Frequently Asked Questions

WHAT IS THE DIFFERENCE BETWEEN APR & INTEREST RATE (NOTE RATE)?

APR is the annual cost of a loan to a borrower, including fees. Like an interest rate, the APR is expressed as a percentage. However, unlike an interest rate, it includes other charges or fees such as mortgage insurance, most closing costs, discount points, and loan origination fees. The interest rate is what determines your monthly payments, not the APR!

WHAT IS THE LONGEST TERM I CAN FINANCE MY HOME?

The longest term we offer is a 30-year mortgage term.

WHAT IF I HAVE BAD CREDIT?

We aren’t afraid of bad credit! We have 18 years of experience helping our clients with credit… You have to start somewhere, and we want to help get you there!

HOW LONG DOES MY BANKRUPTCY NEED TO BE DISCHARGED?

For a Chapter 7, it has to be discharged for two years to get VA, FHA, THDA and USDA loans and four years for a conventional loan. For a Chapter 13, the time ticker starts from the file date.

DO YOU REALLY NEED ALL PAGES OF MY BANK STATEMENTS, EVEN IF THE PAGE IS BLANK?

Yes, asset statements are so important because it shows the underwriter where the funds are coming from. All pages are required to make sure there isn’t any missing information.

IS A HOME INSPECTION AND AN APPRAISAL THE SAME THING?

No, a home inspection isn’t a requirement to get a loan, but it’s a smart purchase! A home inspection is an examination of the condition of a home.  Inspections are usually conducted by a home inspector who has the training and certifications to perform such inspections, and you get a detailed report in writing on the items that appear to be deficient. An appraisal is most always a requirement of the lender. A real estate appraisal is the process of developing an opinion of value for the home you are buying to make sure it's “worth” what you have agreed to pay.

WHY DO YOU NEED THE TAX TRANSCRIPTS WHEN I HAVE ALREADY GIVEN YOU MY TAX RETURNS?

Tax returns are what you, as an individual or you with your tax preparer, complete and send to the IRS… Tax transcripts are the IRS’s recorded version of those returns. Basically, confirming that the 2 documents match, exactly is a measure the lender takes to prevent loan fraud.

WHAT ARE SELLER PAID CLOSING COSTS?

Seller paid closing costs are the buyer’s closing costs and prepaid items that the seller has agreed to pay in writing in the purchase contract. This helps to decrease the actual funds that are needed from the buyer, at the time of closing.

CAN I BUY A NEW AUTOMOBILE WHILE WE ARE WAITING TO CLOSE ON OUR HOME?

We ask that you please don’t. It's not that you can’t, but it can add complications like new credit inquiries and a new debt that has to be included into the debt-to-income ratio. Depending on the situation, it could cause a borrower to not qualify for a loan.

CAN I OPEN A CREDIT CARD DURING THIS PROCESS?

We ask that you please don’t without asking us first. Most of the time a credit card will not cause your loan to not qualify, but it can. It will also add extra steps for you to help us verify the new debt and have it added to your credit bureau

MY UTILITY COMPANY NEEDS TO DO A CREDIT CHECK TO TURN ON ELECTRICITY AT MY NEW HOUSE. IS THAT OK?

Yes, that is 100% OK.

HOW LONG DO I HAVE TO WAIT TO BUY A NEW HOME IF I HAVE A FORECLOSURE?

Two years for a VA loan, three years for FHA, THDA,  and USDA loans, and four years for a conventional loan.

WHAT DOES A TITLE COMPANY DO IN MY TRANSACTION?

The title company reviews the title to the home, issues title insurance policies, facilitates closings, and files and records paperwork at the courthouse. They are a very important part of your transaction.

WHAT IS HAZARD INSURANCE?

This is also referred to as homeowners insurance. It’s insurance that protects a property owner against damage caused by fires, severe storms, and other natural events. Hazard insurance usually refers to a section of a general homeowners insurance policy that protects the structure of the home as well.  All mortgage loans require this insurance, and we require 12 months to be paid at or before the closing of every purchase transaction.

WHAT DOES ESCROW ACCOUNT MEAN?

With a mortgage escrow account, you pay the servicer a certain amount each month to cover property taxes, homeowners insurance, and (sometimes) private mortgage insurance. This comes in handy when your taxes and insurance are due every year because you never have to write a separate large check to make the payment.

DO YOU LEND ON VACANT LAND?

No, we do not, but we can always refer you to a local bank that does.

DO YOU DO AUTO LOANS?

No, we always recommend going to your local credit union. They will have lots of options, lower rates, and only do one credit pull.

DO YOU DO HOME EQUITY LINES OF CREDIT?

No, we do not, but we can always refer you to a local bank that does.

ARE YOU LOCAL?

Very! Our parent company, Cardinal Financial, is nationwide, but we are locally known as Peoples Home Equity and have been in business in Knoxville for over 20 years!

DO YOU SELL YOUR LOANS?

Sometimes… but we also have a great percentage of loans that are serviced by our parent company, Cardinal Financial.  Either way, your loan is always safe, and nothing can change about the term, the rate, or the structure of the loan you closed with us.

DO YOU LEND JUST IN TENNESSEE?

Cardinal Financial lends in all 50 states