Frequently Asked Questions
Many of the people we talk with have very similar questions. We have included some of the questions and answers in the hope that you will find this helpful. Don't hesitate to call or email us with additional questions—we always appreciate an opportunity to help educate others about their housing loan options.
Why use Scott Chinchar, your Clearwater Mortgage Guy?
When you are making a significant purchase, you want to talk to a real person and get your questions answered, right? I'm here, and I'm always willing to answer your questions. I take each customer's loan very personally, as though I were financing my own home. You can always reach my assistant or myself—and if you do have to leave a message, we will always return your call immediately. Some lenders leave their customers guessing about the status of their loan, but we understand just how stressful buying a new home (or even refinancing) can be and we will do everything in our power to ensure that you feel informed and in control of the process, every step along the way.
We work with numerous lenders to get you a loan with the best possible rate. We shop for you to find the best rate for the kind of loan that fits your needs. And if you have had difficulties obtaining a loan elsewhere, we can assist you with a program to improve your credit profile so that we can do that loan for you.
Why not just go to a bank?
When you go to a bank, you are dealing with one lender, but if they say "no," you must start the process again with a different bank. You can continue to do this and hope that you find the loan you are looking for and the rate you want. However, there are hundreds of lenders throughout the country, and not all of them are banks or names that you would recognize. The advantage with us is that we do the shopping for you. You apply one time, and we find the lender to match your particular needs. And—especially important—your credit report is only pulled one time.
It is essential to know that to be a mortgage broker, we are required to attend training, pass a test, pass a national test, receive a background check and fingerprint check as well as our own credit pulled and reviewed. The loan officers at the banks are not required to do any of that. An interesting fact.
Can I get a loan even if my credit isn't great?
Yes! Depending on your credit scores and other credit factors, you can still get a loan. Sometimes you will have to put more money down or take less money out than you would with good credit; however, you can still get a loan. The better your credit is, the better interest rate you will get, and the less money you will need to put down when buying a home. That applies as well to refinancing; the better your credit is the better interest rate you will get, and the more money you can pull out of your home.
What does it mean to "lock-in" a rate?
When you apply for a loan, you can continue the process without the interest rate being locked. That is known as a "float." At some point during the loan application and approval process, you as the borrower will have to decide to "lock-in" the rate, and the rate for your loan will then be the current rate on the day that you lock-in. Basically, the decision to float or lock relates to how willing you are to gamble that rates will be lower tomorrow or next week, etc. It usually makes sense to lock in your rate fairly early in the loan process, but it is essential to understand that no lender can absolutely guarantee that rates will not drop (or increase) between the time you lock in and when you close on your loan. Interest rates move up and down daily.
What is an "escrow" account?
An "escrow" or "impound" account is maintained by your lender to cover the taxes and insurance that must be paid each year for your home. For most loans, the lender is provided with the information about the property taxes and homeowners' insurance that will be due annually. The lender then divides the total into 12 equal amounts and adds this to the amount that is due on your loan each month. When the taxes and insurance are due, the lender makes the payment on your behalf. If you sell your home, any funds leftover in the escrow account will be refunded to you.
What is "PMI?"
"PMI" is Private Mortgage Insurance. When you purchase a home, if your down payment is less than 20%, the lender will require that you pay for PMI. This insurance policy is taken out on behalf of the lender to protect the lender's investment if you default on the loan. It is usually included in your monthly loan payment, along with your standard homeowner's insurance and property taxes.
What is included in closing costs?
In Florida, closing costs include the following:
- Appraisal fees
- Lender fees (charges for underwriting, processing, tax services, document preparation, wire fees, etc.)
- Title Company charges
- County and State taxes
- Survey fees
- Any necessary escrow or impound amounts, normally several months worth paid in advance
- Your first year of homeowner's insurance
Although it is not possible to precisely predict the total amount of closing costs, in Florida, for a home selling for $100,000, closing costs will average around $3,000. Your mortgage broker or lender should provide you with more exact information well in advance of your closing date.
Do I have to document my income?
What's involved in obtaining a loan for investment property?
G-enerally, loans for investment property are similar to those for a home purchase, except that the lender will require a higher down payment (20% - 25%) and the interest rate will be slightly higher. This is due to the higher degree of risk on a loan for investment property as opposed to a home loan.
Can you help me get a loan for commercial property?
Yes! I can definitely help you get the loan you need for commercial property investment. Call today so that we can go to work finding the loan program that fits your needs.
Does you handle Small Business Administration loans?
Yes! I can help you with an SBA loan, and this can be a very good option for a business owner who is seeking to purchase commercial property, and maybe also get cash to purchase equipment or do any necessary renovation. If you qualify for an SBA loan you will most likely be able to make a smaller down payment and have a longer term of loan, which can be a substantial benefit to you as a business owner.
Can I get a HARP (Home Affordable Refinance Program)? Do you have that program?
-YES!!! We have HARP! Call today. You may qualify!