Find Answers to Frequently Asked Questions
What’s the best way to get started when it comes to buying a home?
You’ll want to learn as much as you can and do your homework. We present our First Time Home Buyer Seminar and our Home Construction Loan Seminar several times a year. Our seminar schedule is posted under the “News & Events” area of www.members1st.org.
What types of mortgages does Members 1st offer?
We offer Construction Loans, Mortgage Pre-Approvals, Mortgage Refinancing, a First Time Home Buyers Program, First Mortgages with various terms including 15- and 30-year fixed rate mortgages, 7-year balloon mortgages, 30-year fixed VA/FHA mortgages, USDA 100% financing, PHFA and more.
What documents do we need to have to apply for a mortgage?
We will typically need recent paystubs that cover 30 days, last 2 years W-2 forms, bank statement for 1-2 months and most recent retirement statements including any 401k or IRAs. If you are self-employed, we will need copies of the most recent 2 years complete tax returns in place of the paystubs listed above.
How will I/we know what type of mortgage is the right one for me/us?
There is no answer for this that would apply to everyone. The best way to determine which type of mortgage may be best for you is to speak with one of our mortgage experts. There are many types of mortgages and based on your individual circumstances and future plans. Together we will look at all of your available options and we will recommend the one that is best for you.
What are the qualifying guidelines for a mortgage?
Your income, employment, assets, liabilities and credit history all play a role in your approval process. Once again, it can be very individualized and there is not one answer to this. Our mortgage experts are trained and experienced and can answer this based on what type of mortgage would suit your individual needs.
What are the application fees?
There is no application fee for an initial consultation and pre-approval. Once you have a home under contract, we will collect an application fee or appraisal fee that ranges from $375 to $450.
What’s the difference between being pre-qualified for a mortgage and being pre-approved?
Pre-qualified typically does not involve the gathering of documentation and is not reviewed by anyone that will ultimately approve the request.
Pre-approval typically does involve the gathering and validation of information given and is reviewed and approved.
How do I/we get pre-approved for a mortgage?
You may apply online at www.members1st.org
or call our mortgage department at (717) 795-6026 to schedule an appointment with one of our mortgage experts.
How long will a mortgage application appointment take?
Typically an application will take between 45-90 minutes.
The entire process from application to closing on your loan and new home will generally take between 30-60 days to complete.
How do I/we lock in an interest rate?
You must first find a home and have an accepted agreement to purchase the home signed by all parties. Once this is complete you may lock in by contacting your mortgage representative and they will lock in your rate by phone or schedule a time to meet at a later time.
How long does the application and approval process take?
Typically we can get an approval within 24-48 hours of receiving the necessary documentation and completing an application. This may vary depending on your individual circumstances.
What if I/we change our minds after we apply? Can we back out?
You may cancel your application at any time, however any application fee paid is not refundable.
Will I/we need to put a down payment? How is the amount of a down payment determined?
The rate and terms of your loan will be based on a down payment figure ranging from 0-20 percent down. The amount of money you will be required to put down is based on many factors which include your credit rating, if you are a veteran, where you are purchasing your home, and many other criteria. Your mortgage expert will be happy to give you any options that are available to you.
What is Private Mortgage Insurance?
Private Mortgage Insurance (PMI) is extra insurance that lenders require from most home buyers. If your down payment is less than 20 percent of the appraised value or sale price, a buyer is required to obtain PMI. This is designed to protect your lender against any default on the loan (i.e., you fail to make payments).
What will my/our Private Mortgage Insurance premiums be?
PMI charges vary depending on the size of your down payment and your loan. Premiums are not tax deductible.
How long do I/we need to keep Private Mortgage Insurance?
When you reach the point in your payments where your loan-to-value ratio hits 78 percent, PMI premiums may be discontinued; however, each individual loan situation may have different requirements.
What’s an escrow account?
An escrow account is used to collect and hold funds to pay your property taxes, homeowner’s insurance premiums or other charges when they become due. The account is often established for you by your lender when you take out your mortgage.
Do I/we need to have an escrow account?
You typically are required to have an escrow account unless you put 20% or more down on your new home. When you put 20% or more down you will be given the option to have an escrow account or you may pay your own taxes and insurance.
How do I/we figure out what our monthly payment will be?
Your monthly payment will be based on your loan amount, interest rate, the length of your financing term, taxes, homeowner's insurance and mortgage insurance if required.
Will our real estate taxes be included in our monthly payment?
Property taxes and home owners insurance will be a part of your mortgage payment if you have an escrow account. They will then be paid automatically when they are due by your mortgage servicer.
Is there a settlement service at Members 1st?
Yes. Members 1st Settlement Services is located in our Administrative Headquarters in Mechanicsburg.
What can we expect at settlement?
Settlement is when you sign all of your final documents for purchasing your home and obtaining your mortgage loan. This is when the deed to your new home is finalized and you take possession of your home. This is also when you will be asked to bring any funds needed to purchase your home and finalize your mortgage loan.
What are points?
A point is a fee equal to 1 percent of the loan amount. Lenders may charge 1, 2 or more points.
What are discount points used for?
Discount points are prepaid interest on the mortgage loan. The more points you pay up front, the lower the interest rate on the loan. This kind of point is typically tax deductible.
What are closing costs and how are they determined?
Closing costs are costs involved in purchasing a home and processing and closing your mortgage loan. Some of these costs are the same for all loans such as state transfer tax, recording fees for your mortgage and deed and title insurance. Other fees vary depending on the loan type such as appraisal fees and origination fees.
There are numerous other fees included in closing costs and they vary based on what mortgage program is used for purchase.
Will our mortgage be sold to another lender?
Typically Members 1st processes, closes and funds your loan in our name and the servicing (collecting of payments) of your loan is sold to another lender. This is done to allow us to obtain the best possible rate for our members. This in no way changes any terms or conditions of you loan. Once your loan closes, the terms and conditions of your loan can not change by law.
Will there be pre-payment penalties on our loan and if so, what could it be?
Typically there are no pre-payment penalties on mortgage loans.