Frequently Asked Questions

What is the Annual Percentage Rate?

Annual Percentage Rate, or APR, represents the percentage relationship of the total finance charge to the amount of the loan, over the term of the loan. Do not confuse the APR with your quoted interest rate, which is used to determine your monthly principal and interest payment. The APR reflects the cost of your mortgage loan as a yearly rate. It will be higher than the interest rate stated on the note because it includes (in addition to the interest rate) loan discount points, fees and mortgage insurance.

What is debt-to-income ratio?

It is a formula lenders use to determine the loan amount for which you may qualify. Guidelines may vary, depending on the loan program you have selected.

What is a fixed rate mortgage?

It is, quite simply, a loan with an interest rate that remains the same for the entire repayment term.

What can I expect from my GREAT EAST^SM Mortgage Consultant?

Your GREAT EAST^SM Mortgage/Wells Fargo Home Mortgage Consultant is the representative you consult about a mortgage loan. Sometimes called a loan officer, account executive or sales representative, he/she is the one who guides you through the loan selection, application and approval process.

What are points?

Simply put, one point equals 1% of the loan amount. Paying points can decrease the interest rate.

I've been told I may have to purchase Private Mortgage Insurance (PMI). What is it, and why do I need it?

PMI is a mortgage insurance policy on a conventional mortgage loan issued by a private mortgage company. If your down payment is less than 20%, you may be required to purchase PMI.