Loan Process FAQ

Do you have home loan questions? There’s certainly a lot to know and consider
when buying a home, so it’s not uncommon to have questions. Take a look at some
of these FAQs to gain an understanding of the home-buying process.

Home loan questions

How do I know if I qualify for a home loan?

Your best option is a home loan preapproval — an evaluation of your credit worthiness based on your income, assets, debts and past credit use.

To obtain your home loan preapproval today, call us at (310) 954-0808. If you have other home loan questions, call a Trimax Bank home loan advisor at (310) 954-0808 or visit your local bank branch.

Credit Reports

What is a credit report and why is it important?

Along with your income, assets and debts, your history of credit management is an important factor when applying for a home loan. Three national credit reporting agencies continuously monitor your use and re-payment of credit, including credit cards, car loans, student loans and any other short- or long-term loan. Make sure you know what’s in your credit reports so you can correct any errors.

All three agencies report the following information:

  • Identification: Name, address, Social Security number, employer, date of birth and spouse’s name.
  • Credit history: Current and past payment history of all open and paid accounts. Negative information, such as late payments, can stay on your report for seven years, while bankruptcies can remain for up to 10 years.
  • Collection: Any creditor who has turned over an account to a collection agency may be listed.
  • Public records: Items of public record that affect your finances, such as bankruptcies, divorce decrees, child support and other judgments are listed.
  • Inquiries: Anyone who has checked your credit in the past 18-24 months is listed.

How do I order a credit report?

You can order your credit report (usually for free) or dispute information that it contains by contacting the agencies listed below:

Finding the Right Home Loan

What types of loans does Trimax offer?

Trimax offers a wide array of great loan programs tailored to fit your individual
needs in either a fixed-rate mortgage or an adjustable-rate mortgage (ARM). Some
of the home loan products we offer include:

  • 10-, 15-, 20-, 25- or 30-year fixed-rate loan terms
  • 3-, 5-, 7- or 10-year adjustable-rate loan terms (up to $417,000)
  • 3- or 5-year jumbo adjustable-rate loan terms (over $417,000)
  • Interest-only home loan products
  • First-time homebuyer home loan programs

Have more home loan questions? Browse types of home loans.

Which loan is best for me?

We’ll help you choose the best home loan for your needs based upon three key factors:

  • How long do you plan to keep your home?
  • How much you need to borrow?
  • How much financial risk are you willing to accept?

To learn more about the wide variety of home loan products that Trimax Bank offers or for any other home loan questions, you can request information online or speak directly with a home loan advisor at (310) 954-0808.

Down payments

How do I determine the amount of my down payment?

The most important factor in determining the size of your down payment is the amount of cash immediately available to you:

  • Most home loan programs have minimum down payment requirements based on the amount you need to borrow compared to the actual value of the home. This amount is commonly known as the loan-to-value ratio or LTV for short.
  • You can calculate the LTV by dividing the loan amount by the appraised value. The bigger your down payment, the lower your LTV. For example, if you bought your home for $200,000 and put $50,000 down, your LTV would be 75% (150,000/200,000).
  • A low LTV not only gives you a better chance of a home loan approval, it also can affect the interest rate of your home loan, thus lowering your monthly mortgage payment.

Use our Payment Calculator to compute monthly payments and see how different
down payment amounts affect your payment. For more mortgage FAQs, visit our guide to the Home Loan Process.

Interest Rates

What is the difference between an interest rate and an annual percentage rate (APR)?

An interest rate is the monthly cost you pay on the unpaid balance of your home loan.

An annual percentage rate (APR) includes both your interest rate and any additional costs or prepaid finance charges such as points, origination fee, private mortgage insurance and underwriting and processing fees. (Your actual fees may not include all of the items above.) The APR is a universal measurement that will help you compare the cost of mortgage loans offered by different mortgage lenders.

What is the difference between fixed-rate and adjustable-rate mortgages?

A fixed-rate mortgage is a loan in which the principal and interest payments never change during the life of the loan.

  • Fixed-rate mortgages are beneficial to borrowers who are on a fixed income, who are averse to interest rate changes, and who like the security of fixed payments.
  • Adjustable-rate mortgages are generally preferred by borrowers who do not plan to stay in their home for a long time, who do not qualify for lower fixed interest rates and/or who can handle fluctuating payments.

To find out what interest rates are available to you or for other home loan questions, call a Trimax Bank home loan advisor at (310) 954-0808.

Home loan insurance

What is title insurance?

This common mortgage question is often asked by first-time homebuyers. Title insurance is a one-time expense designed to guarantee that the seller legally owns the property and that there are no outstanding legal or financial claims against it. For you to obtain a home loan, a title insurance company must research the property to confirm when you close on your mortgage the home is titled in your name and there are no outstanding liens against it.

What is homeowner’s insurance?

Homeowner’s insurance protects your property against disaster and liability. This insurance protects you and the lender’s investment in your property. You are required to be insured against unexpected hazards and personal liability claims.

Prepayment of the first year’s homeowner’s insurance will be part of your closing costs. Your ongoing insurance premiums will become part of your monthly mortgage payment.

What is windstorm/hail or hurricane insurance? When is it required?

There are hazards for which an investor or bank may require coverage that is not included on traditional homeowner’s policies. These hazards include, but are not limited to, windstorms, hail damage or hurricanes. There are coastal areas, primarily the Eastern seaboard and Gulf Coast, where certain hazards are excluded as standard coverage. If the homeowner’s insurance policy limits or excludes any hazards such as windstorms, hail or hurricanes, then a separate policy covering these natural disasters must be provided.

What is flood insurance? When is it required?

Flood insurance is specific insurance coverage that protects against property loss from flooding. A flood certificate is obtained during the loan approval process to determine whether or not the property being purchased or refinanced is located in a special flood hazard area.

If it is determined that the property is located in a flood hazard area, flood insurance will be required on the loan. Should flood insurance be required on a property under Federal Emergency Management Agency (FEMA) guidelines, the policy must be equal to the hazard coverage. The maximum coverage available is $250,000 on a flood policy for a residential dwelling.

What is private mortgage insurance (PMI) and how does it work?

Private Mortgage Insurance (PMI), also known as a mortgage insurance premium (MIP), protects lenders against the possibility of default. You may be billed monthly, annually, as an initial lump sum or some combination of these methods for your mortgage insurance premium. Ask your Trimax loan advisor if mortgage insurance is required and how much it will cost. Mortgage insurance protects the lender where the borrower is not able to provide a 20% down payment. This insurance should not be confused with products such as mortgage life, credit life or disability insurance, which are designed to pay off a mortgage in the event of a borrower’s death or disability.

When is PMI required?

Lenders often require mortgage insurance for loans when the down payment is less than 20% of the sales price.

If I have an existing mortgage is my PMI now tax deductible?

Unfortunately, no. At this time, the government is only allowing tax deductible PMI for purchases and refinances that closed in the 2007 tax year.

Home Inspection

What is a home inspection? Do I need one?

A home inspection is not an appraisal. It is an evaluation of the general quality of the home with details about the structural condition of the house and the life expectancy of its major systems, such as plumbing, heating and electrical.

The inspection will tell you whether your new home is free from defects that could cause problems both now and in the future. A home inspection is generally a contingency in the purchase agreement. You have a set amount of time for a professional inspector to examine the house, and if any major issues are found, you can use them in price negotiations.

Closing on your home loan

What is the total amount I will pay for closing costs? What do these costs include?

Closing costs typically total between 2% and 5% of the purchase price of the home. These mostly one-time fees include:

  • Appraisal
  • Title insurance
  • Closing transaction fee
  • Loan origination fee
  • Discount points
  • Recording fee
  • Underwriting fee
  • Processing fee

What are prepaids?

Prepaids refer to fees you will owe to cover costs such as property tax, homeowner’s insurance and pro-rated interest. The lender collects these fees to ensure your taxes and insurance are paid on time.

What happens at closing?

The day you close represents the culmination of your efforts and those of your loan advisor to complete the financing of your home. You want the closing to be as smooth and stress-free as possible, so be sure to resolve any home loan questions before closing.

To close your loan, you’ll need to:

  • Bring certified funds totaling the down payment, closing costs and prepaid items. The total amount of funds you’ll need will be provided to you the day before in the form of a settlement statement, commonly known as a Housing and Urban Development (HUD) statement. The settlement statement is a key part of the closing and identifies the different fees and charges associated with the loan. The HUD statement will be included in the final closing documents.
  • Sign all the applicable documents. When you’re finished, you’ll receive a copy of every document and the keys to your new house.

Refinancing

If I am refinancing, do I need to make my existing mortgage payment when it is due?

Yes. If your mortgage payment is due before your new mortgage loan closes, you should still make any mortgage payment that is pending. It is important payments are made on time to maintain your credit rating.

Is my loan-to-value (LTV) based on the purchase price or appraised value?

When refinancing your home, the LTV is the appraised value compared to the loan
amount. For example, if your home appraises for $100,000 and your loan amount is
$80,000, your LTV would be 80% (80,000/100,000).

When purchasing a new home, the LTV is the loan amount divided by the lesser of
appraised value or the purchase price.

Escrow

What are escrow accounts and how much do I need in my escrow account?

An escrow account holds money you pay to the mortgage company to cover your taxes, insurance and other costs associated with homeownership. The funds are included in your monthly mortgage payment, making budgeting easier for these expenses. The mortgage company is responsible for the timely disbursement of escrow funds.

What is an escrow waiver?

Trimax Bank will consider requests for a waiver of taxes and homeowner?s insurance. Our Underwriting department will evaluate the request during the credit review and approve the escrow waiver prior to closing if all requirements are met. Borrowers with an escrow waiver are responsible for paying all taxes and homeowner insurance premiums when they are due.

Monthly Payments

Can I make a mortgage payment online? Can my mortgage payment be
automatically deducted from my checking account?

Yes, you can make an online payment through the MyLoans feature on Trimax.com. MyLoans simplifies the mortgage payment process and makes it easy for you to automatically schedule future and recurring payments directly from your checking account.

What is MyLoans?

MyLoans is a simple way for you to manage your Trimax loan(s) online, and it’s always available when you need it — 24 hours a day, seven days a week from anywhere you have Internet access. It’s free, easy-to-use and it allows you to:

  • View your loan balance, interest rate and payment due date.
  • View your year-to-date interest and year-to-date taxes.
  • Instantly access your monthly statements online.
  • Simplify tax time. View yearly 1098 tax statements online (available during tax season).
  • Pay your loan online and take the hassle and expense out of writing and mailing checks.
  • Have confidence in a process that’s easy, fast and secure.

Can I pay my monthly loan payments by credit card?

No, we do not accept credit card payments.

Can I make bi-weekly payments on my Trimax Bank loan?

Bi-weekly payments are one of four auto-debit options we offer; however, they are not available on all loans. We do not accept bi-weekly payments sent by third-party companies.

Can I change the monthly payment due date on my loan?

No, we are unable to change your due date based on the contract/note that was signed at closing.

Mortgage Payment Relief

I lost my job or have had a cut in my hours or rate of pay, making it difficult to make my payments. Is foreclosure my only option?

No! There are many options available to help you avoid foreclosure. For details visit our Mortgage Payment Relief page or call our loss mitigation department at (310) 954-0808 to discuss your situation with one of our loan counselors. Trimax Bank wants to help.

I owe more on my loan than my property is worth. Does this mean that I can’t sell the property?

No — in fact, if you are unable to continue making your payment, selling your home for its current fair market value is often the best way to avoid foreclosure. Our loss mitigation specialists can help you navigate through the short sale process.

Will I have to make up the difference between what I owe on the loan and what I can sell it for?

It depends on your overall situation. To the extent you are able to honor your obligation, we will expect you to do so and will work with you to make this as easy as possible.

What information will I have to provide to take advantage of one of the relief options?

We will need to see information that verifies your financial hardship. This might include lay off notices or other notices from your employer concerning your rate of pay or a reduction in hours, tax returns, medical bills and/or other information that documents your financial hardship. We may also need to see recent bank statements, a listing of what you own and what you owe and information on your household budget. We can work with you to assemble this information.

I don’t understand the forms required to take advantage of the relief options, can someone help me complete the forms?

Absolutely! Give us a call at (310) 954-0808 and we’ll answer all your questions.

How will my credit report be impacted by these relief options?

We are required to report the status of your loan each month to the credit repositories and will continue to do so during the relief period. However, the damage to your credit report from using one of our relief options is far less than it would be if your home were to go to foreclosure. Also, creditors may look more favorable on future credit applications if you can show that you cooperated with your lender during a time of financial hardship.

Will I continue to get phone calls during the process?

Until a formal arrangement is made to bring your account current, the normal loan servicing process will continue, including phone calls and letters from our loan counseling department.

Are there any tax considerations?

With a short-sale, the IRS generally does not count debt forgiveness as income if the debt was secured by your primary residence. However, exceptions to this do exist and you should consult your tax advisor for more details.

I’m also past due on some of my other debts, how will that impact the process?

There are many credit counseling agencies available that can help you work with your credit card lenders and other creditors to reduce your payments. Many credit counselors offer assistance with budgeting and may also have information on other financial assistance available in your area from state and local government agencies, churches and other civic organizations.

Contact the U.S. Department of Housing and Urban Development toll free at (800)-569-4287 to find out how to contact credit counselors in your area. Or visit their web site at www.hud.gov and look for information on how to avoid foreclosure.

I’ve made extra principal payments on my mortgage in the past, can these amounts be reapplied as regular payments to bring my loan current?

In some cases, this may be possible. There is usually a fee for doing this but it can be a way to reinstate your loan depending on what your investor allows.

I’m currently in foreclosure — are there any options for me?

If you are currently in foreclosure there may still be time to save your home. The only way to determine what, if any, options are still available is to contact our Loss Mitigation Department at (310) 954-0808.

We hope that these mortgage FAQs were helpful. If you have additional home loan
questions, please call a Trimax Bank home loan advisor at (310) 954-0808 or
contact your local bank branch.


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