530-274-0916
Serving The California Marketplace
Home | About Us | Contact Us
530-274-0916
Serving The California Marketplace
Home | About Us | Contact Us

FAQs

Can I apply for a loan before I find a property to purchase?

Yes, applying for a mortgage loan before you go house-hunting is advised. Having your financial documents and credit report reviewed ahead of time gives you an opportunity to address any discrepancies on your credit report and narrows down your price range. A loan pre-approval will also let the seller know you are a serious and qualified buyer. Most seasoned Realtors will insist on this before they spend time negotiating with a seller or presenting an offer on your behalf. In a multi-offer situation you will have the advantage of loan pre-approval over those offers without it.

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. Nevada County Mortgage can help you evaluate your choices and help you make the most appropriate decision.

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: 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.

How much cash will I need to purchase a home?

The amount of cash will vary depending on several things, including the loan type, the agreement with the seller on costs they may pay on your behalf and whether you are required to have an impound account. Generally, you will need the following:

Earnest Money Deposit: Good faith deposit that is presented along with your offer.

Down Payment: A percentage of the purchase price of the home; this will determine your "loan-to-value".

Closing Costs: Costs associated with the processing, underwriting and closing of the loan.

Pre-Paid Costs: Costs that typically recur- interest, taxes and fire insurance – sometimes mortgage insurance.

What are closing costs and what is the difference between non-recurring and recurring costs?

A home loan involves many fees –usually 3rd party "non-recurring" fees associated with the underwriting, funding and closing of your loan. These fees vary from state to state, but typically include such things as title & escrow fees, lender fees, appraisal, credit report, flood certification, tax service fee, recording fee and any requested inspections as advised by your Realtor. Recurring costs are ongoing fees that will continue for the life of the loan, such as interest, property taxes and fire insurance, which are pro-rated at the close of escrow.

What are points?

One “point” is equal to one percent of the loan amount. Points can either be charged upfront to reduce the interest rate or in the form of a lender credit, it can be used in exchange for a higher interest rate to offset closing costs. Your loan agent can help you determine if paying points is to your advantage. You will want to evaluate the upfront costs compared to the savings over the life of the loan. You should take into consideration your current cash reserve situation, any improvements you plan on making to the property and how long you think you will own the home.

What is mortgage insurance?

Mortgage insurance policies are designed to reimburse a mortgage lender up to a certain amount in the event of a default. Most lenders require mortgage insurance when the down payment is less than 20%. The monthly amount is based on several factors including the actual loan-to-value, borrower's credit score and program type.

Are there home loans available with no down payment?

Loan programs can change frequently. Currently, the two most popular loans for 100% financing are the VA and USDA loan. The U.S. Department of Veterans Affairs (VA) loans are available to borrowers who are currently serving in the military and to veterans with honorable discharges who meet certain qualifications. The USDA loan offers 100% financing to certain borrowers who meet income eligibility factors and for properties located in a geographically designated "rural" area.

What is a credit score and how does it impact my ability to qualify for a loan?

Credit scores are based on information collected by credit bureaus and reported each month by your creditors. Such things as payment history, outstanding balance, type of credit, length of time you've had the credit account and number of inquiries all impact your credit scores. Generally, FICO scores at 740 and above will qualify for the best rate and term. Some loan programs, such as FHA offer more flexibility for borrowers with less-than-perfect credit. For more information, visit www.myfico.com.

When can I lock a rate?

Once we have reviewed your financial documentation and credit package, we will notify you about your rate lock options.

What is an impound account?

An impound account, sometimes called an "escrow account" is set up to pre-pay your property taxes and fire insurance on a monthly basis. This means your monthly payment will include principal, interest, taxes and fire insurance (PITI). The lender will pay the property taxes and insurance as they become due. This is usually required on any government loan and on most loans with less than a 10% down payment.

Can I apply for a loan before I find a property to purchase?

Yes, applying for a mortgage loan before you go house-hunting is advised. Having your financial documents and credit report reviewed ahead of time gives you an opportunity to address any discrepancies on your credit report and narrows down your price range. A loan pre-approval will also let the seller know you are a serious and qualified buyer. Most seasoned Realtors will insist on this before they spend time negotiating with a seller or presenting an offer on your behalf. In a multi-offer situation you will have the advantage of loan pre-approval over those offers without it.

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. Nevada County Mortgage can help you evaluate your choices and help you make the most appropriate decision.

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: 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.

How much cash will I need to purchase a home?

The amount of cash will vary depending on several things, including the loan type, the agreement with the seller on costs they may pay on your behalf and whether you are required to have an impound account. Generally, you will need the following:

Earnest Money Deposit: Good faith deposit that is presented along with your offer.

Down Payment: A percentage of the purchase price of the home; this will determine your "loan-to-value".

Closing Costs: Costs associated with the processing, underwriting and closing of the loan.

Pre-Paid Costs: Costs that typically recur- interest, taxes and fire insurance – sometimes mortgage insurance.

What are closing costs and what is the difference between non-recurring and recurring costs?

A home loan involves many fees –usually 3rd party "non-recurring" fees associated with the underwriting, funding and closing of your loan. These fees vary from state to state, but typically include such things as title & escrow fees, lender fees, appraisal, credit report, flood certification, tax service fee, recording fee and any requested inspections as advised by your Realtor. Recurring costs are ongoing fees that will continue for the life of the loan, such as interest, property taxes and fire insurance, which are pro-rated at the close of escrow.

What are points?

One “point” is equal to one percent of the loan amount. Points can either be charged upfront to reduce the interest rate or in the form of a lender credit, it can be used in exchange for a higher interest rate to offset closing costs. Your loan agent can help you determine if paying points is to your advantage. You will want to evaluate the upfront costs compared to the savings over the life of the loan. You should take into consideration your current cash reserve situation, any improvements you plan on making to the property and how long you think you will own the home.

What is mortgage insurance?

Mortgage insurance policies are designed to reimburse a mortgage lender up to a certain amount in the event of a default. Most lenders require mortgage insurance when the down payment is less than 20%. The monthly amount is based on several factors including the actual loan-to-value, borrower's credit score and program type.

Are there home loans available with no down payment?

Loan programs can change frequently. Currently, the two most popular loans for 100% financing are the VA and USDA loan. The U.S. Department of Veterans Affairs (VA) loans are available to borrowers who are currently serving in the military and to veterans with honorable discharges who meet certain qualifications. The USDA loan offers 100% financing to certain borrowers who meet income eligibility factors and for properties located in a geographically designated "rural" area.

What is a credit score and how does it impact my ability to qualify for a loan?

Credit scores are based on information collected by credit bureaus and reported each month by your creditors. Such things as payment history, outstanding balance, type of credit, length of time you've had the credit account and number of inquiries all impact your credit scores. Generally, FICO scores at 740 and above will qualify for the best rate and term. Some loan programs, such as FHA offer more flexibility for borrowers with less-than-perfect credit. For more information, visit www.myfico.com.

When can I lock a rate?

Once we have reviewed your financial documentation and credit package, we will notify you about your rate lock options.

What is an impound account?

An impound account, sometimes called an "escrow account" is set up to pre-pay your property taxes and fire insurance on a monthly basis. This means your monthly payment will include principal, interest, taxes and fire insurance (PITI). The lender will pay the property taxes and insurance as they become due. This is usually required on any government loan and on most loans with less than a 10% down payment.

Nevada County Mortgage, a dba Northern Sierra Financial Services
426 Sutton Way #114
Grass Valley, CA 95945
Office: (530) 274-0916
Fax: (530) 274-7620
Real Estate Broker
Department of Consumer Affairs
Bureau of Real Estate
State of California
(877) 373-4542
 
Shelley Mortara
Broker / Loan Consultant
NMLS #254913
BRE #01159350
 
 
Wendy Wells
Loan Consultant
NMLS #254875
BRE #01432994
 

Northern Sierra Financial Services · BRE #01851459 · NMLS #235599

Nevada County Mortgage, a dba Northern Sierra Financial Services
426 Sutton Way #114
Grass Valley, CA 95945
Office: (530) 274-0916
Fax: (530) 274-7620
Real Estate Broker
Department of Consumer Affairs
Bureau of Real Estate
State of California
(877) 373-4542
 
Shelley Mortara
Broker / Loan Consultant
NMLS #254913
BRE #01159350
 
 
Wendy Wells
Loan Consultant
NMLS #254875
BRE #01432994
 

Northern Sierra Financial Services · BRE #01851459 · NMLS #235599