Mortgage & Construction Loan FAQs

What is Private Mortgage Insurance (PMI)?

PMI is protection for the lender against loss if a borrower defaults. Typically for Conventional loans, PMI is required if your down payment is less than 20% of the purchase price. For example, on a purchase price of $100,000, PMI would be required if you put less than $20,000 (20% of $100,000) as a down payment.  Other types of loans such as FHA, VA, and USDA have similar versions of PMI.

What is title insurance and why do I need it?

Title insurance protects against problems with the title to your property, such as someone with a legal claim against the home.  Learn more about Lenders and Owners title policies. 

What is an appraisal?

An appraisal is a report made by a qualified person, who sets forth an opinion or estimate of property value. Among other considerations of value, the appraisal uses recent local real estate sales activity as a major basis for valuation. 

What are closing costs?

Closing costs cover all the fees and expenses associated with a loan transaction. Closing costs may include fees for an appraisal, credit report, title insurance, survey, and points. Closing costs vary depending upon the loan product.

Should I refinance my home?

Although each situation is different, there are several reasons to refinance including:

  • To lower your monthly principal and interest payments.
  • To move to a secure, fixed rate loan.
  • To take cash out of the equity in your home.

For more information on refinancing your home, call 402-323-1128 in Lincoln, or toll-free 1-800-297-2837.

Which types of mortgages are eligible for refinancing?
  • Conventional Loans, including Fixed Rate and Jumbo Loans
  • VA Loans, administered by the Department of Veteran Affairs
  • FHA Loans, through the Federal Housing Administration
Do I need an appraisal for a construction loan?

Yes, you or your builder will provide Union Bank with blueprints, a new home specification sheet, and contract. We will then arrange for an appraisal based on these plans and specs.

How is the money for construction accessed?

Your construction loan functions like a line of credit. You only pay interest on what you “use.” Your builder will submit draws monthly. 

What happens when my home construction is completed?

Once your home is complete your permanent mortgage loan (30, 20 or 15 year fixed) is nothing more than a refinance of the construction loan.

What do I do if I have questions about the Nebraska property escrow analysis I just received?

For specific questions related to your Nebraska property escrow analysis, please click here for our FAQ download. If you have any questions not covered in the FAQ, our contact information is in the download.

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