Home Loan Basics

We've made the process of financing your home faster and easier than ever before. Learn about mortgages and purchasing a home.

Upgrading your home with a home equity loan is a great way to unlock your home’s potential.

• Home Equity Loans & Lines
  • Home equity - the value of your home minus your current mortgage balance - is a powerful financial tool. That's because you can borrow against it, just like you borrowed to get your first mortgage. And because the money you borrow is secured by collateral (your home), the interest rates and terms are generally much better than what you'd get with unsecured loan like a credit card.
• Reasons to get a home equity loan or line of credit include:
  • Financing home renovations or repairs
  • Consolidating and refinancing higher interest debt
  • Financing an education - for a loved one or yourself

The sky is practically the limit when it comes to using your home's equity. All you have to decide is whether to choose a home equity loan or a home equity line of credit (HELOC).

• Home Equity Loans
  • With a home equity loan, sometimes called a second mortgage, you get all the money you want to borrow all in one lump sum. You get to choose the term you want to borrow it for, such as 5, 10, 15 or 20 years. This can be a good choice if you have one big project to pay for all at once and/or you want a fixed monthly payment over the life of the loan.
• HELOC
  • With a home equity line of credit, you can choose when and how much to borrow over time. Similar to a credit card, you'll get a limit that you can borrow against (your equity) and you'll only pay interest on the amount you actually withdraw. Because of this, your payment can vary over time. A HELOC can be a good option if you need to pay for expenses that span over an extended period, such as ongoing home repairs or college tuition.

Protect your investment with homeowners insurance. Learn helpful tips as you shop for coverage.

1. Required Insurance
   • Homeowners Insurance: Homeowners Insurance covers fire, theft, certain natural disasters and personal liability if someone is injured on your property. It protects the Lender against the loss of the property securing your mortgage. You'll have to prove that you have adequate homeowners coverage as a condition of obtaining a mortgage.
   • Title Insurance: Several things happen behind the scenes when you buy a house. For example, we will have someone perform a title search to make sure the seller has a legal right to transfer ownership, and to see if there are liens or restrictions on the property. A lawyer, abstractor or employee of the title company does the title search. Title insurance provides protection against financial loss in case of a defect in the title turns up at some future date. Possible defects include:
     • Flawed information in deeds or mortgages (like an incorrect name)
     • Liens or claims against the property or property owner (unpaid taxes or judgments)
     • Claims to ownership from a former owner or spouse
     • Invalid deeds (from a past sale or transfer by a party who didn't actually own the property)
2. May Be Required
   • Private Mortgage Insurance: When you acquire a mortgage with less than a 20% down payment, we may require you to buy mortgage insurance. This coverage helps protect the lender in case you can't make your payments and default on the loan. Your Lender isn't the only beneficiary. Mortgage insurance makes it possible for people with small down payments to buy the home of their choice.
   • Flood Insurance: Flooding is not covered by a standard homeowners insurance policy. To determine if you need flood insurance, ask your insurance professional about the flood history in your area. If there is a potential for flooding, you will be required to purchase a policy that covers the structure and your personal belongings. 
     
     Flood insurance can be purchased from an insurance agent or company under contract with the Federal Insurance Administration (FIA), part of the Federal Emergency Management Agency (FEMA). Flood insurance is only available where the local government has adopted adequate flood plain management regulations under the National Flood Insurance Program (NFIP).
3. Optional Insurance
   • Mortgage Life Insurance: This coverage can reduce or pay off your mortgage if you die before the loan is repaid. It generally is decreasing term life coverage. The benefit payable matches your mortgage balance. Consider your entire financial picture, not just your home, in deciding what life insurance protection you need.

As soon as you complete your home loan application, you'll receive important disclosures. Don't worry if you don't understand something; give us a call and we'd be happy to help explain it.

• Consumer Handbook on Adjustable Rate Mortgages
• Your Home Loan Toolkit

Congratulations on taking the first step towards home ownership! We'll help you learn the ins and outs of home buying to make the best decisions.

• Home Buying Process
• Financial Education
• First Time Home Buyer Program