It is always a good idea to get pre-approved for a home prior to looking for the property? This way, you will be able to present a preapproval letter to the sellers when you make an offer. This will make you just like a cash buyer by letting the seller know you already have financing in place. A seller is more likely to accept an offer from a buyer who has financing than one that does not. If you are still several months away from looking for a home, feel that you may have credit issues, or if you are unsure of how much you qualify for, it may be advised to apply now. Having these questions answered will provide ample time to make any improvements to credit or other aspects of your qualification potential.

The Annual Percentage Rate (APR) is defined as 'the cost of obtaining mortgage financing expressed as a percentage rate'. The rate is a combination of the first year's interest and the closing costs together, telling you the true cost of taking out a loan. You will receive a Federal Truth-in-Lending Disclosure from us once you apply that will show the APR. The APR differs from the actual rate of interest that is used to calculate your monthly payments. The Note Rate is the rate at which you lock in and will be used to calculate your monthly Principal and Interest payments. The APR has no bearing on your monthly payments; it is only to be used as a means of lender comparison.

Hometrust Mortgage Company funds its own loans at closing. Therefore, we are a true mortgage company. When you close on your home, the funds are sent directly from Hometrust Mortgage; no waiting on outside investors to fund the transaction. Since Hometrust is in full control of the funds being loaned, we can issue the monies at our discretion to be provided to your seller and close the deal. You and your real estate agent will be able to leave closing promptly once the closing documents are executed and the closing process fully completed.

You are able to lock in at any point after you have an accepted Earnest Money Contract. A lock is specific to a property address and closing date. Therefore, if you cancel a Contract to purchase another property, your rate lock will be subject to change to current market rates. Generally, most buyers will lock in within 30-45 days of closing. When locking in over 60 days, you may be subject to a higher interest rate to secure a longer-term lock, which is based on the market on the day you lock in. We will require that you lock, however, at least one week prior to closing. This will allow ample time to ensure your closing papers will be sent to the attorneys office to draw legal papers in time for your closing.

Generally, an approval is good for up to six months. This does not mean, however, that you will need to re-apply. After six months, a new credit report will be obtained and you may be asked to supply current bank statements and updated pay stubs. It is always a good idea to maintain a good credit standing if you have been approved and wish to wait awhile before buying a home. This will help prevent any changes in your approval status.

Private Mortgage Insurance, commonly called PMI, is an insurance paid by the mortgagor that protects the lender against default on the loan. PMI has no benefit to the buyer, and is a form of insurance that protects the mortgage company. Although subordinate financing can be used to avoid PMI, a buyer generally must have a down payment of 20% to avoid PMI payments. PMI should not be confused with 'mortgage insurance', which is a separate insurance policy unassociated with a mortgage, which will pay off the remaining balance in the event of the death of a homeowner. This type of insurance can be obtained through most agents who offer life insurance policies, and can sometimes be included in conjunction with a life insurance policy.