Frequently Asked Questions
What documents do I need?
Depending on the type of loan, or any questions that come up during underwriting, there may be more information needed. But the list below is a good start.
- Copies of Checking and Savings account statements for the past 2 months
- Evidence of any other assets such as stocks and Bonds
- Copies of two most recent pay stubs
- W2 forms or Income Tax Returns for the past 2 years
- Sales contract on new home, if applicable
What does my mortgage payment include?
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: Also known as "Escrows". 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.
What type of Loan do I need? (FHA, VA, Jumbo...)?
This can be a very confusing part of the process. The loan type you choose is often based on your finances and your credit. Determining the best loan type for you is part of our consultation with you. If you would like to know what loan type you need before you fill out an application you can call us and we can ask you a few questions to help determine the best fit for you.
How do I know how much house I can afford?
Generally speaking, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value. Give us a call, and we can help you determine exactly how much you can afford.
What is the difference between a fixed-rate loan and an adjustable-rate loan?
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.
How is an index and margin used in an ARM?
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).
How do I know which type of mortgage is best for me?
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. Petra Lending Group can help you evaluate your choices and help you make the most appropriate decision.
How much cash do I need to purchase a home?
The amount of cash that is necessary depends on a number of items. VA loans offer 100% financing. FHA requires 3.5% down and most conventional loans require 5% down. 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
What are my obligations if I fill out a loan application?
There are no obligations when you apply for a loan with PLG. We will review your application and discuss all your options. No charge, no commitment.
What kind of costs can I expect before my loan closing?
The only fee paid before closing is for your appraisal - and that is paid to the appraisal company. PLG does not charge any fees - no application fee and no origination fees.
What will my rate be if I have bad credit?
Rates depend on many factors. Credit is one of those factors. Some other factors include the amount of equity in the property, the level of income documentation provided and the debt level you have as compared to income. Until we understand the structure of your specific loan and the loan is approved, the interest rate can only be estimated. Our goal is to provide you with the lowest interest rate possible so we can earn the business of you and your friends in the future.
How can I avoid paying Private Mortgage Insurance (PMI) on my mortgage?
PLG offers VA and USDA Rural Housing Loans with up to 100% financing. For some loan programs PMI is unavoidable, but does not always have to be paid monthly. Please consult with one of our loan consultants for greater detail.
What is an interest only loan and how can it help me?
An interest only loan should really be described as an interest only OPTION loan. Each month when you make your mortgage payment you have the option of paying principal plus interest or simply the interest. This can help greatly if you have significant financial obligations in addition to your home payment or if you are looking to afford more home with a lower payment. There are interest only option loans available for purchase or refinance. They come in the form of fixed rates or adjustable rates.
What is the lowest down payment necessary when buying rental property?
At PLG we have several investment property loans available with up to 80% financing. Credit score requirements will vary so please contact a PLG representative for more details.
What if I have Judgements or tax liens?
Depending on the specifics of your situation you may qualify for financing with open judgments on your credit. For complicated issues such as these we recommend a personal consultation with one of our loan officers, please call the number above or apply on our convenient loan application.
How do I qualify for a low down payment if I have bad credit?
At PLG with two of three credit scores as low as 640 you may qualify for financing on a conventional mortgage. If your scores are between 620 and 640 then you may qualify for 96.5% financing on FHA loans or 100% financing on VA loans. Other restrictions apply. Please complete our convenient online loan application to qualify. Call for conditions or apply online today.
What are my options if I am behind on my mortgage?
If you are less than three months behind on your payment we have many programs to help you refinance your home. If you are over three months behind on your home the most we are capable of refinancing is 65% of the value of your home. For complicated issues such as these we recommend a personal consultation with one of our loan officers, please call the number above.