FAQ

Q: How do I start the loan process with Network Mortgage?

• Give us a call at (530) 899-1870
• Use our Contact Form to arrange an appointment or return call
• Request a no obligation Rate Quote before making an appointment
• Visit our location in Chico, California

Q: What are the main types of mortgages?

The most common mortgages are fixed and adjustable-rate mortgages:

• Fixed-rate mortgages offer the stability of regular monthly payments over a given length of time, or term.
• Adjustable-rate mortgage (ARM) programs offer an initial interest rate and payment lower than a standard fixed-rate mortgage.

If you plan to be in your home for more than seven years, you may want to consider a fixed-rate mortgage, which offers predictable payments and long-term protection against rising mortgage interest rates.

If you plan to be in your home for seven years or less, an adjustable-rate mortgage (ARM) could be attractive. Keep in mind that with an ARM, your monthly payments have the potential to go up each time your interest rate adjusts.

Q: What are current mortgage interest rates?

This is a tough question to answer accurately because there are so many variables involved:

• Income history
• Current debt
• Credit worthiness
• Down payment
• Property value

Also, in constantly changing economic times (like now), mortgage rates can fluctuate on a daily — even hourly — basis. That said, you can get a general idea of current mortgage rate trends by taking a look at our mortgage rate updates.

Keep in mind that these estimates are base on national averages and may or may not reflect conditions and demand in your local area. For a more in-depth analysis of rates, you can visit the Freddie Mac website directly.

Finally, we’d be happy to give you an estimated interest rate quote.

Q: Will self-employment affect my ability to get a mortgage?

Not necessarily, but keep in mind the following:

• Being self-employed may require paying a higher interest rate, as lenders look to compensate for the lack of verifiable, steady income.
• Self-employed individuals often use business expenses to reduce taxable income. This can backfire when they need to prove a substantial income to qualify for a loan.
• Some lenders offer low-documentation (stated income/stated asset) loans, but the interest rate is usually much higher than “conventional” mortgages.
• If you’re self-employed, you can improve your chances of getting a mortgage by offering a larger down payment, paying down debt, or increasing your credit score.

Q: How long does it take to get a mortgage?

Maybe longer than you think. The mortgage process is pretty involved, especially regarding required documentation, property appraisals and third-party verifications.

The entire mortgage process has three basic parts:

1. Getting pre-approved
2. Getting the property appraised
3. Getting the actual loan

On average, in a normal market, this process takes about 30 days. During high-volume months, it can take longer — Maybe an average of 45 to 60 days, depending on the lender.

Also, if the lender uncovers any financial quirks in your documentation (poor credit score, previous foreclosure, excessive debt, etc), getting a mortgage can become a slower and more complicated process.

Q: What is a VA mortgage?

The Veteran’s Administration (VA) loan program is guaranteed by the U.S. Government’s Department of Veteran’s Affairs. VA loans may be available to the following individuals:

• Honorably discharged veteran
• Active duty service member
• Un-remarried surviving spouse of a military service member
• Reservist
• National Guardsperson

Q: What is an FHA mortgage?

Federal Housing Administration (FHA) loans are insured by the U.S. Government through the U.S. Department of Housing and Urban Development, also called HUD. FHA loans offer an excellent start to first-time home buyers, with options such as a low down payment or low closing costs.

Q: What is an HECM reverse mortgage?

The Home Equity Conversion Mortgage (HECM) is the Federal Housing Administration’s (FHA) reverse mortgage program which enables seniors age 62 and older to withdraw some of the equity in your home. You choose how you want to withdraw your funds, whether in a fixed monthly amount or a line of credit or a combination of both. You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing. Learn more

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

That depends. There are a lot of opportunities when it comes to down payments. A few of your options may include:

• HomePath by Fannie Mae requires down payments of 3%
• Home Possible by Freddie Mac requires down payments of 3%
• Some local municipalities that offer down payments of less than 3%
• Some lender rebate programs can result in down payments as low as 1%
• United States Department of Agriculture (USDA) rural home loans require no down payment
• Veteran’s Administration (VA) loans require no down payment

Just keep in mind that many conventional loans, with down payments of less than 20%, may require private mortgage insurance (PMI).

Today, there are many loan programs that can be tailored to fit your lifestyle and financial resources. If you’d like to discuss which options may apply to your situation, you can contact us at any time.

Q: What is private mortgage insurance?

Private mortgage insurance (PMI) is insurance provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders require mortgage insurance for loans that have a loan-to-value ratio above 80% (less than 20% equity). Learn more

Q: Can I buy a home if I have lousy credit?

Perhaps. Keep in mind that lenders don’t just look at your credit history, but also at your ability and willingness to pay in the future. At Network Mortgage we may be able to help you buy a home even if your credit isn’t perfect.

Q: Are mortgage costs tax-deductible?

Three types of mortgage and homeowners costs may be tax-deductible:

• Discount points
• Interest paid on a home loan or home equity loan
• Property taxes

After the year that you buy your house, only your mortgage interest and annual property taxes are deductible. Be sure to consult your tax advisor for advice about your specific situation.

Q: What are the benefits of refinancing?

You should consider refinancing if you want to pay off high-interest-rate debt, shorten the length of your repayment term, or lower your monthly mortgage payment.

Q: When does it make sense to refinance?

In general, one or more of the following conditions should be present before you should consider refinancing:

• Mortgage interest rates are falling
• Your home has significantly appreciated in market value
• You’ve been making payments on your original 30-year mortgage for less than ten years

Q: Can I refinance to take cash out of my house?

Yes. There are a variety of options that allow you to tap into your home’s equity and take cash out. Consult your loan advisor for the best cash-out refinancing plan for you.

Q: Can I consolidate debt when refinancing my mortgage?

Yes. Cash-out refinancing can help homeowners consolidate high-interest, non tax-deductible debt. Because your mortgage interest rate is likely to be lower than your credit card rates or personal bank loans, consolidating debt may reduce your overall monthly debt payments. In addition, your mortgage interest may be tax-deductible, while your credit card interest is not.