#
#
#
Mortgage FAQ

Edina Realty Mortgage
Homebuying and financing simplified

Our affiliated lender, Edina Realty Mortgage, provides the convenience of one stop shopping and fast, efficient service. They specialize in purchase and refinance products, including FHA, VA, renovation and jumbo financing, as well as down payment assistance programs.

Mortgage Prequalifying and Applying

How can I start my application?

We offer many convenient ways to start the mortgage application process:

Request a consultation

Begin entering your information online and receive a follow up call from a home mortgage consultant.

Do you require a property inspection?

No, but if you're buying a home, it's a highly recommended that you obtain a property inspection and make your purchase offer contingent on the findings of the inspection.

There is a difference between a property inspection and an appraisal. An appraisal is required by most mortgage lenders in order to support the value of the real estate and the terms of the mortgage agreement.

Do I need an attorney?

The decision to use an attorney is up to you. In general, real estate attorneys are involved in purchase transactions; refinancing generally doesn't require an attorney. There are many areas of the country where attorneys are not typically used in real estate transactions.

Rates and Terms

How are interest rates determined?

Interest rates are influenced by the financial markets and can change daily or multiple times within the same day. The changes are based on many different economic indicators in the financial markets.

What is a rate lock?

  • A rate lock gives you protection from financial market fluctuations that could affect your interest rate range.
  • You can choose to lock or not lock your interest rate range. On the date and time you lock, that interest rate range remains available to you for a set period of time.
  • If there are no subsequent changes to your loan and your interest rate range is locked, the interest rate range on your application generally remains the same.
  • If there are changes to your loan, your final interest rate at closing may be different.

What is the difference between "locking" and "floating?"

  • Locking ensures that your loan pricing will be unaffected during the locking period by giving you a specified period of protection from financial market fluctuations in interest rates.
  • Locking sets the range of pricing available to you; it doesn't guarantee that a specific rate will apply.
  • Your final rate, which may not be determined until closing, will reflect the pricing that was available at the time you locked.
  • Floating – or not locking – means your rate will fluctuate with the up and down movements of the market. The benefit to floating is if interest rates were to decrease, you would have the option of locking in at a lower level of rates.

Refer to our Loan Pricing Disclosure for more information.

When can I lock and how much does it cost?

  • The fee for locking varies.
  • You can lock anytime you locate a property, or start your refinancing process, up until ten business days before the closing.
  • You can select a specific length of time for your lock, usually 60 days.

Mortgage Approval and Closing

If I've already been preapproved by the lender, how long does it typically take to close?

The time to close will vary, depending on your situation. Once you've been preapproved, closing generally occurs within 45-60 days.

If I have a mortgage and want to refinance, will I have to pay closing costs again?

Yes. There are costs related to processing any new loan application; they can include fees paid to third parties, such as an appraiser, the title company, and other closing expenses.

What is an origination charge?

The origination charge is the amount charged for services performed on the initial loan application and loan processing. This includes all charges (other than discount points) that lenders and brokers involved in the transaction will receive for originating the loan. It includes any fees for application, processing, underwriting services, and payments from the lender for origination.

Can I close my loan at the lender's location?

Each state has its own specific closing requirements, so check with your closing representative for the details. Typically, closings can be held at the lender's locations or at an attorney's office. Some states permit "mail away" – or "mail out" – closings. If you're able to obtain a "mail away" closing, we will send you the documents using overnight delivery.

 

How much money will be required al closing?

The amount you'll need to close your loan includes your down payment, closing costs, and prepaid amounts for property taxes , and insurance escrow accounts. We will provide you with a good faith estimate (GFE) of settlement costs when your loan is accepted. Within 24 hours of your closing, the closing agent will provide you with the final amount that you will need to close.

Insurance

Will homeowners insurance be required at closing?

Proof of homeowners insurance will be required before you can close your loan. Typically, you will need to present an insurance binder and pay for one year's worth of insurance coverage.

What is the difference between private mortgage insurance and homeowners insurance?

A homeowners insurance (or hazard insurance) policy covers damages to your home, your belongings and accidents as outlined in your policy.

Mortgage insurance is required if you have less than 20% equity (or down payment) in your home and protects the mortgage lender if a customer is unable to make loan payments and defaults on the loan.

How long do I have to pay for private mortgage insurance (PMI) on my loan?

If you obtained your loan after July 29, 1999, you can request cancellation of PMI when your loan-to-value (LTV) reaches 80%.

Cancellation requires that you have a good payment history, the property value has not decreased, and you can certify that there are no liens against your property.

Lenders are required (by the Homeowner's Protection Act of 1998) to terminate PMI at 78% LTV (based on the amortization schedule) if the loan is current or has reached the midpoint of the payoff.

What is title insurance?

An insurance policy protects a lender and/or homebuyer (only if homebuyer purchases a separate policy, called owner's coverage) against any loss resulting from a title error or dispute.

Is purchasing title insurance mandatory?

All mortgage lenders require lender's coverage for an amount equal to the loan. It lasts until the loan is repaid. As with mortgage insurance, it protects the lender but the borrower pays the premium at closing.

If you are a service member on active duty, prior to seehing a refinance of you existing mortgage loan, please consult with your legal advisor regarding the loss of any benefits