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Q: What is a Credit
Score?
A: Your credit
score is what a lender will
use to determine your
willingness to pay back a
loan. Credit scores only
include information
contained in your credit
profile. They do not include
income, savings, down
payment amount, or
demographic factors like
gender, race, nationality or
marital status.
Past delinquencies,
derogatory payment behavior,
current debt level, length
of credit history, types of
credit and number of
inquiries are all considered
in credit scores. Your score
considers both positive and
negative information in your
credit report. Late payments
will lower your score, but
establishing or
reestablishing a good track
record of making payments on
time will raise your score.
Q:
What is a Good Faith
Estimate?
A:
Buyers will
receive a "Good Faith
Estimate" of at the time the
loan application is
submitted to the lender.
This is one of the most
important documents you will
receive during the lending
process. The Good Faith
Estimate will include the
details of all fees
associated with the
transaction, interest rates
and loan programs and total
amount due at the close of
your loan. It is very
important to ask for a Good
Faith Estimate when you are
shopping for any lender.
Q:
Why
Title Insurance?
A:
Before closing on a
property, you'll want to
know that no other
individual or entity has a
right, lien or claim to the
property. Determining that
your rights and interests to
the property are clear is
the business if the title
insurance company.
One of the
marked advantages of title
insurance is that prior to a
policy being issued, the
title insurance company
completes extensive research
into relevant public
records, maps and documents
to trace ownership of the
property and determine if
anyone other than you has an
interest in the property.
Through its research, the
title insurance company can
usually identify any title
problems that may arise and
have these problems
cleared-up prior to closing.
Q:
What
is a Rate Lock?
A:
A rate lock or a rate
commitment is a lender's
promise to hold a certain
interest rate and a certain
number of points for you for
a specified period of time
while your application is
processed. This prevents you
from going through your
whole application process
and at the end of it finding
out the interest rate has
gone up.
Q:
How can I make sure
my rate is low?
A:
A rate lock period can vary
in length, and longer ones
usually cost more. A lender
will agree to "hold" your
interest rate and points for
a longer period, say 60
days. The longer the lock
period, the higher
the costs, for example: |