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1. Do I need an appointment to apply for a mortgage loan? Answer
2. What documents do I need to provide at the time of the application? Answer
3. Do you have a program for first time homebuyers? Answer
4. How do I know how much house I can afford? Answer
5. What is the minimum credit score I need to get a home loan? Answer
6. Can I get a copy of my credit report from the Credit Union? Answer
7. What can I do to improve my credit score? Answer
8. Should I close out any credit accounts? Answer
9. I had a short sale or foreclosure. Is there a waiting period before I am eligible to qualify for another home loan? Answer
10. I had a bankruptcy. When am I eligible for a home loan? Answer
11. How do I know which type of mortgage is best for me? Answer
12. What does my mortgage payment include? Answer
13. How much cash will I need to purchase a home? Answer
14. What is the required minimum down payment? Answer
15. How much are closing costs? Answer
16. What are Escrows? Answer
17. Some lenders advertise “No Closing Costs”. Do you offer the same? Answer
18. Will my loan be sold? Answer
19. What is the difference between a fixed-rate loan and an adjustable-rate loan? Answer
20. How is an index and margin used in an ARM? Answer

Q : Do I need an appointment to apply for a mortgage loan?
A : Real Estate loans are more specialized than typical consumer loans, and therefore generally require more time during the initial and subsequent interviews. Although an appointment is not required, it is highly recommended to avoid lengthy wait times. We also have a convenient and secure online application available 24 hours a day, 7 days a week for your convenience. Just click "Apply Online" in the left sidebar to get started. One of our experienced Loan Originators will be in touch with you to follow up, generally within one business day.
 
Q : What documents do I need to provide at the time of the application?
A : We will need documents to verify income and assets. Typically this will be your most recent pay stubs, two months of bank statements, as well as W-2's for the last two years. For self-employed borrowers, we will need two years tax returns. We will also need a valid Government-issued ID. Non US Citizens will be required to have approval as a Permanent Legal Resident and provide a copy of a Green Card.
 
Q : Do you have a program for first time homebuyers?
A : A first time homebuyer is technically considered to be anyone who has not owned property in the past 3 years, but if you have never owned a home and are thinking about becoming a homeowner for the very first time, we understand you have a lot of questions. We offer Down Payment Assistance through the City of Orlando, Orange County and Seminole County. All of these programs require a First Time Homebuyer Class and Certificate from one of their approved agencies and have specific qualification and eligibility requirements. Ask one of our Real Estate loan originators for more information regarding Down Payment Assistance.
 
Q : How do I know how much house I can afford?
A : Generally speaking, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are able to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value. Give us a call, and we can help you determine exactly how much you can afford.
 
Q : What is the minimum credit score I need to get a home loan?
A : The minimum score requirement can vary depending on the type of loan and the program, but at the minimum you currently need a 620 credit score to be eligible for a conventional home loan. Some government sponsored products have minimum score requirements at 580.
 
Q : Can I get a copy of my credit report from the Credit Union?
A : The Credit Union subscribes to a service provider that allows us to access your credit. These providers classify us as "users" and prohibit us from sending the consumer anything but the Scores. However you are entitled to a FREE annual credit report from all three credit bureaus (Equifax, Experian and TransUnion). There is no cost and they will not ask you to subscribe to a service. The web address to obtain your free annual credit report is www.annualcreditreport.com.
 
Q : What can I do to improve my credit score?
A : There are many factors which can affect a credit score, but the most common factors are related to delinquency and high usage of credit. If you had some late payments or even collections in the past, the best thing to do is pay on time going forward. You can't change the past, but you can move forward. Also, be sure to keep the balances on any revolving credit (credit cards, lines of credit) below 30% of the limit. Lastly, pay more than the minimum payments if possible. These are just a few of the most common factors which may improve your score.
 
Q : Should I close out any credit accounts?
A : Closing established tradeline accounts may lower your credit score. You can pay down the accounts to zero, but when you close the account you reduce the ratio of available credit, which could reduce your score.
 
Q : I had a short sale or foreclosure. Is there a waiting period before I am eligible to qualify for another home loan?
A : Guidelines are as follows for waiting periods after a Short Sale, Foreclosure, or Deed in Lieu of Foreclosure: These will vary greatly depending on the product. As each borrower's situation is unique, we encourage you to contact us and speak with a Mortgage Loan Officer today.
 
Q : I had a bankruptcy. When am I eligible for a home loan?
A : Guidelines require a 2 year waiting period from the date of the Bankruptcy Discharge in order to be eligible for a home loan. If a home was included in the Bankruptcy (Short Sale, Foreclosure, or Deed in Lieu), see FAQ related to Short Sales and Foreclosures for waiting periods.
 
Q : How do I know which type of mortgage is best for me?
A : There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, including your current financial picture and how long you intend to keep your house. Orlando Federal Credit Union can help you evaluate your choices and help you make the most appropriate decision.
 
Q : What does my mortgage payment include?
A : For most homeowners, the monthly mortgage payments include three separate parts. Principal: Repayment on the amount borrowed. Interest: Payment to the lender for the amount borrowed. Taxes & Insurance: Monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company.
 
Q : How much cash will I need to purchase a home?
A : The amount of cash that is necessary depends on the type of loan product that you have selected. We encourage you to call one of our Mortgage Loan Officers today.
 
Q : What is the required minimum down payment?
A : In order to avoid Mortgage Insurance the minimum down payment is usually 20% of the purchase price. On a sales price of $100,000.00, that would mean you would need to put down $20,000.00 and finance $80,000.00. If you are unable to put down 20% there are a few options: • Conventional with Mortgage Insurance: The minimum down payment required for this type of loan is 5% of the purchase price. On the same scenario as above, you would be required to put down $5,000.00 and finance $95,000.00. Mortgage Insurance would be required. The cost for conventional mortgage insurance can vary depending on factors such as your credit score, the loan amount, type of dwelling, location of property, term of the loan and other factors. The minimum term for conventional mortgage insurance is 2 years or until you have 20% equity in your home, whichever is later. • Government Loans: FHA, VA and USDA are all government sponsored loan programs. FHA requires only 3.5% down but they charge an UP FRONT MORTGAGE INSURANCE PREMIUM as well as MONTHLY PMI, and at this time it is for the LIFE OF THE LOAN. If you are a Veteran, you may qualify for a VA loan. Check with your Veteran’s Administration to request a Certificate of Eligibility. VA loans do not require a down payment, but they do charge a VA Funding Fee, which varies depending on the amount of times you have used your VA Eligibility. USDA loans, also known as Rural Development, also do not require a down payment and they do charge an up front Guarantee Fee of 2% plus a monthly Guarantee Fee, similar to FHA. • Piggy Back Loans: Some borrowers may be eligible for a combination first and second lien loan, sometimes referred to as “Piggy Back loans”, because the 2nd is originated at the same time as the first. Usually these are structured as an 80% first lien, 10% second lien and the borrower is required to contribute 10% toward the down payment. This would be an 80/10/10 scenario. This option would eliminate the need for mortgage insurance since the first lien loan would be limited to 80%. Your Loan Originator can assist you with determining which of these options is best for you.
 
Q : How much are closing costs?
A : Closing costs include lender fees to originate your loan, title/settlement agent fees, state and county taxes, recording fees, interim interest, third party fees (appraisal, credit report, survey, etc.) and may include escrows. The closing costs typically average at around 4-5% of the total loan amount, but can be more or less depending on the size of the loan.
 
Q : What are Escrows?
A : An Escrow Account is best described as a “sidecar” to your mortgage loan. It is a non-interest-bearing savings account held by the lender who will be servicing your loan (collecting and distributing the monthly payment). The purpose of the Escrow Account is so that the lender/servicer can manage the payment of your annual premiums associated with the property insurance and taxes. When the bill is due every year, the bill is forwarded to the lender/servicer and the premium is paid by the lender/servicer on your behalf out of the Escrow Account. If your loan requires escrows, they will typically include your Annual Homeowner’s Insurance Premium and Property Taxes, divided into monthly increments and included in your monthly payment. On a purchase transaction, typically the first year of Homeowner’s Insurance plus three months’ is collected at closing as well as three months’ of Property Taxes. For example: If Homeowner’s Insurance is $1200 per year and Property Taxes are $1500 per year: $1200 + $1500 = $2700.00 /12 = $225.00 monthly x3 = $675.00 + $1200.00 (1st year annual premium) = $1875.00 collected at closing Please note these amounts are for illustration purposes only. Flood insurance may also be included, if required. The amounts of insurance and property taxes will vary based on a variety of factors. Your loan originator will provide you with a detailed Good Faith Estimate and Truth In Lending (TIL) Disclosure demonstrating exactly how much your total estimated closing costs will be based upon your unique loan scenario.
 
Q : Some lenders advertise “No Closing Costs”. Do you offer the same?
A : Keep in mind that mortgage lending is a business and no business could operate at a loss, so you will want to bear in mind that the costs are being incurred and therefore you should ask how they are compensating for these costs. Lenders offering low, reduced, or no closing costs may be charging a higher interest rate to compensate for lower closing costs, but you will need to determine the overall cost of paying a higher interest rate to avoid paying some or all of the closing costs. Talk to your loan originator about available options for reducing closing costs.
 
Q : Will my loan be sold?
A : The Credit Union reserves the right to sell your loan on the Secondary Market. Your loan may be serviced by another lender, but the terms of the loan cannot change.
 
Q : What is the difference between a fixed-rate loan and an adjustable-rate loan?
A : With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest changes periodically, typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will likely change. There are advantages and disadvantages to each type of mortgage, and the best way to select a loan product is by talking to us.
 
Q : How is an index and margin used in an ARM?
A : An index is an economic indicator that lenders use to set the interest rate for an ARM. Generally the interest rate that you pay is a combination of the index rate and a pre-specified margin. Three commonly used indices are the One-Year Treasury Bill, the Cost of Funds of the 11th District Federal Home Loan Bank (COFI), and the London InterBank Offering Rate (LIBOR).