Frequently Asked Questions
Q: How do I start the loan process?
A: Simple, to start the loan process you may fill out one of the three application forms located under “Apply Now” or contact us directly at 515-334-4980 to speak with a qualified loan officer.
Q: What is the difference between a mortgage broker and a bank?
A: As a mortgage broker, we deal with hundreds of loan programs provided by several nationwide lenders. This allows us to offer individuals more choices to fit their individual needs. Banks on the other hand are limited only to their specific programs and rates.
Q: How can I determine what mortgage amount I will qualify for?
A: Based on your income, your current debts and estimated down payment and credit, Central Iowa Lending can usually help you determine the maximum mortgage amount for which you could qualify within minutes. This process is frequently referred to as a "prequalification analysis".
Q: What is PMI? Can I get rid of the PMI on my loan?
A: PMI or Private Mortgage Insurance is normally required when you buy a house with less than 20% down. Mortgage insurance is a type of guarantee that helps protect lenders against the costs of foreclosure. This insurance protection is provided by private mortgage insurance companies. It enables lenders to accept lower down payments than they would normally accept. In effect, mortgage insurance provides what the equity of a higher down payment would provide to cover a lender's losses in the unfortunate event of foreclosure. Therefore, without mortgage insurance, you might not be able to buy a home without a 20% down payment.
The cost of PMI increases as your down payment decreases. Example: The cost of PMI on a 10% down payment is less than the cost of PMI on a 5% down payment. Your PMI premium is normally added to your monthly mortgage payment.
The decision on when to cancel the private insurance coverage does not depend solely on the degree of your equity in the home. The final say on terminating a private mortgage-insurance policy is reserved jointly for the lender and any investor who may have purchased an interest in the mortgage. However, in most cases, the lender will allow cancellation of mortgage insurance when the loan is paid down to 80% of the original property value. Some lenders may require that you pay PMI for one or two years before you can apply to remove it.
To cancel the PMI on your loan, contact your lender. In most cases, an appraisal will be required to determine the value of your property. You will probably also be required to pay for the cost of this appraisal. Another way of canceling the PMI on your loan is to refinance and to get a new loan without PMI.
Q: What is the difference between pre-qualifying and pre-approval?
A: A pre-qualification is normally issued by a loan officer, who, after interviewing you, determines the dollar value of a loan you can be approved for. However, loan officers do not make the final approval without seeing required income documentation and verifying credit, so a pre-qualification is not a commitment to lend.
Pre-approval is a step above pre-qualification. Pre-approval involves verifying your credit, down payment, employment history, etc. Your loan application is submitted to an underwriter and a decision is made regarding your loan application. If your loan is pre-approved, you are then issued a mortgage commitment letter. A pre-approval can help you negotiate a better price with the seller, since being pre-approved is very close to having cash in the bank to pay for the house!
Q: What is a rate lock?
A: A rate lock is a contractual agreement between the lender and buyer. There are four components to a rate lock: loan program, interest rate, points, and the length of the lock.
Central Iowa Lending •
Ph: 515-334-4980 •
Fax: 515-334-4985
Privacy Policy
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 |
 |
TYPE |
RATE |
APR |
| 30 yr. Fixed | 6.375% |
6.546% |
| 15 yr. Fixed | 5.875% |
6.093% |
| 3yr Arm | 5.5% |
6.570% |
| 5yr Arm | 5.875% |
6.997% |
| These rates are based on 80% LTV, a loan amount of $125,000, 1% origination fee, and customary closing cost. Rates are subject to change without notice. Last Updated July 29, 2008 |
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