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Mortgage FAQs

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Questions About Your Application

Can I apply for a loan before I find a property to purchase?

Yes, getting pre-approved before you start shopping for a home may be the best thing you can do! Most realtors will not show you a house without evidence that you have been pre-approved. You can quickly and easily apply online or call one of our experienced Mortgage Officers directly to get your pre-qualification.

Once you find your perfect home, simply contact your Mortgage Officer and they can help you with the next steps.

Will I be charged any fees if I authorize my credit information to be accessed?

TEG does not charge any upfront fees to get pre-qualified.

Can I really borrow funds to use towards my down payment?

Yes, you can borrow funds to use as your down payment! However, any loans that you take out must be secured by an asset that you own, and you will be required to provide documentation to show the value and ownership of the asset.

The payment of any loan that you may take out, with the exception of a loan secured by your financial asset (ex: 401k or Retirement Account) will need to be taken into consideration when qualifying you for the mortgage.

Funds from a personal loan or cash advance are not an acceptable source of funds for downpayment or closing costs.

How do you decide what you need from me to process my loan?

We take full advantage of an automated underwriting system that allows us to request as little information as possible to verify the data you provided during your loan application. Gone are the days when it was necessary to verify every piece of data collected during the application. The automated underwriting system compares your financial situation with statistical data from millions of other homeowners and uses that comparison to determine the level of verification needed. In many cases, a single W-2 or pay stub can be used to verify your income or a single bank statement can be used to verify the assets needed to close your loan.

I’m self-employed. How will you verify my income?

The income of self-employed borrowers is verified by obtaining copies of personal and business federal tax returns. Depending on your loan program and how long you have been self-employed, tax returns for the most recent year(s) will be needed.

We’ll review your tax returns to determine the net income from self-employment to determine qualification.

Will my overtime, commission, or bonus income be considered when evaluating my application?

In order for bonus, overtime, or commission income to be considered, you must have a history of receiving it and it must be likely to continue. We need to obtain copies of year-end pay stubs for the previous two years and a recent pay stub to verify this type of income. If you don’t have access to your year-end pay stubs, we will verify this directly with your employer. We’ll review to determine the consistency and stability of the income to determine what can be used as qualifying income.

If you haven’t been receiving bonus, overtime, or commission income for at least two years, it probably can’t be used for qualification but may be considered as a compensating factor.

I am retired and my income is from pension or social security. What will I need to provide?

We will ask for verification of receipt, including copies of your bank statements, most recent pension award statement, 1099-R or similar to verify. Sometimes it will also be necessary to verify that this income will continue for at least three years since some pension or retirement plans do not provide income for life. This can usually be verified with a copy of your award letter. If you don’t have an award letter, we can contact the source of this income directly for verification.

If any of your retirement is tax free, we will need a copy of your tax return so that we can”gross up” that income to account for the fact that you do not have to pay taxes on it.

If I have income that’s not reported on my tax return, can it be considered?

Generally, only income that is reported on your tax return can be considered when applying for a mortgage. Unless, of course, the income is legally tax-free and isn’t required to be reported.

If you are self-employed, you may be able to qualify for a mortgage using business or personal bank statements for qualification. These speciality programs require larger downpayments and offer interest rates that are higher than conventional mortgage rates. Speak to your Mortgage Officer to see if this option is appropriate for your situation.

How will rental income be verified?

If you own rental properties, we will need the most recent year’s federal tax return to verify rental income. We’ll review the Schedule E of the tax return to verify your qualifying rental income after all expenses except depreciation. Since depreciation is only a paper loss, it won’t be counted against your rental income. If you haven’t owned the rental property for a complete tax year, we’ll ask for a copy of any leases you’ve executed and proof of receipt of rent for the last two months, and we’ll estimate the expenses of ownership.

I have income from dividends and/or interest. What documents will I need to provide?

Generally, two years personal tax returns are required to verify the amount of your dividend and/or interest income so that an average of the amounts you receive can be calculated. In addition, we will need to verify your ownership of the assets that generate the income using copies of statements from your financial institution, brokerage statements, stock certificates or Promissory Notes.

Typically, income from dividends and/or interest must be expected to continue for at least three years to be considered as qualifying income.

Do I have to provide information about my child support, alimony, or separate maintenance income?

Information about child support, alimony, or separate maintenance income does not need to be provided unless you wish to have it considered for repaying this mortgage loan.

Will my second job income be considered?

Typically, income from a second job will be considered if a two-year history of secondary employment with stable or increasing incoming can be verified.

I’ve had a few employers in the last few years. Will that affect my ability to get a new mortgage?

Having changed employers frequently is typically not a hindrance to obtaining a new mortgage loan. This is particularly true if you made employment changes without having periods of time in between without employment. We’ll also look at your income advancements as you have changed employment.

If you’re paid on a commission basis, a recent job change may be an issue since we’ll have a difficult time of predicting your earnings without a history with your new employer.

If you are contemplating making any changes to your employment while your mortgage is in process, please discuss this with you Mortgage Officer prior to changing employers.

I was in school before obtaining my current job. How do I complete the application?

If you were in school before your current job, enter the name of the school you attended and the length of time you were in school in the “length of employment” fields. You can enter a position of “student” and income of “0.” You may need to provide a copy of your transcript for verification.

If my property’s appraised value is more than the purchase price can I use the difference towards my down payment?

Unfortunately, if you are purchasing a home, we’ll have to use the lower of the appraised value or the sales price to determine your down payment requirement.

It’s still a great benefit for your financial situation if you are able to purchase a home for less than the appraised value.

I’m getting a gift from someone else. Is this an acceptable source of my down payment?

Gifts are an acceptable source of down payment if the gift giver is related to you or your co-borrower. We’ll ask you for the name, address, and phone number of the gift giver, as well as the donor’s relationship to you. Donor ability may also need to be verified. Depending on your loan program, you may need to verify you have some of your own funds in the transaction. Gifts are not allowed for investment properties.

Prior to closing, we’ll verify that the gift funds have been transferred to you by obtaining a copy of your bank receipt or deposit slip to verify that you have deposited the gift funds into your account.

I am selling my current home to purchase this home. What type of documentation will be required?

If you’re selling your current home to purchase your new home, we’ll ask you to provide a copy of the settlement or closing statement you’ll receive at the closing to verify that your current mortgage has been paid in full and that you’ll have sufficient funds for our closing. Often the closing of your current home is scheduled for the same day as the closing of your new home. We will need the executed purchase contract so we can estimate net proceeds, with settlement of closing statement prior to funding.

I am relocating because I have accepted a new job that I haven’t started yet. How should I complete the application?

Congratulations on your new job! If you will be working for the same employer, complete the application as such but enter the income you anticipate you’ll be receiving at your new location.

If your employment is with a new employer, complete the application as if this were your current employer and indicate that you have been there for one month. The information about the employment you’ll be leaving should be entered as a previous employer. We’ll sort out the details after you submit your loan for approval.

I’ve co-signed a loan for another person. Should I include that debt here?

Generally, a co-signed debt is considered when determining your qualifications for a mortgage. If the co-signed debt doesn’t affect your ability to obtain a new mortgage, we’ll leave it at that. However, if it does make a difference, we may be able to exclude the monthly payment of the co-signed debt if you can provide verification that the other person responsible for the debt has made the required payments, by obtaining copies of their canceled checks for the last twelve months with no late payments.

I have student loans that aren’t in repayment yet. Should I show them as installment debts?

Yes. All student loans, whether they are in repayments or not, are considered installment debts. If the monthly payment reporting on credit is “0”, you will be qualified using an estimated payment, generally .5% of the balance, unless documentation of a different current payment amount greater than “0” is provided.

How will a past bankruptcy or foreclosure affect my ability to obtain a new mortgage?

If you’ve had a bankruptcy or foreclosure in the past seven years, it may affect your ability to get a new mortgage. The amount of time since the bankruptcy or foreclosure may limit the loan programs you are eligible for. Generally, a minimum of two years since bankruptcy or 3 years since forclosure is required though, if due to extenuating circumstances, a shorter timeframe may be possible. It is also important that you’ve re-established an acceptable credit history with new loans or credit cards. Speak to your Mortgage Officer about your individual situation to see what options are available.

What, exactly, is an installment debt?

An installment debt is a loan that you make payments on, such as an Auto Loan, a Student Loan or a Debt Consolidation Loan. Do not include payments on other living expenses, such as insurance costs or medical bill payments. We’ll include any installment debts that have more than 10 months remaining when determining your qualifications for this mortgage.

Questions About Your Closing and Beyond

What happens at the loan closing?

The closing will take place at the office of a title company or attorney in your area who will act as our agent. If you are purchasing a new home, the seller may also be at the closing to transfer ownership to you.

You will be receiving a preliminary copy of your Closing Disclosure (CD) at least 3 business days before consummation which sums up the terms of your loan and what you pay at closing. If you have any questions regarding these documents, you may speak with your TEG Closer, your Mortgage Officer or your attorney.

During the closing you will be reviewing and signing your loan documents.
The most important documents you will be signing at the closing include:

Note: This is the document you sign to agree to repay your mortgage. The note includes the details of your loan including the amount borrowed, the interest rate, the payment amount, the term and any penalties that may be assessed.

Mortgage / Deed of Trust: This document gives the lender a security interest in the property being used as collateral for the loan. This document gives the lender the right to foreclose if you fail to make the payments or violate the loan contract. In some states, the document is called a Deed of Trust instead of a Mortgage.

If you are refinancing your primary residence, Federal Law requires that you have three (3) business days to cancel or rescind the mortgage if you change your mind for any reason. This means that the loan funds won’t be disbursed until the fourth business day.

Will I need to have an attorney represent me at closing?

In New York, it is typical for borrowers who are purchasing a house to be represented by an attorney, though it is not required. In other areas, attorneys are not as common at a real estate closing though you always have the option to hire an attorney to represent your interests in the transaction if you prefer.

Can I get advanced copies of the documents I will be signing at closing?

At least three days prior to closing you will receive the initial closing disclosure which summarizes the details and closing costs associated with your transaction.

If you would like to receive a full copy of the closing documents to review in advance, please request them from your attorney, settlement agent or TEG Closer.

Who will be at the closing?

The settlement agent will represent TEG and will attend the closing. In addtion, a title representative will be present.

If this is for a purchase transaction, the seller(s) and seller’s attorney, along with the realtors, may attend.

I won’t be able to attend the closing. What other options are there?

If you won’t be able to attend the loan closing, a power of attorney will need to be approved and executed in advance. Please let us know as soon as possible if you anticipate a hardship with personally attending so that we can plan accordingly.

If I apply, where will the closing take place?

We use a network of settlement agents and attorneys to conduct our closings. Closings typically occur at the office of the settlement agent.

Can I make my monthly payments with an automated debit from my checking account?

Automated monthly payments are available and can be set up through Mortgage Servicing post-closing.

Questions About Your Credit Score

What is a credit score and how will my credit score affect my application?

A credit score is one of the pieces of information that we’ll use to evaluate your application.

Credit scores are based on information reported each month by your creditors to the credit bureaus. Credit scoring algorithms are used to compare your credit history with millions of other consumers. There are different models used depending on the type of loan applied for. This is why the credit score your mortgage lender uses may be different than the credit score obtained when applying for an auto loan.

Some of the things that affect your credit score includes your payment history, the length of the time you have had outstanding credit, the types of credit you use, the number of inquiries that have been made about your credit history in the recent past past and your credit utilization. Credit utilization considers the percent of available credit lines used in reference to the credit limit. Payments received 30 days or more after the due date may be reported as late to the credit bureaus.

Credit scores used for mortgage loan decisions range from approximately 300 to 900. Generally, the higher your credit score, the lower the risk that your payments won’t be paid as agreed.

Using credit scores allows us to quickly and objectively evalute your credit history when reviewing your loan application. However, there are many other factors when making a loan decision and we never evaluate an application without looking at the total financial picture of a member.

Will the inquiry about my credit affect my credit score?

An abundance of credit inquiries can sometimes affect your credit scores since it may indicate that your use of credit is increasing.

The data used to calculate your credit score doesn’t include any mortgage or auto loan credit inquiries that are made within the 30 days prior to the score being calculated. In addition, all mortgage inquiries made in any 14-day period are always considered one inquiry. Don’t limit your mortgage shopping for fear of the effect on your credit score.

What if my credit is less than perfect?

Every situation is different. Sitting down with one of our Mortgage Officers to review your credit will allow them to help determine what options are available. If you are not currently eligible for a mortgage, we can help you come up with a plan to help improve your credit score.

Questions About Loan Programs, Rates and Fees

How are interest rates determined?

Interest rates fluctuate based on a variety of factors, including inflation, the pace of economic growth, and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will almost always lead to low interest rates, while concerns about rising inflation normally cause interest rates to increase. Our nation’s central bank, the Federal Reserve, implements policies designed to keep inflation and interest rates relatively low and stable.

What is an Adjustable-Rate

An Adjustable-Rate Mortgage, or an “ARM” as they are commonly called, is a loan type that offers a lower initial interest rate than most fixed rate loans. The tradeoff is that the interest rate can change periodically, usually in relation to an index, and the monthly payment will go up or down accordingly. Against the advantage of the lower payment at the beginning of the loan, you should weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. It’s a trade-off. You get a lower rate with an ARM in exchange for assuming more risk. For many people in a variety of situations, an ARM is the right mortgage choice, particularly if your income is likely to increase in the future or if you only plan on being in the home for three to five years.

Here’s some detailed information explaining how ARM’s work:

Adjustment Period

With most ARMs, the interest rate and monthly payment are fixed for an initial time period such as one year, three years, five years, or seven years. After the initial fixed period, the interest rate can change every year. For example, one of our most popular adjustable rate mortgages is a five-year ARM. The interest rate will not change for the first five years (the initial adjustment period) but can change every year after the first five years.

Index

Our ARM interest rate changes are tied to changes in an index rate. Using an index to determine future rate adjustments provides you with assurance that rate adjustments will be based on actual market conditions at the time of the adjustment. The current value of most indices is published weekly in the Wall Street Journal. If the index rate moves up so does your mortgage interest rate, and you will probably have to make a higher monthly payment. On the other hand, if the index rate goes down your monthly payment may decrease.

Margin

To determine the interest rate on an ARM, we’ll add a pre-disclosed amount to the index called the “margin.” If you’re still shopping, comparing one lender’s margin to another’s can be more important than comparing the initial interest rate, since it will be used to calculate the interest rate you will pay in the future.

Interest-Rate Caps

An interest-rate cap places a limit on the amount your interest rate can increase or decrease.

There are two types of caps:

1. Periodic or adjustment caps, which limit the interest rate increase or decrease from one adjustment period to the next.
2. Overall or lifetime caps, which limit the interest rate increase over the life of the loan.

As you can imagine, interest rate caps are very important since no one knows what can happen in the future. All of the ARMs we offer have both adjustment and lifetime caps. Please see each product description for full details.

Negative Amortization

“Negative Amortization” occurs when your monthly payment changes to an amount less than the amount required to pay interest due. If a loan has negative amortization, you might end up owing more than you originally borrowed. None of the ARMs we offer allow for negative amortization.

Prepayment Penalties

Some lenders may require you to pay special fees or penalties if you pay off the ARM early. We never charge a penalty for prepayment. Contact a Loan Officer Selecting a mortgage may be the most important financial decision you will make and you are entitled to all the information you need to make the right decision. Don’t hesitate to contact a Loan Officer if you have questions about the features of our adjustable rate mortgages.

Should I pay discount points in exchange for a lower interest rate?

Discount points are considered a form of interest. Each point is equal to one percent of the loan amount. You pay them, up front, at your loan closing in exchange for a lower interest rate over the life of your loan. This means more money will be required at closing, however, you will have lower monthly payments over the term of your loan. To determine whether it makes sense for you to pay discount points, you should compare the cost of the discount points to the monthly payments savings created by the lower interest rate. Divide the total cost of the discount points by the savings in each monthly payment. This calculation provides the number of payments you’ll make before you actually begin to save money by paying discount points. If the number of months it will take to recoup the discount points is longer than you plan on having this mortgage, you should consider the loan program option that doesn’t require discount points to be paid. If you’d prefer not to make this calculation the “old-fashioned way,” we have a discount points calculator!

Is comparing APRs the best way to decide which lender has the lowest rates and fees?

The Federal Truth in Lending law requires that all financial institutions disclose the APR when they advertise a rate. The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all, closing fees are included in the APR calculation. These fees in addition to the interest rate determine the estimated cost of financing over the full term of the loan. Since most people do not keep the mortgage for the entire loan term, it may be misleading to spread the effect of some of these up front costs over the entire loan term. Also, unfortunately, the APR doesn’t include all the closing fees and lenders are allowed to interpret which fees they include. Fees for things like appraisals, title work, and document preparation are not included even though you’ll probably have to pay them. For adjustable rate mortgages, the APR can be even more confusing. Since no one knows exactly what market conditions will be in the future, assumptions must be made regarding future rate adjustments. You can use the APR as a guideline to shop for loans but you should not depend solely on the APR in choosing the loan program that’s best for you. Look at total fees, possible rate adjustments in the future if you’re comparing adjustable rate mortgages, and consider the length of time that you plan on having the mortgage. Don’t forget that the APR is an effective interest rate–not the actual interest rate. Your monthly payments will be based on the actual interest rate, the amount you borrow, and the term of your loan.

How do I know if it’s best to lock in my interest rate or to let it float?

Mortgage interest rate movements are as hard to predict as the stock market and no one can really know for certain whether they’ll go up or down. If you have a hunch that rates are on an upward trend then you’ll want to consider locking the rate as soon as you are able. Before you decide to lock, make sure that your loan can close within the lock-in period. It won’t do any good to lock your rate if you can’t close during the rate lock period. If you’re purchasing a home, review your contract for the estimated closing date to help you choose the right rate lock period. If you are refinancing, in most cases, your loan could close within 30 days. However, if you have any secondary financing on the home that won’t be paid off, allow some extra time since we’ll need to contact that lender to get their permission. If you think rates might drop while your loan is being processed, take a risk and let your rate “float” instead of locking. After you apply, you can lock in by contacting your Loan Officer by telephone.

How much money will I save by choosing a 15-year loan rather than a 30-year loan?

A 15-year fixed rate mortgage gives you the ability to own your home free and clear in 15 years. And, while the monthly payments are somewhat higher than a 30-year loan, the interest rate on the 15-year mortgage is usually a little lower, and more important – you’ll pay less than half the total interest cost of the traditional 30-year mortgage. However, if you can’t afford the higher monthly payment of a 15-year mortgage don’t feel alone. Many borrowers find the higher payment out of reach and choose a 30-year mortgage. It still makes sense to use a 30-year mortgage for most people.

Who Should Consider a 15-Year Mortgage?

The 15-year fixed rate mortgage is most popular among younger homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. They own more of their home faster with this kind of mortgage, and can then begin to consider the cost of higher education for their children without having a mortgage payment to make as well. Other homebuyers, who are more established in their careers, have higher incomes and whose desire is to own their homes before they retire, may also prefer this mortgage.

Advantages and Disadvantages of a 15-Year Mortgage

The 15-year fixed rate mortgage offers two big advantages for most borrowers: You own your home in half the time it would take with a traditional 30-year mortgage. You save more than half the amount of interest of a 30-year mortgage. Lenders usually offer this mortgage at a slightly lower interest rate than with 30-year loans – typically up to .5% lower. It is this lower interest rate added to the shorter loan life that creates real savings for 15-year fixed rate borrowers. The possible disadvantages associated with a 15-year fixed rate mortgage are: The monthly payments for this type of loan are roughly 10 percent to 15 percent higher per month than the payment for a 30-year. Because you’ll pay less total interest on the 15-year fixed rate mortgage, you won’t have the maximum mortgage interest tax deduction possible.

Compare Them Yourself

Use the “How much can I save with a 15 year mortgage?” calculator in our Resource Center to help decide which loan term is best for you.

Are there any prepayment penalties charged for these loan programs?

Home Equities (Fixed and HELOC) have 3 year recapture period – if paid to 0 or paid in full and closed in the first 3 years, borrower is expected to pay a fee to cover closing costs paid by TEG.

What is your Rate Lock Policy?

The interest rate market is subject to movements without advance notice. Locking in a rate protects you from the time that your lock is confirmed to the day that your lock period expires. A lock is an agreement by the borrower and the lender and specifies the number of days for which a loan’s interest rate and discount points are guaranteed. Should interest rates rise during that period, we are obligated to honor the committed rate. Should interest rates fall during that period, the borrower must honor the lock. Your loan officer will advise you when your loan is eligible to lock. We do not charge a fee for locking in your interest rate up to 60 days. Once we accept your lock, your loan is committed into a secondary market transaction. Therefore, we are not able to renegotiate lock commitments. In additional to traditional locks, TEG offers long term lock options for up to 9 months on conventional loans with a free float down option within 60 days of expiration. A lock deposit equal to .5% of your loan amount is required, which will be refunded at closing. Not all loan programs are eligible for long term locks. Contact your Mortgage Loan Officer for details.

Tell me more about closing fees and how they are determined.

A home loan often involves many fees, such as the appraisal fee, title charges, closing fees, and state or local taxes. These fees vary from state to state and also from lender to lender. Any lender or broker should be able to give you an estimate of their fees, but it is more difficult to tell which lenders have done their homework and are providing a complete and accurate estimate. We take quotes very seriously. We’ve completed the research necessary to make sure that our fee quotes are accurate to the city level – and that is no easy task!

To assist you in evaluating our fees, we’ve grouped them as follows: Third Party Fees Fees that we consider third party fees include the appraisal fee, the credit report fee, the settlement or closing fee, the survey fee, tax service fees, title insurance fees, flood certification fees, and courier/mailing fees.

Third party fees

Are fees that we’ll collect and pass on to the person who actually performed the service. For example, an appraiser is paid the appraisal fee, a credit bureau is paid the credit report fee, and a title company or an attorney is paid the title insurance fees. Typically, you’ll see some minor variances in third party fees from lender to lender since a lender may have negotiated a special charge from a provider they use often or chooses a provider that offers nationwide coverage at a flat rate. You may also see that some lenders absorb minor third party fees such as the flood certification fee, the tax service fee, or courier/mailing fees.

Taxes and other unavoidables 

Fees that we consider to be taxes and other unavoidables include: State/Local Taxes and recording fees. These fees will most likely have to be paid regardless of the lender you choose. If some lenders don’t quote you fees that include taxes and other unavoidable fees, don’t assume that you won’t have to pay it. It probably means that the lender who doesn’t tell you about the fee hasn’t done the research necessary to provide accurate closing costs.

Lender Fees

Fees such as discount points, document preparation fees, and loan processing fees are retained by the lender and are used to provide you with the lowest rates possible. This is the category of fees that you should compare very closely from lender to lender before making a decision.

Required Advances 

You may be asked to prepay some items at closing that will actually be due in the future. These fees are sometimes referred to as prepaid items. One of the more common required advances is called “per diem interest” or “interest due at closing.” All of our mortgages have payment due dates of the 1st of the month. If your loan is closed on any day other than the first of the month, you’ll pay interest, from the date of closing through the end of the month, at closing.

For example, if the loan is closed on June 15, we’ll collect interest from June 15 through June 30 at closing. This also means that you won’t make your first mortgage payment until August 1. This type of charge should not vary from lender to lender, and does not need to be considered when comparing lenders. All lenders will charge you interest beginning on the day the loan funds are disbursed. It is simply a matter of when it will be collected. If an escrow or impound account will be established, you will make an initial deposit into the escrow account at closing so that sufficient funds are available to pay the bills when they become due. If your loan requires mortgage insurance, up to two months of the mortgage insurance will be collected at closing. Whether or not you must purchase mortgage insurance depends on the size of the down payment you make. If your loan is a purchase, you’ll also need to pay for your first year’s homeowner’s insurance premium prior to closing. We consider this to be a required advance.

What is title insurance and why do I need it?

If you’ve ever purchased a home before, you may already be familiar with the benefits and terms of title insurance. But if this is your first home loan or you are refinancing, you may be wondering why you need another insurance policy. The answer is simple: The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and especially your mortgage lender, want to make sure the property is indeed yours: That no individual or government entity has any right, lien, claim, or encumbrance on your property. The function of a title insurance company is to make sure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly, and that your interests as a homebuyer are fully protected. Title insurance companies provide services to buyers, sellers, real estate developers, builders, mortgage lenders, and others who have an interest in real estate transfer.

Title companies typically issue two types of title policies:
1) Owner’s Policy. This policy covers you, the homebuyer.
2) Lender’s Policy. This policy covers the lending institution over the life of the loan.

Both types of policies are issued at the time of closing for a one-time premium, if the loan is a purchase. If you are refinancing your home, you probably already have an owner’s policy that was issued when you purchased the property, so we’ll only require that a lender’s policy be issued. Before issuing a policy, the title company performs an in-depth search of the public records to determine if anyone other than you has an interest in the property. The search may be performed by title company personnel using either public records or, more likely, the information contained in the company’s own title plant. After a thorough examination of the records, any title problems are usually found and can be cleared up prior to your purchase of the property. Once a title policy is issued, if any claim covered under your policy is ever filed against your property, the title company will pay the legal fees involved in the defense of your rights. They are also responsible to cover losses arising from a valid claim. This protection remains in effect as long as you or your heirs own the property. The fact that title companies try to eliminate risks before they develop makes title insurance significantly different from other types of insurance. Most forms of insurance assume risks by providing financial protection through a pooling of risks for losses arising from an unforeseen future event, say a fire, accident or theft.

On the other hand, the purpose of title insurance is to eliminate risks and prevent losses caused by defects in title that may have happened in the past. This risk elimination has benefits to both the homebuyer and the title company. It minimizes the chances that adverse claims might be raised, thereby reducing the number of claims that have to be defended or satisfied. This keeps costs down for the title company and the premiums low for the homebuyer. Buying a home is a big step emotionally and financially. With title insurance you are assured that any valid claim against your property will be borne by the title company, and that the odds of a claim being filed are slim indeed.

What is mortgage insurance and when is it required?

First of all, let’s make sure that we mean the same thing when we discuss “mortgage insurance.” Mortgage insurance should not be confused with mortgage life insurance, which is designed to pay off a mortgage in the event of a borrower’s death. Mortgage insurance makes it possible for you to buy a home with less than a 20% down payment by protecting the lender against the additional risk associated with low down payment lending. Low down payment mortgages are becoming more and more popular, and by purchasing mortgage insurance, lenders are comfortable with down payments as low as 3 – 5% of the home’s value. It also provides you with the ability to buy a more expensive home than might be possible if a 20% down payment were required. The mortgage insurance premium is based on loan to value ratio, type of loan, and amount of coverage required by the lender. Usually, the premium is included in your monthly payment and one to two months of the premium is collected as a required advance at closing. It may be possible to cancel private mortgage insurance at some point, such as when your loan balance is reduced to a certain amount – below 75% to 80% of the property value. Recent Federal Legislation requires automatic termination of mortgage insurance for many borrowers when their loan balance has been amortized down to 78% of the original property value. If you have any questions about when your mortgage insurance could be cancelled, please contact your Loan Officer.

How do I lock my rate?

Contact your loan officer.

What is the maximum percentage of my home’s value that I can borrow?

The maximum percentage of your home’s value depends on the purpose of your loan, how you use the property, and the loan type you choose, so the best way to determine what loan amount we can offer is to complete our online application!

Questions About Mortgages

How do I know which home loan is right for me?

This is what our personal service is all about… helping you make the best loan choice for your specific needs. Our mortgage officers are experienced professionals with knowledge covering a wide range of home loan programs. Each consultant is able to explain the advantages of appropriate loan programs, considering the specific financial goals of the member. Generally picking the right home loan is about selecting the length of time the applicant believes they will stay in the home, coupled with their ability to support larger payments in years to come.

What is equity?

Equity is the difference between the amount for which a home can be sold and the amount still owed on the mortgage. This important difference represents the homeowner’s financial interest in the property. A homeowner can borrow against the equity in his/her home with a home loan and use the funds for virtually any purpose… from debt consolidation to major purchases to home improvements. Because the loan is mortgage-based, interest on the home loan may also be tax deductible. Consult your tax advisor to see whether this advantage applies to you.

What is the difference between a fixed rate and an adjustable rate mortgage?

A fixed rate mortgage provides a rate of interest that remains the same for the life of the loan. An adjustable (or variable) rate mortgage has an interest rate that adjusts periodically on the basis of change in a specified financial index. Typically, adjustable rate mortgages start out at somewhat lower rates than fixed rate mortgages. They can fluctuate up, raising the monthly payment, or down, lowering the monthly payment, depending on the activity of the index to which they are tied. Our mortgage officers can discuss the advantages of both types of mortgages to help[ you decide which product is best for you.

Does it make sense to refinance if I recently obtained a home loan?

It might be a good time to refinance if you recently obtained a mortgage. Given today’s interest rates, a rate lower than the one on your current mortgage may be available and can result in savings every month. Consolidating your existing first and second mortgages, as well as outstanding credit card balances and other debt, into a single home loan payment might save you a considerable amount monthly. You will also benefit from the convenience of one single monthly payment by consolidation of your debts. Our mortgages officers can help you determine if this option works to your best advantage!

How much can I afford in mortgage payments?

How much can you afford depends entirely on your specific personal financial situation? Our mortgage officers can help you find out exactly what that amount may be. Generally, a homeowner should plan that 28-36% of their gross income can be used for housing payments. In some circumstances, up to 41% or more can be approved. For a quick estimate, use our loan calculator.

What is an APR?

These three letters stand for Annual Percentage Rate, that is the total yearly cost in interest, as a percentage of the loan amount. The figure includes such items as the base interest rate and the primary mortgage insurance. TEG Federal Credit Union does not charge a loan origination fee (points). For more information, please see our APR Information page.

How do I get started?

It couldn’t be easier! Just give us a call, or submit the form shown in the Apply Now section of our website. Plan to have your most current paystubs and bank statements available for quick reference.

Questions About Your Property

Are there any special requirements for condominiums?

Since the value and marketability of condominium properties is dependent on items that don’t apply to single-family homes, there are some additional steps that must be taken to determine if condominiums meet our guidelines. One of the most important factors is determining if the project that the condominium is located in is complete. In many cases, it will be necessary for the project, or at least the phase that your unit is located in, to be complete before we can provide financing. The main reason for this is, until the project is complete, we can’t be certain that the remaining units will be of the same quality as the existing units. This could affect the marketability of your home. In addition, we’ll consider the ratio of non-owner occupied units to owner-occupied units. This could also affect future marketability since many people would prefer to live in a project that is occupied by owners rather than renters. We’ll also carefully review the appraisal to ensure that it includes comparable sales of properties within the project, as well as some from outside the project. Our experience has found that using comparable sales from both the same project as well as other projects gives us a better idea of the condominium project’s marketability. Depending on the percentage of the property’s value you’d like to finance, other items may also need to be reviewed.

I’ve heard that some lenders require flood insurance on properties. Will you?

Federal Law requires all lenders to investigate whether or not each home they finance is in a special flood hazard area as defined by FEMA, the Federal Emergency Management Agency. The law can’t stop floods. Floods happen anytime, anywhere. But the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 help to ensure that you will be protected from financial losses caused by flooding. We use a third party company who specializes in the reviewing of flood maps prepared by FEMA to determine if your home is located in a flood area. If it is, then flood insurance coverage will be required, since standard homeowner’s insurance doesn’t protect you against damages from flooding.

Does TEG Federal Credit Union provide financing for manufactured homes?

We define manufactured housing as housing units that are factory built with a steel undercarriage that remains as a structural component and limits the structure to a single story. These types of manufactured homes are sometimes known as mobile homes. We do not consider other factory-built housing (not built on a permanent chassis), such as modular, prefabricated, panelized, or sectional housing, to be manufactured housing. If your home is one of these types, please complete the application indicating that your home is a single family home. In order to qualify for our loan programs a manufactured home must meet the following requirements:

    • A manufactured home is any dwelling built on a permanent chassis and attached to a permanent foundation system. Be a one-family dwelling that is legally classified as real property.

    • The towing hitch, wheels, and axles must have been removed and the home must be permanently attached to a foundation system that meets state and local codes as well as the manufacturer’s requirements.

    • Foundation system must be appropriate for the soil conditions for the site and meet local and state codes. The land on which the manufactured home is situated must be owned by you. We do not provide financing for manufactured homes located on rented or leased land.

    • Must have been built in compliance with the Federal Manufactured Home Construction and Safety Standards that were established June 15, 1976. Generally, compliance with these standards will be evidenced by the presence of a HUD Data Plate that is affixed near the main electrical panel of the home or in another readily accessible and visible location. Must be at least double-width, 24 feet wide, and have a minimum 600 square feet of gross living area. Must be acceptable to typical purchasers in the market area.

Questions About TEG Federal Credit Union

Why choose TEG Federal Credit Union for my Home Loan?

TEG Federal Credit Union has a wide range of loan programs that are competitively priced. Using the latest technology, we have made the borrowing process simple and convenient. As a direct lender, we can offer you a competitive rate and eliminate fees associated with a loan arranged through a broker. Our commitment is to provide top quality service.

Are we right for you?

Whether you’re purchasing or refinancing, we’re certain you’ll find our service amazing!

If you’ll be purchasing but haven’t found the perfect home yet, complete our application and we’ll issue an approval for a mortgage loan now with no obligation!

How much help should I expect from my Mortgage Officer?

Our commitment is to provide top quality service. Our Mortgage Officers have a full range of loan programs to offer, and the very latest technology to expedite the loan process. They will listen to your needs, and make sure they understand you completely, before discussing your options and making sure you thoroughly understand them. From application through funding, we make the loan process simple and convenient for you!

Questions About Our Website

Is this website secure?

Security is a top priority for TEG Federal Credit Union. We ensure that all personal and confidential information is transmitted and stored through an encrypted process.

How is my privacy protected?

TEG Federal Credit Union may share your data as noted in our Privacy Statement. Please see our Privacy Statement for more details.

What if I have other questions?

Please e-mail [email protected] with all of your questions or call us at 845-452-7323 and a representative will follow up with you.

Find helpful articles, tools, and other great resources to help you with your homebuying journey.

Apply for a TEGFCU Mortgage

To apply for a mortgage, you must either be a current member or become a member before closing. Membership is open to anyone (and their immediate families) who lives, works, worships, or attends school in Dutchess, Orange, Ulster, Putnam, Rockland, Sullivan, and Westchester County, NY with an initial $5 deposit, as well as Members of the Dutchess County SPCA or Child Care Council of Dutchess and Putnam Inc which are headquartered in our field of membership. Also, if you are purchasing a primary residence in one of these counties you are eligible for membership.

Apply for a TEGFCU Mortgage

To apply for a mortgage, you must either be a current member or become a member before closing. Membership is open to anyone (and their immediate families) who lives, works, worships, or attends school in Dutchess, Orange, Ulster, Putnam, Rockland, Sullivan, and Westchester County, NY with an initial $5 deposit, as well as Members of the Dutchess County SPCA or Child Care Council of Dutchess and Putnam Inc which are headquartered in our field of membership. Also, if you are purchasing a primary residence in one of these counties you are eligible for membership.

We Do Business in Accordance with Federal Fair Lending Laws – Fair Housing Poster.

Home Mortgage Disclosure Act Notice – The HMDA data about our residential mortgage lending are available for review. The data show: Geographic distribution of loans and applications Ethnicity, race, sex, and income of applicants and borrowers Information about loan approvals and denials. HMDA data for many other financial institutions are also available online. For more information, visit the Consumer Financial Protection Bureau’s website.

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