Mortgage Application FAQs
Purchasing a home is a big decision, and the mortgage application process can be daunting. Our FAQ section is designed to help answer some of your questions and help guide you through the process. If you have other questions, always feel free to call the K. Hovnanian® American Mortgage, L.L.C.™ team. We’ll be happy to help you.
The federal government provides a free booklet that provides great insight into the loan process and what to expect. Click here to read the booklet.
Who will I be working with at K. Hovnanian® American Mortgage, L.L.C.™ during the mortgage process?
Your Account Manager is your personal representative throughout the entire loan process. You can contact him or her at any time with questions or concerns. You will also speak regularly with your Loan Processor, the person responsible for gathering and reviewing all of the documentation necessary to get your loan approved and closed. We’re just as excited as you are about making your dream home a reality!
Will my personal information be protected? Do you sell my personal information to other companies after my loan closes?
K. Hovnanian® American Mortgage, L.L.C.™ takes the protection of your personal information very seriously and protects that information even more vigorously than industry standards and requirements mandate. We do not sell your information to outside firms once your loan closes with us. Please note that some outside firms scour the public recordings docket and may send solicitations to you after closing. These firms are in no way endorsed by us, nor does K. Hovnanian® American Mortgage, L.L.C.™ provide the information to them.
I obtained a loan in the past and did not need to provide a lot of documentation. Now you are requesting a list of documents. Why?
New regulations and industry standards have been put in place over the past few years that require ANY and ALL mortgage originators to very thoroughly document income, assets, credit, and collateral to ensure that all of the factors used to determine your loan approval are accurate. Your Account Manager and Loan Processor will help you through the process and will be able to explain why any particular piece of documentation is required.
I have submitted the bank statements that you requested. Now you are asking for a different bank statement or document. Why?
Once we receive your documentation, we thoroughly review it to ensure that there is a clear picture of your financial position. Sometimes, the documents that you provide raise additional questions, such as the source of a large deposit or other activity that may be out of the ordinary. We don’t want anything to stand in the way of getting you into your new home, so we need to make sure we have all necessary documentation in place before we continue in the process.
I have submitted the documents that you requested. Now, as our closing approaches you are asking for current bank statements or documents. Why?
Depending on the length of time between your initial loan application and when your home is completed, we may be required to “refresh” your credit, bank statements, and other documentation to ensure that there are no significant changes to your financial position. Generally, most documents are good for 120 days, however, this time may be different depending on the documentation and individual situation.
How often do you examine my credit score and verify my assets and employment?
During the loan process, we will “pull” your credit a number of times to ensure that your credit situation is similar to what it was when you made your application. We do this to help ensure that there are no surprises for you as you near closing. For this reason, we highly recommend that you consult with your Account Manager prior to making any large purchases on credit, as it may impact your credit status. We are also required to re-verify items such as employment and available assets up to the time of closing. If you experience a change in any of these areas, we highly recommend that you discuss your situation with your Account Manager. Don’t let a seemingly minor change become a major hassle!
Will I be sending my payments to K. Hovnanian® American Mortgage, L.L.C.™ after we close?
Your initial payments will be remitted to K. Hovnanian® American Mortgage, L.L.C.™. After a period of time, usually 15–45 days, you will receive a letter from us introducing you to your loan servicer, the party to whom you will be submitting your payments from that time forward. Your loan servicer is uniquely equipped to provide you with a high level of service during the repayment of your mortgage. You should make your payment to K. Hovnanian® American Mortgage, L.L.C.™ until notified. You may contact your Account Manager about your loan status at any time.
What does it mean to lock in an interest rate?
The interest rate market is subject to movements without advance notice. Locking in a rate protects you from increases in the mortgage rate from the time your lock is confirmed to the day that your lock period expires.
What causes interest rates to change?
There are a couple of reasons why interest rates change. The first is supply and demand. Most mortgages are put into pools and then sold to investors through mortgage-backed securities that offer a rate of return similar to those of a bond. If investors feel the economy is doing well, stocks will go up and investors will place more money in stocks and less in bonds (and mortgage-backed securities) or vice versa. As a result, a strong economy generally means higher interest rates while a weaker economy generally means lower interest rates. The second reason for interest rate change is inflation. Inflation is the enemy of low interest rates. When an economy grows too fast, inflation can occur. Inflation means the cost of goods goes up and the dollar doesn't go as far. High inflation leads to higher interest rates and low or no inflation leads to lower interest rates. As a result, every economic report can potentially affect interest rates. In general, good news for the economy is bad news for interest rates and bad news for the economy is good news for interest rates.
When should I lock my interest rate?
Locking your rate means committing to a specific loan program and structure at a specific interest rate for a specific period of time. As long as you close your loan before the expiration of that lock, we are committed to honoring the terms regardless of interest rate movement. Rates can be locked in any time after the loan application has been made, subject to loan approval, but no later than seven business days before the scheduled closing date of your loan.
Rates can be locked for varying periods of time. Traditional lock periods are 30 or 60 days. As a rule, the longer period of time you are locking in the loan, the more expensive the loan will be either in higher fees and/or a higher interest rate. Long-term locks often have some type of up-front lock fee attached to them. The best time for you to lock depends on a couple of different variables including when you are scheduled to close on your loan, the effect a changing interest rate could have on your loan approval, and your tolerance for risk. We recommend that you discuss with your Account Manager what your lock strategy is going to be and when you feel the time is right to lock in your loan.