Mortgage & Construction Loan FAQs
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.
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.
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.
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.
- Conventional Loans, including Fixed Rate and Jumbo Loans
- VA Loans, administered by the Department of Veteran Affairs
- FHA Loans, through the Federal Housing Administration
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.
Your construction loan functions like a line of credit. You only pay interest on what you “use.” Your builder will submit draws monthly.
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.
