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What are the differences between pre-qualification and pre-approval? |
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Pre-qualification is the lender's opinion of your ability to qualify for a loan and is based on your employment, income, and general information about your home and your current mortgage.
Pre-approval is the underwriter's decision that you are qualified for a loan, subject to the receipt and review of all conditions to close the loan and the lender's review of your completed application and credit history. |
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What are the differences between the APR and the interest rate? |
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APR - Actual Percentage Rate
The APR will be outlined in your Truth-In-Lending Statement. The APR is usually a little higher than the actual interest rate. The APR is higher because it includes some of the additional costs of obtaining mortgage financing, also known as closing costs. This is a common practice in the mortgage industry. |
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How much are closing costs? |
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| Closing costs, on the average, are about 2-3% of the loan amount. They include lender fees, attorney fees, title charges, escrows, and state taxes. The loan program you choose determines the exact amount of closing costs. |
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| A point is 1% of the loan amount. For example, a point on a $100,000 loan would be $1,000. Discount points are fees charged by lenders to reduce the amount of the interest rate. Avalon Mortgage does not charge discount points. We are able to offer great rates without charging points. |
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What is meant by the term |
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| When we lock your interest rate, it means that you are guaranteed that specific rate for a specific amount of time. We lock your loan when you set an appointment to meet with a loan officer. We usually lock loans for thirty days and there is no charge to you. This is enough time to meet, collect your paperwork, submit your loan to underwriting, and close. |
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How will I be kept updated on the status of my loan? |
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| Your loan officer will keep you informed of your loan status. You will also have your loan officer's contact information in case you have any questions or concerns. Customer service is our number one priority so you can rest assured that you are in good hands when dealing with Avalon Mortgage. |
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Who orders the appraisal and/or survey? When is it ordered? |
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| When your loan is approved, we will order an appraisal for you. We will contact you to set up a time for the appraiser to come out to your home and then we will schedule it. If you are doing a new home purchase, we will set up the survey the same way. |
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What is the difference between an equity line and a second mortgage? |
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An equity line is a revolving loan. It is similar to a credit card, in that, you have a credit limit and can charge and payback up to that limit. You get a credit card and checks to write against the loan at any time. The interest charged on an equity line is tied to the prime rate. We have equity lines with rates as low as prime. Your rated depends on your credit score. Equity lines are credit score driven. They usually have a lower rate than a second mortgage and are much more flexible. The payment is usually 1% of the amount borrowed, so it changes every month.
A second mortgage is a fixed rate loan, for a fixed term and has the same payment every month. It is not as flexible as an equity line and is similar to a car loan. |
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We have refinanced with Avalon multiple times, and our experiences could not have been better.
Avalon's staff is honest, professional, and efficient. This is an exceptionally well-managed company.
- Waymon and Pat
