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Frequently Asked Questions

Do you have questions about the mortgage process? You are not alone; the loan process can indeed be daunting. Check out the answers below to some of the questions that have been most frequently asked about the loan process.

We are here to serve you; please don't hesitate to reach out to any of our experienced Mortgage Consultants for a one-to-one consultation. We will answer your mortgage questions and help you understand your options, and better empower you to make smart borrowing decisions.

There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, including your current financial position and how long you intend to keep your house. Gum Tree Mortgage can help you evaluate your choices and help you make the most appropriate decision.

For most homeowners, the monthly mortgage payments include four separate parts:

Principal: This is the repayment on the amount borrowed.

Interest: This is the payment to the lender for the amount borrowed.

Taxes & Insurance: 1/12th of your property taxes and hazard insurance are paid into a special escrow account. This feature is sometimes optional, in which case you will be responsible for these expenses to be paid by you directly to the County Tax Assessor and property insurance company when they come due.

Private Mortgage Insurance (PMI): Some mortgage loan products required Private Mortgage Insurance. When it is required, it will be included in your monthly payment.

Private Mortgage Insurance is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Private Mortgage Insurance is generally required for a loan with an initial loan to value (LTV) percentage in excess of 80%. In most cases, this will mean that you will have to pay Private Mortgage Insurance if your down payment is less than 20% of the value of the home you are purchasing or refinancing. The cost of the mortgage insurance is typically added to the monthly mortgage payment.

That will depend. If you would like to use the income of your spouse to qualify, then you must apply for the mortgage jointly and both of your credit will be considered. If you choose to apply without your spouse, then only your income will be considered when qualifying you for the loan.

20% certainly is the ideal situation for a buyer to have available but we have programs available for certain buyers that require no down payment at all.

Gum Tree Mortgage is an independent mortgage lender. We ONLY offer mortgage loans. That is important because it means we focus on providing you the best service, rate, program, total mortgage experience you can have. We want to make you a loan. We want to help you get a house. If you are not ready today, we will take the time to coach you on what you need to do to get into position to buy a home. Let Gum Tree Mortgage help you realize the dream you have.

Here is a good general list of items that you should be prepared to provide.
Photo ID and Social Security card
Two most recent pay stubs covering at least 30 days.
Previous two years W2's and/or 1099's
Previous two years Tax Returns (all schedules)
Two most recent bank statements - All accounts, All pages (checking/savings)

Yes, there are several different loan programs that are designed with the first time home buyer in mind. Some offer limited or no down payment options.

This is not a question you can answer with a YES or NO. The answer is: Maybe.
Credit is just one of the items that a mortgage decision is based on. There are several programs designed for clients with limited credit. To know for certain, you will need to speak with a Gum Tree Mortgage professional, who is trained to find your specific answer to this all important question.

Yes, we offer a few mortgage programs that allow for 100% financing. Not all borrowers will qualify.

Each program has different tolerances for approval. Income, credit history, the size of your down payment, etc. are all factors in how much you could borrow.

We are generally able to close a mortgage loan inside of 30 days from the date we receive the contract or permission to order the appraisal, which is much sooner than the national average of 45 days.

No. Gum Tree Mortgage does not offer any mortgage programs that have prepayment penalties.

Generally speaking, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value. Give us a call, and we can help you determine exactly how much you can afford.

With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest changes periodically, typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will likely change. There are advantages and disadvantages to each type of mortgage, and the best way to select a loan product is by talking to us.

An index is an economic indicator that lenders use to set the interest rate for an ARM. Generally the interest rate that you pay is a combination of the index rate and a pre-specified margin. Three commonly used indices are the One-Year Treasury Bill, the Cost of Funds of the 11th District Federal Home Loan Bank (COFI), and the London InterBank Offering Rate (LIBOR).

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