FAQ

What does it mean to lock in the interest rate?
Interest rates are subject to change every day. From the time of your original application to closing, your interest rate and monthly payment could be different from what you planned. To protect against the uncertainty of interest rate movements, Pinnacle offers you the option to lock in a particular interest rate and guarantee it for a specified amount of time, typically 30-60 days.

Can I lock in a loan program and interest rate online?
No. After you submit your online request for application, a Pinnacle Mortgage representative will contact you to review your information and discuss the loan options.  You can choose a loan program and lock in your interest rate through your mortgage representative.

When refinancing, do I need to purchase title insurance again?
Yes, you will need to reissue title insurance on a refinanced mortgage.  This is to insure the lender for the amount that you are re-financing. The original title policy purchased when you bought the home, is still in effect for the borrower.

What is PMI?
PMI stands for Private Mortgage Insurance.  It is insurance protection for the lender in the event of borrower default. PMI is required on any loan that exceeds 80% of the value of the home.  PMI is added to your monthly mortgage payment and is required for a minimum of one year. 

What is the difference between down payment money and closing costs?
Down payment money is the difference between the sale price of a home and the amount that is to be financed by the lender. Closing costs are the charges incurred by the borrower to pay for various costs associated with obtaining/settling a mortgage loan. For example, transfer taxes and title insurance are examples of several closing costs.

Why is the Annual Percentage Rate (APR) on the Truth-In-Lending Disclosure different from my interest rate?
The Annual Percentage Rate and the interest rate are not the same. The APR is the cost of the loan taking into account various loan charges, of which interest is, only one such charge. Other charges used in calculating the APR are discount points, origination fees, PMI, pre-paid interest and other credit costs. The APR is calculated by spreading these charges over the life of the loan, which results in a rate higher than the interest rate shown on your note. If interest were the only charge associated with your loan, the APR and the interest rate would be the same.

What is a bi-weekly mortgage?
The bi-weekly mortgage gets its name from the frequency of its payments, which occur every fourteen days. Each payment however, is half the amount of a monthly payment. A traditional 30-year fixed rate mortgage has twelve monthly mortgage payments a year. A bi-weekly mortgage, on the other hand, with payments due every fourteen days, requires 26 payments (in some years 27 payments) over the course of a year. The advantage of a bi-weekly mortgage includes substantial interest savings, fast equity build up and a shortened loan term.

What are points and do I need to pay them?
One point is 1% of the loan amount. Points represent pre-paid interest paid at closing for the purpose of obtaining a lower interest rate. If points are not paid, a higher interest rate may be given. Please contact a mortgage loan representative to discuss if paying points is the right option for you.

Should I try to pay as many points as possible to lower my interest rate?
Consider paying points to lower your interest rate if you are planning to stay in the property for at least several years. If you are planning to move within a few years, the monthly savings you gain may not be enough to recover the cost of the points that you paid initially.

What is an escrow account?
An escrow account is an account, which the lender holds monies collected from your mortgage payment to pay future property taxes and insurances.

What is transfer tax / tax stamps?
Generally, whenever real estate changes hands, a tax is collected. Typically, the tax is split between the buyer and seller. However, this is not always the case.

What is title insurance?
Title insurance assures the borrower and the lender that the mortgage is a valid first lien protected against hidden, as well as known, defects in the title as insured.

Can I get assistance for closing costs?
Yes. Closing cost assistance is available in several ways. Please contact a mortgage loan representative for details.

When can I lock in my interest rate?
A rate may be locked at application or you may choose not to lock (float) the interest rate up until 5 days prior to settlement. Generally lock-ins are for 30 or 60 days and are dependent upon when your closing/settlement is scheduled. Please contact your mortgage loan representative for further details.