Many communities just outside large metropolitan areas are defined as “rural” by the USDA and qualify for this mortgage loan. Whether you’re looking to move away from the city or refinance your rural residence, the USDA Loan Program is designed to improve the economy and quality of life in rural America.

Are There Mortgages Or Programs Available For A First Time Home Buyer?

There are some grants available to certain buyers to help with down payment. It’s important to remember if you’re buying a home using grants that a seller may view your situation different than a buyer whom is getting a conventional mortgage and putting 20% down. The primary reason a seller may think twice about accepting a purchase offer with grants or first time home buyer programs is because they don’t understand how they work. If you which to have a low down payment FHA Mortgage is probably the best option.

How do you determine how much I can borrow?

We look at a lot of factors to determine how much you qualify to borrow. Some key factors are your credit history, the property value and your debt-to-income ratio (DTI). What’s DTI? It’s the percentage of your monthly gross income that goes towards paying debt. This helps us to determine a monthly mortgage payment you can afford.

What documents will I need to apply for a mortgage?

-Your social security card

-Current valid ID

-Income documentation

  • Pay stubs for last two months
  • W2s forms for past two years
  • One to two years of federal tax returns (all pages)

-Assets

  • Last two months of bank statements (all pages)

-Information on current debt, including car loans, student loans and credit cards.

How long does it take to get a mortgage?

The average time frame is 30-45 days from application. It’s important to understand that there are many factors why a mortgage approval can be delayed. While going through the process of getting a mortgage, it’s important to stay in constant contact with us and make sure you get any requested document to we ask for as soon as possible. If a borrower does not cooperate with us in getting the required documentation in a timely manner, it may end up being the reason a closing is delayed or even worse, cancelled.

Once I’ve submitted my application online, how long will it take before I know if I’ve been pre-qualified?

You will receive a phone call from one of our mortgage originators within 24 hours (during standard business days) of submitting your application. Depending on the complexity of your loan scenario, the pre-qualification process is fairly quick. A

“pre-qual” is a guide as you go through the home buying process. It does not guarantee you will be approved for the mortgage.

What’s the benefit of refinancing?

You may want to consider refinancing if you are interested in paying off high-interest-rate debt, shortening the length of your repayment term for your mortgage or lowering your monthly mortgage payment.

When does it make sense to refinance?

There are numerous reasons borrower refinance the loans they already have. Some of these are:

  • To lower the monthly payment
  • To lower the interest rate
  • To switch from an adjustable rate to a fixed rate, or vice versa
  • To refinance for a higher amount in order to pay off other debts or get cash
  • To change the remaining term of the loan
Can I refinance to take cash out of my house?

Yes. FCG offers a variety of options that allow you to tap into your home’s equity and take cash out.

How can I consolidate debt when refinancing my mortgage?

Cash-out refinancing can help homeowners who want to consolidate high-interest, non tax-deductible debt. Because your mortgage interest rate is likely to be lower than rates on credit cards or other types of bank loans, consolidating debt may reduce your overall monthly debt payments. In addition, your mortgage interest may be tax-deductible, while your credit card interest is not.

Do I need to have my house appraised in order to refinance?

Yes, in most cases. However, depending on the circumstances, an appraisal may not be required.

What is HARP?

This is the Home Affordable Refinance Program and can make refinancing a possibility, even if you owe more on your mortgage than your home is currently worth. To see if you’re eligible for HARP, give us a call at 281-789-8975.

Do I have to refinance in to the same term of my current mortgage?

No – there may be other options available for qualified borrowers. Example if you currently have an Adjustable Rate Mortgage, you may have the ability to lock in to a Fixed Rate Mortgage or go from 30 year term to a 15 year term.

Can I roll my closing cost into my loan?

Maybe, if you are applying for a refinance, but each situation is unique. If you’d like to roll closing costs in to your loan, feel free to call us at 281-789-8975 or if you rather have some call you fill out your contact information, and an mortgage originator will get back to you within 24 hours to go over your scenario.

What is a Loan Estimate?

This document provides an itemized list of fees and costs associated with your loan and is provided within 3 business days of applying for a loan. The Loan Estimate breaks down your loan terms on a standardized form.

What will my rate be?

Rates are based on variety of factors such as the loan purpose, your credit history and ability to repay, the value of the collateral and the loan amount.

Will my interest rate change?

The answer to whether a buyers interest rate will change or not it depends on various items. Depending on the type of mortgage a buyer obtains can determine whether or not their interest rate will change. Mortgage products such as FHA mortgages in most cases will be a fixed rate mortgage, which means the interest rate will not change over the life of the loan. A type of mortgage that can result in interest rate changes is known as an adjustable rate mortgage, which is also known as an ARM. An adjustable rate mortgage will typically have a set amount of time in which the interest rate is fixed. Once the fixed interest rate time is over, the rate will be subject to change. ARM’s are not very common nowadays as most buyers prefer to have the “peace of mind” of their mortgage interest rate not changing drastically, which can drastically impact a month payment.

What is an appraisal?

An appraisal is a written estimate of a property’s market value completed by an appraiser. The value is based upon a market analysis of recent sales prices for similar properties in the area, and the property’s physical condition.

What are the closing costs?

Closing cost included items like appraisal fees, title insurance fees, attorney fees, pre-paid interest and documentation fees. These items are usually different for each borrower due to differences in the type of mortgage, the property location and other factors. You will receive a closing disclosure of your closing cost in advance of you closing date for your review.

Which amounts are included in my monthly payments?

If you have a fully amortizing mortgage, portions of your monthly mortgage payment go towards loan principal and interest. Interest-only mortgage payments include only the interest that is due on the outstanding principal balance. If you mortgage carries mortgage insurance, a portion of your monthly mortgage payment will pay this also, unless the lender has paid your mortgage insurance or you have paid your mortgage insurance upfront. If you have set up an escrow account for your mortgage, then portions also go toward your property taxes and homeowners insurance.

What is PMI?

Private Mortgage Insurance is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Private Mortgage Insurance is generally required for a loan with an initial loan to value percentage in excess of 80%. In most cases, this will mean that you will have to pay Private Mortgage Insurance if you down payment is less than 20% of the value of the home you are purchasing or refinancing. The cost of the mortgage insurance is typically added to the monthly mortgage payment.

What is a Closing Disclosure?

The Closing Disclosure has to be received by the applicant at least three business days before closing. It contains any updated information on projected payments, how much closing costs will be, and other loan terms.

How does my escrow account work?

An escrow account is a separate account that holds funds for the purpose of paying bills such as homeowner’s insurance and property taxes. The lender collects the funds to be deposited into the account each month along with your monthly payment and then pays the bills for you when they come due. By taking the annual amounts charged for homeowner’s insurance, property taxes and other annually paid items and dividing them by 12, a payment amount is determined and is added to your monthly principal and interest payment. Spreading the cost of these expenses over 12 months makes it easier for you to budget those expenses and you won’t have to come up with additional cash when bills are due. For some loans, escrow accounts are a requirement.

When is my due date?

Your mortgage payment due date is listed on your monthly billing statement or coupon. A late charge is assessed if the payment has not been received and processed by the date noted. It is very important that you establish and maintain good credit by making sure your payment reaches to the lender by the due date each month. Late payments can affect your credit record.

Which mortgage and homeowners cost are tax-deductible?

Three types of mortgage and homeowners costs may be tax-deductible: discount points, interest paid on a home loan or home equity loan and property taxes. After the year that you buy your house, only your mortgage interest and annual property taxes are deductible. For a refinanced loan, points must be deducted over time. Consult your tax advisor for advice about your situation.


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Contact Info

112 W. 4th St Houston, TX 77007
M: P.O. Box 1319 Houston, TX 77251

Phone: 281-789-8975
E-Fax: 281-817-7707
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
Company NMLS #1058422

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