 |
| What is mortgage insurance? |
|
| Mortgage insurance, also known as PMI, is insurance that protects the lender from losses when a mortgage with a low down payment defaults. A low down payment is usually defined as less than 20% of the purchase price or appraised value, whichever is less.
|
|
| What are closing costs? |
|
| Closing costs are money paid by the borrower in connection with the closing of a mortgage loan. Depending on the specific loan, this may include an origination fee, discount points, appraisal, credit report, title insurance, attorney's fees, survey, and pre-paid items such as tax and insurance payments.
|
|
| How can I estimate my closing costs? |
|
| Closing costs are different from case to case. Generally, these costs are estimated between 3% and 6% of the sales price of your new home.
|
|
| At what point do I need to obtain a hazard (homeowner's) insurance policy? |
|
| At least five (5) business days prior to closing you need to provide Sovereign Bank with a copy of the "Declaration Page" of your hazard (also known as homeowner's) insurance policy that insures the subject property from the day prior to your closing. You will also need to provide evidence of payment in full of the policy premium for at least one year.
|
|
| What information do I need to include on the mortgage holder's line of my hazard (homeowner's) insurance policy? |
|
Sovereign Bank, ISAOA ATIMA
PO Box 628
Amelia, OH 45102
|
|
| What is a flood certification? |
|
| Sovereign Mortgage is required to obtain a flood certification on all loans secured by residential real estate. A flood certification indicates if the subject property is located within a designated flood zone. If the subject property is located within a flood zone, the borrower must obtain flood insurance.
|
|
| Does Sovereign Mortgage® offer construction loans? |
|
| We offer a variety of lending options that meet the unique needs associated with building a home, with interest-only payments during the construction period. Your loan will automatically roll into a mortgage upon completion of your home. Email us or call any one of our offices for more information.
|
|
| How can I get a copy of my credit report? |
|
| To obtain a copy of your credit report visit annualcreditreport.com or call 1-877-322-8228. The law allows you to order one free copy of your report from each of the nationwide consumer reporting companies every 12 months. Reviewing your credit report prior to applying for a mortgage will give you the opportunity to identify and resolve any credit issues or discrepancies.
|
|
| How quickly can I be pre-qualified for a mortgage loan? |
|
| After providing a Sovereign Mortgage loan representative with all of the necessary information, you will receive an answer within a few minutes.
|
|
| What is a Reverse Mortgage? |
|
| A Reverse Mortgage is not for everyone, but in the right circumstances provides the opportunity for senior citizens to remain in their homes and convert equity into income. Borrowers retain ownership of the property without making any monthly payments. |
|
| Who is eligible for a Reverse Mortgage? |
|
-
All borrowers must be 62 or older. If the home is jointly owned, both borrowers must be at least 62.
- There must be equity in the home.
- There are no income or credit qualifications.
- All applicants are required to participate in HUD-approved counseling to learn more about Reverse Mortgages.
- Loans are on the borrower's primary residence only. A primary residence is defined as where the borrower lives 51% of the time and where they file tax returns and the state their driver's license is from.
|
|
| How much money can the borrower receive with a Reverse Mortgage? |
|
- The amount will vary from borrower to borrower depending on age, appraised value of the home, the amount of equity in the home, and current interest rates. For the Home Equity Conversion Mortgage, the loan amount is also capped at the HUD mortgage limit for the property's location.
- The funds can be received as a lump sum of cash, regular monthly payments, a line of credit to draw on as needed, or any combination of these.
- No monthly payments are required during the life of the loan.
|
|
| Is there any restriction on how the Reverse Mortgage funds are used? |
|
- No, the funds can be used to reduce debt, make repairs or renovations, take care of medical expenses, or pay for daily living expenses.
- Consult your tax advisor, but in most cases, the money is tax free.
|
|
| How much does a Reverse Mortgage cost? |
|
- There will be interest charges, origination fees, closing costs, an appraisal, and insurance.
- Closing costs and fees can be financed as part of the loan.
- Borrowers must still pay their property taxes and homeowners' insurance.
|
|
| When is the Reverse Mortgage due? |
|
- The loan matures when all borrowers no longer occupy the home as a primary residence. Typically, this occurs upon the sale of the home, when the owners move permanently, or when they pass away.
- When the loan is due, the heirs can either repay the loan and keep the home or sell the home and repay the loan.
|
|
| When is a Reverse Mortgage not beneficial? |
|
- If the borrowers plan to sell the home or move in the next few years. This is because the fees are typically rolled into the loan amount.
- If the borrowers want to leave their home to their children free and clear.
|
|
| What are some other sources of information on Reverse Mortgages? |
|
- Sovereign Bank Reverse Mortgage Specialists have received specialized training in order to assist customers with Reverse Mortgages.
- The AARP Website is a good source of information.
|
Equal Housing Lender - Member FDIC
Printer-friendly format
