Loan Application
Mortgage and Rate Information
Credit Ratings
Closing
What's the easiest way to apply?
You can apply online by filling out our online application, by phone or by faxing an Easy Application available from your market manager. If you prefer, we can fax or express mail our application package for your review.
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Is the online application secure?
Transmitting secure personal information online is a top priority at First Equity Mortgage. Safeguards and tools are in place to ensure safe transactions.
VeriSign Authentication - First Equity Mortgage and 90% of web sites worldwide entrust VeriSign Secure Server IDs to authenticate themselves and to enable SSL (Secure Sockets Layer) encryption to protect sensitive data and transactions
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What is needed to process my loan?
We want to make applying for a loan easy. We use the information you provided on our Easy Application and process that information through our automated underwriting system. Our system compares your financial situation with statistical data from millions of other homebuyers to determine the level of verification needed. We then issue you a preapproval letter identifying the documents needed for your final approval. The following documents are needed for most approvals. 1,2,3,4,5 as listed.
- Last year's W-2 forms.
- One month's current pay stubs.
- A list of current "liquid" assets and balances, such as checking and savings accounts.
- A list of your current debts and associated monthly payments, such as credit card bills, car loans and student loans.
- And if you are self-employed, we will need federal tax returns from the past two years.
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Whom do I contact on my loan status?
Once we receive your completed application and supporting documentation, we will assign you to a First Equity Account Representative. Your Account Representative is responsible for collecting any remaining documentation, preparing your application for approval, and clearing your file for closing. So, you can call him or her any time during the process to find out exactly where your loan stands.
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What is the process once I apply?
Pre-Approval-You can submit your application on-line, by fax or over the phone with a First Equity Representative, see Contact Us for phone numbers for your area. We will process your application and a representative will contact you within one hour to confirm the results of the pre-approval.
Final Approval- Your First Equity Representative will discuss programs and products that will best suite your financial needs. A package will be mailed to you with disclosures and a list of documents you need to send us to finalize the approval. Once the final loan approval is issued you can focus on the final details of completing your home.
Locking your Rate-as the financing division of Drees Homes we offer locks that cover the immediate purchase of a market home or a lock to cover the duration of a build to order home. Your account representative can lock you anytime during the purchase process.
Closing- as you approach closing we may need to update documents if they have become outdated; also we will need information from your insurance agent on your
homeowners insurance. We will confirm any changes to the loan and purchase contract and make sure you have the appropriate contacts at the title company. The title company will advise you how much money you need to bring to closing generally three days prior to closing. The title company name and phone number are also located on your approval letter.
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How long will it take for my loan to be approved?
The majority of our loans move through an automated underwriting system, so we generally can approve your loan by the end of the next business hour after receiving your application.
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What are the advantages of using First Equity versus other mortgage companies?
First Equity has been Drees' mortgage company for over 20 years. Not surprisingly, more homeowners who build with a Drees company use First Equity than any other mortgage lender. No one else keeps you as closely connected to the people building your home. Additionally, Drees and First Equity will work to significantly lower your cost of home financing.
At First Equity, we anticipate the special needs and unique situations that arise. Your Account Representative continuously communicates with your Market Manager as you build your new home. If you'd like to customize your home and the price changes, we remain informed. We anticipate potential changes in financing and closing date so rate locks are not lost and extra appraisal fees are not charged. Other lenders don't have our direct connection.
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What is the difference between the interest rate and the annual percentage rate (APR)?
Interest rate is the contractual rate that you agree to pay for your mortgage loan. This rate is used to calculate the interest portion of your monthly mortgage payment. Annual percentage rate (APR) includes your interest rate and factors in the prepaid finance charges to give you an average yearly rate. APR can be a good tool to use when you're comparison shopping for rates.
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How do I lock the rate on my loan?
Your First Equity Representative receives daily updates on interest rates, call your representative and they will assist you with locking.
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What if my loan can't close before the rate lock expires?
If your loan can't close by the date your rate lock expires, you can re-lock your rate and points. We base your new rate and points on your original rate and points, or pricing at the time you re-lock, whichever is higher. Contact your First Equity Account Representative for more information.
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What is Private Mortgage Insurance (PMI)?
PMI or Private Mortgage Insurance is normally required when you buy a house with less than 20% down. Mortgage insurance is a type of guarantee that helps protect lenders against the costs of foreclosure. Private mortgage-insurance companies provide this insurance protection. It enables lenders to accept lower down payments than they would normally. In effect, mortgage insurance provides what the equity of a higher down payment would provide to cover a lender's losses in the unfortunate event of foreclosure. The wide-use of mortgage insurance has made it possible to buy a home without a 20% down payment!
The cost of PMI increases as your down payment decreases. Example: The cost of PMI on a 10% down payment is less than the cost of PMI on a 5% down payment. Your PMI premium is normally added to your monthly mortgage payment.
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Can I get rid of the PMI on my loan?
The decision on when to cancel the private insurance coverage does not depend solely on the degree of your equity in the home. The final say on terminating a private mortgage-insurance policy is reserved jointly for the lender and any investor who may have purchased an interest in the mortgage. However, in most cases, the lender will allow cancellation of mortgage insurance when the loan is paid down to 80% of the original property value.
To cancel the PMI on your loan, contact your lender. In most cases, an appraisal will be required to determine the value of your property. You will probably also be required to pay for the cost of this appraisal. Another way of canceling the PMI on your loan is to refinance and to get a new loan without PMI.
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What are points?
Points are quoted as a percentage of the mortgage amount and are fees added on to loans. Points are paid at the time you close on your home. Each point is equal to one percent of the loan amount. For example, three points on a $100,000 loan equals $3,000.
As a borrower, you may choose to pay for more than the required points in order to lower the interest rate on the loan. Each additional point lowers your interest rate (and thus your monthly payment) a little more but means you need to pay more up-front
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What is a credit score?
A FICO score is a credit score developed by Fair Isaac & Co. Credit scoring is a method of determining the likelihood that credit users will pay their bills. Fair Isaac began its pioneering work with credit scoring in the late 1950s and, since then, scoring has become widely accepted by lenders as a reliable means of credit evaluation. A credit score attempts to condense a borrowers credit history into a single number. Fair Isaac & Co. and the credit bureaus do not reveal how these scores are computed. The Federal Trade Commission has ruled this to be acceptable.
Credit scores are calculated by using scoring models and mathematical tables that assign points for different pieces of information in an attempt to best predict future credit performance. Developing these models involves studying how thousands, even millions, of people have used credit. Score-model developers find predictive factors in the data proven to indicate future credit performance. Models can be developed from different sources of data. Credit-bureau models are developed from information in consumer credit-bureau reports.
Credit scores analyze a borrower's credit history considering numerous factors such as:
- Late payments
- The amount of time credit has been established
- The amount of credit used versus the amount of credit available
- Length of time at present residence
- Employment history
- Negative credit information such as bankruptcies, charge-offs, collections, etc.
There are really three FICO scores computed by data provided by each of the three bureaus--Experian, Trans Union and Equifax. Some lenders use one of these three scores, while other lenders may use the middle score.
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How can I increase my credit score?
While it is difficult to increase your score over the short run, here are some tips to increase your score over a period of time.
- Pay your bills on time. Late payments and collections can have a serious impact on your score.
- Do not apply for credit frequently. Having a large number of inquiries on your credit report can worsen your score.
- Reduce your credit-card balances. If you are "maxed" out on your credit cards, this will affect your credit score negatively.
- If you have limited credit, obtain additional credit. Not having sufficient credit can negatively impact your score.
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What if there is an error on my credit report?
If you see an error on your report, report it to the credit bureau. The three major bureaus in the U.S., Equifax (1-800-685-1111), Trans Union (1-800-916-8800) and Experian (1-888-397-3742) all have procedures for correcting information promptly. Alternatively, your mortgage company may help you correct this problem as well.
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What if I can't attend the closing?
If you can't attend the closing, just contact your First Equity Account Representative to discuss other options. We'd be glad to express mail your documents in advance to sign and forward to the closing agent. Don't worry, we'll work on a solution to fit your circumstances.
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If I want to change my loan type or loan amount before closing, what do I do?
If you decide to change loan programs or loan amount, contact your First Equity Account Representative to discuss your options. Generally, changing loan programs or loan amounts isn't an issue. Just remember, though, if you'd already locked in an interest rate, pricing for the new loan may change.
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What if my loan can't close before the rate lock expires?
If your loan can't close by the date your rate lock expires, you can re-lock your rate and points. We base your new rate and points on your original rate and points, or pricing at the time you re-lock, whichever is higher. Contact your First Equity Account Representative for more information.
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What information can I expect to see on the Closing / Settlement statement?
The closing or HUD-1 Settlement statement itemizes all the costs associated with the purchase. It lists the balance of the purchase price of the property minus the down payment, filing fees, pro-ration of real estate taxes, and itemizes other fees charged such as points.
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When will I find out the exact amount of money I need at closing?
Your loan processor will contact you before closing to go over your final costs and to confirm your loan terms. The closing agent, or an attorney, will calculate the exact amount you will bring to closing. You'll want to be sure the funds you bring to closing are certified (e.g. a cashier's check). The check can be made payable to you and endorsed over at the closing to the appropriate party.
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