Q: Do I need to be prequalified before I begin searching for my home?

A: Definitely! If you know that you will be approved prior to your house hunt, the process goes much smoother. The process is simple. To arrange to be prequalified for your purchase, take the following steps:

1. Gather your personal financial information, such as bank statements, W-2 forms, and paycheck stubs.
2. Your City First mortgage professional will pull your credit report and evaluate your financial documents. With this information, you and your City First Loan Officer are able to discuss the best home financing options that will help you achieve your financial goals.
3. To inform both your Realtor and the seller of the property that you a preferred and serious potential buyer, City First will write a prequalification letter for you. This will give any offer you extend on a property more weight. This backing will allow you to relax and enjoy the process of looking for your new home!

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Q: Is it still possible to qualify for a loan even if I have past credit problems?

A: In challenging economic times such as these, a good number of people have found themselves with financial difficulties. These times create opportunities to incorporate valuable lessons in to a person’s financial planning. When the desire to move forward into home ownership sets in, it is often questioned what chances exist for those that have encountered financial problems.

The first distinction that is important to make is the difference between a person with a bad credit experience in the past and a person who is a bad credit risk. There is an important difference.

Lenders' main questions will be along the lines of the following:

1. What was the situation of the financial difficulty? What circumstances caused the specific trouble?
2. What steps did you take to resolve the issue?
3. What measures were taken to prevent the situation from occurring again? Have you reestablished yourself financially? Were the changes that were made the right ones?

If you have encountered more challenging credit problems like bankruptcy and foreclosure, your explanation needs to be more thorough and have much more importance; additionally, the greater the credit problem, the more recovery time is necessary.

Everyone finds themselves in tough financial situations at one point or another, but everyone deserves another chance. Do not allow previous problems intimidate you and prevent you from trying to get a fresh start!

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Q: How do I know what my interest rate will be?

A: You discuss this with your City First Loan Officer who advises you of the rates available for your loan product. You then “lock” the rate with your loan officer.

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Q: How does the Annual Percentage Rate differ from the interest rate?

A: The Annual Percentage Rate is the financing rate calculated with the finance charges over the life of the loan. The interest rate calculates the principal and interest payment for the loan.

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Q: What does my mortgage lender mean by points or origination fee?

A: One point is equal to one percent of the loan amount. Points and origination fees are used to buy down the interest rate. Origination fees help pay the cost for the lender to do the loan.

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Q: When mortgage lenders refer to "PITI" what are they referring to?

A: PITI is principal, interest, taxes, and insurance: the components of a monthly mortgage.

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Q: When my loan officer asks me if I want to waive escrows, what exactly does this mean?

A: When you waive escrows, you take the responsibility of paying your taxes and insurance rather than having them included in your monthly payment. Waiving escrows may raise the interest rate. You can only waive escrows if your loan program allows for this such as conventional loans that have a loan value of 80% or less on your first lien.

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Q: Will I get a copy of my credit report and appraisal?

A: You may obtain a copy of your credit report through the credit bureaus. You will receive a copy of your appraisal at your closing.

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Q: Where do I go for closing?

A: A mobile notary will be sent you your home, work, or place of choosing for you to sign loan documents. You pick the time and place, and we make sure it gets set up!

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Q: Where do I send my first mortgage payment?

A: Refer to your "First Payment Letter" in your closing documents to determine where to send your first mortgage payment. If you receive a statement from your new lender prior to the due date of your first payment, send your payment to the new lender. Otherwise, send your payment to City First, as detailed in your "First Payment Letter." Remember to include your loan number on your check.