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1. Is HomeTown Credit Union Right for Me? Answer
2. What can you expect when you apply for a mortgage? Answer
3. What is the timeframe for getting a mortgage? Answer
4. How do I know which type of mortgage is best for me? Answer
5. What does my mortgage payment include? Answer
6. How much cash will I need to purchase a home? Answer
7. I am getting a gift from someone else. Is this an acceptable source of my down payment? Answer
8. What is the difference between a fixed-rate loan and an adjustable-rate loan? Answer
9. How is an index and margin used in an ARM? Answer
10. Can I apply for a loan before I find a property to purchase? Answer
11. Will I be charged any fees if I authorize my credit information to be accessed? Answer
12. Will the inquiry about my credit affect my credit score? Answer
13. I am relocating because I have accepted a new job that I have not started yet. How should I complete the application? Answer
14. I have had a few employers in the last few years. Will that affect my ability to get a new mortgage? Answer
15. I have heard that some lenders require flood insurance on properties. Will you? Answer
16. I have student loans that are not in repayment yet. Should I show them as installment debts? Answer
17. I was in school before obtaining my current job. How do I complete the application? Answer
18. Will my second job income be considered? Answer
19. Do I have to provide information about my child support, alimony or separate maintenance income? Answer
20. How will rental income be verified? Answer
21. I am self-employed. How will you verify my income? Answer
22. If I have income that's not reported on my tax return, can it be considered? Answer
23. My income is from pension, social security, SSI Disability or Child Support. What will I need to provide? Answer
24. How will a past bankruptcy or foreclosures affect my ability to obtain a new mortgage? Answer
25. I am purchasing a home, do I need an appraisal AND a home inspection? Answer
26. What is an appraisal and who completes it? Answer
27. How long does it take for the property appraisal to be completed? Answer
28. Will I get a copy of the appraisal? Answer
29. Does HomeTown Credit Union provide financing for manufactured homes? Answer

Q : Is HomeTown Credit Union Right for Me?
A : As a not-for-profit financial cooperative, we are a member owned institution—this means that our profits go directly back to you, our members, in the form of lower interest rates on loans and less fees on our accounts and services. So, by being a member and doing your loan with HomeTown Credit Union, you are benefiting yourself. Whether you are purchasing or refinancing, we are confident that we have the products and service to meet your needs. If you are purchasing but have not found the perfect home yet, complete our application and we will issue a pre-approval for a mortgage loan now with no obligation!
 
Q : What can you expect when you apply for a mortgage?
A : During the application process you will be asked questions about the home and your finances. This is usually completed in a short period of time. After your application is completed, our Mortgage Originator will answer any questions you may have. Your Mortgage Originator is a mortgage expert and will provide help and guidance along the way. They will ask you information required to make a decision about your loan. The mortgage staff will keep you informed every step of the way. Once you have received your preliminary pre-approval you can begin shopping for your new home. When you find a home and have an accepted, signed purchase agreement from the seller we will order the appraisal from a licensed appraiser. During this time we will also be verifying and up-dating the information you have provided. If additional documents and information is required, our Real Estate Lending Processor will be contacting you. The Mortgage Originator will also contact your Real Estate Agent or the seller so that they will know whom to contact with questions. Title insurance will be necessary. The staff in the mortgage department will work with the Real Estate Agent or seller to insure the title work is ordered as soon as possible. We’ll use the title insurance policy to confirm the legal status of the property and to prepare the necessary documents for you to purchase your home. After we receive all the necessary documentation, the appraisal, and the title work, all parties involved will be contacted to schedule your loan closing.
 
Q : What is the timeframe for getting a mortgage?
A : The mortgage and home buying process can be a bit overwhelming, but we are here to be your guides and partners as you pursue home ownership. The timeframe varies depending on whether you are purchasing or refinancing and also depending on the type of mortgage you are getting. While every application is different and will have a different timeframe, generally refinances take at least 30 days and purchases take at least 45 days. In order to help you better understand what all goes on during this time, here is a brief overview of the process: Pre-Approval To start the home buying process, meet with us to start an application. We will ask some general questions and request some documents in order to get the process started. Once we have your information, we will create a pre-approval application to go over with you which will show you an estimate of your payment and closing costs as well as provide an idea of what you could be pre-approved for. After signing your pre-approval application, we have our underwriters review your application to make sure there are no apparent issues that could compromise your ability to purchase a home. Once they have finished reviewing the information, we will provide you with a pre-approval letter to take to a realtor to start looking at homes! Please note that we take your application very seriously and Please note that we generally do not provide instant pre-approvals that we take the time to review the information you provide when you apply to avoid any potential hang-ups. In doing so, you can feel confident that you are qualified to purchase for the amount of your pre-approval when you receive your pre-approval letter. Shopping Once you have your pre-approval, you can begin working with a realtor. They will generally ask for your pre-approval letter up front so they can know what program you are going with and how much you are pre-approved for. This information will help them to know what homes you should be able to secure financing for. Once you find a home you like, you will make an offer with your realtor. If the offer is accepted, you and the seller will sign a purchase agreement confirming the details of the sale. At this point you may have an inspection done of the property to verify that the home is in sound condition. Once you have a signed purchase agreement, you will need to get a copy of this to us so we can resume working on your mortgage. Processing and Underwriting Once we have your signed purchase agreement we will resume processing and underwriting your loan. Our activities will focus around three main areas: Appraisal – We will order an appraisal on your behalf to make sure the home’s value is sufficient to support the mortgage you are taking out. The appraisal will also confirm that the home is in sufficient condition to meet the requirements of the mortgage program you are using to purchase or refinance your home. Title Work – We will request a review of the title for the property you are purchasing or refinancing to make sure that there are no issues that could jeopardize your interest in the property after you purchase it. This includes verifying previous sales and making sure that there are no liens on the property. Information Verification – We will update your documentation to verify that there has been no change to your financial or credit status that would impact your ability to buy or refinance the home. We are making sure that you will be able to afford the payment for your loan and the additional expenses that are related to owning the home. Additionally, we will make sure that the documentation we have for you is sufficient to meet the requirements of the mortgage program you are using to purchase or refinance your home. Closing Once all of the verifications, appraisal, and title work have been completed, we will be ready for your closing. The closing will be administered by a title company, law office, or notary and you and your agent will be consulted for setting up this appointment. At closing on a purchase, the seller and real estate agents will receive their payments and you will generally receive the keys to your new home. At closings on a refinance, your signing will trigger a three day rescission period after which you will receive the check for any cash you are getting back off of the refinance. After your closing, you may receive additional information about managing your mortgage account in the future.
 
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. Home Town 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.
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    Q : How much cash will I need to purchase a home?
    A : The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply:
  • Earnest Money: The deposit that is supplied when you make an offer on the house
  • Down Payment: A percentage of the cost of the home that is due at settlement
  • Closing Costs: Costs associated with processing paperwork to purchase or refinance a house
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    Q : I am getting a gift from someone else. Is this an acceptable source of my down payment?
    A : Gifts are an acceptable source of down payment, if the gift giver is related to you or your co-borrower. We will ask you for the name, address, and phone number of the gift giver, as well as the donor’s relationship to you. If your loan request is for more than 80% of the purchase price, we will need to verify that you have at least 5% of the property’s value in your own assets in most instances. Prior to closing, we will verify that the gift funds have been transferred to you by obtaining a copy of your bank receipt or deposit slip to verify that you have deposited the gift funds into your account.
     
    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).
     
    Q : Can I apply for a loan before I find a property to purchase?
    A : Yes, applying for a mortgage loan before you find a home may be the best thing you could do! If you apply for your mortgage now, we will issue a pre-approval subject to you finding the perfect home. Once you are pre-approved, we will issue a pre-approval letter to you; you can use the pre-approval letter to assure real estate agent and sellers that you are a qualified buyer. A pre-approval is a great first step as real estate agents will often encourage buyers to get pre-approved before they begin showing the buyers any homes. Having a pre-approval for a mortgage may give more weight to any offer to purchase that you make. When you find the perfect home, you will simply call the Credit Union to continue your application. We will discuss the process moving forward, including when and how to lock in our great rates and we will complete the processing of your request.
     
    Q : Will I be charged any fees if I authorize my credit information to be accessed?
    A : When you apply, there is no charge to you for the credit information that we access with your permission to evaluate your application. You will only be charged for a credit report if you decide to complete the application process after your loan is approved.
     
    Q : Will the inquiry about my credit affect my credit score?
    A : An abundance of credit inquiries can sometimes affect your credit scores since it may indicate that your use of credit is increasing. That being said, the data used to calculate your credit score does not include any mortgage or auto loan credit inquiries that are made within the 30 days prior to the score being calculated. In addition, all mortgage inquiries made in any 14-day period are always considered one inquiry. This means you do not need to limit your mortgage shopping for fear of the effect on your credit score. While a credit inquiry may affect your credit score, the affect is very minimal and it is worth the cost to make sure you are getting the best deal on one of the largest purchases you will ever make.
     
    Q : I am relocating because I have accepted a new job that I have not started yet. How should I complete the application?
    A : Congratulations on your new job! If you will be working for the same employer, complete the application as such but enter the income you anticipate you will be receiving at your new location. If your employment is with a new employer, complete the application as if this were your current employer and indicate that you have been there for one month. The information about the employment you will be leaving should be entered as a previous employer. We will sort out the details after you submit your loan for approval.
     
    Q : I have had a few employers in the last few years. Will that affect my ability to get a new mortgage?
    A : Having changed employers frequently is typically not a hindrance to obtaining a new mortgage loan. This is particularly true if you made employment changes without having periods of time in between without employment. We will also look at your income advancements as you have changed employment. If in the past two years you have changed from hourly/salary income to commission income or if you have become self – employed this may impact your application. Please contact us to discuss your situation further.
     
    Q : I have heard that some lenders require flood insurance on properties. Will you?
    A : Federal Law requires all lenders to investigate whether or not each home they finance is in a special flood hazard area as defined by FEMA, the Federal Emergency Management Agency. The purpose of this law is to help to ensure that you will be protected from financial losses caused by flooding. We use a third party company who specializes in the reviewing of flood maps prepared by FEMA to determine if your home is located in a flood area. If it is, then flood insurance coverage will be required, since standard homeowner's insurance does not protect you against damages from flooding. If it is not, flood insurance will not be required but can be purchased at the borrower’s discretion. Should your home ever become included in a FEMA flood area during the course of your loan, you would be required to add a flood insurance policy.
     
    Q : I have student loans that are not in repayment yet. Should I show them as installment debts?
    A : Yes, the payment must be counted regardless of deferment period. If the payment amount does not show on credit report, we will need to obtain a copy of loan agreement from the borrower.
     
    Q : I was in school before obtaining my current job. How do I complete the application?
    A : If you were in school before your current job, Upon completing the application what will be entered is the name of the school you attended and the length of time you were in school in the “length of employment” fields, the position of “student “ and income of “0” will be entered.
     
    Q : Will my second job income be considered?
    A : Typically, income from a second job will be considered if a two year history of secondary employment can be verified.
     
    Q : Do I have to provide information about my child support, alimony or separate maintenance income?
    A : Information about child support, alimony, or separate maintenance income does not need to be provided unless you wish to have it considered for repaying this mortgage loan. If you wish to include this income for the purpose of your prequalification, please let us know and we will request the documentation we need in order to include this income.
     
    Q : How will rental income be verified?
    A : If you own rental properties, we will ask for the last two year's federal tax returns to verify your rental income. We will also ask for a copy of your current least agreement to document that the property is currently occupied. If you have not owned and rented out the rental property for a complete tax year, we will not be able to include the rental income on your application.
     
    Q : I am self-employed. How will you verify my income?
    A : Generally, the income of self-employed borrowers is verified by obtaining copies of personal (and business, if applicable) federal tax returns for the most recent two-year period. Additionally, an up to date profit-and-loss statement may be requested to verify your income for the current year. We will review and average the net income from self-employment that was reported on your tax returns to determine the income that can be used to qualify. We will not be able to consider any income that has not been reported as such on your tax returns. As with any other employment type, we will need to be able to document two years of self-employment in order verify income stability.
     
    Q : If I have income that's not reported on my tax return, can it be considered?
    A : Generally, only income that is reported on your tax return can be considered when applying for a mortgage. The exception to this is if the income is legally tax-free and is not required to be reported.
     
    Q : My income is from pension, social security, SSI Disability or Child Support. What will I need to provide?
    A : For pension income, we generally ask for a copy of your pension plan to document your future pension income. We also need to be able to document that you have received this income for at least one month and can either use the pension check stub or bank statement to verify this. For social security income, we need your most recent award letter to document the amount you will receive in the future. We also need to document that you have received this income for at least one month and can verify this using your bank statement. For SSI Disability, we need the most recent award letter to document the amount you will receive in the future. We also need the documentation showing whether the disability is permanent or not and, if not, how long you will continue to receive the disability income. For child support income, we need the most recent award letter to document what you will receive in the future. We also need to be able to verify that you have received this income consistently for the past 12 months and this can either be done with a letter from the county or with bank statements. We will need to determine how long this benefit is to continue. If the child support is from a divorce, we generally need a full copy of the divorce decree. If you're receiving tax-free income, such as social security earnings in some cases, we will consider the fact that taxes will not be deducted from this income when reviewing your request.
     
    Q : How will a past bankruptcy or foreclosures affect my ability to obtain a new mortgage?
    A : If you have had a bankruptcy or foreclosure in the past, it may affect your ability to get a new mortgage. Unless the bankruptcy or foreclosure was caused by situations beyond your control, we will generally require that two to five years have passed since the bankruptcy or foreclosure. It is also important that you have re-established an acceptable credit history with new loans or credit cards.
     
    Q : I am purchasing a home, do I need an appraisal AND a home inspection?
    A : Both a home inspection and an appraisal are designed to protect you against potential issues with your new home. As they have totally different purposes, it is encouraged for you to get both in order to help confirm that you have found the perfect home. The appraisal is generally required by the lender but the inspection is done only by the borrower’s request. The appraiser will make note of obvious construction problems such as termite damage, dry rot or leaking roofs or basements. Other obvious interior or exterior damage that could affect the salability of the property will also be reported. However, appraisers are not construction experts and will not find or report items that are not obvious. They will not turn on every light switch, run every faucet or inspect the attic or mechanicals and that is where the home inspector comes in. Inspectors perform a thorough review of the interior and exterior of your potential home and can educate you about possible concerns or defects with the home. If at all possible, find an inspector that will allow you to accompany them during the home inspection. This is your opportunity to gain knowledge of major systems, appliances and fixtures, learn maintenance schedules and tips, and to ask questions about the condition of the home. Generally you will be given the option to walk away from your offer on a home should major issues be discovered during your inspection, but you should ask your realtor prior to making an offer if an inspection can be added as a contingency.
     
    Q : What is an appraisal and who completes it?
    A : An appraisal is a determination of the value of the property you are purchasing or refinancing and it is generally required to complete your loan. An appraiser will inspect both the interior and exterior of your home and note the features and qualities of your home to generate a report for your lender. An appraisal report is a written description and estimate of the value of the property. The format of the appraisal and the appraiser’s qualifications are governed by national standards and most states have additional licensing requirements for appraisers. After the appraiser inspects the property, they will compare the qualities of your home with other homes that have sold recently in the same neighborhood. These homes are called "comparables" and play a significant role in the appraisal process. Using industry guidelines, the appraiser will try to weigh the major components of these properties (i.e., design, square footage, number of rooms, lot size, age, etc.) to the components of your home to come up with an estimated value of your home. It is not uncommon for the appraised value of a property to be exactly the same as the amount stated on your sales contract. This is not a coincidence, nor does it question the competence of the appraiser. Your purchase contract is the most valid sales transaction there is. It represents what a buyer is willing to offer for the property and what the seller is willing to accept. Only when the comparable sales differ greatly from your sales contract will the appraised value be very different.
     
    Q : How long does it take for the property appraisal to be completed?
    A : Licensed appraisers who are familiar with home values in your area perform appraisals. We order the appraisal as soon as the appraisal fee is paid. Generally, it takes 10-14 days before the written report is sent to us. We follow up with the appraiser to insure that it is completed as soon as possible. If you are refinancing, and an interior inspection of the home is necessary, the appraiser should contact you to schedule a viewing appointment. If you do not hear from the appraiser within seven days of the order date, please inform your Loan Officer. If you are purchasing a new home, the appraiser will contact the real estate agent, if you are using one, or the seller to schedule an appointment to view the home. We will promptly give you a copy of any appraisal, even if your loan does not close.
     
    Q : Will I get a copy of the appraisal?
    A : As soon as we receive your appraisal, we will update your loan with the estimated value of the home. We will promptly give you a copy of any appraisal, even if your loan does not close.
     
    Q : Does HomeTown Credit Union provide financing for manufactured homes?
    A : HomeTown Credit Union does provide financing for manufactured homes through a Federal Housing Administration program. This program does have some specific qualifications for financing that must be met in order to get approved. In order to qualify for our loan programs a manufactured home must meet the following requirements: • Must be a double wide • Must have been constructed after June 15, 1976 • Unit must not have been previously installed or occupied at another site or location • Borrower must obtain deed and title to the mobile home and the land – units in mobile home parks do not qualify • Wheels, axle, and tow tongue must be removed