- How much home can I afford? Answer
- How much cash will I need to purchase a home? Answer
- How do I know which type of mortgage is best for me? Answer
- What is the difference between a fixed-rate loan and an
adjustable-rate loan? Answer
- How is an index and margin used in an ARM? Answer
- What is a VA Loan? Answer
- What is the minimum information that I will need to complete a
loan application? Answer
- What is mortgage insurance? Answer
- What are closing costs? Answer
- What is a flood certification? Answer
- What does my mortgage payment include? Answer
- What is a reverse mortgage? Answer
- Who do I contact if I have questions concerning my
existing mortgage loan serviced by Univest? Answer
- Where do I mail my tax and insurance bills if my mortgage loan
is serviced by Univest and you escrow for these items? Answer
Q : How much home can I afford?
Generally speaking, you can purchase a home with a value of two
or three times your annual household income. However, the amount
you can borrow will also depend upon your employment history,
credit history, current savings and debts, and the amount of down
payment you are willing to make. You may also be able to take
advantage of special loan programs for first time buyers to
purchase a home with a higher value. Please contact us and
one of our experienced mortgage professionals will assist you in
determining how much you can afford.
Q : How much cash will I need to purchase a home?
The amount of cash that is necessary depends on a number of
items, most notably your down payment and loan program. An
FHA loan is an ideal choice for first-time home buyers as it
requires as little as 3.5% down. Generally speaking, though,
you will need to supply:
- Earnest Money: The deposit that is supplied when you make an
offer on the house
- Down Payment: A percentage of the cost of the home that is due
at settlement (total down payment of 20% required to avoid mortgage
- Closing Costs: Costs associated with transfer taxes, title
insurance and other costs such as recording fees.
Q : How do I know which type of mortgage is best for
There is no simple formula to determine the type of mortgage
that is best for you. This choice depends on a number of factors,
including your current financial picture (including
downpayment funds) and how long you intend to keep your
house. Our experienced mortgage professionals can help
you evaluate your choices and make the most appropriate
Q : What is the difference between a fixed-rate loan and
an adjustable-rate loan?
With a fixed-rate mortgage, the interest rate stays the same
during the life of the loan. With an adjustable-rate mortgage
(ARM), the rate changes periodically, typically in relation to
an index. While the monthly payments that you make with a
fixed-rate mortgage are relatively stable, payments on an ARM loan
will likely change: see our fixed-rate vs. ARM mortgage calculator.
There are advantages and disadvantages to each type of mortgage,
and the best way to select a loan product is by talking to one of
our mortgage professionals.
Q : How is an index and margin used in an ARM?
An index is an economic indicator that lenders use to set the
interest rate for an ARM. Generally the interest rate that you pay
is a combination of the index rate and a pre-specified margin. For
our product menu, the index for conforming and jumbo ARMs is the
one-year London Interbank Offering Rate (LIBOR) and the index for
FHA ARMs is the one-year Constant Maturity Treasury (CMT).
Q : What is a VA Loan?
VA (Veteran Administration) loans are home loans designed to
assist eligible veterans in purchasing or refinancing a home as
their primary residence. VA loans are offered by private
lenders, such as banks, and are insured by the Department of
Veterans Affairs. These home loans offer more flexible
income, debt and credit requirements and are available in either
fixed or adjustable-rate options. To qualify for a VA loan,
you must be a current or former member of the U.S. armed
forces or an eligible spouse and you need to obtain a Certificate
of Eligibiilty. For more information on eligibility, contact
the Winston Salem Eligibility Center at 888.244.6711.
Q : What is the minimum information that I will need to
complete a loan application?
Regardless of whether you apply online or directly with one of
our experienced mortgage professionals, you will need a minimum of
- Social Security Number
- Gross income amount, including secondary sources, if applicable
- Two most recent paystubs and two most recent W2's (salaried
- Two most recent personal and business tax returns
- Name and address of your employer, and of your previous
employer if you have been at your current job for less than two
- Previous address, if you have been at your current residence
for less than two years
- Asset information, including the value of your banking,
investment and other accounts and documentation to support
available funds for down payment and closing costs
- Current expenses, including housing, credit card and loan
payments, child support and other obligations
- Estimated purchase price and down payment amount (if you are
purchasing a home)
- Estimated property value and loan amount (if you are
- Agreement of sale (if purchasing a home)
Q : What is mortgage insurance?
Mortgage insurance, also known as PMI, is insurance that
protects the lender from losses that can occur when a borrower
defaults on a mortgage. PMI is required on first mortgage
purchase transactions when the borrower has less than a 20% down
payment. Likewise, it is required on first mortgage refinance
transactions when the borrower has less than 20% equity in the
property being refinanced. The cost of PMI is typically
added to the monthly mortgage payment. PMI must stay in
effect for a minimum of 60 months or until the loan to value ratio
is at or below 78%.
Q : What are closing costs?
Closing costs are expenses paid by the borrower in connection
with the closing of the mortgage loan. Depending upon the
specific loan, these expenses may include an application fee,
origination fee, discount points, title insurance, attorney's fees,
transfer taxes for purchase transactions and pre-paid items
such as tax and insurance payments.
Q : What is a flood certification?
Lenders are required to obtain a flood certification on all
loans secured by residential real estate. A flood
certification indicates if the property is located in a designated
flood zone. If the subject property is located within a flood
zone, the borrower must obtain flood insurance.
Q : What does my mortgage payment include?
For most homeowners, the monthly mortgage payments include three
- Principal: Repayment on the amount borrowed
- Interest: Payment to the lender for interest on the amount
- Tax & Insurance Escrows: Monthly payments are normally made
into an escrow account for items like hazard insurance and property
taxes. This feature is sometimes optional with a one-time waiver
fee. If we waive your escrows, the bills will be paid by you
directly to the County Tax Assessor and property insurance
Q : What is a reverse mortgage?
A reverse mortgage is a special home loan product that allows a
homeowner aged 62 or older the ability to access the equity that
has accumulated in their home. To qualify, you must own the
property outright or have a small mortgage balance. Often, the
lender may require, as part of the program, that the small mortgage
balance be paid. A reverse mortgage does not require payments back
to the lender for as long as you live there. The home itself will
be the source of repayment. The loan is underwritten based on the
value of the collateral (home) and the life expectancy of the
borrower. The loan must be repaid when you die, sell your home, or
no longer live there as your principal residence. You must
still maintain homeowners insurance and pay your real estate
For more information on reverse mortgages, please
go to http://www.helpwithmybank.gov/ - Office of
the Comptroller of the Currency - Answers about Reverse
Q : Who do I contact if I have questions
concerning my existing mortgage loan serviced by Univest?
Please contact us in the manner most convenient to you:
Univest Bank and Trust Co.
Mortgage Processing Center
P.O. Box 64197
Souderton, PA 18964-0197
Q : Where do I mail my tax and insurance bills if my
mortgage loan is serviced by Univest and you escrow for these
Please mail original copies of your tax and insurance bills to
the following address:
Univest Bank and Trust Co.
Attn: Loan Operations
14 N. Main Street
P.O. Box 64197
Souderton, PA 18964-1713