Frequently Asked Questions

  • Where do I send my initial first mortgage payment?

    Refer to your “First Payment Letter” in your closing documents to determine where to send your first mortgage payment. If you receive a statement from your new lender prior to the due date of your payment, send your payment to the new lender.  Otherwise, send your payment to WestStar Mortgage as detailed in your “First Payment Letter”. Remember to include your loan number on your check.

  • Will I have two separate payments if I have a second lien?

    The second lien is often from a different lender than the first lien.  Therefore, borrowers with a second lien will make two separate payments each month; one for the first lien and one on the second lien.

  • What inspections are required by the lender?

    The lender will require an appraisal on most transactions, and exceptions to this can be discussed with your WestStar Mortgage loan consultant.  If the appraiser requires or recommends repairs, then they must be completed prior to settlement. If the sales contract mentions repairs then they need to be completed prior to settlement. The appraiser will perform a final inspection to assure that the repairs were completed. A termite report is required on all government loans and the property must be declared free of infestation. If necessary, all repairs will need to be completed prior to settlement. The appraiser will perform a final inspection to assure that the repairs were completed. If the termite report recommends treatment, then treatment is required. We will need a receipt showing the name and amount of chemicals used and we must have a termite report that indicates all infestation has been eliminated and repairs have been completed.

  • Do I need to have certain amount of cash or liquidity in reserves after I finance my home?

    Reserve requirements are program specific. Your WestStar Mortgage loan consultant will provide this information at the time of your loan application.

  • Where do I go for closing?

    Your closing will take place at the offices of the Settlement Company, unless other arrangements have been made. It is not unusual for refinance transactions to be settled in the convenience of your home and where allowable by state laws conducted by a professional notary. Your WestStar Mortgage loan consultant can assist you in describing the required criteria for doing conducting settlement for WestStar Mortgage, Inc.

  • When my loan officer asks me if I want to waive escrows, what exactly does this mean?

    When you waive escrows, you take the responsibility of paying your taxes and insurance portion of your monthly mortgage payment rather than having those items included in the payment you send to your servicing lender. Waiving escrows may add a small fee to your closing costs. You can only waive escrows if your loan program allows for this such as conventional loans that have a loan to value of 80% or less on your first lien.

  • How does mortgage insurance work?

    Mortgage insurance operates very similar to the insurance you have on your automobile. There is a premium paid by the borrower and it protects against loss to the lender, in the event of non payment and subsequent foreclosure proceedings.  If the borrower is not able to repay the amount of the insured mortgage loan, then the lender will file a claim with the mortgage insurer for a portion or the full amount of losses.

  • How do I know if I need mortgage insurance” If I do need it, how do I get it?

    If you make a loan application with a down payment of less than 20% or a LTV greater than 80% for a purchase or refinance on a conventional loan, then you will be required to have mortgage insurance.  Your WestStar Mortgage loan consultant can provide details on the requirements for qualifying for the loan (Credit Score guidelines are more restrictive) and acquiring the required insurance coverage.

  • What amount is required for a down payment and what is a loan-to-value?

    When buying a home or refinancing an existing loan the lending industry maintains certain parameters to measure risk in a loan scenario. One of those parameters is the relationship between the property value (as determined by an independent third party professional known as an appraiser) and the loan request (known as loan-to-value and often referenced as LTV).  There is not an established amount for down payment or equity for every loan. This will vary based on the loan program; Conventional, FHA, VA, USDA or state bond agency program that you may desire. Depending on your situation and eligibility, you may find very low down payment or equity requirements available and your WestStar Mortgage loan consultant will be able to help you find a loan program that best fits your financial goals and needs. There may be a requirement for private mortgage insurance if your down payment or equity is less than 20%.

  • When mortgage lenders refer to “PITI” what are they referring to?

    PITI is principal, interest, taxes and insurance; the main components of a monthly mortgage payment.

  • Why will I receive a Truth-in-Lending disclosure?

    Truth-in-Lending disclosures are sent to all borrowers after a loan application has been made.  The Truth-in-Lending Act is a federal law requiring lenders to reveal all of the terms of a mortgage.  The APR that appears on your Truth-in-Lending will be higher than the interest rate on your Real Estate Lien Note, as it is calculated based on the term and finance charges.

  • How does the Annual Percentage Rate (APR) differ from the interest payment rate (IPR)?

    The APR is the financing rate calculated with the finance charges over the life of the loan. The IPR calculates the principal and interest payment for the loan.

  • What does my mortgage lender mean by points or origination fee?

    One point is equal to one percent of the loan amount.  All points are used to buy down the interest rate. The originations fees help pay the cost for the lender to do the loan.

  • When will I find out what my closing costs will be to close?

    Your WestStar Mortgage loan consultant will provide you a Good Faith Estimate at the time of your application. The Settlement Statement (HUD-1) is prepared by the title company according to closing instructions prepared by the lender. This is available 24 hours prior to closing by contacting the title company. Therefore you receive your costs estimates twice and there should be no significant disparity between the estimates provided up front and the actual costs reflected on the HUD-1.

  • How do I know what my interest rate will be?

    You discuss this with your WestStar Mortgage loan consultant who will provide you with information related to current market conditions, for your loan product choice. You “lock” the rate and discount points with your loan consultant.

  • Should I select the 15 year or the 30 year product?

    It really depends on what your goals are; with the 15 year program you will have a higher payment but will pay off the loan much sooner with less interest paid over the life of the loan. However, the 30 year program has a lower monthly mortgage payment.

  • What is the difference between FHA and a VA loan?

    A FHA loan is a loan insured by the Federal Housing Administration. You as the borrower pay a premium as part of your up-front closing costs as well as a monthly insurance premium, which is part of the required monthly payment.  A VA loan is a loan guaranteed by the Veterans Administration. The borrower must have served in the Armed Forces for a specific time period. Both the FHA and VA have their own unique qualifying guidelines and you should meet with a WestStar Mortgage loan consultant to explore which of these programs and others may best suit your personal financial needs.

  • How will I know the loan program that is best for me?

    Deciding on the best loan program for you will depend greatly on your personal financial situation. You can focus on the most beneficial options by asking yourself a few questions.

    1. Do you anticipate any significant financial changes in the next few years?
    2. Do you plan to live in this home for a substantial amount of time?
    3. Would an adjustable mortgage payment make you comfortable or uncomfortable?
    4. When you enter the next phases of life (children’s college, retirement, etc..), would you aim to be out of mortgage debt?

  • Should I get a fixed or adjustable interest rate?

    When deciding on the type of program you want, it’s all a matter of time. You’ll want to think about a fixed rate mortgage if you plan to be in your home for more that seven years. Fixed rates provide you with set payments for the Principal and Interest portion of your payment and protection against increasing mortgage interest rates. An adjustable rate mortgage would be more suitable for you if you foresee living in your home for less than seven years. With an adjustable rate mortgage, you open yourself up to the possibility of having your monthly payments increase each time your interest rate changes.

  • When I apply for a mortgage, what documents will I need?

    Usually, you will need to provide documents that will verify your employment, income and assets.  Typical loan programs require the following documents:

    1. A copy of your social security card
    2. Pay stubs for the last two months
    3. W-2 forms for the past two years
    4. Bank statements for the past two or three months.
    5. One to two years of federal tax returns
    6. A signed contract of sale (if applicable and you’ve already chosen your new home)
    7. Information on current debt, including car loans, student loans and credit cards

  • If WestStar Mortgage, Inc. is paying for my closing costs, would it be advantageous for me to pay

    You could use the money you save in closing costs to buy down your interest rate, an in turn, reduce your monthly payment, saving you thousands of dollars in interest over the life of your loan.

  • Do I need to be pre-approve or pre-qualified before I begin searching for a refinance loan or a home

    Definitely! If you know that you will be approved prior to finalizing your plans for the refinance proceeds or your house hunt, the process goes much smoother.  The process is not complicated. To arrange to be pre-qualified for your refinance or purchase, take the following steps:

    1. Gather your personal financial information, such as bank statements for the last two months, W-2 forms for the last two years and pay stubs for the last two months and set up an appointment with your WestStar Mortgage loan consultant.
    2. Your WestStar Mortgage loan consultant will pull your credit report and evaluate your financial documents.  This information will allow you and your licensed lending professional from WestStar Mortgage to discuss the best home financing options that will help you achieve your financial goals.
    3. WestStar Mortgage can provide your Realtor a pre-approval letter subsequent to ordering a credit report in the name of all designated borrowers and your personal information through our automated underwriting system. This is much more valuable that a pre-qualification letter which is of limited value since it simply tells you what you might qualify for without taking into consideration your credit-worthiness; if your loan request involves a prospective new home. This will give any offer you extend more influence on the seller’s consideration.

  • What documentation is required to refinance?

    We usually need at least two months (sixty days) of bank and employment statements. We will need a two year history on employment and income. If you are self-employed or work on commission, then we will require more documentation. Your WestStar Mortgage loan consultant will be able to provide you with a precise list of needed documentation after reviewing your application.

  • I’m a past customer; do I need to submit a new application?

    We really appreciate our past customers. Yes, you need to fill out a new application; as your financial situation related to income and debt must be reevaluated in almost all loan scenarios. Ask your WestStar Mortgage loan consultant if you are eligible for ‘our streamline’ programs as this could minimize the required documentation.

  • Do I need to be pre-approve or pre-qualified before I begin searching for a refinance loan or a home

    Definitely! If you know that you will be approved prior to finalizing your plans for the refinance proceeds or your house hunt, the process goes much smoother.  The process is not complicated. To arrange to be pre-qualified for your refinance or purchase, take the following steps:

    1. Gather your personal financial information, such as bank statements for the last two months, W-2 forms for the last two years and pay stubs for the last two months and set up an appointment with your WestStar Mortgage loan consultant.
    2. Your WestStar Mortgage loan consultant will pull your credit report and evaluate your financial documents.  This information will allow you and your licensed lending professional from WestStar Mortgage to discuss the best home financing options that will help you achieve your financial goals.
    3. WestStar Mortgage can provide your Realtor a pre-approval letter subsequent to ordering a credit report in the name of all designated borrowers and your personal information through our automated underwriting system. This is much more valuable that a pre-qualification letter which is of limited value since it simply tells you what you might qualify for without taking into consideration your credit-worthiness; if your loan request involves a prospective new home. This will give any offer you extend more influence on the seller’s consideration.

  • What documentation is required to refinance?

    We usually need at least two months (sixty days) of bank and employment statements. We will need a two year history on employment and income. If you are self-employed or work on commission, then we will require more documentation. Your WestStar Mortgage loan consultant will be able to provide you with a precise list of needed documentation after reviewing your application.

  • What is the minimum Credit Score for loan applicants at WestStar Mortgage, Inc?

    Our standard minimum credit score is 620 however if the loan is a conventional loan requiring mortgage insurance then the requirements will be higher. Your WestStar Mortgage loan consultant can advise you of the specific requirements based on your selected loan program.

  • If my current mortgage rate is half a point higher than today’s rate, is it worth it to refinance?

    Most definitely! The half point difference means significant savings each month.

  • Is it still possible to qualify for a loan even if I have past credit problems?

    When the nation is challenged economically as it is now, there is a large segment of the overall population dealing with financial difficulty and doubt. When the desire to move forward into home ownership sets in, it is often questioned what chances exist for those that have encountered financial problems.  It is unfair to rush to judgment on whether a person who has had a bad credit experience is a bad credit risk. There is a critical distinction that must be made in evaluating the credit-worthiness of a consumer.  Lenders’ main questions will typically evolve around the following topics:
    1. What were the circumstances related to the financial difficulty and what caused the problem?
    2. What steps did you take to resolve the issue?
    3. What measures were taken to prevent the situation from occurring again and have you reestablished your credit standing and financial strength?

    If your personal experience included bankruptcy or foreclosure then your explanation needs to be more thorough. Additionally, the more serious the credit issues experienced then typically the longer the recovery time and significance is placed on longer term reestablished credit relationships.