Mortgage FAQs

Frequently Asked Questions about Mortgages

Have questions? We have answers! Below are some commonly asked questions about the home loan process.

Q: How do I apply and does it cost money?

You can apply online with any mortgage lender 24/7, schedule an appointment online, or connect with one of our mortgage professionals in person or over the phone. Hills Bank is pleased to offer free pre-approvals with no application fee.

Q: I’ve scheduled an appointment with a lender, what do I need to bring?

For most individuals we will need the following information.

  • Most recent paystub with year-to-date earnings
  • 2 most recent bank statements (please include all pages)
  • Previous year W-2's
  • Copy of signed purchase agreement (if applicable)

Pro Tip: After you apply for a loan, you will be provided with your own secure online borrower mortgage portal. This will be a place to easily upload additional documents to your lender and will be used by the bank to send you important disclosures such as your house appraisal and approval letter.

Q: Do I need excellent credit to buy a house?

Your credit score directly impacts your interest rate and ability to get approved for a loan. But you don’t need perfect credit to get a loan. Conventional loans require a minimum credit score of 620. A lower score could require more money down and cost you more in interest.

Pro Tip: You can get a free copy of your credit report once a year at annualcreditreport.com.

Q: How much money do I need to put down?

Hills Bank offers 100% financing for qualified home buyers!

Q: What are the steps in the home loan process?

Q: Why should I work with a Realtor?

Q: When is the right time to get pre-approved?

A pre approval letter shows your Realtor and potential sellers that you are a serious buyer capable of securing a loan. It also lets you know what price range you can afford before you start searching for homes. We suggest meeting with a lender before you begin the house search to get your questions answered, learn more about the home loan process, and know what you can qualify for.

Pro Tip: We understand that your schedule is busy. Our lenders will meet you on a Saturday by appointment to discuss loan options. Contact a lender today!

Q: How long is my pre-approval good for?

Your Hills Bank pre approval is valid for 6 months subject to no material changes to your application.

Pro Tip: Once you are pre approved, avoid taking our any new loans, store cards, or credit cards without first discussing it with your lender. Additional credit could jeopardize your approval.

Q: What is an escrow account?

Escrow accounts are used to pay property taxes and insurance premiums for your home. This means there is no need to save separately for those annual and biannual bills; the bank already takes care of setting that money aside by setting up an escrow account for you. An escrow account can be compared to a savings account. Money is paid directly to the escrow, where it is held until payments for annual or biannual property taxes and insurance premiums are due. In Iowa property taxes are paid in March and September.

Learn more on our blog, Escrow Accounts: What You Need To Know

Q: I’m currently renting, does it make sense to buy?

This decision involves many factors including your cost of rent, how long you plan to live in the home, and mortgage interest rate, so we recommend you speak with one of our mortgage professionals. You can also use our Rent vs. Buy calculator to get started.

Rent or Buy
This calculator compares the cost of renting versus the real cost of buying a home.

Q: When comparing financial institutions, what should I be considering?

It’s important to compare closing costs, interest rates, available loan options, and customer service. The home loan process can be complex so you will want a lender that is accessible, responsive to your questions, and knowledgeable. If you are having trouble getting timely responses and your questions answered during the pre approval stage, it could be a sign of future issues and a reason to consider other options.

Q: There are lots of loan options. Which type of mortgage is best for me?

Our experienced mortgage team is well versed in the various loan options available and will help you find the perfect mortgage by taking the time listen and learn about your financial situation and future goals.

Q: What is an ARM loan?

Check out this short video that explains ARM loans.

Q: There are many financial institutions to choose from. Why should I work with Hills Bank?

The home loan process can be stressful and complicated, but it doesn’t have to be. At Hills Bank we combine our most valuable resource, our people, with technology to simplify the process and provide a seamless mortgage experience from pre approval through closing. By choosing Hills Bank you will receive:

  • A dedicated lender who takes the time to listen and learn about your financial situation and goals.
  • Open and clear communication about your loan status throughout processing.
  • Free pre-approval.
  • Low rates and closing costs.
  • Variety of mortgage options tailored to you.
  • Ability to do business the way you want, whether it's online, over the phone or face to face.

Have a question that’s not answered above?

Contact one of our mortgage professionals today!

 

Calculators

The following calculators can be helpful resources on the path to home ownership.

Fixed Rate Mortgage
Calculate the principal and interest payments for fixed rate mortgage.

Rent or Buy
This calculator compares the cost of renting versus the real cost of buying a home.

Mortgage Comparison
This calculator will help you compare the total cost of any two or three mortgages. This analysis includes the effect of a tax deduction for interest. If the interest is not deductible, or if you do not want to show the effect of the tax deduction, choose an income tax rate of zero.

Early Mortgage Payoff
Find out how much interest you can save by paying an additional amount with your mortgage payment. The additional amount will reduce the principal on your mortgage, as well as the total amount of interest you will pay, and the number of payments.

Refinance
When you refinance at a lower interest rate, you usually pay refinancing costs including points, fees, and closing costs. This calculator will tell you if the amount you save in interest will exceed these refinancing costs. The calculated results depend on how long you plan to keep this property.

The information provided by these calculators is for illustrative purposes only. The default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a financial professional prior to relying on the results. The calculated results are intended for illustrative purposes only and accuracy is not guaranteed.