Key Questions Specific to East Lake Lending

How long does loan approval take?

Depending on your specific credit history, down payment and loan option, you could be approved within 2 to 24 hours.

How long will it take to close?

If through a pre-approval program, it could be two weeks – in most cases 30 days from application.

Key General Loan Questions

Can I include closing costs in my loan?

Typically not on a new loan, however, the seller can pay most or all if negotiated as part of the sales contract. Frequently, when refinancing, you can include some or all.

How much money will I need at closing?

Obviously the exact dollars will vary based on all the loan parameters, but typically you`ll need enough to include the down payment, closing costs, initial taxes and insurance escrow. You`ll get a good faith estimate of settlement costs when you apply, and the actual final sum within 24 hours of closing.

How large a mortgage will I qualify for?

A general rule of thumb used by lenders is that borrowers not spend more than 30% of their gross income per month on their mortgage, or have more than 42% total debt. Specifically, lenders consider six key factors: gross income, cash you have for the down payment-closing costs-cash reserves required, outstanding debts, credit history, type of mortgage, and interest rates.

What difference does the loan term make?

Monthly payments and total savings depend on your interest rate and loan amount. For example, on a $100,000 loan at 7.25% interest, the monthly payments on a 15-year note would be $912.86 versus $682.18 for a 30-year. The 15-year saves considerable money on total interest paid.

How do I know which term is best for me?

The right term length depends on your monthly income and long-term financial goals.

• Longer term offers lower monthly payments, good for tight budgets or directing cash towards other investments/expenses
• Shorter term means higher monthly payments but repays loan and builds equity faster and saves on interest

Are there really no-cost or no-fee loans?

Unfortunately, no. The points and fees are just included in the loan principal so you pay them off over the life of the loan versus paying them at closing.

What`s the difference between a Fixed-Rate and an Adjustable Rate mortgage?

Fixed-Rate loans maintain the same interest rate for the entire loan term, which translates into predictable, monthly payments and protection from rising rates for you. When refinancing, they make sense when rates are low.

Adjustable-Rate loans have a low, fixed initial interest rate (fixed period can range from one to ten years), then adjust annually based on a market index, not to exceed a predetermined cap. They`re attractive if refinancing when rates aren`t extremely low.

Who pays closing costs?

It may be the seller or buyer—that`s where good negotiation skills pay off!

Should I always look for the lowest interest rate?

While the rate is important, it`s the overall cost of the loan, including the annual percentage rate (APR), fees, discount and origination points that really counts.

What`s a bi-weekly mortgage and what are the benefits?

By paying half of your monthly payment every two weeks, it actually results in 26 half-payments or 13 monthly payments per year instead of 12. If you had a $70,000, 30-year bi-weekly mortgage at 10% interest, you`d save $60,000 in interest and pay it off in less than 21 years.

Key Terms:

Origination fee : charged by the lender to cover loan document processing and credit review

Points : one point equals one percent of the loan amount

Discount point : paid to the lender to permanently buy down the interest rate

Mortgage insurance : required on loans with a down payment of less than 20% to protect the lender if the borrower defaults

Lender fees : offset the cost of producing the loan (also called processing or underwriting fees)

APR : (annual percentage rate) typically about .5% higher than the note rate, it reflects the true cost of your loan as a yearly rate including things like discount points and origination fees

Term : period of time to repay your loan, usually 30 years, but can be 20, 15 or 10.

Appraisal : certified appraiser`s estimate of value required by the lender that considers square footage, construction quality, design, floor plan, neighborhood, transportation, shopping, schools, lot size, topography, view and landscaping

Comparative Market Analysis : real estate agent`s informal estimate of market value based on sales of comparable homes in a neighborhood

Inspection : required by buyer as a condition to purchase

Escrow account : established by the lender when you close to manage payments of recurring items such as taxes and home owner insurance as they become due to avoid lapses in coverage or delinquency in payments

Closing costs : fees for lender charges, such as: points (if applicable), appraisal, credit report, flood certification, tax service and underwriting cost, title insurance, recording, survey, post payment and State document stamp fees. Escrow charges for taxes and home owners insurance.

Lock-in or rate-lock : lender`s promise to hold a certain interest rate and points for you for a specified period while your loan application is processed, not the same as a loan commitment, may charge a fee upfront or at settlement

East Lake Lending & Title - 3442 East Lake Road, Palm Harbor, FL 34685
Phone - 727.787.2030 | Fax - 727.787.3236 | Email: info@eastlakelending.com