Mortgage Questions - Preparing To Apply

Is there a fee charged or any other obligation if I complete the online application? 

There is no fee to complete an online application for a home equity loan.

Capitol Federal Savings Bank requires a Prepaid Appraisal fee for refinance and purchase transactions only. The Prepaid Appraisal Fee will be quoted to you in your Closing Costs as you move forward through the online application.

If you are applying for a preapproval, the Prepaid Appraisal Fee is not due at this time, however will be due at the time you inform your loan officer that you have signed a contract to purchase your new home. If you are applying for a preapproval and want to lock in the rate for 60 days on a fixed rate commitment or 180 days on an adjustable rate commitment, a $150 rate lock fee is required before submitting your online application. If you do not want to lock in the rate at this time on your preapproval, you are not required to pay a fee and the rate you select is not guaranteed. You will be asked at the end of the on-line application process if you want to lock in the rate.

Fees can be paid by VISA® or Mastercard or from your Capitol Federal checking or savings account.

If the appraisal service is not completed for whatever reason, you will receive a refund of the Prepaid Appraisal fee. If the appraisal is completed and you close your loan with Capitol Federal, the Prepaid Appraisal fee will be credited towards the appraisal fee at closing. If the appraisal is completed and your loan is withdrawn or denied, the Prepaid Appraisal fee is nonrefundable and will be paid to the appraiser who provided the service.
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What is a credit score and how will my credit score affect my application?

A credit score is one of the pieces of information that Capitol Federal will use to evaluate your application. The credit score is calculated by the credit bureau, not by the lender. 

Your credit score is affected by your payment history, your outstanding obligations, the length of time you have had outstanding credit, the types of credit you use and the number of inquiries that have been made about your credit history in the recent past. Your credit score is a compilation of all this information converted into a number that helps a lender to determine the likelihood that you will repay the loan on schedule.

Using credit scores to evaluate your credit history allows us to quickly and objectively evaluate your credit history when reviewing your loan application. However, there are many other factors when making a loan decision, and Capitol Federal never evaluates an application without looking at the total financial picture of a customer.
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Will the inquiry about my credit affect my credit score?

An abundance of credit inquiries can sometimes affect your credit scores since it may indicate that your use of credit is increasing.

But the data used to calculate your credit score doesn't include any mortgage or auto loan credit inquiries that are made within the 30 days prior to the score being calculated. And all mortgage inquiries made in any 14-day period are always considered one inquiry.
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Will I be charged any fees if I authorize my credit information to be accessed? 

No credit report fees are charged for the purpose of submitting online mortgage or home equity loan applications. You will only be charged for a credit report after going through the application process and your loan is approved and closed.
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What can I expect when I apply for a mortgage loan? 

Through the online mortgage loan application process, you will be asked questions about the home and your finances, such as income, assets and liabilities. This process usually takes less than 20 minutes to complete.

Before accepting your application, Capitol Federal requires a Prepaid Appraisal fee for refinance and purchase transactions only. We do not require the Prepaid Appraisal fee on Home Equity loan applications.

As soon as you have finished the application, Capitol Federal will review your request for instant approval. (Don't worry if your application is not approved online - it doesn't necessarily mean we can't provide you financing. Some situations are too complicated for an automated decision and require a little human intervention. We will review your information offline and a loan officer will contact you to discuss your situation.)

After completing your online application, a loan officer will contact you to answer any questions you may have. We will send you an application package that will contain papers for you to sign, along with a list of items we will need to verify regarding the information you provided about your finances during the online application.

We will order the appraisal, arrange the title work and arrange the loan closing at the Capitol Federal office in your area.
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How do you decide what you need from me to process my loan? 

We take full advantage of an automated underwriting system that allows us to request as little information as possible to verify the data you provided during your loan application. Gone are the days when it was necessary to verify every piece of data collected during the application. The automated underwriting system compares your financial situation with statistical data from millions of other homeowners and uses that comparison to determine the level of verification needed. W-2 statements for two years or pay stubs for one month can generally be used to verify your income. Bank statements for two months can be used to verify the assets needed to close your loan.
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I'm self-employed. How will you verify my income? 

Generally, the income of self-employed borrowers is verified by obtaining copies of personal (and business, if applicable) federal tax returns for the most recent two-year period. However, based on your entire financial situation, we may not need full copies of your tax returns.

Capitol Federal will review and average the net income from self-employment that's reported on your tax returns to determine the income that can be used to qualify. We won't be able to consider any income that hasn't been reported as such on your tax returns. Typically, we'll need at least one year history of self-employment to verify that your self-employment income is stable.
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Will my overtime, commission, or bonus income be considered when evaluating my application? 

In order for bonus, overtime or commission income to be considered, you must have a history of receiving it and it must be likely to continue. We'll usually need to obtain copies of W-2 statements for the previous two years and a recent pay stub to verify this type of income. If a major part of your income is from commission earnings, we may need to obtain copies of recent tax returns to verify the amount of business-related expenses, if any. We'll average the amounts you have received over the past two years to calculate the amount that can be considered as a regular part of your income.

If you haven't been receiving bonus, overtime or commission income for at least one year, it probably can't be given full value when your loan is reviewed for approval.
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I am retired and my income is from pension or social security. What will I need to provide? 

Capitol Federal will ask for copies of your recent pension check stubs (or bank statement if your pension or retirement income is deposited directly in your bank account.) Sometimes it will also be necessary to verify that this income will continue for at least three years since some pension or retirement plans do not provide income for life. This can usually be verified with a copy of your awards letter. If you don't have an awards letter, we can contact the source of this income directly for verification.

If you are receiving tax-free income, such as some social security earnings, we'll consider the fact that taxes will not be deducted from this income when reviewing your request.
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If I have income that's not reported on my tax return, can it be considered?

Only income that is reported on your tax return can be considered when applying for a mortgage, unless the income is legally tax-free and isn't required to be reported.
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How will rental income be verified? 

If you own rental properties, we'll generally ask for the most recent year's federal tax return to verify your rental income. Capitol Federal will review the Schedule E of the tax return to verify your rental income, after all expenses except depreciation. Since depreciation is only a paper loss, it won't be counted against your rental income.

If you haven't owned the rental property for a complete tax year, we'll ask for a copy of any leases you've executed and we'll estimate the expenses of ownership.
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I am relocating because I have accepted a new job that I haven't started yet. How should I complete the application? 

Congratulations on your new job! If you will be working for the same employer, complete the application as such but enter the income you anticipate you'll be receiving at your new location.

If your employment is with a new employer, complete the application as if this were your current employer and indicate that you have been there for one month. The information about the employment you'll be leaving should be entered as a previous employer. We'll sort out the details after you submit your loan for approval.
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I've had a few employers in the last few years. Will that affect my ability to get a new mortgage? 

Having changed employers frequently is typically not a detriment to obtaining a mortgage loan. This is particularly true if you made employment changes without having periods of time in between without employment. We'll also look at your income advancements as you have changed employment.

If you're paid on a commission basis, a recent job change may be an issue since we'll have a difficult time predicting your earnings without a history with your new employer.
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I was in school before obtaining my current job. How do I complete the application? 

If you were in school before your current job, enter the name of the school you attended and the length of time you were in school in the "length of employment" fields. You can enter a position of "student" and income of "0."
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Can I use a gift from someone as the source of my down payment? 

Gifts are an acceptable source of down payment, if the gift giver is related to you or your co-borrower. We'll ask you for the name, address and phone number of the gift giver, as well as the donor's relationship to you.

Prior to closing, we'll verify that the gift funds have been transferred to you by obtaining a copy of your bank receipt or deposit slip to verify that you have deposited the gift funds into your account.
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I am selling my current home to purchase this home. What type of documentation will be required? 

If you're selling your current home to purchase your new home, Capitol Federal will require you to provide a copy of the settlement or closing statement you'll receive at the closing to verify that your current mortgage has been paid in full and that you'll have sufficient funds for our closing. 

Often the closing of your current home is scheduled for the same day as the closing of your new home. If that's the case, we'll just ask you to bring your settlement statement with you to your new mortgage closing.
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Can I borrow funds to use towards my down payment? 

You can borrow funds to use as your down payment, but any loans that you take out must be secured by an asset that you own. If you own something of value that you could borrow funds against such as a car or another home, it's a perfectly acceptable source of funds. 

If you are planning on obtaining a loan for this purpose, make sure to include the details of this loan in the Expenses section of the application.
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Can I make my monthly payments with an automated debit from my checking account? 

Automated monthly payments are available. At the loan closing, an automated payment application will be provided. Return it at your earliest convenience to enroll in the automated payment program.
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I have co-signed a loan for another person. Should I include that debt here? 

Generally, a co-signed debt is considered when determining your qualifications for a mortgage. If the co-signed debt doesn't affect your ability to obtain a new mortgage, we'll leave it at that. However, if it does make a difference, we can ignore the monthly payment of the co-signed debt if you can provide verification that the other person responsible for the debt has made the required payments by obtaining copies of their cancelled checks for the last 12 months.
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I have student loans that aren't in repayment yet. Should I show them as installment debts? 

Any student loan, whether in repayment now or deferred for repayment in the future, should be included in the application. If you are not sure exactly what the monthly payment will be at this time, enter an estimated amount.
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How will a past bankruptcy or foreclosure affect my ability to obtain a new mortgage?

If you've had a bankruptcy or foreclosure in the past, it may affect your ability to get a new mortgage. Unless the bankruptcy or foreclosure was caused by situations beyond your control, we will generally require that two to four years have passed since the bankruptcy or foreclosure. It is also important that you've re-established an acceptable credit history with new loans or credit cards.
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I have income from dividends and/or interest. What documents will I need to provide? 

Generally, two years personal tax returns are required to verify the amount of your dividend and/or interest income so that an average of the amounts you receive can be calculated. In addition, we will need to verify your ownership of the assets that generate the income using copies of statements from your financial institution, brokerage statements, stock certificates or Promissory Notes.

Typically, income from dividends and/or interest must be expected to continue for at least three years to be considered for repayment.
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Do I have to provide information about my child support, alimony or separate maintenance income? 

Information about child support, alimony or separate maintenance income does not need to be provided unless you wish to have it considered for repaying this mortgage loan.
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Will my second job income be considered? 

Typically, income from a second job will be considered if a one-year history of secondary employment can be verified.
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MORTGAGE QUESTIONS:
Preparing To Apply