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General Mortgage Questions

  1. What is a lock commitment?
  2. When can I lock my rate?
  3. Can I change my loan’s rate or loan program once I have already locked?
  4. What happens to my rate if the loan does not fund within the lock period?
  5. How can I check the interest rates currently being offered?
  6. Who locks my rate?
  7. How long is my rate locked?
  8. Can the rate lock period be increased or decreased after I have selected a rate lock period and locked a rate on my purchase loan?
  9. Other lenders or mortgage brokers have been able to offer a "float down rate option" after I lock in a rate, why don't you?
  10. What are third party fees?
  11. What are closing costs?
  12. Do I have to pay closing costs if I am an existing Provident Funding customer?
  13. What is an escrow/impound account?
  14. When do I have to carry flood insurance?
  15. Do I need an escrow/impound account?
  16. Will I receive a better rate or price by selecting to have an escrow/impound account with my loan?
  17. How long does the loan process take?
  18. Can I choose the appraiser?
  19. Can I receive a copy of the appraisal?
  20. Can I receive a copy of my credit report?
  21. Does Provident Funding charge an upfront fee/deposit?
  22. What is the loan-to-value ratio (LTV)?
  23. What is private mortgage insurance?
  24. Can I select a higher rate in lieu of paying PMI?

1. What is a lock commitment?
A lock commitment is a written agreement between you and the Lender, entitled a Rate Lock Confirmation, which guarantees a specific interest rate at a particular price based on the loan characteristics selected if the loan closes within a set period of time. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><?xml:namespace prefix = o />

2. When can I lock my rate?
On Refinance transactions, after the loan is approved by Lender's Underwriting (AU) system, you may lock your rate with your Loan Originator or with a Mortgage Consultant (MC).

On Purchase transactions, once your application has been submitted and approved by the Lender’s Automated Underwriting (AU) system and you have a fully executed purchased agreement for the house you are buying, you have the option of locking your rate with your Loan Originator.

Once your loan is locked, you must close and fund within that lock period for your rate lock to be guaranteed. When you choose to lock in your rate, you will be provided with a Rate Lock Confirmation via email or fax from your Mortgage Consultant (MC). Your Rate Lock Confirmation will detail the loan terms you have selected.

3. Can I change my loan’s rate or loan program once I have already locked?
If for some reason you want to select another rate on the same or a different loan program, the Lender will accommodate your request. The Lender will use the rate sheet from the day you first locked to determine the price (points/credit) associated with your newly selected rate and/or loan program. Such changes may result in the re-approval of your loan and/or a longer processing time. As a result, if your loan does not fund by the lock expiration date, the lender reserves the right to re-price your interest rate and/or lender origination points/credit.

4. What happens to my rate if the loan does not fund within the lock period?
If your lock commitment expires prior to funding due to delays in our receiving the documentation necessary to approve and fund your loan, your loan will be subject to worse case pricing. Worse Case Pricing is calculated by comparing pricing from the original lock date to current pricing and the selecting the higher of the two.

5. How can I check the interest rates currently being offered?
You can view daily interest rates online at www.njprimemortgage.com/products.aspx or by calling our office where you will be put in contact with a licensed Mortgage Consultant at (732) 823-5503.

6. Who locks my rate?
After the loan is approved by the lender’s Automated Underwriting (AU) system, you may lock your rate online or over the phone with a Mortgage Consultant (MC).

On Refinance transactions, after the loan is approved by the lender’s Automated Underwriting (AU) system, you may lock your rate online or over the phone with a Mortgage Consultant (MC).

On Purchase transactions, once you submit your loan application, your loan is approved by the lender’s Automated Underwriting (AU) system, and you have a fully executed purchase contract for the house you are buying, you have to contact your Mortgage Consultant (MC) to lock your loan.

We will not honor rate lock requests left on voicemail or requested via email as rates are subject to change throughout the day. The rate and price you receive will be based upon the current rate at the time when you speak with your Mortgage Consultant (MC).

7. How long is my rate locked?
Refinance rate locks are valid for 45 or 60 days. The lock period is dependent on the type of loan transaction. For more details please consult your Mortgage Consultant 732-823-5503.

Purchase rate locks are valid for 30, 45 or 60 days, depending on the rate lock period selected at the time of locking.

8. Can the rate lock period be increased or decreased after I have selected a rate lock period and locked a rate on my purchase loan?
Your rate lock period may be extended; however, you will be subject to Worse Case Pricing. Worse Case Pricing is calculated by comparing pricing from the original lock date to current pricing and then selecting the higher of the two.

9. Other lenders or mortgage brokers have been able to offer a "float down rate option" after I lock in a rate, why don't you?
Lenders and mortgage brokers who offer a "float down rate option" often do not offer the best possible price initially, or may cancel their rate lock with the initial investor/lender and lock in with a new lender when rates fall. This practice increases rates for the entire industry because locked loans that do not fund cost lenders a lot of money. Some of our lender’s business model is designed to offer you the best possible price every day and that is why we do not offer a "float down rate option". And in cases where we work with other lenders who allows rate float down usually their initial rates are higher than the lenders who do not offer rate float down. So you decide how you want to proceed and discuss this option with us 732-823-5503.

10. What are third party fees?
Third party fees are any fees associated with the loan that are charged by parties other than the lender and the broker. Generally, third party fees may include appraisal fees, title and closing fees, notary fees, recording fees, delivery/courier fees, or transfer taxes.

11. What are closing costs?
Closing costs are expenses incurred by borrowers (and sellers in the case of purchase transactions) when obtaining a new mortgage loan and transferring property. Non-Recurring Closing Costs (NRCC’s) are costs that are only charged in connection with obtaining a new mortgage loan. Examples of NRCC’s would include: origination fee, title insurance fee, settlement agent fee, notary fee, commitment/administration fee, or appraisal fee. Recurring Closing Costs include costs that not only may be charged in connection with obtaining a new mortgage loan, but are also charged on an ongoing basis. Examples of Recurring Closing Cost would include; prepaid interest, property taxes and hazard insurance. Other fees may be included depending on the transaction or generally accepted charges in your property state.

12. Do I have to pay closing costs if I am an existing NJ Prime Mortgage customer?
Yes, closing costs have to be paid on all loans. However, depending on your loan terms and the selected loan program, NJ Prime Mortgage may pay for some or all of your closing costs in exchange for selecting a higher interest rate.

13. What is an escrow/impound account?
This is an account established with the lender to pay your property taxes, homeowner’s insurance, flood insurance (if required) and mortgage insurance (if required) when they become due. If you have an escrow/impound account, then your regular monthly mortgage payment will include principal, interest and an escrow payment. Your escrow payment is based on 1/12th of the annual estimated payments for your property taxes, homeowner’s insurance, flood insurance (if required) and mortgage insurance (if required).

14. When do I have to carry flood insurance?
If your property lies within Flood Zone "A" or "V", federal law (FEMA) requires you to maintain and provide proof of flood insurance coverage. The Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 prohibit Federal agency lenders from originating home loans in Flood Zone "A" or "V" unless flood insurance has been purchased by the homeowner and is maintained during the term of the loan.

15. Do I need an escrow/impound account?
Most lenders requires an escrow/impound account; call us to discuss some other alternatives.  

16. Will I receive a better rate or price by electing to have an escrow/impound account with my loan?
Yes, most lender will give you better rate.

17. How long does the loan process take?
The loan process varies based upon current market conditions, the program you select and the state in which the property is located. The process generally can take as few as 15 days or as long as 60 days.

18. Can I choose the appraiser?
No the lenders does not allow customers or the brokers to choose their own appraiser. The lender will order all required appraisal services from one of national appraisal vendors to insure a quality product is provided at a competitive price.

19. Can I receive a copy of the appraisal?
Yes. Once the appraisal is complete a copy will be emailed to you directly.

20. Can I receive a copy of my credit report?
Yes. You can receive a copy of your credit report by your credit reporting agency (CRA).

21. Do you charge an upfront fee/deposit?
Yes we do charge a $495 upfront deposit when we lock your rate. The upfront deposit will be refunded when the loan is closed.

22. What is the loan-to-value ratio (LTV)?
LTV is a ratio that is determined by comparing the loan amount against the value of the property or the sales price, whichever is less. The loan-to-value ratio (LTV) is one consideration in qualifying you for a loan. To calculate the LTV, divide the amount you are borrowing by the value of the subject property or the purchase price, whichever is less. For example, if you are purchasing a property that is selling and appraising for $200,000 and you would like to borrow $100,000, the LTV is 50%.

23. What is private mortgage insurance (PMI)?
Private mortgage insurance (PMI) is a type of insurance that protects the lender in the event a borrower does not make their payments in a timely manner, resulting in loan default and potentially foreclosure. On most loan programs, PMI is required if the loan-to-value ratio is greater than 80 percent.

24. Can I select a higher rate in lieu of paying PMI?
All lenders does not allow this just call our Mortgage Professional to discuss this option.