Frequently Asked Questions
General Mortgage Questions
Q: What is a pre-qualification?
A: A pre-qualification will estimate how much money you are eligible to borrow before you apply for a mortgage. Be prepared to provide basic information such as income, debts and assets. A pre-qualification is not a pre-approval or loan approval.
Q: What is an appraisal?
A: An appraisal is a report made by a licensed appraiser who provides a professional opinion or estimate of property value. When you apply for a mortgage loan with JMT Mortgage, we will initiate the process to get an appraisal ordered.
Q: How important is my credit?
A: Your credit is an important consideration for determining your creditworthiness. Information in your credit report is prepared by a credit bureau or consumer reporting agency. Any late payments or other adverse information contained in your credit report will receive additional review during the underwriting of your loan application, and may require further written explanation(s) or documentation from you as we consider your loan request.
Q: What are closing costs?
A: Closing costs cover all the fees and expenses associated with a loan transaction. Closing costs may include fees for an appraisal, credit report, title insurance, survey, and points. Closing costs vary depending upon the loan product and the fees that are customary in your area.
Q: What is title insurance and why do I need it?
A: Title insurance protects the lender (lender's policy) and the homeowner (owner's policy) against loss resulting from disputes over ownership of the property.
Q: What is Private Mortgage Insurance (PMI)?
A: PMI is insurance provided by non-government insurers that protect the lender against loss if a borrower defaults. Typically PMI is required if your down payment is less than 20 percent of the purchase price. For example, on a purchase price of $100,000.00, PMI would be required if you put less than $20,000 (20% of $100,000) as a down payment.
Q: What information do I need to apply for a loan?
A: In all mortgage applications, JMT Mortgage will ask for information regarding your employment, income, assets, debts and the prospective property you intend to purchase or refinance. Other information may be needed depending upon your situation.
Q: What are discount points and how are they calculated?
A: Discount points are a one-time charge (or credit) by the lender. Each point is equal to 1% of the principal loan amount and can be paid to buy down the applicable interest rate. If you choose to pay points, they are typically paid at the time of closing. Discount points may be negotiated in the Purchase Contract to be paid by either the seller or borrower. Contact JMT Mortgage for more information.
Q: Can I apply for a loan before I have a home to purchase?
A: Yes. This is highly suggested by realtors and JMT Mortgage. You may provide the required documentation for a loan pre-approval to verify income, debts and assets prior to your purchase. Once we obtain a credit report, we can make a credit only loan decision. This process is called a pre-approval. Since the property to be purchased is typically not known for a pre-approval, estimated sales price and loan amount are used to make a loan decision.