Frequently Asked Questions

Do you have questions? We can help!
You will find the answers to several frequently asked mortgage questions below.

What qualifies as a late mortgage payment, and what are the consequences?

If you make a payment after the stated due date, you may be charged penalties or late fees. A pattern of late credit payments may lead to poor credit and could negatively affect future loans. For instance, lenders may evaluate you as a high risk and offer a loan with a higher-than-usual interest rate.
In general, a mortgage payment is considered late, or delinquent, if it is received 15 days beyond the due date. A payment is considered to be in serious delinquency when it is 60 to 90 days late. Consequences may include costly penalty charges, default on the loan and possibly foreclosure on the property.

What qualifies as a late payment, and what are the consequences?

If you make a payment after the stated due date, you may be charged penalties or late fees. A pattern of late credit payments may lead to poor credit and could negatively affect future loans. For instance, lenders may evaluate you as a high risk and offer a loan with a higher-than-usual interest rate.
In general, a mortgage payment is considered late, or delinquent, if it is received 15 days beyond the due date. A payment is considered to be in serious delinquency when it is 60 to 90 days late. Consequences may include costly penalty charges, default on the loan and possibly foreclosure on the property.

Can I apply for a loan if I don't have an established credit history?

Lenders may accept other sources of credit, such as a documented history of bills you've paid on time for rent, utility or cable services. For more information, contact your experienced PHH Home Loans, LLC loan consultant.

What is good credit? And how can I establish it?

Good credit shows mortgage lenders that you make payments on time and are willing to repay any money borrowed. In general, people with good credit are often offered the lowest available interest rate.
One of the best ways to establish good credit is by making all of your credit payments on time. For more about the benefits of good credit, and strategies for establishing, building and maintaining it, talk with a credit advisor.

How much homeowners insurance do I need?

A homeowners’ insurance policy, as required by the lender, needs to cover the cost to rebuild the home. The insured amount may be higher or lower than the actual purchase price, and your insurance company can give you an estimate based on specific property information.

What is refinancing and what are some reasons people choose to refinance?

Refinancing is the process of paying off one mortgage loan with the money from a new loan, using the same property as security. The decision to refinance will depend upon your personal objectives – but here are some of the most common reasons you might choose to do so:
• To reduce monthly mortgage payments: When a lower interest rate on your loan is available – typically 1 percent lower or more – refinancing can help you save money every month.
• To cash out a portion of the equity in your home: You can get extra cash by obtaining a new loan for a balance larger than the one on your existing loan. You can then use the cash for anything from home improvements to college tuition.
• To obtain a stable interest rate: You may be able to switch from the uncertainty of a variable interest rate to a more stable (and possibly even lower) fixed rate.
• To consolidate debt: Similar to a cash out refinance, debt consolidation allows you to take out a new loan for a larger balance than your existing mortgage. You can then use the cash difference to pay off any higher interest debts you may have. Essentially you are using your home as collateral for the consolidated debts.
• To pay off your mortgage sooner: You can switch to a shorter repayment term, which can help you save thousands of dollars in interest payments.
To help decide if it makes good sense to refinance, start by speaking with an experienced loan consultant

What is title insurance and why is it required?

Title insurance protects the lender (and you, if you purchase a separate, additional policy) against losses from disputes over a property’s title, such as unknown liens or other discrepancies in ownership. You also pay a one-time fee for the policy at the closing.

How do I get an appraisal

Once you have applied for a mortgage, the lender will schedule a property appraisal for the home or property you are considering. You must designate a contact, usually your real estate agent, to give the appraiser access to the property. The appraiser then comes and evaluates the condition of the home – including its structure, electrical wiring, plumbing and more – and sends the results to your lender.
For more information about your appraisal or any other steps in the home-buying process, contact your loan consultant.

How much will my property taxes be?

You can find this information out from the home’s seller or your real estate agent and confirm it with the recording office in the county where the property is located. Property taxes are reassessed from time to time, so this amount may change.

What is the TRID/RESPA Loan Estimate?

The TRID/RESPA Loan Estimate provides a summary of key loan terms to help borrowers understand terminology used during the mortgage application process, and estimates of loan and closing costs to help borrowers understand the details of their transaction.

What checks do I need to bring to the closing?

You will need a cashier's check or certified check for your closing costs and fees. It is also a good idea to bring a few blank personal checks in case any last-minute costs arise.

What is the Annual Percentage Rate (APR) of a loan, and how is it different from the interest rate?

The annual percentage rate (APR) is the total annual cost of your mortgage loan, including the interest rate (the fee to borrow money calculated as a percentage of the amount borrowed), loan fees, points and any other charges. APR is required by the Truth-in Lending Act and gives you a tool for comparing the mortgage rates of different loan programs.

How often do interest rates change?

Interest rates change based on fluctuations in the market; however, some lending products allow you to “lock in” on a specific rate. With a rate lock, your rate will not change regardless of what happens in the interest rate market, as long as you close on or before the rate lock expiration date.

What factors go into determining the interest rate on my loan?

Rates are influenced by current market conditions. In addition, your credit history will be evaluated – and good credit is typically rewarded with a lower rate. To learn about credit and its importance in obtaining a mortgage loan, see our article “All About Your Credit.” Also taken into account are factors such as your loan-to-value ratio, your income, your assets and the purpose of the loan.

What documents will I need to provide to complete my loan transaction?

Requirements for documentation vary by state and depend on a variety of factors. Here is a list of some of the common documents you’ll need:
• A fully executed agreement of sale for the property being purchased.
• Financial statements for your bank and brokerage accounts.
• A HUD-1 settlement statement on the property you are selling, if applicable.
• A copy of your most recent pay stub.
• Previous W-2s.
• Statements for your primary residence or a copy of a rental lease.
• A homeowners’ insurance policy.
• A flood insurance policy, if applicable.
For more information, or to discuss any aspect of financing a home, contact your loan consultant.

Why is an appraisal necessary? Can I use the tax value of the home?

Appraisals compare the current market value of your home to other properties in your area that have recently sold. A current appraisal is necessary for the lender to justify the loan amount that you've requested. Note that the appraised value of your home differs from the value used for property taxes, and then be aware that the appraisal is not a guarantee of the home’s value.

How do you use the personal information I enter on this site, and how can I be sure that mine will be secure?

We respect the fact that a mortgage loan application contains confidential information that needs to be treated responsibly and with care. For that reason, we use an advanced security system in all Internet-based communications and in the management of personal records.

When should I start evaluating financing options, and how do I know what I can afford?

You should look for a mortgage before you start looking for a new home. Once you examine financing options and get a pre-approval decision, you'll know how much money you can borrow and what level of home you can afford.
Before you begin looking for your home or property, real estate agents may ask you to get pre-approved. Having a pre-approval letter in-hand can give you an advantage over other buyers who may be interested in the same home – it shows the seller and real estate agent that you're financially ready to buy the home.

Do I need to sell my current home before I apply for a new mortgage loan?

No, but depending on your income and debt levels, you may need to sell your home before you can close on the new one. Ask one of our experienced loan consultants for more information.

How much down payment will I need?

The minimum required down payment depends on the mortgage program you qualify for. In general, at least 3.5 percent of the sale price is required for an FHA or VA mortgage. If you put down less than 20 percent on a conventional loan, you may need private mortgage insurance (PMI).
Unlike primary homes, however, second homes do not qualify for FHA or VA mortgage financing. Buyers of second homes may be required to contribute a higher down payment for a second home – so be prepared if you are financing a vacation home or an investment property.
You may be eligible to incorporate closing costs into your loan, added into either your interest rate or your loan amount. You will still need money for your down payment, but this will help reduce the amount of money required at closing. An experienced PHH Home Loans, LLC consultant can help you find the loan that fits your needs, including the amount of the down payment.

Do I have to attend the closing in person?

In most cases, you will need to attend the closing on a home or property purchase. However, in some cases you can grant power of attorney to a friend or family member to represent you or take the steps to complete a mail-away closing. Your mortgage representative can help evaluate your options.

Can I be pre-approved for a loan if I have credit problems?

Yes, we offer mortgage loan options to customers who may not have perfect credit. If you are concerned about your credit, or have other questions about credit, contact an experienced PHH Home Loans, LLC loan consultant who can help you find a mortgage loan that fits your unique financial needs.

Contact Us

PHH Home Loans, LLC
572 Ritchie Hwy
Severna Park, Maryland 21146

Phone: 301-789-6170

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