Tools & FAQ’s
At Music City Mortgage, we believe in empowering you with the information you need to make informed home financing decisions. That’s why we offer a suite of online tools, starting with our powerful mortgage calculator.
Mortgage Calculator
Our online calculator is like having a mortgage expert available whenever needed. It’s easy to use, with no financial jargon or confusing terms. Just a few simple inputs, and you’ll gain valuable insights:
- What if I put down 20% instead of 10%?
- How much can I afford to borrow?
- How much will my monthly payments be?
Take control of your financial future with Music City Mortgage—start exploring today!
Frequently Asked Questions
What is an appraisal?
Appraisals are mandatory written estimates of the value of your home. For the most accurate appraisals, qualified and knowledgeable appraisers with expertise in the local market will create this document. This information ensures that you are not being taken advantage of and are paying a fair price for your new home.
What is private mortgage insurance (PMI)?
If your down payment is less than 20% (sometimes 25%), you will be required to pay private mortgage insurance (PMI). PMI is made to protect lenders in the event they must foreclose after the borrower defaults on their loan. The money paid toward PMI offsets any of the lender’s losses. After certain equity in your home is achieved, PMI is often eliminated or removed.
What is the difference between my annual percentage rate (APR) and actual interest rate?
Annual percentage rate (APR) and actual interest rate are the two interest rates that apply to your loan. The actual interest rate (also known as the note rate) is used to calculate your monthly mortgage payment. Your APR includes your actual interest rate as well as other fees such as PMI, closing costs, and mortgage broker fees.
What are closing fees?
Closing costs are the various fees incurred when obtaining a mortgage. These are detailed in the good faith estimate and are distinct from the fees paid directly to the bank, which are usually a minor part of the overall cost.
What is title insurance and why do I need it?
Title insurance is required to close on your home, protecting against disputes that may arise over the property’s title. A title company researches the property’s history to ensure legal transfers between previous buyers and sellers. It also protects the lender against illegal or fraudulent title transfers.
Do I need homeowners insurance prior to closing?
Yes, you must obtain a homeowners insurance policy from a B class III or higher-rated company before closing. The policy should be valued at least at your mortgage amount and include the mortgage clause as specified in your loan commitment letter. Please fax us a copy of the insurance binder page and paid receipt at least five days before closing.
What is an escrow account?
An escrow account, also known as an impound account, is established by lenders to manage the tax and insurance portion of mortgage payments. Sufficient funds are collected at closing to establish reserves in these accounts, which are then used, along with monthly deposits, to pay taxes and insurance as needed.
How do I know if I should pay points?
Before paying points, consider the following:
- Home purchase or refinance: Points on a purchase are fully tax-deductible in the year of purchase, while refinance points are deducted over the loan’s life.
- Relocation benefits: Companies often cover up to three points for relocating employees.
- Planned length of stay: Make sure you’ll live in the home long enough to offset the points’ cost with interest savings.
What is a survey? Do I need one?
An aerial view sketch of your home that shows property boundaries and potential encroachments is called a mortgage survey. Your attorney can advise if a new one is necessary, as older ones may be acceptable.
How much money do I need to bring to closing?
The funds required for closing vary depending on your individual loan and transaction type. You’ll receive a good faith estimate at the application and final figures from your attorney a few days before closing.
If you’re purchasing a property, you’ll typically need to bring money to cover the down payment and closing costs. Refinancing often allows you to include closing costs in the loan amount.
- The money owed generally includes:
- Down payment (for purchase transactions)
- Closing fees (title fees, appraisal, recording, survey, flood certification, etc.)
- Escrow account funds (taxes, insurance, and PMI if applicable)
If you would like to learn more or still have questions that weren’t answered above, please contact us today for a free consultation!