Fixed rate or an adjustable rate (ARM)?

With a fixed rate loan, the interest rate stays the same over the life of the loan. If you are committing to a forever home, a fixed rate may be the best option.

An adjustable rate mortgage has an interest rate that is fixed for a specific amount of time, then will go up or down based on an external financial index. This is a good option if you plan to sell your home before the rate becomes variable.

How can I Pre-Qualify?

  • Online prequalification
  • Complete the Mortgage Inquiry online form
  • Call our Mortgage Department at 614.552.0511
  • Stop in at any Heartland Bank location

Once pre-qualified, you’ll know how much you are eligible to borrow, thus making your shopping easier. Sellers also appreciate pre-qualified buyers.

What is an appraisal?

An appraisal is a property valuation completed for a fee by a licensed or certified, third party professional. It is based on the opinion of the appraiser with respect to the market value of the property being considered.

Why should I refinance?

  • You are interested in a lower monthly payment
  • You would like a lower interest rate
  • You would like an adjustable rate or a fixed rate
  • You want to refinance for a higher mortgage to pay off debts or obtain cash
  • You want to change the term of your current mortgage

Do I need a property/home appraisal?

An appraisal will be needed in almost every situation.  The market value of the home you want to purchase is set by the appraisal.  We need to be sure that the house is worth what you are requesting for a loan as it is the collateral for the loan.

Will I receive a copy of the appraisal?

Yes, as an applicant, you are given copies of all completed appraisals on the property of interest.

What does "market value" mean?

Market value is the amount a buyer is willing to pay for a property and the amount a seller is willing to accept for a property in the marketplace. An appraiser will give his opinion on the market value of a property.

What is a comparable sale?

Comparable sales are used by appraisers to determine an accurate property market value. They are properties that have recently sold with qualities similar to the property under consideration. The appraiser is responsible for choosing properties that best reflect the local marketplace and closely match the desired property.

How fast will I get my funds?

For a mortgage, the funds are available when you close your loan. For a refinance or home equity line of credit, funds are available on the fourth business day after signing the loan documents. There is a three day waiting period when you have the right to revoke your application.

What is the difference between interest rate and APR?

An interest rate is comparable to a fee for borrowing the funds disbursed by a loan. The APR (annual percentage rate) is the total fee including interest, points and bank fees expressed in an annual rate.

What is pre-paid interest?

Pre-paid interest is interest paid in advance. It is the daily interest cost that begins accumulating on your loan closing date until the end of the month of your closing.

You are responsible for this amount at closing as your first monthly mortgage payment will consist of the full month’s interest of the month prior to your first payment. For example, let’s say you closed your loan mid-January.  If your first payment is due March 1st, that payment will include the interest for February. As interest is standardly paid in arrears, rather than having a first payment that includes a month and a half interest, we collect for the partial month at closing.

How do I cover my closing costs?

You are responsible for the closing costs at the closing of your loan. Often, the seller is asked to cover a portion and you will need to cover the balance (or the full amount depending on the offer made by the seller). You can speak with your Loan Officer regarding these costs as there are times when they can be absorbed into the total loan amount.

Explain closing costs?

These are costs to you for completing your loan. They can include title insurance fees, attorney fees, pre-paid interest and documentation fees. Additional fees are possible based on the specifics of the individual customer.

We provide a Loan Estimate explaining your closing costs during the application process. After approval and before closing, we will provide you with a Closing Disclosure. This document details all of the costs, credits and fees required to complete the entire loan process.

What are my monthly payments based on?

  • Principal and Interest
  • Mortgage Insurance (if required, often called PMI)
  • Real Estate Taxes and Insurance

Is a down payment required?

Most often, some form of down payment is required. Heartland Bank offers low down payment options for several mortgage programs. Program qualification depends on each individual situation and your needs.

Explain PMI?

PMI stands for Private Mortgage Insurance. It is usually required if you have less than a 20% down payment on your new property.  The monthly payment for this insurance is usually included in your monthly payment.  This can often be dropped when the lender is comfortable with the amount of equity achieved over time.

How can I lock-in my interest rate?

If this is your first mortgage, Heartland Bank can lock-in your interest rate once your loan is approved. Speak with your loan officer for specific details.

What is the LTV ratio?

LTV means loan-to-value. This is calculated by dividing the mortgage amount by the property’s market value. The ratio is used to determine if PMI is required and can be used in figuring your interest rate. The market value used is the lesser of the appraisal value versus the purchase price.

How do I know what my prospective home is worth?

Ultimately, this is determined by the appraisal.  However, you could check online real-estate resources to verify what homes in the neighborhood are selling for.  It is also possible to check local auditors' websites for recent tax information.

Is mortgage interest tax deductible?

First, we recommend that you consult a tax advisor with questions on whether the mortgage interest will be tax deductible in your specific situation. The interest may be tax deductible, but each situation is different and must be addressed as such.

What factors will determine if I am approved for a loan?

Our underwriting department will look at:

  • Property value
  • Credit history
  • Credit score
  • Your debt-to-income ratio

What determines my interest rate?

  • Credit history and credit scores
  • Daily changes in the market
  • Specific individual qualifications
  • Purchase or refinance
  • Value of the property
  • Mortgage amount

What is Escrow?

Escrow, for mortgage purposes, is a holding account with us for your taxes and any insurance premiums, including homeowner’s, flood and PMI.  It is an account where we will hold what we collect monthly to fulfill the above mentioned payments. Your annual payments for the taxes and insurance is divided by 12 and added to your monthly principal and interest amount. On their respective due dates, we will send these payments on your behalf, thus relieving you of this worry.

Is Escrow required on my loan?

Escrow is not always required. Again, it often depends on:

  • Loan program chosen
  • Down payment amount

What bills are paid out of an Escrow?

  • Real estate taxes  
  • Required insurance premiums (homeowner’s, flood insurance and/or PMI)
  • Does not pay association fees, non-required insurance premiums, additional tax bills or any taxes that are non-real estate unless included on your real estate tax assessment.

How will you determine how much my property tax and insurance payments will be?

Your homeowner’s insurance company will provide figures for insurance costs. For the tax portion, we will estimate the annual taxes bases on the most recent tax documents available for the property.

Will the monthly amount you collect for my escrow account change?

We will complete an annual review of the Escrow based on the anniversary date of your loan, unless we, or you as the customer, believe that there will be a significant change in the amount due, at which time we may complete a review before the anniversary date. If there are increases/decreases to taxes or insurance, we will notify you with an Escrow Account Disclosure Statement reflecting any changes.

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