What information will be needed for the application (and how it's kept private)

Anything you submit over our website is 100 percent, fully secure. And we never, ever share it with anyone except by permission -- that is, if you're giving us information you want us to use to get you the best loan, we use that information to tell mortgage lenders about you and convince them to loan you money. In turn, those mortgage lenders are bound by federal law to keep your information secure.

Here is a list of the information mortgage lenders will use to consider your loan application.

For all loans.

Social Security Number, for borrower and co-borrower if any.

Employment History
For the last two years, employment dates, addresses, salary.
Current pay stubs or W-2 forms.

Check and Savings Accounts and Certificates of Deposit
Location of bank accounts, account numbers and balances;
Address of bank if out of town
Last 3 months' statements

Stocks, Bonds, and Investment Accounts
Broker's name and address, description of stocks, bonds, etc.
Last 3 months' statements or copies of stock certificates

Life Insurance Policies
Insurance company, policy number, face amount, cash value, if any

Retirement Plan
Approximate vested interest value
Copy of latest statement

Automobiles
Make and model of automobiles, their resale value

Other Assets
Market value of personal and household property

Liabilities and Other Non-Mortgage Debt
Creditors names, addresses, account numbers
Monthly payments and balances

Other income information you may need

If you're self-employed
Two years tax returns, profit and loss statements, both company and personal if separate.
Current balance sheet and profit and loss statement if more than two months into the new fiscal year, signed by CPA.

If you have income from:
Commission
Overtime
Bonus
Partnership
Rental Property
Trust
Notes Receivable
Interest/Dividends
You'll need two years' personal federal tax returns

If employed in family business
Personal federal income tax returns and all schedules for the past two years

If divorced or separated
Complete executed divorce decree and settlement agreement
Payment history of alimony/child support over the past 12 months, if it is a financial obligation.
If you choose to have this be considered as part of your income (you don't have to), be prepared to provide 12 months canceled checks or bank statements reflecting income deposits.

If you're buying a home

Purchase sales contract or offer to purchase and all addenda
Furnish contract with original signatures of buyer and seller

If a source of your down payment is a gift:
Name, address and relationship of donor.
Gift funds will be verified in both the donor and recipient's accounts.
Note: Not all loan programs allow gifts to be part of your down payment.

For FHA Financing
Evidence of Social Security Number and photo identification

For VA Financing
DD214 and Certificate of Eligibility

For Construction/Perm Loan
Signed construction with cost breakdown, builder plan and specifications

What is the difference between the interest rate and the A.P.R.?

Each mortgage loan you see advertised has an interest rate and an Annual Percentage Rate (A.P.R.) Why? The quick answer is that federal law requires the lender to tell you both.

The A.P.R. is a tool for comparing different loans, and is composed of not only different interest rates, but different points and other terms. The A.P.R. should represent the "true cost of a loan" to the borrower expressed in the form of a yearly rate. This way, lenders can't "hide" fees and upfront costs behind low advertised rates.

While the A.P.R.'s purpose is to make it easier to compare loans, it can sometimes make things confusing. That's because the A.P.R. includes some, but not all, of the various fees and insurance premiums that accompany a mortgage. And since federal law does not clearly define how lenders must calculate A.P.R., it can vary from lender to lender and loan to loan.

The A.P.R. on a loan tied to a market index, like a 5/1 ARM, assumes the market index will never change. But ARMs were invented because the market index changes and makes fixed rate loans cheaper or more expensive to make -- that's why they're variable rate in the first place!

So, A.P.R.s are at best inexact. The lesson is, that A.P.R. can be a guide, but you need a mortgage professional to help you find the truly best loan for you.

When you're browsing for loan terms, note that the A.P.R. will not tell you about balloon payments, prepayment penalties, or how long your rate is locked. Also, you'll see that A.P.R.s on 15-year loans will carry a higher relative rate due to the fact that points are amortized over a shorter period of time.

What are the advantages of fixed rate versus adjustable rate loans?

With a fixed-rate loan, your monthly payment of principal and interest never change as long as you have your loan. Your property taxes may go up (we almost said down, too!). Your homeowner's insurance premium part of your monthly payment may increase as well, but generally, with a fixed-rate loan, your payment will be very stable.

Fixed-rate loans are available in all shapes and sizes: 30-year, 20-year, 15-year, even 10-year. Some fixed-rate mortgages are called "biweekly" mortgages and shorten the life of your loan. You pay every two weeks, a total of 26 payments a year -- which adds up to an "extra" monthly payment every year.

During the early amortization period of a fixed-rate loan, a large percentage of your monthly payment goes toward interest, and a much smaller part toward principal. That gradually reverses itself as the loan ages.

You might choose a fixed-rate loan if you want to lock in a low rate. If you have an Adjustable Rate Mortgage (ARM) now, refinancing with a fixed-rate loan can give you more monthly payment stability.

Adjustable Rate Mortgages -- ARMs, as we called them above -- come in even more varieties. Generally, ARMs determine what you must pay based on an outside index -- perhaps the 6-month Certificate of Deposit (CD) rate, the one-year Treasury Security rate, the Federal Home Loan Bank's 11th District Cost of Funds Index (COFI), or others. They may adjust every six months or once a year.

Most programs have a "cap" that stops your monthly payment from going up too much at once. There may be a cap on how much your interest rate can go up in one period -- for example, no more than two percent per year, even if the underlying index goes up by more than two percent. You may have a "payment cap," that instead caps the total amount your monthly payment can go up in one period. In addition, almost all ARM programs have a "lifetime cap" -- your interest rate can never exceed that cap amount, no matter what.

ARMs often have their lowest, most attractive rates at the beginning of the loan, and can guarantee that rate for anywhere from a month to ten years. You may hear people talking about or read about what are called "3/1 ARMs" or "5/1 ARMs" or the like. For those, the introductory rate is set for three or five years, and then adjusts according to an index every year for the life of the loan. Loans like this are often best for people who anticipate moving -- and therefore selling the house to be mortgaged -- within three or five years, depending on how long the lower rate will be in effect.

You might choose an ARM to take advantage of a lower introductory rate and count on either moving, refinancing again or simply absorbing the higher rate after the introductory rate goes up. With ARMs, you do risk your rate going up, but you also take advantage when rates go down by pocketing more money each month that would otherwise have gone toward your mortgage payment.

Refinancing Options

There aren't quite as many loan programs as there are borrowers, though it may seem like it sometimes! We're here to help qualify you for the best loan program to fit your needs. But there are some general considerations you can have in mind in advance.

Are you refinancing primarily to lower your rate and monthly payments? Then your best option might be a low fixed-rate loan. Maybe you have a fixed-rate mortgage now with a higher rate, or maybe you have an ARM -- adjustable rate mortgage -- where the interest rate varies. Even if it's low now, unlike your ARM, when you qualify for a fixed-rate mortgage you lock that low rate in for the life of your loan. This is especially a good idea if you don't think you'll be moving within the next five years or so. On the other hand, if you do see yourself moving within the next few years, an ARM with a low initial rate might be the best way to lower your monthly payment.

Are you refinancing primarily to cash out some home equity? Maybe you want to pay for home improvements, pay your child's college tuition bill, or take your dream vacation. If so, you'll want to qualify for a loan for more than the balance remaining on your current mortgage. If you've had your current mortgage for a number of years and/or have a mortgage whose interest rate is higher, you may be able to do this without increasing your monthly payment.

Do you want to cash out some equity to consolidate other debt? Good idea! If you have the home equity to make it work, paying off debt with higher interest rates than your mortgage's -- for example, credit cards, home equity loans, car loans, some student loans -- can save you hundreds of dollars a month.

Do you want to build up home equity more quickly, and pay off your mortgage sooner? Consider refinancing with a shorter-term loan, such as a 15-year mortgage. Your payments will be higher than with a longer-term loan, but in exchange, you'll pay substantially less interest and will build up equity more quickly. If you have had your current 30-year mortgage for a number of years and the loan balance is relatively low, you may be able to do this without increasing your monthly payment -- you may even be able to save! For example, let's say years ago you took out a $150,000 30-year mortgage at eight percent. Your payment is about $1,100, exclusive of taxes, insurance and so on. If your balance today is down to $130,000, you might take out a 15-year mortgage at six percent and have an almost identical monthly payment. This is a great option for people whose main goal is not to save money on their monthly payment but to build up equity and pay off their home more quickly.