Frequently Asked Questions

When should I apply for a loan?
You can obtain pre-approval anytime for a maximum loan amount.

How do I apply for a loan?
Please fill an application either online by pressing "Rate Tracker" button or call us on 610-853-1000 for a quick & easy loan approval process.

How much cash will I need for closing the loan?
It depends on your credit and the loan amount. For good credits, you may be eligible to get a home with 0% down.

How much documentation will I need?
It varies form person-to-person and depends upon the type of program you choose. Please call us to access your situation.

I don't have enough cash set aside for a down payment, but I can afford to pay a mortgage. What should I do?
Try contacting your local housing authority. They may have a program structured for a no-down-payment or a low-down-payment loan. If you qualify for the loan program, you'll be able to start shopping for your new home.

Some lenders offer no down payment programs, but you should go in to those loan programs with your eyes wide open. You'll pay a higher interest rate because of the increased risk and will be required to pay private mortgage insurance. The added expenses will make the loan that much more expensive.

What is the normal down payment procedure when purchasing an existing home with a 30-year fixed rate mortgage?
The primary lender will require private mortgage insurance if the loan-to-value is more than 80 percent. So a 20 percent down payment is sufficient to avoid PMI, provided the home appraisal justifies the purchase price. Homeowners hate paying PMI because it's an insurance policy to protect the lender if the homeowner defaults on the mortgage. The homeowner would rather spend money making additional principal payments.

If you can't afford to put 20 percent down, you can take out a second mortgage concurrent with the first and avoid PMI by having the primary lender loan 80 percent of the purchase price, and the secondary lender lend some fraction of the balance -- usually 10 percent. These loans are called 80-10-10 loans. The secondary loan is typically for 10-15 years and will carry a higher interest rate than the primary mortgage because of it's increased risk. (The primary mortgage gets paid off first from the proceeds on the sale of the home.)

Be careful with this approach because an 80-10-10 loan may turn out to be more expensive than a 90-10 with PMI. If you're trying to choose between the two loan programs, compare the additional interest expense of the 80-10-10 against the PMI payments. You can request cancellation of PMI when your loan-to-value reaches 80 percent, so the PMI payments won't last forever.

What is the difference between discount points and loan-origination points in a 30-year fixed-rate mortgage?
Discount points are prepaid interest. Origination points represent money paid to the originating lender as compensation for preparing the loan and arranging financing.

They're called points because a point represents one percentage point of the loan amount. One point on a $200,000 loan is $2,000. You can lower the stated interest rate on your loan by paying discount points, although paying points will increase the loan's annual percentage rate (APR). Discount points as an interest expense may generate an income tax deduction. This flowchart prepared by the IRS will help you determine if you can fully deduct discount points in the tax year that they were paid. IRS Publication 530 spells out what you can and cannot deduct.

What is the difference between a mortgage rate quoted and the APR? Which one should I be looking at when I am looking at lower mortgage rates?
Think of the APR on a loan as the all-in interest rate on the loan. Along with the stated interest rate on the mortgage, it includes how points and closing costs affect that interest rate. Using APRs to compare loans isn't a definitive comparison because the Truth-in-Lending Act allows lenders to estimate closing costs and permits some rounding (up to .125 percent) but it's a better measure to use when comparing loans than the stated or nominal interest rate.