Mortgage FAQs

What is a Balloon Loan?
A balloon loan is usually a five or seven year loan calling for payments which are insufficient to fully amortize the amount of the loan before the maturity date. This creates a balloon payment, which is due at maturity.

On an adjustable rate mortgage, how is my new interest rate determined?
Most adjustable rate mortgages require that the index is adjusted on a specific date, then a margin is added to the index and the result is rounded to determine the new interest rate.

What is an adjustable rate mortgage?
An adjustable rate mortgage (ARM) is a loan under which the interest rate is tied to a specific index and is periodically adjusted to more closely coincide with current rates, including increases in the index, as well as decreases. The amounts and times of adjustment are agreed to in the adjustable rate note signed by the homeowner.

Why is my interest rate going up but my payment going down?
If you have sent in extra money in addition to your regular payment, you will have lowered your principal balance ahead of schedule. When it is time to adjust your interest rate, we will determine your new payment amount by using your current principal balance, new interest rate and remaining term. If you have sent in enough extra money, it is possible to lower your payment even though your interest rate increases.

If my payment is due on the 1st and I have a 15-day "grace" period, when would a late charge be assessed?
Late charges are assessed after the close of business on the 16th. If the 16th falls on a weekend or holiday, late charges are assessed after close of business on the next business day.

What if my loan is in foreclosure and I want to reinstate my mortgage?
You can reinstate your mortgage at any time up to the foreclosure sale date if you pay all past due payments plus any fees and costs associated with the foreclosure.

My spouse is obligated to make the mortgage payments under our divorce agreement. Am I still liable?
If you signed the note and mortgage, you are still liable for the payments. A divorce agreement does not alter your obligation to make payments.

If I deeded my interest in the property to my spouse or someone else, does this remove my liability?
No. Deeding your interest in the property to someone else only means that you no longer own the home. You are still obligated to make payments, as stated in your note and mortgage.

If I am closing on my house, or have requested a Payoff Statement, do I still need to make my payment this month?
Yes. It is important that you continue to remit your monthly payment as you normally would. There could be unforeseen delays in the closing, and if the regular monthly payment is not received, it could have a negative impact on your credit rating.

If I have a large escrow shortage, do I have any options if I am unable to make the larger payment?
Yes. You may pay the escrow shortage in-full with one lump sum payment or we can spread the shortage over a 12-month period.

Why did my payment increase?
Your monthly payment will increase or decrease with any change to your taxes and/or insurance. Your taxing authority and insurance company/agent will notify us when they make any type of change, which ultimately will affect your monthly payment. You may wish to contact your local taxing authority or insurance company/agent for details concerning changes to your annual bills.

Why did I receive an overage check?
An overage check can be a result of your insurance premiums and/or taxes being less than we expected to pay. Your escrow analysis statement will show how the overage was calculated. Federal law requires us to return the surplus of funds to you.

Can I pay my own taxes and insurance?
Yes, however, it is likely that the interest rate on your loan will be slightly higher. Collecting for taxes and insurance in your monthly payment creates an escrow account. This is established at the closing of the loan and will remain for the term of the loan. An escrow account provides a convenient, no-hassle service by allowing us to pay your tax bills and insurance premiums for you.

Why did I receive a check from an overage in my escrow account and then my monthly payment increased?
Your annual escrow disbursements are projected by using your previous year's actual escrow disbursements. Your estimated disbursements are deducted from your escrow balance plus your projected monthly escrow payments for the next 12 months. If your projected escrow overage is greater than $50.00, Federal law requires us to refund the overage. Then, if your insurance premium or taxes increase during this 12-month period, you may have a shortage, which would increase your monthly payment for the next year.

What is Force-Placed or Lender-Placed Insurance?
When proof of sufficient insurance coverage has lapsed, been canceled or has not been received, as a last resort, we will obtain coverage on your property through a selected insurance company. Force-placed insurance is almost always more expensive than insurance coverage you can purchase yourself, and it only covers the structure. Personal property is not covered.

Can I pay my own insurance?
If you have a VA, FHA or conventional loan with Private Mortgage Insurance, your insurance premium must be collected.

Do I have to carry insurance on my home?
Yes, the terms of your mortgage require that you maintain homeowners insurance on your property for an amount equal to the remaining loan balance.

Can I cancel my Private Mortgage Insurance (PMI)?
Not all loans are eligible for PMI cancellation. Loans that are eligible have specific guidelines that may change at any time. Please call Karen McIntyre, Senior Mortgage Representative, for more information regarding your own situation.

Can I change insurance companies?
Yes. You can choose whatever insurance company you want as long as it maintains either a "B" or better general policyholder's rating, or a "6" or better financial rating as published in the A. M. Best Company's Insurance Reports. Just be sure to notify us of the change.

Do I have to carry Flood Insurance?
If your property lies within flood zone "A" or "V", federal law requires you to maintain and provide proof of flood insurance coverage. Prior to closing, you were notified if your property was located in one of these zones. Federal law also requires that we monitor any changes in flood zones for as long as your loan is outstanding; so if there is ever a change in the status of the flood zone where your property is located, we will notify you by mail.

How long will it be before I receive a coupon book?
Normally the coupon book will be mailed within three to four weeks after the closing of your loan. In the meantime, please use the temporary coupons that were provided to you at closing for remitting your payment. You may also write your loan number on the memo line of the check or money order. It is always a good idea to write your loan number on the memo line of your check or money order regardless if you use a coupon or not.

Who holds the Deed to my property?
You should have received a copy of the Deed after the closing on your loan. The original Deed was sent for recording at the Recorder's Office of the county in which your property resides. The Deed was then returned to you. You may obtain a copy of the recorded Deed from your County Recorder's Office.

Who do I call for information on refinancing my existing loan?
Please call Karen McIntyre, our Senior Mortgage Representative, at (609) 466-7399. For additional information, please visit our Refinance section on our web page.

Do you offer Home Equity Loans?
We offer you the option of a revolving Home Equity Line of Credit or a Home Equity Loan. Both products are second mortgages. Please call any one of our Branch Managers at (609) 466-2900 to discuss which product may be right for you.

Why are 'Late Charges Paid' included in my 'Total Interest paid' amount?
In IRS Publication 936 of the IRS Home Mortgage Interest Deduction Guidelines, the IRS has stated that late charges paid must be included as interest paid.

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