Frequently Asked Questions

  • What is a pre-qualification?

    A pre-qualification will estimate how much money a prospective homebuyer will be eligible to borrow, before you actually apply for a mortgage loan. You must be prepared to provide basic information such as income, debts, and assets. A pre-qualification is not a pre-approval or loan approval.
  • Why do you need 30 days pay stubs?

    These allow LeaderOne Financial to get a good understanding of your wages and what we, as lenders, can count as income for you to qualify. As a rule of thumb, we want to see two years of consistent wages in the same industry.
  • How important is my credit?

     Your credit is an important consideration for determining your creditworthiness. Information in your credit report is prepared by a credit reporting bureau or credit reporting agency. Any late payments or other adverse information contained in your credit report will receive additional review during the underwriting of your loan application, and may require further written explanation(s) or documentation from you as we consider your loan request.
  • How much money will I have to come up with to buy a home?

    That depends on a number of factors, including the cost of the home and the type of mortgage you obtain. Generally, you need to have access to the funds to cover the following costs:
    • Earnest Money
    • Down Payment---A percentage of the cost of the home that you must pay at  the time of settlement.
    • Closing Costs---The costs associated with the mortgage transaction.
  • What are closing costs?

    Closing costs cover all the fees and expenses associated with a mortgage loan transaction. These costs may include the following fees: appraisal, credit report, title insurance, bank fees, document preparation fees, recording fees, property transfer tax and points. The closing costs vary depending upon the loan product chosen.
  • What is title insurance and why do I need it?

    The title insurance assures the homebuyer that any valid claim against the property will be covered by the title insurance company.

    The function of a title insurance company is to make sure your rights and interests to the property are clear, that the transfer of title takes place efficiently and correctly, and that your interests as a homebuyer are fully protected. Title insurance companies normally issue two type policies; a lender&quo;s policy that covers the lending institution and the owner&quo;s policy which covers the homebuyer. Both policies are issued at the time of closing for a single premium.
  • What is Private Mortgage Insurance (PMI)?

    PMI is insurance provided by a non-governmental insurer that protects the lender against loss if the borrower defaults. Loans with a down-payment of less than 20% of the purchase price require private mortgage insurance. Mortgage Insurance premiums are based on the loan-to value ratio, type of loan and the amount of coverage required by the lender. The premium is normally included in with your monthly mortgage payment.
  • Will I always have to pay Private Mortgage Insurance (PMI)?

    Federal Regulations require that PMI be canceled when the principal balance on the mortgage reaches a certain point. Automatic termination of PMI normally occurs for many borrowers when their principal balance has been amortized down to 78% of the original property value.
  • What information do I need to apply for a loan?

    We will ask for information about your employment, income, assets, debts and the property you wish to purchase, construct, or refinance.   Other information may be requested depending upon your situation and the program chosen.
  • What term (length of loan) is best for me?

    The monthly payments on a 30-year mortgage are lower than those for a 10, 15, 20, or 25 year mortgage; however, a shorter term can offer a lower interest and shorter loan term which can save you a considerable amount of money as the loan amortizes.
  • What will my mortgage cover?

    Most loans have 3 parts:
    • Principal: The repayment of the amount you actually borrowed
    • Interest: Payment to the lender for the money you borrowed
    • Property Taxes: the annual city/county/school taxes assessed on your property divided by the number of mortgage payments you make in a year. During the life of the loan you will repay more in interest than you will in principal, because of the way mortgage loans are structured, you will pay mostly interest in the early years and mostly principal in the final years.
  • What do I need available when I apply for a mortgage?

    You should have the following available:
    • Social Security Numbers for all borrowers
    • Copies of your checking and savings accounts for the past three months.
    • Evidence of any other assets like stocks or bonds
    • Recent pay-stubs detailing your earnings and two most recent years W-2&quo;s.
    • Two most recent years tax returns for self-employed applicants
    • Evidence of Pension or Social Security income
    • List of all credit card accounts and the approximate balance and monthly payment amounts
    • List of  loan account numbers and the approximate balance and monthly payment amount
  • If I refinance, do I need a new appraisal and credit report?

    Yes, a new appraisal and credit report are necessary.
  • Why do I need to pay for another title insurance policy when we already own the property?

    A new policy is necessary for the lender to be certain there are no liens, claims, or encumbrances against the property.
  • What is a cash-out refinance?

    You may be able to refinance your home for more than you currently owe with a loan to value ratio of less than 80% to use the cash for home improvements, debt consolidation, college expenses or other major purchases.
  • If I have an existing mortgage loan with you do I have to qualify again?

    Yes, you will have to qualify for a refinance loan.
  • Can I have my monthly payment transferred from my checking or savings account?

    Yes, your monthly payment can be automatically deducted from your checking or savings account.
  • Is flood insurance required?

    Federal regulations requires that we have a flood determination performed on your property prior to loan settlement and monitor the flood map changes for the life of your loan. If you insurable improvement is located in a Special Flood Hazard Area or Zone A as determined by the Federal Emergency Management Association (FEMA), we will require a flood insurance policy and we will maintain an escrow account for the premium payments.
  • Does it make sense to pay "points" to get a lower interest rate?

    Paying "points" up front when you go to settlement with your mortgage will lower your interest rate but there are factors to consider. Each point will cost you 1% of your original loan amount at settlement. To determine whether it makes sense to pay discount “points”, you need to compare the cost of the discount points to the monthly savings created by lowering the interest rate. Simply divide the total cost of the discount points by the savings in each monthly payment. This calculation provides the number of payments you&quo;ll have to make before you actually begin to save money by choosing to pay discount “points”. If the number of months it will take to regain the discount points is longer than you plan on holding this mortgage, you should consider an interest rate product that doesn&quo;t require discount points.
  • What is the best way to determine the banks rates and total costs?

    The Annual Percentage Rate (APR) is required to be disclosed when advertising or providing the customer with the Federal Truth in Lending disclosures. Lenders are required to disclose the actual “cost” of borrowing and the APR is intended to make it easier to compare lenders and loan options. However, not all fees are included in the APR; fees such as the appraisal are not included although the customer is usually responsible for them.

    The APR is not the actual interest rate. Your monthly principal and interest payment will be based on the actual interest rate, the loan amount and the term of your loan.
  • Are there any prepayment penalties?

    There are no prepayment penalties on any of the conforming loan products that we offer.
  • What is the amount of homeowners insurance that will be required?

    You will be required to insure the property for at least the amount of the loan since the lender is looking to protect its investment in your property in the event there is a loss. However, the replacement value of your home may be considerably higher and the borrower should consider that there is sufficient replacement coverage in case there is a total loss.
  • What are the benefits of buying a home versus renting?

    Take a moment to review the following advantages and disadvantages to see how your situation fits in:

    Renting:
     (Advantages): More fixed costs for the term of the lease; when the lease is up you can just move; there is generally less work in maintaining a home or apartment; and smaller "up-front" cash needed.
     (Disadvantages) No matters what happens with the value of the home, you will never gain equity but the owner will; limited or no ability to personalize your living space; no tax advantage to renting, your landlord gets all the tax breaks that are available.

    Buying:
    (Advantages): Over time, the mortgage balance decreases and the equity builds, even if the value of the home does not increase; the ability to remodel the home to match your needs; and there can be tax advantages attached to home ownership (contact your tax advisor for details).
    (Disadvantages) Variable costs; generally a larger initial investment—the down payment; if you want to move, the home generally must be sold; improvements or maintenance work needs to be done by you and paid by you; and value of home can decrease.
  • Do I need to be prequalified before I begin searching for my home?

    Definitely! If you know that you will be approved prior to your house hunt, the process goes much smoother. The process is simple. To arrange to be prequalified for your purchase, take the following steps:
    1. Gather your personal financial information, such as bank statements, W-2 forms, and paycheck stubs and meet with your LeaderOne Loan Officer.
    2. Your LeaderOne mortgage professional will pull your credit report and evaluate your financial documents. With this information, you and your LeaderOne Loan Officer are able to discuss the best home financing options that will help you achieve your financial goals.
    3. To inform both your real estate agent and the seller of the property that you a preferred and serious potential buyer, LeaderOne will write a prequalification letter for you. This will give any offer you extend on a property more weight. This backing will allow you to relax and enjoy the process of looking for your new home!
  • If I am a non-citizen, can I qualify?

    Different guidelines are established for non-citizens. Each loan type varies.

    FHA: As a requirement, the home being purchased in this country must be the primary residence for FHA loans. Non-citizens also must have a Social Security card and all other documentation regularly required for FHA buyers.

    FMAC: Freddie Mac underwrites loans for permanent and nonpermanent residents alike, with no special requirements for the latter.

    FNMA: Through Fannie Mae, non-citizens are required to hold a green card (have permanent resident alien status). Non-permanent resident aliens are required to supply an additional down payment and proof of permission to work in the United States for extended periods through a work visa. Additionally, they must occupy the purchased property.

    Be sure to meet with your LeaderOne Loan Officer before choosing a home. This will help you be aware of your specific financing opportunities.
  • Is it still possible to qualify for a loan even if I have past credit problems?

    In challenging economic times such as these, a good number of people have found themselves with financial difficulties. These times create opportunities to incorporate valuable lessons in to a person&quo;s financial planning. When the desire to move forward into home ownership sets in, it is often questioned what chances exist for those that have encountered financial problems.

    The first distinction that is important to make is the difference between a person with a bad credit experience in the past and a person who is a bad credit risk. There is an important difference.

    Lenders' main questions will be along the lines of the following:
    1. What was the situation of the financial difficulty? What circumstances caused the specific trouble?
    2. What steps did you take to resolve the issue?
    3. What measures were taken to prevent the situation from occurring again? Have you reestablished yourself financially? Were the changes that were made the right ones?
    If you have encountered more challenging credit problems like bankruptcy and foreclosure, your explanation needs to be more thorough and have much more importance; additionally, the greater the credit problem, the more recovery time is necessary.

    Everyone finds themselves in tough financial situations at one point or another, but everyone deserves another chance. Do not allow previous problems intimidate you and prevent you from trying to get a fresh start!
  • How will I know the loan program that is best for me?

     Deciding on the best loan program for you will depend greatly on your personal financial situation. You can focus on the most beneficial options by asking yourself a few questions:
    • In the next few years, do you anticipate your finances to change?
    • Do you plan to live in this home for a substantial amount of time?
    • Would an adjusting mortgage payment make you comfortable or uncomfortable?
    • When you enter the next phases of life (children&quo;s college, your retirement, etc…), would you aim to be out of mortgage debt?
    When you cover these questions with your LeaderOne Loan Officer, together you can determine answers that will help you choose the loan program best fits your needs and helps you attain your goals.
  • What is the difference between a FHA and a VA loan?

    A FHA loan is a loan guaranteed by the Federal Housing Administration. FHA issues specific guidelines for mortgages. A VA loan is a loan guaranteed by the Veterans Administration. To obtain a VA loan, the borrower must have served in the Armed Forces for a specific time period.
  • How do I know what my interest rate will be?

    You discuss this with your LeaderOne Loan Officer who advises you of the rates available for your loan product. You then “lock” the rate and discount points with your loan officer.
  • Should I get a fixed or adjustable interest rate?

    When deciding on the type of rate you want, it's all a matter of time. You'll want to think about a fixed rate mortgage if you plan to be in your home for more than seven years. Fixed rates provide you with set payments and protection against increasing mortgage interest rates. An adjustable rate mortgage would be more suitable for you if you foresee living in your home for less than seven years. With an adjustable rate mortgage, you open yourself up to the possibility of having your monthly payments increase each time your interest rate changes.
  • What does my mortgage lender mean by points or origination fee?

    One point is equal to one percent of the loan amount. Points and origination fees are used to buy down the interest rate. Origination fees help pay the cost for the lender to do the loan.
  • When mortgage lenders refer to "PITI" what are they referring to?

    PITI is principal, interest, taxes, and insurance: All of the components of a monthly mortgage.
  • What amount is required for a down payment?

    There is not an established amount of a down payment for every loan. Depending on your situation and eligibility, you may find very low down payment requirements available. Your LeaderOne Loan Officer will be able to help you find a loan program that best fits your financial goals and needs.
  • How does mortgage insurance work?

    Mortgage insurance operates very similar to the insurance you have for your vehicle. It protects against loss, requires payment of a premium, and is used in the case of an emergency. The lender is able to foreclose on the home if the borrower is not able to repay the amount of an insured mortgage loan; the lender can file a claim with the mortgage insurer for a portion or the full amount of losses.
  • Do I need to have a certain amount of money left after I buy my home?

    Reserve requirements are program specific. Your LeaderOne Loan Officer will this information with you.
  • When my loan officer asks me if I want to waive escrows, what exactly does this mean?

    When you waive escrows, you take the responsibility of paying your taxes and insurance rather than having them included in your monthly payment. Waiving escrows may add a small fee to your closing costs. You can only waive escrows if your loan program allows for this such as conventional loans that have a loan value of 80% or less on your first lien.
  • Why did I receive a Truth-In-Lending?

     Truth-In-Lending's are sent to all borrowers after a loan application has been made. The Truth-In-Lending Act is a federal law requiring lenders to reveal all of the terms of a mortgage. The APR that appears on your Truth-In-Lending will be higher than the interest rate on your Real Estate Lien Note, as it is calculated based on term and finance charges.
  • Will I get a copy of my credit report and appraisal?

    You may obtain a copy of your credit report through the credit bureaus. You will also receive a copy of your appraisal at your closing.
  • What inspections are required by the lender?

    The lender requires an appraisal on most transactions. A clear termite report is required on government transactions. If the appraiser recommends repairs or if repairs are mentioned in the contract, the lender will require that those repairs be done before closing. The appraiser then will perform a final inspection to assure that the repairs were completed.
  • When will I find out what my final figure is for the total costs to close?

    The Settlement Statement (HUD-1) is prepared by the title company according to closing instructions prepared by the lender. This is available 24 hours prior to closing by contacting the title company.
  • Where do I go for closing?

    Your closing will take place at the title company. The title company name and address appears in your sales contract. Call the title company to schedule a time for your closing.
  • Will I have two separate payments if I have a second lien?

    The second lien is often from a different lender than the first lien. Therefore, borrowers with a second lien will make two separate payments each month - one on the first lien and one on the second lien.
  • Where do I send my first mortgage payment?

    Refer to your "First Payment Letter" in your closing documents to determine where to send your first mortgage payment. If you receive a statement from your new lender prior to the due date of your first payment, send your payment to the new lender.

    Otherwise, send your payment to LeaderOne Financial Corporation as detailed in your "First Payment Letter." Remember to include your loan number on your check.
LeaderOne Financial

LeaderOne Financial
Corporate Headquarters

NMLS # 12007
Branch NMLS # 12007

Direct: 800-270-3416
Fax: 866-383-2556

11020 King St. Suite 390
Overland Park, KS 66210

   
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