FAQ

About Loan Cabin

4 questions

Why choose Loan Cabin?

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We are a modern lender whose mission is to streamline the mortgage process by using technology to provide consumers a quick, simple, and transparent home loan.

As a Loan Cabin customer, you can expect:

  • Aggressive rates quoted in just minutes
  • Initial pre approval in 20 minutes or less
  • Team with extensive experience and knowledge
  • 100% online application process available

Is Loan Cabin a direct lender?

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Yes, we are. We work with all our borrowers from the application through funding of the loan, which creates a quick and seamless experience.

Will Loan Cabin service my mortgage?

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No. Once your loan is funded, Loan Cabin will transfer ownership of your loan to an investor who will provide servicing.

Does Loan Cabin offer mortgages in my state?

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We currently originate mortgages in the following states:

  • California
  • Colorado
  • Florida
  • Georgia
  • Illinois
  • Indiana
  • Michigan
  • New Jersey
  • Pennsylvania
  • Mississippi
  • Texas
  • Kentucky

We’re working on growing though out the country.

Loan Types and Products

5 questions

What types of mortgages does Loan Cabin offer?

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We currently offer both fixed and adjustable rates for conventional, FHA, VA and Jumbo loans. Type of properties we will finance:

  • Single-family homes
  • Multi-family homes (1-4 units)
  • Townhouses
  • Condominiums
  • Planned Unit Development (PUD)
  • Manufactured homes

At this time we do not offer mortgages for:

  • Multi-family homes (Five or more units)
  • Co-ops
  • Mixed-use properties
  • Commercial properties

Rates

4 questions

How does Loan Cabin determine my mortgage rate?

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Your interest rate will be factored by current market conditions, your credit score and credit history, your property specific characteristics, and your debt to income ratios.

Will I get the same rate I was quoted?

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Yes. If you provide accurate information at the time of application, the rate quote you receive will be available to you.

Keep in mind that rates change constantly, so the sooner you apply the sooner you can lock in your rate.

What is included in the monthly payment?

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When you get a rate quote, the monthly payment shown includes the principal and interest of the loan. You will also need to pay taxes and insurance, which vary based on location and other factors.

What are points and credits?

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Points represent a percentage of your loan amount (1 point = 1%). You might choose to pay points at closing in exchange for a lower interest rate on the loan. In other words, by pre-paying some interest, you are “buying down” your rate.

Conversely, you might choose to receive a credit (or rebate) at closing to help cover other costs and fees. This would correspond to a higher interest rate on the loan.

Locking

5 questions

What exactly does "locking" mean?

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A mortgage rate lock is an agreement between a borrower and Loan Cabin that allows the borrower to lock in the interest rate on a mortgage over a specified time period at the current market interest rate. Loan Cabin guarantees your interest rate will not change from the offer rate to the closing, as long as you close within the specified time frame and there are no changes to your application.

How long should I lock for?

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Most of our customers lock for 30 days, which is plenty of time to close your loan as long as all parties do their best to close with us. On a purchase transaction, you want to make       sure your lock period at least runs through the scheduled date of your closing. On refinance transactions involving the subordination of an existing second mortgage or home equity line of credit we recommend a 45 day lock.

Can I choose a different rate or loan product after I lock?

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Yes. You’ll be locking in all the loan products you see when viewing “Today’s rates”. This means you can change your rate, your rate type (fixed vs. adjustable), or your loan term (15, 20, 30).

What if I need to break my lock?

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You are free to withdraw your application and break your lock at any time. There is no fee for doing so. However, you won’t be able to lock a rate with us for the same property for 30 days.

What if my lock expires before my loan is complete?

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We will extend your lock if it expires before your loan closes. If the loan delay was caused due to any complications on our end, we will waive the lock extension fee.

Home Purchase Loan Costs

6 questions

Where can I get a cost estimate?

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Once you find a property and get pre approved from one of our experienced mortgage professionals, we will provide you with an official Loan Estimate.

Does Loan Cabin charge lender fees?

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Loan Cabin does charge a lender fee of $1290.00 on most loans. There are zero application fees and origination points.

How much will it cost me to buy a home?

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  • Down payment: This is the portion of payment saved up by you that we deduct from your purchase price and we lend you the rest.
  • Third-party fees: These are fees paid to third parties, not us at Loan Cabin. These services are required to get a purchase loan no matter which lender you use and we don’t mark up the prices. Some of those fees may be paid by the seller. Examples of these fees are appraisal fees, title fees, attorney fees, and flood transfer taxes.

Which third-party fees will I be charged?

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Here is a list of some of the third-party fees associated with a home purchase loan. This does not include other costs.

  • Appraisal fee: A home appraisal must be done by a licensed appraiser from our appraisal management company to determine the value of the property. Once this is completed we will provide you the report for your records.
  • Credit report: We need to check your personal credit in order to determine your creditworthiness and monthly debt obligations.
  • Flood certification: We need to determine if your property is in a flood zone to ensure appropriate insurance coverage is in place.
  • Lender’s title insurance: This fee protects us as a lender against problems with the title of your property.
  • More title fees: You will see small miscellaneous title fees charged by the title company of choice. These are charged by the title company for things such as document processing, wire fees and closing fee.
  • Real estate transfer taxes: Local and state governments charge a transfer tax when real-estate is transferred or sold from one entity to another.
  • Recording fees: A fee charged by your city or county to officially record the sale, so that is becomes a matter of public record.
  • Settlement: This fee is paid to the settlement or escrow agent for coordinating the handling and disbursement of funds between the buyer and seller.
  • Owner’s title insurance: It ensures you are protected if someone later makes a claim against the title of the property. Protects your financial investment in the home.

When will I need to pay these costs?

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Once your offer is accepted by the seller listing the home, you will then sign a purchase agreement between yourself and them. The seller will require you to put down earnest money to secure the property. This payment shows the seller you are serious about their home and they can hold your earnest money in good faith that you will purchase the property. Don’t worry, this amount will be applied to your down payment at the time of closing.

At the very end, at the time of closing you will then pay for the remaining down payment, third party fees, and pre-paid cost.

Refinance Loan Costs

5 questions

How much will my closing costs be?

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Your exact closing costs will depend on your unique loan scenario. Generally, closing cost will vary from $1865-3500 depending on what state you are located in.

Closing costs include:

  • Points or credits, as determined when you select your rate
  • Third-party settlement fees, which are noted on all loan estimates and disclosures
  • Per diem, which is pre-paid interest from the day of closing through the end of the month prior to your first payment
  • Escrow payment, if applicable

Within 3 days of submitting your application, we’ll send you a loan estimate that outlines your expected closing costs. If anything changes before closing, we’ll send you an updated loan estimate.

At least 3 days prior to closing, we’ll provide a closing disclosure that gives a fully itemized list of closing costs.

What fees and costs can I expect with Loan Cabin?

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You can decide whether to pay points up front to buy down your rate, or to take a credit and a higher rate.

You are also responsible for all third-party settlement fees, which can include independent property appraisal, title services, and recording charges, depending on your circumstances.

Your loan estimate, which we will send you within 3 days of submitting your application, will have a breakdown of all fees.

When will I be expected to pay fees?

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There are three possible fees that you may need to pay before closing. We will not charge any fees until after we have sent you disclosures and you have provided intent to proceed.

  • Appraisal fee
    • The vast majority of borrowers need to pay a third-party appraisal fee.
    • The amount is $405-$550
    • This fee will be charged around the time you lock your rate.
    • The only time the appraisal fee is not required is in some refinance situations, if the investor allows a Property Inspection Waiver (PIW). The PIW fee is typically around $175.

All other fees will be paid at closing. We’ll send you a loan estimate within 3 days of submitting your application that lists the expected fees. And at least 3 days prior to closing we’ll send you a final closing disclosure that includes the exact breakdown of your closing costs.

What will be the payoff amount of my current mortgage?

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You should continue to pay your current mortgage as scheduled until we close your new loan. We will coordinate with your current mortgage bank prior to closing to determine the final payoff amount. At least 3 days prior to closing, we’ll provide a closing disclosure that gives a fully itemized list of costs, including your loan payoff amount.

Does Loan Cabin charge pre-payment penalties?

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No, Loan Cabin does not originate any loans with a pre-payment penalty.

To be sure about any fees you will pay, refer to your loan estimate (which we will send you within 3 days of submitting your application) and your closing disclosure (which we will send you at least 3 days before closing). These documents will include information about all expected fees and penalties

Pre-Approval Letters

8 questions

What is a pre-approval letter?

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A pre-approval letter is a document from Loan Cabin stating an exact loan amount you can borrow, assuming certain conditions are met later such as a satisfactory financial review, title report, and appraisal. You can give this letter to your real estate agent and potential sellers to show that you’re qualified about buying a home. Obtaining a letter also lets you know what you can afford, so you only spend time viewing properties in

How do I get a pre-approval letter?

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Once a qualified person of our staff reviews your credit report, income docs, and assets we will determine the right amount for your pre approval.

How long does it take to get a pre-approval letter?

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For a verified pre-approval letter, you will need to upload financial documents such as your last two years W2s, 30 days of current paystubs, last two years of current tax returns, and two months current bank statements. Once we receive all your documentation we will issue a preapproval in 20 minutes or less. Then we will review them and generate your letter. We may require additional processing time if the documentation you submitted is incomplete or if we need to verify overtime, bonus, or commission earnings with your employer.

Why would my verified income be different than my stated income?

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The amount of income we verify impacts the total loan amount we can offer you. In some cases, verified income might be lower than stated income. Investor and industry guidelines govern what income we are able to use. Here are a few examples:

•If you earn bonus, commission, or overtime income that hasn’t been consistent over the last 2 years, we may not be able to give you credit for all of it.

•If you are reporting any self-employment losses on your tax return, they will be deducted from your qualifying income.

•If self-employment income is declining year-over-year, we have to use the lower amount.

•If you report rental income, we use the net amount, after subtracting out certain expenses you have written off on your tax return.

•If you are using income from alimony or child support, we have to document that it will be received for at least the next 3 years.

If you want additional certainty as to the purchase price you qualify for, we recommend getting a verified pre-approval letter.

Why would my verified assets that are used to determine my down payment be lower than expected?

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We must verify that you have control over the assets you are planning to use for your down payment. There are some cases when verified assets might be lower than you expect. Here are a few examples:

  • If you have large deposits in your bank account from an ineligible source (e.g. cash deposit, undocumented source, unsecured loan such as a credit card advance) we will not be able to give you credit for those funds.
  • We are typically only able to use assets from investment and retirement accounts if they are liquidated prior to closing the loan.
  • We are only able to use a percentage of any pending property sale values, and not the full amount.
  • We only consider assets from business accounts on a case by case basis.

If you want additional certainty as to the purchase price you qualify for, we recommend getting a verified pre-approval letter.

Who can I contact if I have questions about my verified pre-approval letter?

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You may contact your assigned Loan Consultant by email or by phone. You may also schedule a conversation with them at your convenience. The contact details for your assigned Loan Consultant are located on the top right corner of your screen when you sign in to your loan.

Loan Process

6 questions

Will I have a point of contact at Loan Cabin?

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Yes. We will introduce you to one of our licensed mortgage professionals. You can contact your loan officer anytime throughout the process. We provide phone, email, and chat support during much of the week:

•Monday-Friday: 9AM – 9PM EST

•Saturday-Sunday: 10AM – 6PM EST

What do I need to do to lock my rate?

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After you get pre-approved, select your preferred rate and terms, with a subject property address you can lock in your rate.

How quickly can I close my loan?

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Loan Cabin usually closes loans between 3-4 weeks from application. 

The exact timing depends on a few factors, including how quickly you can submit all required documents, as well as the timing of third-party services.

The most common situation that requires a longer time to close is a refinance where the borrower has a second mortgage that needs to be subordinated.

If your loan happens to have more complicated circumstances and will take longer to close, your loan officer will discuss this with you when it’s time to lock your rate, and you may agree to a longer lock period.

Do I need to have an escrow account?

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An escrow account is not required for most borrowers. However, having an escrow account usually helps in getting the best rate and maintaining your peace of mind.

If you choose to have an escrow account:

•The annual amount of your property taxes and homeowners insurance will be divided by 12.

•Your monthly mortgage payment will be increased by this amount.

•Your mortgage provider will pay your taxes and insurance for you out of the escrow account.

•Your total payments are the same, and you may get a better rate.

Without an escrow account, you are responsible for paying your tax and insurance bills directly.

Can I transfer my current escrow account?

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No. Any balance in your current escrow account at the time of new loan funding will be refunded to you by your current mortgage servicer. This typically happens within 3 weeks from time of closing.

Is my data Secure?

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Absolutely, Loan Cabin does not disclose any non-public personal information about our customers or former customers to anyone except as required by law.

Once a mortgage is recorded the information becomes public record. Other companies may pull information from public records in order to solicit business from our customers. We do not sell or share any non-public personal information with marketers outside our company, and we do not sell or share any such information with other financial institutions through the use of joint marketing agreements. Therefore, any solicitations for additional products and/or services would not be from our company. We advise our customers to use caution when responding to these requests.

Credit Scores

9 questions

How does my credit score affect my mortgage?

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Your credit score helps lenders evaluate your ability to pay back your loans, based on your borrowing history. The higher your credit score, the better rates you’ll be able to get. This can lead to significant savings over the life of your mortgage.

How can I get my credit report?

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While there are many online resources, Loan Cabin does not endorse any one in particular. The Federal Trade Commission offers more information, including how you can get one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies. Please visit this link for more info: https://www.ftc.gov/faq/consumer-protection/get-my-free-credit-report

What is a hard credit check?

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For a “hard credit check” we use the median score from Transunion, Experian, and Equifax. This signifies to credit bureaus that you are interested in opening a new line of credit, and will have a small impact on your credit score (usually less than five points).

What if I don't recognize a credit line that's listed on my report?

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In many cases, credit lines have unrecognizable labels. If you’ve reviewed and accounted for all your debts and still think a credit line is incorrect, please schedule a call with your Loan Consultant. We cannot resolve the problem without getting more information from you.

How do multiple credit checks work?

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If you are shopping around with different lenders, credit bureaus will typically only dock your score once within a 30-day period, no matter how many mortgage lenders do a credit check. That means if you’ve already done a hard credit check with another lender but want to switch to Better, it won’t impact your score.

How do you choose which credit score to use?

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During pre-approval, we use the FICO Classic 04 credit score from Transunion. This is a soft credit check and won’t affect your credit score. If you apply with a co-borrower, we use the lower of your two scores.

When you want to continue with your loan application, with your authorization we pull your credit scores from all three major credit bureaus (Transunion, Experian, and Equifax) and use the median of the three scores received.

What if I’m applying with a co-borrower?

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We have to use the lower credit score of you and your co-borrower. If one of you has a low credit score, we often recommend that the person with the higher credit score apply to get the best terms possible. You’ll still be able to put both names on the title. However both people may need to apply if more funds are needed for your down payment, or to improve your debt to income ratio.

Is my credit score too low to apply?

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We can currently only provide loans to customers with a credit score of 620 or above. If your score improves, let us know, we’d love work with you.

Appraisals

10 questions

Why do I need an appraisal?

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How much money you can borrow is in part determined by the value of the collateral provided, which is your home. An appraisal is needed to determine the value of your home.

Can I use or transfer a recent appraisal?

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Unfortunately, no. When applying for a new mortgage it is always the lender that must order the appraisal report, and we do not accept appraisal transfers from other mortgage transactions.

I know an appraiser. Can he or she complete my appraisal report?

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Unfortunately, no. The lender must choose the appraiser. In the event the appraiser selected by the lender is an appraiser that you know, that appraiser must disclose the nature of your relationship in the appraisal report.

How long does an appraisal inspection take?

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The appraisal inspection takes approximately 10 minutes per 1,000 square feet. Therefore a 2,000 square foot home will take approximately 20 minutes to inspect.

What is the difference between a home inspection and an appraisal?

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An appraisal provides an estimate of value. A home inspection comments on the structural soundness of your home and the components within it, such as the furnace and water heater.

If the appraised value of my home goes up, will this affect my taxes?

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No, it will not affect your taxes. The appraiser does not report the appraised value or anything they see in the home (e.g., illegal decks or additions, converted garages, etc.) to the tax assessor.

What does an appraisal report look like?

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Depending on the property type, an appraiser will prepare a specific report.

• Single family homes: Uniform Residential Appraisal Report

• Condominiums: Individual Condominium Unit Appraisal Report

• Multi-family homes: Small Residential Income Property Appraisal Report

A copy of your appraisal report will be shared with you once we receive it.

Which home improvements add value to a home?

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Valuing a house is more of an art than a science. However, there are rooms you want to pay more attention to than others. The general rule of thumb is kitchen and baths have the greatest return on investment. Highly individualized finishes, such as high-end toilets or expensive media rooms, have lower returns.

Loan Servicing

5 questions

How will my loan be serviced after closing?

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Loan Cabin will service your loan for a short period after it closes, usually about 30 days. After 15-30 days Loan Cabin will sell your loan on the secondary market and transfer loan servicing.

After that, we will transfer your loan to a permanent servicer. We have a large roster of reputable servicers and mortgage investors including major US banks, government-sponsored entities, publicly-traded mortgage companies, and specialized servicing firms. We collect third-party reviews and survey our borrowers post-transfer to ensure the permanent servicers are quality partners.

I thought Loan Cabin is a direct lender, not a broker

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What a broker does is sell your loan application to another lender. We don’t do that.

As a direct lender, we process your application, underwrite, close, and fund your loan. We access the capital markets to find you the lowest rate possible and match you to the investor who best matches your loan profile. We take 100% responsibility for the entire process, including making sure the transfer to your permanent servicer goes smoothly.

Our goal is to provide full transparency. You can always ask your loan officer about your loan’s permanent servicer, or email hello@loancabin.com

How do I make my first payment?

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After your loan closes, you will receive instructions by email and in writing on where to direct your first payment.

In some cases, your first payment will be made to us. In others, your loan may be transferred quickly enough that your first payment will be to the permanent servicer.

Official notification of your transfer and new payment instructions will come via US mail, and should arrive no fewer than 10 calendar days before your payment is due to your permanent servicer.

Can I set up automatic payments with Loan Cabin?

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We recommended making a one-time payment, as your loan will very likely be transferred to a permanent servicer before the second payment is due.