Mortgage FAQ

Who Is Mortgage Bank?

Mortgage Bank is owned and operated by Gigfoot LLC out of Asheville, North Carolina. We partner with lenders and real estate brokers to bring the web a library of technical know-how and knowledge into the Mortgage industry. All of the information you will find on our site is heavily researched and cross-checked with lenders, brokers, and buyers across the nation. our goal is to help clear the fog and the fear for future home buyers and refinancers everywhere.

Why buying a house wasn’t taught to everyone in high school is beyond me. With millions of questions and sometimes only a few answers this section is dedicated to clearing the fog on home buying, mortgages, banks, brokers and lenders. Ins-and-outs, dos-and-don’ts for new home buyers and refinancers. We hope you learn from this FAQ and please let us know if we left something out you’d like to see.

How Do I Calculate Monthly Payments?

Your monthly payment is determined through a simple interest calculation based off an interest rate, number of years, and a principle (amount of loan). If you want to compute your monthly house payment, use our Mortgage Calculator.

What Is Amortization?

Amortization is the process of paying off a debt by installments of principal and earned interest over a period of time. An Amortization table or schedule will show your monthly payments from first payment to last. Our Mortgage Calculator can output a full amortization schedule based off your loan parameters.What Is FHA?

FHA stands for the Federal Housing Administration. FHA was established in 1934 as an agency within the U.S. Department of Housing and Urban Development (HUD). FHA’s mission is to advocate loan programs aimed at stimulate housing growth. An FHA loan is a mortgage loan insured by the Federal Housing Administration (FHA). FHA loans originated during the Great Depression when the rates of foreclosures and defaults were sky-rocketing. The FHA guarantees the loan to the lender. Borrowers help fund FHA through paid insurance premiums. Today’s FHA helps people who cannot afford a conventional downpayment or do not qualify for PMI insurance.

What Is PMI?

PMI is private mortgage insurance. Lenders can buy loan default insurance from PMI companies thereby stimulating the lender’s willingness to loan money. Thanks to PMI, more home loans are acquired by more people.

What Is Subprime?

Subprime can refer to a loan or a lender. Subprime means less than prime, as in prime rate. If the prime rate was 6% then a subprime rate would be a higher rate like 8%. Subprime loans are more expensive than mainstream loans due to their interest. Subprime loans appeal to borrowers with sub-par credit. Borrowers with a blemished financial record or a limited credit history can borrow with a higher interest rate to compensate for increased credit risk.

What Is HUD?

HUD is the Department of Housing and Urban Development. HUD was created by Congress in the Housing and Urban Development Act of 1965. HUD fosters the Federal Housing Administration (FHA) and promotes housing and community development on a federal level. HUD also sponsors Ginnie Mae (GNMA).

What Is GNMA?

GNMA is also know as Ginnie Mae. GNMA is a government-owned corporation sponsored by HUD providing loan payment insurance to member lenders. GNMA stands for the Government National Mortgage Association. Ginnie Mae was created by Congress in 1968 under the umbrella of HUD.

Loan Eligibility Factors

Each lender has their own criterian for determining your eligibility for a loan. On average, here’s what all lender’s use to determine your eligibilty for a mortgage loan.

  • 70% Fico Score – Lenders factor in all three FICO scores as reported by the three major credit agencies: Equifax, Experion, and Trans Union.
  • 20% Verifiable Income. Your tax form is used to generate a verified income for two years prior.
  • 10% Credit History. Of course this is wrapped up in your FICO score too.