If you are like most homebuyers, you have many questions when it comes to buying, building or refinancing a home.
Below you'll find answers to many of our frequently asked questions. Don't see your question here? Simply contact your local SCBT mortgage lender today. We are happy to help answer any and all questions you may have.
Why should I buy, instead of rent?
A home is an investment. When you rent, you write your monthly check and that money is gone forever. When you own your home, you can deduct the cost of your mortgage loan interest from your federal income taxes and usually from your state taxes. This will save you money each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may increase over the years. Finally, you’ll enjoy having something that’s all yours - a home with your own personal style!
How much cash will I need for closing costs?
Closing costs generally range from 2% to 3% of your loan amount. Closing costs can be divided into three main categories:
- Lender fees. Fees can include origination, points, credit report, and appraisal.
- Third-party fees. These fees vary by state and the attorney you select to close your loan. They can include attorney’s fees for closing, title exam, title insurance and recording.
- Pre-paid items. These are items collected at the time of closing but are not really considered costs including interim interest, taxes, and hazard insurance.
You will be provided with an estimate of your closing costs soon after your application has been received. These estimates could change if you change the product type or loan amount.
How much home can I afford?
The home you can afford is based on the amount of mortgage loan you can comfortably support. Generally, the amount of mortgage you qualify for is based on three factors:
- Your monthly payments as a percentage of income.
- How much cash you have for the down payment and closing costs.
- Your credit history.
Should I consider prequalification for a mortgage before I shop for a home?
Getting prequalified for your mortgage is an important step before you shop for a home. It tells you how much home you can buy and makes applying for your mortgage easier. A mortgage prequalification can also give you additional leverage with a seller in negotiating the best possible terms of the sale.
What types of mortgages are available?
- Fixed-rate mortgage. You pay the same interest rate and same monthly payment of principal and interest for the duration of the mortgage. The most common terms are 30, 20 and 15 years. Fixed-rate mortgages are best if you plan on being in your home for a while.
- Adjustable-rate mortgage (ARM). The interest rate stays fixed for an initial interest rate period, which ranges from 1 to 10 years. The rate will adjust up or down annually for the life of the loan based on a specified index. An ARM is a good option if you believe interest rates will go down over the next few years or if you plan on staying in your home 5 to 7 years or less.
What are the benefits of a 15-year mortgage?
A 15-year mortgage allows you to own your home in half the time of a conventional mortgage with a 30-year term. Although payments are higher with a 15-year mortgage, you will save thousands of dollars in interest and build equity faster.
Are there any special programs for first-time home buyers?
We offer special mortgage programs for individuals who meet certain income requirements, who are financing property in certain census tracts, or who meet other special requirements. We participate in special loan programs throughout the state and USDA Rural Housing Loans. Benefits include:
- Lower down payments than most other financing options so you will not need as much cash to buy a home.
- Competitive interest rates.
- Reduced closing costs and mortgage loan fees.
- Other restrictions may apply.
How can I lock my interest rate?
You must complete a full mortgage application in order to lock a rate. You can work with your loan originator to discuss your mortgage options. He or she will also help you complete the application and lock in a rate when you are ready.
What is an escrow account?
In addition to the principal and interest payment on your mortgage loan, you may elect to impound additional funds each month in an escrow account to pay for property taxes and insurance (or private mortgage insurance). With some mortgage programs, impounding for taxes and insurance may be required.
Having an escrow account allows you to put aside a small portion each month toward the costs of insurance and property taxes. You send the additional funds each month when you make your mortgage payment. We hold the money in an escrow account and make the payments from the account when they are due.
What should I expect at closing?
Basically, you will sit at a table with your realtor, the realtor for the seller, probably the seller, and an attorney. The attorney will have a stack of papers for you and the seller to sign. While he or she will give you a basic explanation of each paper, you may want to take the time to read each one and/or consult with your agent to make sure you know exactly what you are signing. Before you go to closing, we will give you a booklet explaining the closing costs, a “good faith estimate” of how much cash you will have to supply at closing, and a list of documents you will need at closing. If you are required to bring funds to closing, make sure you contact the attorney’s office for the exact amount and bring a certified check.
What is NMLS?
The Nationwide Mortgage Licensing System and Registry (NMLS) is the legal system of record for licensing in all participating states, the District of Columbia and U.S. Territories. In these jurisdictions, NMLS is the official and sole system for companies and individuals seeking to apply for, amend, renew and surrender licenses managed in the NMLS on behalf of the jurisdiction’s governmental agencies. NMLS itself does not grant or deny license authority.