C&F University

During this period, your C&F loan officer can provide estimates for homes you may be interested in while you work with your real estate agent to find the right home.

Once you are under contract we will regroup, update
any expired documents and discuss your initial loan disclosure package.

After your disclosure package has been signed, your loan will move to processing where information will be gathered to submit to underwriting. Services, such as an appraisal and title, will be ordered. During this time, your interest rate will likely be locked in and you will receive a Loan Estimate.

The underwriting department will decision your loan and will likely be conditionally approved, meaning it’s approved as long as certain criteria are met. Your C&F loan officer and processor will contact you to collect any additional documentation needed for underwriting conditions and resubmit your loan for final approval if necessary.

Once your loan is through underwriting, it will move to our closing department. Our closer and your settlement agent will work on preparing your final figures. You will receive a closing disclosure to sign no later than 3 business days prior to closing.

On the day of closing, you will sign your closing package and get the keys to your dream home!

While your mortgage interest rate is a percentage of the amount borrowed, your APR (annual percentage rate) is a more complete representation of the costs to borrow money and is based on the interest rate, points, and other costs associated with your loan. For these reasons, it is typically higher than your mortgage interest rate. You can find this number in the ‘Comparisons’ section of your loan estimate.

While overall interest rate ranges are based on what’s happening in the economy, the actual rate you’re given is based on multiple factors related to your financial background. Generally, having a strong financial history leads to a more favorable interest rate. Here’s what goes into your rate:

• Credit Score. Your credit score is used to determine how reliable you’ll be in repaying your loan. A higher credit score generally leads to a lower interest rate.
• Loan-to-Value Ratio. Your LTV is calculated by dividing your loan balance by the home’s appraised value. Typically, the lower your LTV, the better your interest rate since you’ll have more equity in the home.
• Loan Term. There are several options when it comes to repayment terms and while a 30-year mortgage tends to be the most popular, a 15-year mortgage often comes with lower interest rates. In general, a shorter term will provide you with a lower rate, but keep in mind that your overall payment will be higher since you’re paying off the balance in a shorter amount of time.
• Loan Type. With many loan programs to choose from, you’ll find that interest rates vary somewhat depending on which option you select. Some of the most popular options include Conventional, FHA, VA, and USDA loans.

As part of shopping around for a mortgage, you’ll notice that interest rates vary amongst lenders. While it may be tempting to automatically choose the option with the lowest interest rate, it’s important to pay attention to all of the numbers in your loan estimate when choosing a lender. For example, the interest rate may be lower, but what if the APR is higher or the closing costs are significantly more? You’ll find that sometimes a lower interest rate isn’t the best option after all! Sometimes the lower interest rates are offset by other costs, meaning you may end up paying equivalent or more when all is said and done.

The higher your score, the better when it comes to showing your credit-worthiness! According to FICO, the biggest source of credit scores, the scoring model looks like this:

• Exceptional: 800+
• Very Good: 740-799
• Good: 670-739
• Fair: 580-669
• Poor: 579 and lower

The three main reporting bureaus (Equifax, Experian and TransUnion) only record a score if the report shows activity within the last two years.

You can check by going to Annualcreditreport.com or visit the bureaus:

• Experian Experian.com/reportaccess
• Transunion Transunion.com/credit_services
• Equifax Equifax.com/FCRA

Contact a C&F Mortgage Local Industry Expert

While the credit bureaus (Equifax, Experian and TransUnion) all use a similar scoring model, they can vary slightly and are based on a specific snapshot in time. Since a mortgage is a significant investment with more risk when it comes to delinquency, C&F Mortgage will pull all three bureau credit scores on the borrower and use the middle of the 3 scores if all 3 repositories have a report, and the lower of if only 2 have a report.

1. Make payments on time. As the most significant factor of your credit score, it’s critical to ensure you’re making timely payments on all of your accounts owed. If you have a hard time remembering deadlines, set a calendar reminder – or better yet, set up automatic payments!
2. Keep your utilization ratio low. It’s important to keep your utilization below 30%, but the lower the better in terms of building your score. Try to pay off your credit cards in full each month to keep this ratio as low as possible.
3. Keep some accounts open. Your credit history is an integral part of your score, so the longer you’ve had credit established, the better. If you have an older credit card that you’ve paid off, it’s sometimes better to keep it active by charging a small amount and paying it in full each month than it is to cancel the account.
4. Diversify your credit. Try not to put all of your eggs in one basket, so to speak. Don’t open up a handful of credit cards and call it a day – try to build your credit across multiple avenues, including a credit card, an auto loan, a personal loan, etc. Choose a few that work for you and focus on nurturing them.
5. Don’t open too many accounts at once. For example, it may be tempting to open up store credit cards to get a discount on your purchase but think about the long-term impacts. Not only do these hard credit inquiries negatively impact your score in the short term, but opening up too many lines of credit can tempt you to spend money you don’t necessarily have on hand. If you do plan to make a big purchase, such as a vehicle or a home, you won’t be penalized for shopping around, so long as all of the inquiries are made within a short period.

Starting from square one? Here are a few pointers:

• Get a secured credit card. This type of card is backed by a cash deposit made upfront and allows you to make purchases, pay your balance on time and incur interest for any balances not paid in full
• Become an authorized user. If you have a family member who can add you to an existing credit card, the payment history will be added to your credit file
• Take out a credit-builder loan. The money is typically held by a lender and released when the loan is repaid in full
• Get a co-signer. If you have someone willing to take out a credit line alongside you, you will both be responsible for ensuring the debt is repaid in full

Closing costs typically range between two to four percent of the purchase price of your house. You will receive a Loan Estimate outlining these costs within three days of your completed loan application.

Mortgage interest rates can change daily and sometimes hourly. If your rate is locked, your rate will not change from the lock in date to the closing date as long as you close within the specific time frame and there are no changes to your loan application.

Lenders put a portion of your monthly mortgage loan payment into an escrow account to cover your homeowner’s insurance, flood insurance if applicable, and your property taxes. When these payments are due, the loan servicer pays them from your escrow account on your behalf.

A fixed rate mortgage carries the same rate for the term of the mortgage loan. The interest rate and term are fixed at the start of the mortgage loan. The monthly amount for the payment of principal and interest will not change during the term of the mortgage loan, regardless of market conditions.

Points and discount points are the same thing. They are percentage points of the loan amount. They are an elective fee that you may choose to pay at the time of closing. They reduce the interest rate that you pay. Your C&F Loan Officer will help you look at the options.

Title insurance is a policy that guarantees the accuracy of the title work done on your home at the time of purchase or refinance and is provided by the title company. As a buyer, you are required to purchase a lender title insurance policy, which only protects the mortgage company, as part of your standard closing costs. You can choose to purchase an owner title insurance policy, which would protect you against any loss in the event of any legal issues relating to the title of your home.