Mortgage Frequently Asked Questions
What is an escrow account for mortgage holders?Escrow generally refers to money held by a third-party on behalf of transacting parties. The escrow account is separate from the mortgage account where deposit of funds occurs for payment of certain required conditions such as state and local property taxes and insurance (e.g. homeowners and flood).
Many mortgages are set-up so that the monthly payment includes a dollar amount to keep your escrow account properly funded to pay estimated annual costs of your property taxes and mortgage related insurances. Keep in mind that the amount needed in your escrow account can change year to year (even if you have a fixed rate loan) if GMFS is informed of changes in tax assessments of your property (state or local) and/or changes to your homeowner or flood insurance policy rates.
For more info please visit the GMFS Mortgage Customer Service site.
Why did my monthly mortgage payment increase?If your monthly mortgage payment goes up unexpectedly, such as with a fixed rate loan, it is typically due to a change regarding your escrow account used by GMFS to pay estimated annual costs of your required state and local property taxes, as well as, mortgage related insurances (e.g. homeowners and flood).
Around the beginning of a new calendar year, GMFS gets informed by state and local governments of any changes to your property tax assessments. In addition, your homeowners insurance and/or flood insurance vendors may notify GMFS of changes to your annual policy rates. Once updated, we may then have to adjust your monthly payments to ensure that there will be enough money in your escrow account to pay last year’s or next year’s taxes and insurances.
Your mortgage statement will show the different costs that are covered by your monthly mortgage payments (e.g. mortgage insurance or “MI” which protects the lender against default, property taxes, insurances, etc.)
For more info please visit the GMFS Mortgage Customer Service site.
Where can I find Customer Service related information such as phone numbers, addresses, payment info, etc?For more info please visit the GMFS Mortgage Customer Service site.
What is the difference between getting preapproved and prequalified for a mortgage?Getting preapproved for a home loan requires more documentation, verification and time than a mortgage prequalification process. Getting a mortgage prequalification is a simpler process than getting a home loan preapproval and yet still demonstrates you are serious about buying a home to both realtors and sellers. Learn more about the difference between being pre-approved for a mortgage vs. pre-qualified for a mortgage.
Wondering if you're qualified to become a homeowner?There are a range of home loan programs with varying minimum qualifications and features such as low to zero minimum down payment. Depending on your goals, you more than likely qualify for at least one of the home purchase products. If not, our skilled Loan Officers can help you with a game plan to get qualified in the near future. You are probably closer than you think. Get Started with a free, no obligation consultation with an experienced GMFS Mortgage Loan Officer.
What do I need to know about my credit score and how do I check it?Your credit score is one of the key factors in determining what type of mortgage and interest rate you qualify for. Of course, the higher your score the lower rate and more options that you may have. However, there are lots of programs available where lower credits scores are acceptable and you can accomplish your dream of home ownership. Some of these options even offer very little or no down payment.
You are entitled to order a free copy of your credit report every 12 months from each of the major credit reporting agencies (Equifax, Experian, and TransUnion) through www.AnnualCreditReport.com. This site is the only one that is government authorized to provide you with FREE copies of your credit report. Dispute any errors on your credit report and get them resolved as quickly as possible. Also, do not open any new accounts within at least six months of applying for a mortgage.
You can also contact the credit agencies directly if you need to dispute information in your report, place a fraud alert or security freeze on your credit file, or have other questions:
- Equifax.com or by phone at 1-866-349-5191
- Experian.com or by phone at 1-888-397-3742
- TransUnion.com or by phone at 1-800-916-8800
For more tips about building or improving your credit, Get Started with GMFS Mortgage.
How much do I need for a down payment?Several home loan programs now have minimum down payment options ranging from 0%-3% of your loan amount. Keep in mind, the total cost of your financing decreases as your down payment amount increases. You should also know that for down payments of less than 20% on conventional home loans, private mortgage insurance (PMI) will be required.
That being said, there are circumstances when the lower down payment options make sense as well. Your GMFS Mortgage Loan Officer can review the best options for your situation and also let you know if there are any homebuyer assistance programs featuring non-repayable grants, available in your area that you qualify for. Get Started
How does student loan debt affect your ability to become a homeownerHaving student loan debt does not automatically preclude you from qualifying for a home loan. As with any financing, your Debt-to-Income (DTI) Ratio is a significant factor in qualifying for a loan. Certain home loan programs weigh student loan debt differently when calculating your DTI. Your GMFS Mortgage Loan Officer can review the best options for your situation. Get Started
How does GMFS Mortgage handle pre-payment penalties?GMFS Mortgage does not charge pre-payment penalties on our home loans.
How do I know how much home I can afford?You can contact us for a free consultation or use our complimentary mortgage calculators to help you determine how much home you can afford and more.
What documents will I need to apply for a mortgage?Please visit our Loan Documents page for more information, including a downloadable PDF of commonly requested home loan documents.
What is PMI (Private Mortgage Insurance) and can it be cancelled?If you make a downpayment of less than 20% or are refinancing your first mortgage with less than 20% equity, you will be required to have PMI (Private Mortgage Insurance). This insurance premium is typically included in your monthly mortgage payment. The PMI policy protects the mortgage lender if the borrower does not repay (defaults) the mortgage. More details about removing or cancelling PMI.
What will my mortgage interest rate be?Interest rates for home loans are based on a variety of factors such as the loan purpose, your credit history and ability to repay, the value of the collateral and the loan amount. Mortgage rates also vary daily and sometimes hourly based on market conditions.
Should I choose a fixed or adjustable interest rate?A fixed-rate mortgage is typical for homebuyers who plan on staying in the home for more than seven years. A fixed-rate mortgage offers predictable payments and long-term protection against rising interest rates.
An adjustable-rate mortgage (ARM) is attractive to homebuyers who plan on staying in the home for seven years or less. With an ARM, your monthly payments have the potential to fluctuate each time your interest rate changes.
GMFs Mortgage Calculator: Which is better: fixed or adjustable?
What is the difference between a “locked” rate and a “floating” rate?A rate lock “locks in” your interest rate for a period of time. Rate locks are typically available for 30, 45, or 60 days, in which your rate will not change.
A floating rate moves up and down with the rest of the market. Please note, the interest rate on your Loan Estimate is not a guarantee. If there are changes in your application—including your loan amount, credit score, or verified income—your rate and terms will most likely change too. In those situations, you will receive a revised Loan Estimate.
What are the benefits of refinancing my home?Refinancing is attractive to homeowners who are interested in paying off high-interest-rate debt, shortening their length of repayment term or lowering their monthly mortgage payment.
Here are some typical scenarios when refinancing with GMFS Mortgage may make sense:
- Mortgage interest rates are falling
- Your home has significantly appreciated in market value
- You’ve been making payments on your original 30-year mortgage for less than ten years
- You have equity in your home and need to consolidate debt or need additional cash
Note: If you refinance your existing loan, your total finance charges may be higher over the life of the loan.
Do I need to have my house appraised in order to refinance?Typically, yes. However, depending on your circumstances, an appraisal may not be required.
What are the benefits of construction and renovation loans?If you’re interested in building, remodeling or repairing a home, you will not need to take a second mortgage or come up with additional capital. You will be able to begin construction on the new home immediately after closing on a loan.
- You can borrow based on the expected value of the upgraded home.
- Typically, your interest rate will be lower and you’ll have a longer period of time to repay the loan.
- The interest, including cost for renovation, is tax deductible.
GMFS Mortgage Construction & Renovation Loans
What if I have an insurance claim for damages to my home?Because your home serves as the collateral for your mortgage until the loan balance is paid off in full, your mortgage lender should always be made aware of any damage to your home that effects the value. Your mortgage lender should be also be a co-payee on any insurance claim check related to repairing your home (e.g. due to damage from fire, flood, wind, etc.). Mortgage loan programs have specific guidelines for the process mortgage lenders must follow to ensure that insurance claim check proceeds are actually used to restore the home and it’s value in a timely manner.