Frequently Asked Questions
What information do I need to provide when I apply?
When you’re ready to fill out our online application, have the following records/documents available for reference:
- Monthly income
- Monthly debt payments
- Total debt you owe
- A total of your assets
- Your Social Security Number
- Employment information and verification (ex: W-2, pay stub, etc.)
Is there an application fee?
There is an application fee quoted as part of the out-of-pocket costs which will be charged to you when you submit your application. If your loan is approved and you proceed through the loan process, this fee will be credited to you at your closing.
How much will closing costs be? How are they determined?
Closing costs vary based on a number of factors. Closing costs include your out-of-pocket costs, pre-paid expenses, application fees, title insurance, origination fees and discount points. First Financial Bank will give you an estimate of your out-of-pocket costs, pre-paid expenses, application fees, title insurance, origination fees and discount points, (your estimated closing costs) upon completion of your loan application. Please note that closing costs do not include your down payment.
How are mortgage interest rates determined?
Interest rates are affected by a number of factors, including inflation, economic growth, and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will usually lead to low interest rates, while concerns about rising inflation normally result in increased interest rates. The Federal Reserve designs and implements policies to keep inflation and interest rates relatively low and stable.
Will the rates quoted to me today be the same tomorrow?
No, as economic reports, inflation and Federal Reserve policy continually fluctuate, mortgage interest rates are also subject to change on a daily basis. When purchasing a home, the rate can be locked in once a borrower has an accepted contract and a property address.
When refinancing, you can lock in a rate at the time of application with an application fee. This means that First Financial will stand by and honor the rate you lock through a specified expiration date for that locked rate.
Is comparing APRs the best way to decide which lender has the lowest rates and fees?
Yes, the annual percentage rate (APR) is the full cost of the loan, including interest and fees, expressed as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it includes points and other credit costs, such as private mortgage insurance, loan discount and origination fees. The APR is calculated the same way at all mortgage lenders, giving home buyers the ability to compare various mortgage loan products based on the annual cost for each loan.
Are there any pre-payment penalties charged for these mortgage loan programs?
No, there are no pre-payment penalties on any of our home mortgage loans.
How long will it take to process my loan? When can I expect to close?
When purchasing a home, the process will usually take up to 30 days. When refinancing, the process usually takes 45 days. Please note that this time estimate is based on your ability to provide the necessary documentation on a timely basis in order for us to continue the process.
Can I apply for a loan before I find a home to purchase?
Yes, a pre-qualification is recommended as soon as you decide to start searching for a home. Going through the pre-qualification process will give you the confidence that you are looking in the right price range for a home, it gives the seller confidence that your offer is legitimate, and it can speed up the time it takes to close on your home. Once you find your perfect home, you will simply call your loan officer to complete your application. You will have an opportunity to lock in our rates and fees at that point, and we will complete the processing of your request.
How will my credit score affect my application?
Your credit score will be used to evaluate your application. Credit scores used for mortgage loan decisions range from approximately 300 to 900. Using credit scores to evaluate your history lets us quickly and objectively evaluate your credit history when reviewing your loan application. However, your credit score is just one of the many factors considered when making a loan decision, and we evaluate an application by looking at the total financial picture of a client.
Will a credit inquiry affect my credit score?
Any time your credit report is pulled—including when you order a copy of your credit report directly from a credit reporting agency—an inquiry is added to your report. Numerous credit inquiries can sometimes affect your score, since it may indicate that your credit use is increasing. But, don’t fear! Your credit score ignores all mortgage loan inquiries made in the 30 days prior to scoring. So, if you find a loan within 30 days, the inquiries won’t affect your score while you may be rate shopping.
What information do I need to provide to process my loan?
During the pre-qualification process you’ll need to provide:
- Most recent pay stub or the W-2 from your employer
- Most recent bank statements
- Proof of any other income such as alimony, annuities, pension stubs, dividends, etc.
Once you schedule an appointment with a mortgage loan consultant, you’ll need to be prepared to verify your:
- Residence history
- Employment history
- Current income, including salary, commissions or bonuses
- Social Security numbers
- Confirmation of all debts, including credit cards and installment loans
- Information on any other properties owned
- Alimony/child support payments
I’m self-employed. How will you verify my income?
The income of self-employed borrowers is verified via copies of personal (and business, if applicable) federal tax returns for the most recent two-year period, which may include W-2 and K-1 statements. We’ll review and average the net income from self-employment that appears on your tax returns to determine your qualified income. We won’t be able to consider any income that hasn’t been reported on your tax returns. We typically require a full two-year history of self-employment to verify that your income is stable.
I’m retired and my income is from pension or Social Security. How will you verify my income?
We will ask for copies of your recent pension check stubs, or a bank statement if your pension is deposited directly into your account. It may be necessary to verify that this income will continue for at least three years. This can usually be verified with a copy of your award letter. If you don’t have an award letter, we can contact the source of this income directly for verification.
If you’re receiving tax-free income (ex: Social Security), we’ll consider the fact that taxes will not be deducted from this income when reviewing your request.
I have income from dividends and/or interest. How will you verify my income?
Two years of personal tax returns are required to verify the amount of your dividend and/or interest income so an average amount can be calculated. In addition, we’ll need to verify your ownership of the assets that generate the income, using copies of statements from your financial institution, brokerage statements, stock certificates or promissory notes.
I own rental properties. How will you verify my income?
We’ll ask for the most recent year’s federal tax return to verify your rental income. We’ll review the Schedule E of the tax return to verify your rental income, after all expenses (minus depreciation). Since depreciation is a paper loss, it won’t be counted against your rental income. If you have not owned the rental property for a complete tax year, we’ll ask for a copy of any leases you have executed and we will estimate the expenses of ownership.
Will my overtime, commission or bonus income be considered when evaluating my application?
In order for bonus, overtime or commission income to be considered, you must have a history of receiving it and it must be deemed likely to continue. We typically request copies of W-2 statements from the previous two years and a recent pay stub to verify this income. If a major part of your income is commission earnings, we may need to obtain copies of recent tax returns to verify the amount of business-related expenses, if any. We’ll average the amounts you have received over the past two years to calculate the amount that can be considered as a regular part of your income. If you haven’t been receiving bonus, overtime or commission income for at least one year, it likely cannot be given full value when your loan is reviewed for approval.
What information do I have to provide about my child support, alimony or separate maintenance income?
Information about child support, alimony or separate maintenance income does not need to be provided unless you wish to have it considered for repaying your mortgage loan.
I am selling my current home to purchase my new home. What documents will you require?
If you are selling your current home to purchase your new home, we will need a copy of the settlement or the closing statement you will receive at the closing of your current home. This will provide the verification that proves your current mortgage has been paid in full and you’ll have sufficient funds to close on your new home. Often, the closing of your current home is scheduled for the same day as the closing of your new home. Verification of prior home sale would need to be provided and reviewed before your new loan closing.
Will a past bankruptcy or foreclosures affect my ability to obtain a new mortgage?
If you’ve had a past bankruptcy or foreclosure, it may affect your ability to get a new mortgage. Unless the bankruptcy or foreclosure was caused by situations beyond your control, we will generally require that two to four years have passed since the bankruptcy or foreclosure.
Is a gift an acceptable source of down payment? Can I borrow funds to use toward my down payment?
Gifts are an acceptable source of down payment, provided the gift giver is related to you or your co-borrower. We’ll ask you for the name, address and phone number of the gift giver, as well as the giver’s relationship to you. If your loan request is more than 80 percent of the purchase price, we’ll need to verify that you have at least 5 percent of the property’s value in your own assets. Prior to closing, we’ll verify that the gift funds have been transferred to you by obtaining a copy of your bank receipt or deposit slip to verify that you have deposited the gift funds into your account.
Will my loan be sold to another company?
First Financial reserves the right to sell its mortgage loans to other companies. It is possible that your loan will be sold, but this will not affect the terms and conditions of the loan.