CORPORATE AND INSTITUTIONAL FAQS

Your Mortgage Specialist can help you determine how much you may qualify for, depending on your income, your future house payment, and your current debts.

An origination fee is charged by lenders for expenses incurred during the loan application process.  The fee is usually equal to one point, or 1%, of the mortgage amount.

Private Mortgage Insurance (PMI) or Mortgage Insurance (MI) is typically collected when your loan amount is above 80% of the value of your home (loan-to-value).   Private Mortgage Insurance is insurance written by a private company protecting the mortgage lender against financial loss in the event of a borrower defaulting on the mortgage.   This should not be confused with life insurance that pays off your mortgage in case of death.

If you are currently in the U.S. military or active in the reserves, or if you have ever served in U.S. armed forces, you may be eligible to get a loan guaranteed by the Veterans Administration.   If you qualify, this special government benefit to veterans might be a good option for you, as it allows you to purchase a home with a low or no down payment.

Your Mortgage Specialist will help you determine just how much your closing costs will be based on the purchase price of your home, mortgage amount, and location (state and local requirements differ).

Appraisals are sometimes used to determine the current fair market value of your home.   An appraisal justifies the requested loan amount.   Tax values obtained from your taxing authority can sometimes be lower than appraisals and may not reflect the appraised value of the home.   Another more affordable option is a drive-by property inspection waiver determined by an automated underwriting system.

Late charges are usually assessed 10 to 15 days after the payment due date.

After the loan application has been completed, it is turned over to our underwriter, and then to the Loan Processor.   The Mortgage Specialist, Underwriter, and Processor are all on the same team, so there are no departmental boundaries that could slow the process down.   Here's how it generally works:

• The Underwriter reviews your application and determines, immediately, if any additional information will be needed to make the loan.
• The Processor sends out the verifications of employment to your employer and verification of deposit to your bank, and orders a credit report, property appraisal, and any other supporting required documents.
• Within three business days after we receive your completed application, we provide you with a good faith estimate of the anticipated closing costs.   This estimate show costs associated with the loan settlement, such as origination fees, mortgage insurance, title insurance, escrow reserves, and hazard insurance.
• Within the same three days you also receive a Truth-in-Lending Disclosure statement.   This statement shows your estimated monthly payment and the total cost of all finance charges on your loan, shown as an annual percentage rate (APR).  The APR represents the dollar amount of finance charges you pay either up front or over the life of the loan, converted to an annual interest rate.   Since the APR includes origination fees and other charges as well as interest on the mortgage loan, the APR is usually higher than the interest rate on the loan.

Getting pre-approved before you go on your house hunting trip helps you in a number of ways:

• It gives you a clear picture of just how much home you can afford.   This way, you save time by targeting only those homes that are within your price range.
• It tells sellers you're a serious buyer, and it gives you bargaining power.
• It helps speed along the final approval process, because most of the work is already done.

You have several options when looking for a loan, and your Mortgage Specialist will help you choose the best option for your situation.   Here are a few definitions of loan product types:

Fixed Rate Mortgages

The interest rate on a fixed rate mortgage remains constant over the life of the loan.   With a fixed rate loan, your monthly principal and interest payment will always remain the same.

Fixed rate mortgages are especially suited for those who expect to remain in their homes for a number of years.   In certain cases, you can provide a down payment as low as 0% - 5% of the purchase price.

Adjustable Rate Mortgages (ARMs)

An adjustable rate mortgage offers you an interest rate that fluctuates over time.   Generally, the initial interest rate is lower than that of a fixed rate mortgage, making the qualifying process easier and lowering your initial monthly payments. The initial rate stays in effect for a specific period, and then the rate and payment adjust.   There are always predetermined limits or "caps" to the amount the rate can fluctuate.

FHA Mortgages

A FHA-insured loan allows you to buy a home with a low down payment, ranging from 3% to 5% depending on the price of the home.   This may provide you with more buying power.

VA Mortgages

If you are currently in the U.S. military or active in the reserves, or if you have ever served in U.S. armed forces, you may be eligible to get a loan guaranteed by the VA.   If you qualify, this special government benefit to veterans might be a good option for you, as it allows you to purchase a home with a low down payment.

Conventional Mortgages

Conventional mortgages are mortgages that are not obtained under a government insured or guaranteed program such as FHA or VA.

Wachovia has simplified the application process - you can complete the process over the phone or online.   The information we collect from you will allow us to make the loan, so it is very important to make sure that all information is complete and accurate.

You can complete the loan application process much more easily and accurately if you prepare for it ahead of time.   We'll ask you for details about your personal finances, including bank account numbers and balances, current loan amounts and payments, and credit card account numbers.   You need to be thorough and precise in your answers, so it's to your benefit to assemble this kind of information before your conversation with your Mortgage Specialist.

Here's a summary of typical information required for a loan application:

• Details of purchase contract and the property
• Personal information
• Employment history and sources of income
• One month's current pay stubs (last 30 days) for borrower and co-borrower
• W2's for past two years
• Three month's current bank statements to verify funds for down payment
• Sales contract, HUD-1, or relocation policy on home being sold
• Fully executed purchase contract on the home being purchased 

Generally, for a Conventional Mortgage, you need a minimum of 5% of the sales price for your down payment.   However, there are programs that require 0-3% down payment based on qualifications.   In addition, you need closing costs, and two months' reserves (escrow or impound) of taxes and insurance.