Mortgage Q&A: This Lender Makes Home Loans Easy to Understand

The topic of mortgage can be very complicated and confusing. That's why Jeremy Ogea, AVP- Branch Manager and Mortgage Loan Officer, is breaking it down and making it simple.

Here are some of the most asked questions we receive about home loans with answers from Jeremy.

Q: What are closing costs, and what do they include?

A: "Think of closing costs like a pie cut into pieces," Jeremy says. Each piece can contain third-party fees, lender fees and escrows." Here's a closer look of what they may include:

• Third-party fees: generally consist of title company fees, appraisals, surveys and credit reports.
• Lender fees: costs incurred by a bank to originate the loan.
• Escrows: prepaid costs collected at closing. Homeowners insurance, mortgage insurance, property taxes and HOA fees are all examples of escrows.

Q: How much do I need for a down payment?

A: First-time and experienced home buyers typically want to know how much they'll need to set aside for a down payment.

"A down payment can vary depending on the type of mortgage that you are looking for" Jeremy says. "There are many down payment options available to a wide range of borrowers. Generally, a smaller down payment can make your purchase more accessible, especially for first-time home buyers. A higher down payment can make your monthly payment smaller, possibly avoiding private mortgage insurance."

Jeremy continues: "No matter what kind of purchase loan you are considering, it's always a best practice to save and have funds set aside for a down payment."

Q: Can I use funds from my family as a down payment?

A: "Generally, yes!" says Jeremy. "When it comes to purchasing a home, sometimes borrowers may not have enough funds for a down payment. Thankfully, there are options for borrowers who may depend on down payment assistance from a donor family member."

Q: How is my interest rate determined?

A: Mortgage rates are determined by many factors and can fluctuate daily.

Jeremy says, "Each individual's mortgage rate depends on several aspects, including the type of loan, credit score, loan-to-value, debt-to-income, and other factors. Some borrowers prefer the lowest rate possible, which is available with a rate buy-down option."

With so many rate options available, it's always best to talk to your lender about your specific needs whether you're purchasing or refinancing.

Q: What's the first step for a purchase pre-qualification?

A: A pre-qualification can help assist in your search for your next dream home.

Jeremy says, "One of the first steps in the process for a pre-qualification is to talk with your loan officer about your options and what you're looking for. After an application is received, your loan officer will review it and make sure all requirements are met to issue a pre-qualification."

Jeremy continues: "It's an exciting opportunity to purchase a home. Rest assured, whether you're a first time or seasoned home buyer, we are here to make the process simple, seamless and rewarding."

Q: Should I refinance my home?

A: Many homeowners look to refinance their loans for several reasons.

"One of the primary reasons borrowers look to refinance their home is to reduce their interest rate, which can result in a lower monthly payment," Jeremy says. "It's always a good time to get a rate and term quote from a loan officer if you're considering lowering your current payment or loan rate."

"Another common reason to refinance is to tap into your home's equity. Cash-out refinancing allows you to typically borrow up to 80% of your home's value to use for numerous reasons. Depending on your situation, it can be a good option for things like consolidating debts, personal expenses or new home improvements."

Have more questions about home loans? Get answers by contacting a mortgage lender at Southside Bank.