FAQs - FREQUENTLY ASKED QUESTIONS

REFINANCE

Q:
What does it mean to refinance a mortgage?
A:
Refinancing is simply the process of replacing your existing mortgage with a new one with a lower rate and/or better terms. It can help you realize your dreams and it doesn't get any easier than with Embrace Home Loans.
Q:
When is the right time to refinance?
A:
There are many great reasons for refinancing, including:
  • You’d like to lower your interest rate or monthly mortgage payments
  • You need cash, fast
  • You’d like to consolidate debt
  • You’re looking to shorten your payback term
  • You want to switch from a variable-rate to a fixed-rate mortgage to create regular, predictable payments
  • You’d like to get a variable-rate mortgage with better terms
Q:
What is the typical refinance process?
A:
Refinancing is usually a much simpler process than buying a home. Typical steps in the process include:
  1. Research the value of your home and check your credit scores.
  2. Gather all needed documents and apply for the refinance.
  3. After your loan is approved, the underwriting process begins—the time for careful review.
  4. Sign your papers and close your loan.
Q:
What kind of refinance loans do you offer?
A:
When you refinance with Embrace, you can get a loan to take cash out, lower your payment, shorten your term, or even do a combination of those, depending on your qualifying numbers. 

PURCHASE

Q:
What does it mean to be pre-qualified?
A:
A simple first step in the mortgage process is getting pre-qualified. Embrace Home Loans can pre-qualify you over the phone or online. We’ll go over your information and discuss your goals. Shortly thereafter you’ll get your pre-qualified amount — the amount for which you might expect to be approved for a loan.
Q:
How does my credit score impact the rate I get on my mortgage loan?
A:
Not only will a good score help you qualify for a home loan, but it will also help you get the lowest rate possible. In fact, your credit score is the most important piece of the puzzle when it comes to your mortgage rate. The higher your score, the lower the interest rate. And on a loan as large as a mortgage, just one percentage point up or down can add up to a significant amount of money.
Q:
How is my credit score calculated?
A:
Your credit score is calculated with a mathematical formula. It uses information in your credit report and compares it to information on tens of millions of other people. The resulting number is a highly accurate prediction of how likely you are to pay your bills. People with the highest credit scores get the lowest interest rates. Your credit score considers both positive and negative information in your credit report. Late payments will lower your credit score, but establishing or re-establishing a good track record of making payments on time will raise your score. Call 800-333-3004 to speak to a Loan Officer to get more information.
Q:
How can I improve my credit score?
A:
Improving your score is not impossible. There are things you can do right now to begin improve your credit score, including:
• Get copies of your credit reports and stay on top of them
• Set up payment reminders and pay your bills on time
• Focus on reducing your debt

Q:
What is an underwriter looking for in a purchase loan application?
A:
Mortgage underwriters are basically interested in two things: can the buyer repay the mortgage and what is the value of the property should the buyer be unable to pay back the mortgage? Knowing this can help you better prepare for the underwriting process.
Q:
What happens at closing?
A:
At closing, you’ll sit down with those involved in your real estate transaction and sign all the legal documents needed to give you ownership of your new place. You’ll also be responsible for paying closing costs, which are typically 3–4% of your home’s purchase price.
Q:
What costs are required at closing?
A:
Closing costs can be divided into two main categories: the lender and third-parties out of the lender's control. Lender fees include any costs associated with processing your loan, such as prepaid interest,, discount points, origination charge, and any rate lock fees. Third-party fees include fees paid for services performed by parties other than the lender – either imposed by the state or local government, or by the individual vendors that provide the service. They also include pre-payments for taxes and insurance that are placed in an impound or escrow account. Third-party fees include appraisal fees, title service fees, and government recording fees.

HOMEBUYING 101

Q:
Why should I buy a home?
A:
Owning your own home gives you a sense of belonging with of your community, and the pride of knowing that you reached your goal of attaining homeownership. Interest payments are typically tax-deductible, and you’ll be building equity each month with your mortgage payments instead of lining your landlord’s pockets.
Q:
Is buying a home better than renting?
A:
That’s a question only you can answer, because there are benefits to both. Buying could be a better deal for you if you plan on living in your home for at least three to five years. The type of loan you choose also comes into play. Give our Rent vs. Buy calculator to weigh your options.
Q:
Is now the time to buy?
A:
Factors to consider include price, interest rates, location, and your financial situation. When interest rates at or near record lows, they aren’t likely to go lower, so waiting for them to drop even more is risky. Only you can determine if you’re ready to buy! Just make sure you have a stable job, and you plan on staying in the home for at least three to five years. You should also have enough money to save for a down payment and closing costs. Use our helpful mortgage calculator to see how much home you can afford.
Q:
How much can I afford?
A:
Everyone's financial situation is different, so it’s important to figure out what you can comfortably afford to borrow, which depends on four factors:
  • Your debt-to-income ratio (your total monthly payments as a percentage of your gross monthly income)
  • Cash you have available for a down payment and closing costs
  • Your credit history
  • The value of the home you’re buying
How much home can YOU afford? Use our handy mortgage calculator and find out!
Q:
What is the loan-to-value ratio? Why do I need to know that?
A:
Loan-to-value (LTV) tells you how much equity you have in your home relative to how much you owe on it and what the house is worth. LTV is important to know when refinancing because it can affect your interest rate and whether or not you’ll need Private Mortgage Insurance.
Q:
What is a home appraisal?
A:
Getting a home appraisal is a standard part of the mortgage process. Lenders like Embrace will give customers a loan based on the appraisal value of the property they’d like to buy or refinance. Appraisals are conducted by 3rd party companies and are not influenced by Embrace Home Loans. Home appraisals are determined by comparing recently sold, comparable homes in the same neighborhood as your home or the home you are interested in purchasing or refinancing. The appraisal company provides a report to Embrace after the appraisal is conducted.  Quite simply, when you use a home for collateral for a loan, the lender wants an appraisal report to make sure the loan will be guaranteed by the value of the property.
Q:
How do you qualify for a loan?
A:
When you first meet or speak with a loan officer, they’ll just want to learn a few basics about you and your financial situation. Once the loan process gets started, you’ll need to provide proof of where you work, your income, any debts you may have, your assets, and how much you plan to put toward a down payment. Our loan officers will clearly explain your mortgage options and answer all your questions so you feel confident in your decision.
Q:
How long does the mortgage process take?
A:
The time needed to complete the mortgage process varies by customer and lender because it includes gathering information from a customer, verifying that information, and processing the actual loan. The average amount of time to close on their home purchases is 47 days across all loan types, according to Ellie Mae. Purchase loans generally take longer to close than refinance loans by an average of 12 days. Factors such as your loan type, your financial situation, and the length of your contract can either lengthen or shorten that time frame.
Q:
Do I need to find a home before I apply for a mortgage?
A:
Short answer – no! It’s actually smarter to get started on the process before you find your dream home. Other lenders offer pre-qualifications. But our Approved to Move™ program gives you much greater bargaining power, because it’s the next best thing to a cash offer, which will make you very appealing to sellers. 
Q:
What’s an escrow account, and how does it work?
A:
Your mortgage payment may include additional costs like your homeowner’s insurance and property taxes. We can add the monthly portion of each of those accounts to your mortgage payment. That money is held in an escrow account managed by a third party to make sure those costs are paid on time.
Q:
What credit score do I need to get approved?
A:
The higher your credit score, the better your financing options will be.  But you can get approved with a credit score as low as 580, as long as you meet the other loan requirements.
Q:
Can you get a mortgage without a credit score?
A:
Actually, yes you can. If you’ve paid off all your debt, it’s possible that you won’t have a credit score when you apply for a mortgage. You’ll just need to supply some additional paperwork so the underwriter can review it personally – it’s a process called manual underwriting, and it might make the mortgage process take a little longer than usual.

EMBRACE

Q:
What is the difference between Embrace, my local bank, and a broker?
A:
In short: no middle man. As a direct lender for Fannie Mae, Freddie Mac, and an approved issuer for Ginnie Mae, we underwrite our loans. We are not a broker or a lead reseller and we never take your call and then pass your application off to someone else. Your Embrace Home Loans Mortgage Specialist works directly with you through the entire loan process — from beginning to end. This kind of personalized service means we can truly get to know you, and provide impeccable service that perfectly fits your needs. It also means we can offer better interest rates and terms — all while keeping you completely informed with real-time, up-to-the-minute information regarding your loan. There’s simply no better way to go through the mortgage process.
Q:
How long has Embrace been in business?
A:
For more than 37 years we’ve been helping tens of thousands of people just like you purchase new homes, refinance existing mortgages and consolidate high-interest debt. CONTACT US now to find out how we can help you make your dreams a reality.
Q:
Can I pay my mortgage online?
A:
Yes you can!  Please use the following link to make payments.  If you do not have an account you must create one the first time.
Q:
Where do I log in to see the status of my loan?
A:
You can view the status of your loan at any time by logging into our Client Portal. We recommend saving this link in your web browser for future use, but you can always find the link here or in past emails from your Embrace loan officer.
Q:
When did Embrace start using Rushmore as a sub-servicer?
A:
Rushmore Loan Management Services began servicing new loans funded after January 2, 2020. As of March 2, 2020, all existing customers serviced by RoundPoint (on behalf of Embrace Loan Servicing) will be transferred to Rushmore. No need to worry, though — you are still an Embrace customer and Rushmore is just one of our trusted partners.
Q:
Does Embrace have low out-of-pocket cost options?
A:
Yes, we do! While it’s wise to put down a larger down payment to lower your monthly payments. But if you put down a smaller down payment or even no money down at all, you won’t have to empty your savings. Just keep in mind that you’ll likely pay a higher interest rate with little or no money down.
Q:
Will my electronic payment authorization with RoundPoint be transferred to Rushmore?
A:
No; we apologize for any inconvenience. If you had an electronic payment set up with RoundPoint, your electronic payment authorization will not be transferred and you will be required to establish a new electronic payment schedule with Rushmore. You’ll need to contact Rushmore directly to set up your new automatic payment. We apologize for any inconvenience, but truly appreciate your understand during this transition.
Q:
Can I get a home equity line of credit (HELOC) with Embrace?
A:
No, Embrace doesn’t offer HELOCs, but you can refinance your mortgage to free up the money you need and can put toward the same things as a HELOC, like paying down debt.
Q:
Will a past bankruptcy, foreclosure, or short sale affect my ability to get a new mortgage?
A:
A lot of mortgage companies require that two to seven years have passed after one of these events in order to qualify for a mortgage. But, when other lenders say “No,” Embrace says, “Yes!” With our proprietary product Beyond by Embrace, you can get a mortgage just one day after a settled Chapter 7 or 13, as long as your credit score is at least 580.

FINANCING

Q:
What does it mean to be pre-approved?
A:
Pre-approval is more involved and carries more weight than pre-qualification.  With Embrace, this process will be as simple and streamlined as possible so you can start finding your new home. We’ll calculate the specific mortgage amount for which you are approved. You'll also have a better idea of the interest rate you will be charged on the loan and, in some cases, you might be able to lock-in a specific rate. With pre-approval, you will receive a conditional commitment in writing for an exact loan amount, allowing you to look for a home at or below that price level. Obviously, this puts you at an advantage when dealing with a potential seller because it’s clear you are very close to obtaining the financing you need.
Q:
How do interest rates affect your mortgage?
A:
High interest rates bring higher monthly payments and increase the overall interest you’ll pay over the life of your loan. A low interest rate saves you money in both the short and long term. Sometimes a bigger down payment can help you get a lower interest rate. Keep in mind that the money you pay in interest doesn’t ever go toward paying off the principal, so it’s smart to get the lowest interest rate possible and then pay off your house as quickly as you can.
Q:
How are rates calculated?
A:
Rates are complicated and can be tricky to understand. Simply CALL US and we’ll help you compare your rate quotes. We’re happy to take you through estimates line by line — ensuring you know what every item means to you and your bottom line. Comparing mortgage rates can be confusing because there are so many factors — from taxes to title insurance — that contribute to calculating your mortgage payment and closing costs. No one is expected to understand it all from the beginning, but we’ll make sure it all makes perfect sense to you in the end.
Q:
How much money do I need to buy a home?
A:
How much money you need depends on the type of loan and the purchase price. We recommend that you have at least 3% for a down payment. You’ll also want to have between 2% and 5% of the purchase price for closing costs – even for loans that don’t require a down payment, such as VA loans or our No Down Payment Program.
Q:
What does your mortgage payment include?
A:
A typical monthly mortgage payment includes the principal, interest, homeowners insurance, property taxes, and private mortgage insurance (PMI) if you put down less than 20%. You can pay more on your mortgage each month, but make sure you specify that you want the extra money to go toward the principal only (vs. prepaying interest).
Q:
Will my credit history prevent me from getting a mortgage?
A:
Your credit history will determine which mortgage loan is right for you. But even if you have a recent bankruptcy, foreclosure, or short sale, we’ve got you covered. When other lenders say, “No,” Beyond by Embrace says “Yes!” As long as you have a credit score of at least 580, we have a mortgage solution for you.
Q:
What's the best way to get started?
A:
The best way to start any mortgage process is with the help of a lender that's 100% on your side — and that's Embrace Home Loans. Simply call 800-333-3004 or fill out our quick, no-obligation and confidential GET A QUOTE FORM now. Your Mortgage Specialist will start working right away to find your ideal mortgage and will be with you every step of the way. This streamlined, personalized approach means the entire process will be as simple and stress-free as possible. In fact, it can all be wrapped up in as little as 21 days after receiving all your documents. There's just no better way to take the next steps toward a better financial future.
Q:
What is PMI, and do I need it?
A:
Private mortgage insurance (PMI) is an insurance policy that protects your lender in case you default on your mortgage. You may be required to purchase it, especially if you plan to make a down payment of less than 20% of your home's purchase price, which means you have a loan-to-value ratio (LTV) greater than 80%. PMI is purchased through a third-party insurance company, and paid via your monthly mortgage payments. How much it costs depends on several factors, but once your LTV is below 80%, you can refinance your mortgage to get rid of the PMI.
Q:
What are points?
A:
Paying discount points means you can lower or “buy down” your interest rate (as well as your monthly payment) over the life of your loan. One point equals 1% of your loan amount. When you pay a point, you are essentially paying part of your interest to the lender up front. So if you have the funds, buying down your rate is a good way to reduce the total amount of interest you’ll pay over time.
Q:
What does it mean to "lock in" your rate?
A:
Think interest rates are on the way up? Then “locking in“ your interest rate before you close may be a great idea. This simply means your lender "freezes" your interest rate—typically between 15-90 days—before you close.
Q:
Aren't the interest rate and the annual percent rate (APR) the same thing?
A:
No, but they are very close. The interest rate is how much it costs to borrow the money from your lender. The APR is the total cost of your mortgage and accounts for additional fees like closing costs, origination charges, lender points, and private mortgage insurance (PMI).

LOAN TYPES

Q:
What types of loans does Embrace offer?
A:
At Embrace Home Loans, we have the loan that's right for you and the expertise to pinpoint precisely which kind of loan that may be. From conventional mortgages — both Fixed and Variable-rate — to easier-to-qualify-for loans like FHA insured, VA or HARP 2, we offer a broad range of options, and will not rest until we find the ideal loan for you.
Q:
What is a conventional loan?
A:
Conventional mortgages are typically underwritten according to the guidelines set by Fannie Mae and Freddie Mac. These come in two different types: fixed-rate and variable-rate mortgages.
Q:
What is an FHA insured loan?
A:
FHA insured loans are mortgages that are insured by the Department of Housing and Urban Development — which means the government is essentially guaranteeing it will pay the mortgage if you cannot. FHA insured loans require a much lower down payment on a house than most other financers…usually just 3.5%. Plus, qualifying for an FHA insured loan is often easier than qualifying for a conventional mortgage — making it attractive for homebuyers and homeowners alike.
Q:
What is the difference between fixed and variable rate mortgages?
A:
A fixed-rate mortgage is perfectly predictable because you never have to worry about your interest rate or your mortgage payments going up. That means they are easy to budget for over the long term (usually 15 or 30 years). Variable-rate mortgages, also known as adjustable-rate mortgages (ARMs), are more complicated than fixed-rate mortgages. Their initial interest rate will usually be lower than a fixed-rate mortgage. However, the interest rate of the mortgage will change over time, and as a result, your payments may go up or down accordingly. Many factors, like how long you intend to keep your home, go into determining which is right for you.  An Embrace Mortgage Specialist will help you determine the exact loan that’s right for you based on your unique needs.
Q:
What loans are available to Veterans and members of the military?
A:
VA Loans are specifically for Veterans and are backed by the Department of Veterans Affairs (VA). These loans allow Veterans to buy a home with little or NO down payment and are easier to qualify for than conventional mortgages. To be eligible, you need to have served at least 181 days of active duty or at least 6 years in the National Guard.
Q:
How do you know which mortgage loan is right for you?
A:

With so many mortgage options out there, it can be hard to know how each would impact you in the long run. The most common mortgage loan types are:

  • Adjustable-rate mortgage (ARM)
  • Federal Housing Administration (FHA) loan
  • Department of Veterans Affairs (VA) loan
  • Fixed-rate conventional loan

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