Frequently Asked Questions About Home Mortgages in Ohio and Florida

What is the difference between the interest rate and the annual percentage rate (APR)?
What if mortgage rates change before I close on my home loan?
What costs are involved in getting a mortgage?
Should I refinance my home loan?
How can I apply for a mortgage loan?
How can I apply additional funds towards the principal balance of my mortgage loan?
Do you offer bi-weekly mortgage payments?
What is required to pay my own property taxes?
What is required to have PMI (Private Mortgage Insurance) removed from my mortgage loan?

What is the difference between the interest rate and the annual percentage rate (APR)?
Interest rate is the contractual rate that you agree to pay for your mortgage loan. This rate is used to calculate the interest portion of your monthly mortgage payment. Annual percentage rate (APR) includes your interest rate and factors in the prepaid finance charges to give you an average yearly rate. APR can be a good tool to use when you're comparison shopping for fixed rates.

What if mortgage rates change before I close on my home loan?
At Third Federal, you automatically receive a 60-day commitment that locks in your interest rate from the date that you apply. If the rate goes up before closing, you will retain the rate you obtained at the time of application. If the interest rate goes down, you can revise to the new lower rate by paying a nonrefundable revision fee at least ten days before closing.

You can also select a 240-day commitment that locks in your interest rate for up to eight months, but you must select this option at the time of application. If you are applying online, please use the last question on the online application (Which reads: "Is there anything else you'd like to tell us about your application?") to indicate that you want the 240-day commitment. To obtain this longer commitment, you must deposit with Third Federal a fee equal to 1% of the loan amount within five days after loan approval. This fee will be credited back to you at closing. If your loan is not closed by the end of the commitment period, or if your loan is cancelled for any reason, your 1% commitment deposit will be forfeited. Failure to deposit within the specified time will result in cancellation of your loan commitment. If interest rates should rise within that eight-month period, you will retain the interest rate in effect at the time you applied for your loan.

What costs are involved in getting a mortgage?
Here's what you'll have to pay when you close on a mortgage loan:

Down Payment: Money that's due up front on the home purchase. It will decrease the amount of money you need to borrow. For example, if you buy a home for $100,000 and have $10,000 for the down payment, you're putting 10% down and will have to finance $90,000 with a mortgage.
Private Mortgage Insurance (PMI): ): This is insurance provided by a private company that protects lenders like Third Federal against loss in case a borrower defaults on the mortgage loan.
Closing Costs: These include Lender Fees, Third Party Fees (Title and Appraisal Costs), and Local Government Fees (Recording Fees, Endorsements and Taxes).
Prepaid Interest: Interest you pay at closing to cover interest that has accrued from the time the bank funds your loan until the date your first payment is due.
Title Insurance: An insurance policy that protects the buyer, mortgagee or other party from financial losses resulting from problems or defects with the property's title.
Points: This is a one-time charge that you can choose to pay in order to lower the interest rate on your loan. Each point is equal to one percent of your loan amount. For example, if your loan amount is $90,000, then one point is equal to $900. You can select zero, one, two or three points to pay on your fixed rate loan. Each additional point lowers your interest rate a little more.
Tax Reserve: If the ratio of your loan to the value (LTV) of your property is greater than 70%, Third Federal requires that your real estate taxes be collected monthly with your mortgage payment. Your real estate taxes are held in escrow until your municipality requires payment. Third Federal will then issue payment for your real estate taxes on your behalf. The number of months to be held in escrow to set up the tax reserve will be based on when the loan is filed and when the next tax bill is due. The dollar amount collected each month for the tax reserve will be based on the last available tax bill. If you prefer to pay your own real estate taxes and have a loan-to-value ratio of less than 70%, Third Federal will consider your request on an individual basis.

Should I refinance my home loan?
What you need to know:

• The maximum amount that you can borrow can not exceed 89.99% (80% if the home is a secondary residence) of the value of the home and includes rolling the closing costs into the loan or getting cash out.
• Your debt-to-income ratios must be able to support your new monthly mortgage payment. Contact a Third Federal Customer Service Representative to help you analyze the numbers for your own situation.
• Your property must be owner-occupied or a secondary residence and either a single-family or double-family home.
• Applications are eligible for properties located in Broward, Charlotte, Collier, Dade, Hernando, Hillsborough, Lake, Lee, Manatee, Martin, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, Sarasota, Saint Lucie, Seminole, and Volusia counties in Florida; Boone, Campbell, and Kenton counties in Kentucky; and the state of Ohio.

How can I apply for a mortgage loan?
When applying for a mortgage loan, you will need to provide Third Federal with the following:

1. Last year's W-2 forms.
2. One month's current pay stubs.
3. A list of current "liquid" assets and balances, such as checking and savings accounts.
4. A list of your current debts and associated monthly payments, such as credit card bills, car loans and student loans.
5. And if you are self-employed, we will need federal tax returns from the past two years.

You can apply at one of our Third Federal Branch offices, by telephone or online.

How can I apply additional funds towards the principal balance of my mortgage loan?
You may make additional principal payments in one of two ways. The first way being to send Third Federal a check. Include with this check a short note referencing your account number and requesting that the funds be applied to the principal balance of your mortgage loan. The second way would be to apply a set amount of funds each month to the principal of your mortgage loan. To do this, you may make arrangements with your local branch office to have the funds automatically withdrawn each month from your Third Federal checking account.

Do you offer bi-weekly mortgage payments?
Third Federal does not offer bi-weekly mortgage payments. You can achieve the same goal by applying additional funds against your principal balance. Please contact a Third Federal Customer Service Representative to review your personal situation at 1-800-THIRDFED (1-800-844-7333).

What is required to pay my own property taxes?
Third Federal will consider allowing you to pay your own property taxes once you have obtained 30% equity in your home. You will then need to send a written request to:

Third Federal Savings
7007 Broadway Ave.
Cleveland, OH 44105
Attn: Loan Services

In this request, be sure to include your mortgage loan number, a daytime telephone number and an original signature. Once your file has been reviewed, Third Federal will contact you to discuss your options.

What is required to have PMI (Private Mortgage Insurance) removed from my mortgage loan?
Once you have obtained 20% equity in your home you will need to send a written request to have your file reviewed. In order for your insurance to be cancelled, you need to have maintained a good payment record over the previous year and have no secondary debt held on the property. You may send your written request to:

Third Federal Savings
7007 Broadway Ave.
Cleveland, OH 44105
Attn: Loan Services

Be sure to include the mortgage loan number and a daytime telephone number with your written request. Once your file has been reviewed, Third Federal will contact you to discuss your options.

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