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Buy a Vacation Home

Considering purchasing a vacation home?

We’ll help you plan for what’s ahead and make an informed decision about your home financing options.

If you’re dreaming about vacation homeownership near your favorite location, you’ve come to the right place for financing information and tips.

Wells Fargo is ready to help you through every stage of homeownership — as you plan to buy, when you purchase, and even after you own your vacation home. From your mortgage application to enjoying your new vacation property, Wells Fargo is with you — every step of the way.

What are the benefits of vacation homeownership?

Having a place to stay near the beach, the lake, the mountains or your favorite resort area offers many potential rewards. When you buy a vacation home, we can help you understand the financial and personal benefits that go along with the purchase, including:

  • Rental opportunity. If your home is in a popular vacation spot, you may be able to rent it and earn additional income when you’re not using it.
  • Ongoing income and cash flow. If you choose to rent your vacation home, it could provide ongoing income to offset your expenses, and may provide tax benefits in the form of depreciation expense. Restrictions apply. (Consult your tax advisor regarding the deductibility of depreciation expense.)
  • Potential tax benefits. Mortgage and home equity interest payments and property taxes may offer the opportunity for tax advantages. (Consult your tax advisor regarding the deductibility of interest.)
  • Potential property appreciation. A vacation home may be a good long-term asset to hold as homes can increase in value.

What should I consider before purchasing a vacation home?

There’s more to buying a vacation property than having a place to relax. Whether you purchase a single family home, townhome or a condominium—there are some items you should consider:

Additional financial responsibilities

  • Consider whether you will occupy your vacation home as a second home exclusively or if you plan to rent it out to others, when you’re away. You may need to install an owner’s closet, provide furnishings or safety features with future renters in mind.
  • Home values can fluctuate and will change over time. This means property values can decrease. Every community and situation is different so it is important to keep this consideration in mind.
  • You may have other expenses in addition to your monthly mortgage payments on the property — such as homeowners association dues, cleaning services, flood insurance, and utilities.
  • Carefully consider your monthly cash flow to ensure that you’re able to manage the additional expenses.
  • You will need to calculate the amount needed for closing costs and associated expenses (such as repairs, cosmetic improvements, and furnishings for your vacation home).

If you purchase a home that needs renovation, finance and renovate with ease

  • If your vacation home needs repairs, ask about our Purchase & RenovateSM loan, which may enable you to buy and repair with one loan.
  • Another streamlined way to purchase and renovate your home is the Wells Fargo Mortgage plus Home Equity Financing program. This option combines a Wells Fargo first mortgage together with home equity financing. There may be tax benefits and reduced closing costs with this option. (Consult your tax advisor regarding any tax benefits.)
  • Depending on the loan you choose, remodeling and repairs may require hiring a contractor.

Is owning a vacation home less expensive than hotel stays or renting?
Depending on the amount you spend on accommodations, owning a vacation home may be less expensive in the long run. You may decide to rent your property out while you’re away, which could generate additional income.

Help ensure your vacation home is restful and enjoyable by carefully thinking through these considerations.

How can I use the equity in my current home to buy a vacation home?

Whether you are looking for a home-away-from-home for family vacations — or a rental property to help generate income — our home equity financing options may help you reach your goals.


  • If you have sufficient equity in your current home, you may be able to purchase your vacation home outright and avoid an additional first mortgage by getting a home equity loan or line of credit.
  • The average time varies, but generally a home equity loan or line of credit can close within 20 to 45 business days.
  • Reduced costs
    Using a home equity loan or line of credit from Wells Fargo may be an option that helps you reduce your costs:You can use the equity in your current home to make a down payment of 20% and avoid paying private mortgage insurance on your new property.
  • By leveraging home equity, you may be able to contribute a larger down payment and lower the monthly mortgage payment on your vacation property.
  • Our home equity financing allows you to select the closing cost option that meets your needs.
  • The interest on home-equity financing may be tax deductible. (Consult your tax advisor on the deductibility of interest.)

View loan options now

 Calculate rates and payments 

What could your monthly payments be? Find out with our rate and payment calculator.

How can I get started with homebuying?

Knowledge of the area where the property is located, as well as an understanding the financial considerations that go along with buying a home can increase your chances for a successful start. Here are some steps you can take to get started.

Create a financial plan

Understand your credit needs and borrowing ability.

Set a time frame

Determine when you’d like to buy your home and use your financial and credit information to establish a budget that can help you achieve your goal.

Consider using a real estate agent

While it’s easy to search for homes online today, you receive invaluable information and assistance by working with a licensed real estate agent.

Many real estate agents also hold a REALTOR® designation. A REALTOR® is a member of the National Association of REALTORS® (NAR). The NAR trains its members in the most effective professional practices and requires them to abide by its strict Code of Ethics.

A licensed real estate agent may help you navigate the homebuying transaction more smoothly. Some of the benefits you’ll enjoy include:

  • Professional assistance and representation
  • Marketplace experience and access to up-to-date information
  • Services provided at no direct cost to you because the agent is compensated from the seller-paid commission when you buy a home

Get started finding a real estate agent by asking friends and family for referrals, ask your home mortgage consultant, or do your research online.

What home financing basics should I understand?

If you obtain home financing, you’ll repay more than the amount you borrowed. How much you repay is determined by several factors, including your interest rate and loan amount. Here are some terms you should understand.

Interest rate

  • The interest rate is the percentage of your loan amount we charge you to borrow money.
  • Interest rates are based on current market conditions, your credit score, down payment, and the type of mortgage you choose. Check today’s rates.

Discount points

  • One point equals 1% of your mortgage amount. If you qualify, you may be able to pay one or more points to lower your interest rate. A lower interest rate means lower monthly mortgage payments.
  • Points are usually tax deductible. Consult a tax advisor regarding tax deductibility. On refinances you may be able to finance points as part of your mortgage amount.

Origination charge

  • On a mortgage, this amount includes all charges (other than discount points) that all loan originators (lenders and brokers) involved will receive for originating the loan.
  • The origination charge covers items including fees, document preparation, and underwriting costs, and other expenses.
  • On refinances, if you qualify, you may be able to finance the origination charge as part of your loan amount.

Loan term

  • Your loan term is the amount of time you have to pay off your mortgage balance.
  • Shorter loan terms typically mean higher monthly mortgage payments, but often have lower interest rates.
  • If you pay off your mortgage balance within a shorter term, you may pay less in total interest than with a longer-term mortgage.

Remember that interest rates only tell part of the story. The total cost of a mortgage is reflected by the interest rate, discount points, and origination charges. This total cost is known as the annual percentage rate (APR), which is typically higher than the interest rate. The APR lets you compare mortgages of the same dollar amount by considering their total annual cost.

Monthly mortgage payment

Your monthly mortgage payment is typically made up of four parts:

  • Principal. The part of your monthly payment that reduces the outstanding balance of your mortgage.
  • Interest. The part of your monthly payment that goes toward the cost of borrowing the money.
  • Taxes. The part of your monthly payment that goes toward property taxes charged by your local government. We typically collect a portion of these taxes in every mortgage payment and hold the funds in an escrow account for tax payments made on your behalf as they become due.
  • Insurance. The part of your monthly payment that pays for homeowners or hazard insurance, which provides protection against losses from property damage due to wind, fire, or other risks. Like taxes, insurance costs are usually collected and paid from an escrow account.

Depending upon your property location, property type, and loan amount, you may have other monthly or annual expenses such as mortgage insurance, flood insurance, or homeowner association fees.

How can I estimate how much I might be able to borrow?

There are different ways to estimate a price range that's appropriate for you. The words prequalification and preapproval may refer to two different services provided by mortgage lenders. While both are useful options for learning your potential purchase price range, it’s important to understand how they differ.


We offer two prequalification options:

  • Prequalification letter.  If you’re considering buying a home, this gives you a general estimate of the loan amount you may qualify for based only on preliminary information you provide (without us obtaining a credit report).
  • Prequalification with credit letter.  If you expect to buy a home but might not be ready to start making bids, this letter carries a little more weight. It provides a general estimate of the loan amount you may qualify for based both on preliminary information you provide and an initial review of a credit report.


Our PriorityBuyer® preapproval letter empowers you to bid on a home with confidence and lets sellers and real estate agents know you mean business. It’s more formal than a prequalification because it:

  • Confirms you’ve submitted an application, are credit-checked and have completed the first loan decisioning phase.
  • States the approximate mortgage loan amount and purchase price range for which you qualify, subject to certain conditions or documentation.
  • Means we may offer a loan commitment once all information on your application is verified, underwriting requirements and conditions are satisfied and acceptable property-related reports are provided.

Benefits of a preapproval 

Having a PriorityBuyer® preapproval letter can provide several benefits. It identifies you as a serious buyer, adds to your negotiating strength when making an offer, lets you shop confidently, and may allow for a faster closing.

It can also help you identify and address possible qualification needs early in the homebuying process. Plus, if you’re a first-time homebuyer with no record of previous mortgage payments, a preapproval may help you feel much more confident pursuing your first home purchase.

Have questions or need help? Our home mortgage consultants are available to help you throughout the home financing process. Contact us today.

How will you evaluate my home financing application?

When you apply for home financing, we generally use these four main criteria to assess your application.


Do you have a reliable, continuing source of income to make monthly payments?

  • Income can come from primary, second, and part-time jobs, as well as overtime, bonuses, and commissions.
  • You may use other sources of income if you want them considered for payment, provided they can be verified as stable, reliable, and likely to continue for at least three years. Some examples include retirement or veteran’s benefits, disability payments, alimony, child support, and rental or investment income.

Current debts and credit history

Do you pay your bills, loans, credit cards and other debts on time?

  • We examine your payment habits before deciding to loan you money.
  • We also review your credit history and credit score.

It's a good idea to check your credit history and correct any problems before applying. Wells Fargo also offers a series of online credit education videos.

Assets and available funds

Do you have enough funds for a down payment (if you're buying a home) and closing costs?

  • You may use funds from various accounts including savings accounts, certificates of deposit (CDs), investments, and retirement funds.
  • If you're buying a home, in some cases, you may be able to use gift funds toward closing costs and all or part of your down payment.
  • Generally, you’ll also need to show that you have additional funds in your accounts to cover several months of mortgage, tax, and insurance payments.

The property

What is the market value of the property you want to finance?

We will order a property appraisal to make sure the value of your property meets our underwriting requirements.

Responsible lending guidelines

We approve applications where we believe the borrower has the ability to repay the loan or line of credit according to its terms. We use two ratio-based guidelines to evaluate your ability to repay.

Debt-to-income ratio
Debt-to-income ratio is the percentage of your monthly income that is spent on monthly debt payments.What is debt-to-income ratio? Debt-to-income ratio is the percentage of your monthly income that is spent on monthly debt payments.

  • We compare your expected monthly mortgage payment (principal, interest, taxes, and insurance) plus other monthly debt obligations to your gross (pre-tax) monthly income.
  • Mortgage program guidelines vary, but a good rule of thumb is to keep your total debt level at or below 36% of your gross monthly income.

Housing-expense-to-income ratio

  Housing-to-income ratio is the percentage of your monthly income that is spent on monthly housing payments.
What is housing-to-income ratio? Housing-to-income ratio is the percentage of your monthly income that is spent on monthly housing payments.

  • We also compare just your expected monthly mortgage payment (including taxes and insurance) to your gross monthly income.
  • Mortgage program guidelines vary, but a good rule of thumb is to keep your housing expense level at or below 28%.

Even if you fall within the 28%/36% guidelines, make sure you’re comfortable making your monthly mortgage, insurance, and tax payments, in addition to all of your other monthly payments. Remember that homes have other costs — such as utilities, maintenance, and repairs — that may not exist if you rent.

How to calculate your ratios

How can I find a home that meets my needs?

In today’s world of instant access, you have a wealth of options available to you through internet searches and mobile apps. You can find detailed information, pictures, as well as video tours of homes available for sale.

In addition, you can receive valuable information and assistance by working with a real estate agent to locate properties for sale that meet your needs. Real estate agents make it their business to know about communities and the homes within them.

As you begin your search, keep these items in mind:

Location, features, and amenities

  • Location is as important as appearance or size. Do you need to be in a particular school district, close to a job, public transportation, or day-care facility?
  • Consider which features and amenities you want in your new home using our home wish list (PDF)*. Separate “wants” from “needs” and prioritize your list.

Types of homes

  • A single-family home is one of the most popular options.
  • Condominiums, town homes, and co-ops all offer different lifestyle and ownership features. You’ll need to budget for monthly fees for garbage and snow removal, landscaping, and similar services charged by these communities.

Consider newly built homes in addition to existing homes. Our Construction Lending Center provides financing tips and buying considerations.

Sometimes finding your ideal home involves compromise. You may want to consider “a diamond in the rough” — a place you can transform with a bit of ingenuity or some renovations. Ask a home mortgage consultant about our Purchase & RenovateSM loan that allows you to buy a home and make renovations and repairs in one transaction.

If you aren’t already working with a real estate agent, your home mortgage consultant can provide you with information to contact real estate agents in your area. Your real estate agent and home mortgage consultant will work together to help make homebuying a rewarding experience.

What can I expect during the homebuying process?

Your real estate agent can help you through each stage of the homebuying process.

Get preapproved

As you go through the process it’s a good idea to have a preapproval for maximum leverage.

Our PriorityBuyer® preapproval letter identifies you as a serious buyer, adds to your negotiating strength when making an offer, lets you shop confidently, and may allow for a faster closing.

Make an offer

Work with your real estate agent to determine the appropriate amount for your initial offer based on comparable home sales, market value, condition of the home, and your closing date.

Put your offer in writing 

Handle all negotiations in writing to make sure both parties understand the terms of the agreement. If you do negotiate verbally, follow up in writing.

Submit a deposit 

This "good faith" deposit demonstrates your commitment to the transaction.

Finalize your purchase contract

The contract is a legally binding contract between the buyer and seller describing all the terms of the transaction. Depending on your state, an attorney, real estate agent, or title company may help negotiate and draft the contract.

Other tools and resources

While our Learning and Planning Center helps you understand all the stages of the home financing process, we also provide additional tools and resources.


Understand your basic loan options

We can help you get started learning about different home loans. Below are a few options you may want to consider based on features that may be important to you. To see additional home loans, visit our Loans & Programs area.

Loan options to consider
Fixed payments
Lower payments starting out
Ongoing access to equity
Equity from your current home to buy another
Higher loan amount

Fixed-rate mortgages
View details


Adjustable-rate mortgages
View details


Mortgage + home equity financing
View details


Home equity financing
View details


 Find the Right Loan for You 

Customize and compare rates, payments, and estimated closing costs.

Get started

We focus on your mortgage and home equity needs with the goal of delivering a straightforward and convenient application experience. Let us show you how easy it is to apply for mortgage or home equity financing with Wells Fargo.

The mortgage application process

What are the steps to apply for a mortgage?

Step 1: Gather essential information.

Before you start, have the following information on hand:

  • Financial information: Income, asset, and expense information.
  • Property information: Estimated purchase price and down payment amount (if buying) or estimated property value and loan amount (if refinancing).

To learn more about the information you’ll need, review our homebuying application checklist (PDF)* or refinance application checklist (PDF)*.

Step 2: Begin your application

Get started through any of these convenient ways:

Your home mortgage consultant will ask for the financial and property information you’ve gathered.

Step 3: Provide supporting documents.

Your home mortgage consultant will:

  • Order a credit report and request any additional documents that we’ll need from you.
  • Provide important disclosure documents to review, sign, and return, including:
    • A Truth-In-Lending Disclosure that shows  terms of the loan, the monthly payment, the annual percentage rate (APR), and the costs of making and closing the loan, including your finance charges.

Learn more about requested documents we may need.

Avoid delays by submitting legible, complete documents as soon as possible, along with any required fees.

Do I need to pay a fee to submit a mortgage application?

Yes, there is a fee to apply for a mortgage. Fees cover the cost of the credit check, verification of your financial information, and property appraisal. Fees vary by loan type and the location of the property. Your home mortgage consultant will provide specific fee details during the application process.

Is there an advantage to locking in my pricing?

If you want to avoid the possibility that interest rates will rise before you close on your home loan, you can lock in your loan pricing after your mortgage application is completed.

For more information, please refer to the Loan Pricing Disclosure.

Is the process different for some types of mortgage loans?

Yes, renovation and new construction mortgage applications involve some additional steps.

Renovation mortgages

If you're purchasing and renovating or refinancing and renovating, you'll need to estimate the post-improvement value of the property. The property appraisal obtained during the processing of your loan must support this estimate.

Visit our Home Improvement Lending Center for more information.

New construction mortgages

When you're purchasing a home from a builder, the new construction mortgage process is very similar to the process for buying an existing home. You can choose a pricing lock for an extended period. This protects you from financial market fluctuations while your new home is being built.

Visit our Construction Lending Center for more information.

The home equity application process

What are the steps to apply for a home equity loan or line of credit?

To apply for home equity financing, you must own a primary residence, investment property, or vacation home. If you don’t own property, please consider a personal loan or line of credit instead.

It's easy, fast, and secure to apply:

Step 1: Gather essential information.
Before you start, have the following information on hand:

  • Financial information. Income, asset, and expense information.
  • Property information. Estimate a realistic value of your home.
  • Funds needed. Carefully evaluate the line of credit or loan amount you'll need.

Step 2: Submit an application.
Not sure which home equity option to choose? Call us, or if you get started online and don't select line of credit or loan, one of our home equity specialists will contact you after you apply to help you understand your options.

It’s easy to get started:

  • Click. Fast, easy and secure and it will take about 10 minutes. Apply Online.
  • Call. Speak with a home equity specialist at 1-888-667-1918.
  • Come in. Find a Wells Fargo location near you.

Step 3: Provide supporting documents.
We’ll tell you which supporting documents you'll need to provide, which may include:

  • Income verification documents. These may include pay stubs or tax returns.
  • Financial documents. These may include bank statements or other asset statements.

Learn more about the documents we may request from you. If you have any questions, you can also call a home equity specialist at 1-888-667-1918 for assistance.

Do I need to pay a fee to submit my home equity application?

There is no fee to submit a home equity application. For closing cost fees, you can select the home equity closing cost option that meets your needs. If you’re a Wells Fargo customer, you may also benefit from additional discounts. 

What should I consider when applying for a home equity loan or line of credit?

  • If requesting a loan, make sure your requested amount is between $10,000 ($20,000 in California) and $500,000. For larger loan amounts, please contact us. If you prefer a line of credit, make sure your requested line amount is between $20,000 and $500,000. For larger line amounts, please contact us.
  • Carefully evaluate how much you need. Your requested amount plus the existing mortgage balance and any other outstanding liens against your property should be less than 80% of your home’s current value.
  • Provide a conservative estimate of the value of your home.
  • Follow the status of your application by signing up for Your Application Status.
  • Ask about special interest rate discounts for Wells Fargo customers.

After you apply for your mortgage, home equity loan, or home equity line of credit, we’ll work with you to ensure that the process is a straightforward and satisfying experience. We make it easy for you to track your application status online and get answers to your questions, every step of the way.

After you apply for a mortgage

What are the steps after my mortgage application is submitted?

Your home mortgage consultant will submit your application for review.  If additional documents are requested, learn more about them in our online document library.

During the financial and property review, we’ll:

  • Verify your employment, income, and financial information
  • Order services such as an appraisal, title insurance, and flood certification.
  • Send you a list of conditions, upon loan approval, that have to be met before you can prepare to close your loan.

You’ll need homeowners insurance to close your loan. Get competitive quotes from multiple insurance providers through Wells Fargo Insurance.  Call 1-877-260-7471, Monday through Friday, 7:30 am to 8:00 pm or Saturday from 9:00 am to 4:00 pm Central Time.

How does the mortgage closing process work?

Prepare to close
Once your application is approved, we’ll work with you and your closing agent to complete the following steps:

  • Ensure all loan approval and closing conditions have been met.
  • Confirm or set a closing date to sign your loan documents.
  • Review the title insurance to make sure you have rights to the property.
  • Review your homeowners insurance policy to make sure you have adequate coverage.

Before your closing, you'll receive your final figures, which include closing costs, escrows and, if you’re buying a home, the down payment.  Your closing agent will let you know the dollar amount, if any, you need to bring to your closing, so you can obtain a cashier’s check.

At closing
We’ll send the closing documents to your closing agent. On your closing day, review the documents carefully with your agent, then sign and date them.

  • If you're buying a home, collect the keys and move in. Congratulations!
  • If you're refinancing, you have a three-day right-of-rescission to cancel the transaction.

After your loan closes, consider managing your account online. Wells Fargo Online® gives you convenient access to account information, tax data, and payment options. Learn more about online payments or sign up for online banking.

How can I keep track of my mortgage application?

Your home mortgage consultant can answer any questions regarding your application status. Also, our Online Application Status allows you to:

  • Track your loan every step of the way in the privacy of your own home or wherever you have internet access.
  • Receive updates regarding the progress of your mortgage application.
  • Check your “action item” list.
  • Find out what documents are needed, where to send them, and more.

What can I do to help my mortgage close on time?

Here are a few important steps you can take to help your mortgage loan close more quickly:

  • Provide accurate information during your loan application interview. Discrepancies in your credit history, employment history, or current bank account balances could delay your application.
  • We may request additional documents as we process your application. Help keep your application moving by submitting them promptly. If additional documents are requested, you can learn more about them in our online document library.
  • Do not make big purchases, take on additional debt or make large deposits or transfers unrelated to your loan until after your closing.

Is the process different for other types of mortgage loans?

Yes, renovation mortgages and new construction mortgage loans involve some additional steps.

Renovation mortgages

  • For all renovation loans, we base the appraised value on the completed improvement value.
  • Wells Fargo must approve your contractors and close the loan before work can begin. Our funding department will assist you in making interim payments to your contractor(s).
  • If you have an FHA 203(k) loan, we must perform inspections of the work before we release funds.
  • Once the inspector is satisfied with the work quality, we release the funds from the escrow account. The checks are made out jointly to you and your contractor. Typically, we do not release funds until work is completed. Upon completion of the project, we perform a final inspection and we disburse the final funds.

Visit our Home Improvement Lending Center for more information.

New construction mortgages

  • You can choose a pricing lock over an extended period. This gives you protection from financial market fluctuations over the time your new home is being built.
  • We’ll work with you to get your permanent loan approved. We’ll also get the final plans and specs so that we can order an appraisal.
  • After we have the appraisal and a fully executed purchase contract, we’ll submit the entire package for final construction loan approval.

Visit our Construction Lending Center for more information.

After you apply for home equity financing

What are the steps after my home equity application is submitted?

We’ll review your application and complete the following:

  • Let you know the status of your application within two business days.
  • Request additional information such as financial documentation and income verification.
  • Order appraisal, title insurance, flood certification, and other services as necessary.

You can also track the status of your application 24 hours a day, 7 days a week.

How does the home equity closing process work?

The average time varies, but generally home equity loans or lines of credit close within 20 to 45 business days.

  • To keep things moving, be  sure to sign and return all requested documents as soon as possible.
  • If additional documents are requested, you can learn more about them in our online document library.
  • Your home equity specialist can help you understand what may be required.

Choose to close your loan in a Wells Fargo bank store, or from the comfort of home by mail if available, or if eligible, through our virtual closing option (PDF)*.

  • Return your documents within 24 hours of signing.
  • We'll activate your account after we receive your signed documents and your right-to-cancel period, if any, has expired.

For home equity lines of credit you’ll be able to access your available credit with your Enhanced Access® Visa® credit card, access checks, Wells Fargo Online® banking, or your ATM card.

After your loan closes, consider managing your account online. Wells Fargo Online® gives you convenient access to account information, tax data, and payment options. Learn more about online payments or sign up for online banking.

How can I keep track of my home equity loan or line of credit application status?

Your Application Status tool allows you to:

  • Receive updates regarding the progress of your home equity application.
  • Check your “to-do” list.
  • Find out which documents are needed, where to send them, and more.

What can I do to help my home equity loan close on time?

  • Monitor Your Application Status, where you can read and accept important account disclosures and get a list of additional items you may need to provide.
  • Make sure you sign all relevant documents, get them notarized (as needed) and return them to us as soon as possible.

After your mortgage or home equity loan closes we provide a variety of ways to manage your account online. View account activity, transfer funds, make payments, and more — anytime, anywhere and at your convenience.

Manage Your Mortgage Account

Manage Your Home Equity Account

Manage Your Finances

We'll help you estimate how much you may be able to borrow. Get Prequalified
Find a local consultant or call 1-877-937-9357

Closing cost options
Most home equity financing offers two options:

Have us pay your closing costs:

Pay your closing costs:

For details, please call 1-888-421-4672.
Private mortgage insurance
Private mortgage insurance (PMI) is insurance written by a private company that protects the lender from losses in the event the borrower defaults on the mortgage. Borrowers are required to pay the premium for private mortgage insurance. Private mortgage insurance limits a lender's exposure to financial loss resulting from loan default. If you make a down payment of less than 20%, even if you have a good credit profile, lenders generally require private mortgage insurance.
Good Faith Estimate
A document provided within three days of application that shows borrowers the approximate costs of the transaction, based on common practice in the locality. Under requirements of the Real Estate Settlement Procedures Act (RESPA), the loan originator must deliver or mail the GFE to the applicant.
Truth in Lending Disclosure
Under the federal Truth in Lending Act (TILA), lenders must provide full disclosure of credit terms. The Truth in Lending disclosure statement shows the loan term, the annual percentage rate (APR), the monthly payment schedule, the total amount of finance charge to be paid, any prepayment penalty, and other important terms.

Appraised value

The home's estimated value — known as appraised value — is an important part of your financing. If you're purchasing, this value usually needs to be equal to or more than the home's purchase price. If refinancing, the appraised value helps to determine your maximum loan amount.

Title insurance
An insurance policy that protects a lender or homebuyer (if the homebuyer purchases a separate policy, called owner's coverage) against any loss resulting from a title error or dispute. On a refinance, if the property has had a recent title insurance policy, a homeowner may sometimes be eligible for a reduced rate on the title insurance (also known as the reissue or refinance rate).
Standard conditions include our receipt of homeowner's insurance policy, flood insurance if necessary, and an acceptable title insurance binder.
Closing agent
This is the person or company that coordinates the execution of your closing documents. May be called by different titles in different states. Some common terms are attorney, title company, settlement agent, escrow company, notary, among others.