Mortgage Loan FAQs

Contact Our Mortgage Department at 888.369.2207 with any questions.

• What closing costs should I expect?
  

  The costs associated with closing an Essential mortgage loan are often much lower than other lenders. By keeping the application process efficient, we are able to reduce the overall costs at closing. Contact us for a one-on-one consultation!

• What is included in a monthly mortgage payment?
  

  The monthly mortgage payment mainly pays off principal and interest, taxes and PMI (private mortgage insurance) if applicable.

• What is PMI?
  

  PMI stands for Private Mortgage Insurance. These are privately-owned companies that provide mortgage insurance that protects lenders against some or most of the losses resulting from a default on home mortgages. Essential only requires PMI on a Fannie Mae Conventional Mortgage Loan, when the loan exceeds 80% loan to value.

• What is an escrow account? Do I need one?
  

  An escrow account is established at the time of the loan closing and when you make your monthly mortgage payment, you will be contributing one twelfth of your yearly insurance premiums and taxes into your escrow account. When your insurance and taxes are due, Essential will disburse the funds from your escrow account and pay the yearly premiums directly to your insurance provider and the tax assessor's office. Escrow accounts are required on all first mortgage loans, with the exception of unimproved land loans.

• What factors affect mortgage payments?
  

  Mortgage payments are based on the loan amount, the loan interest rate, the term of the loan (30 yrs, 20 yrs, 15 yrs, 10yrs) and the amount of monthly escrow account payments.

• What is a Loan-to-Value ratio (LTV) and how does it determine the size of my loan?
  

  The loan to value ratio is determined by the amount of money you borrow compared to the purchase price or appraised value of the property.
  For example: On a property with an appraised value of $100,000, and a loan amount of $95,000, this would result in a 95% loan to value.

• What documentation is required to apply for a mortgage loan?
  
  • Complete loan application, Borrower's Certification & Authorization, Credit Bureau Fee Debit Authorization, Mortgage Appraisal Debit Authorization an Rate Lock Agreement, Disclosure Statement, and 4506T (signed and dated by all parties)
  • 2 years employment history (including name and address of employer; position/title/type of business; yrs. on this job; business phone number; yrs. employed in this line of work/profession)
  • 2 years Housing history: Mortgage Company/Landlord name, addresses and phone numbers for the last 2 years and amount paid
  • What type of property? Single family dwelling, land only, a manufactured home permanently affixed to the property
  • What type of financing terms? Purchase or Refinance?
  • 2 most recent pay stubs (dated within 30 days of application)
  • Last 2 years W-2 forms
  • If self-employed - Last 2 year's Personal and Business (if applicable) Tax Returns (including all schedules with W-2s and 1099s)
  • If rental property(ies) are owned - Last 2 year's Personal Tax Returns
  • Most recent 2 months bank statements for all assets (not needed on any accounts with Essential FCU)
  • Most recent retirement/401K statements
  • Copy of the purchase contract with all addendums and a copy of the earnest money deposit check (if buying a home)
  • Copy of homeowners insurance declarations page (if a refinance)
  • Copy of current wood destroying insect report or contract