How are interest rates determined?
What is an adjustable rate mortgage?
Should I pay discount points in exchange for a lower interest rate?
Is comparing APRs the best way to decide which lender has the lowest rates and fees?
How do I know if it's best to lock in my interest rate or to let it float?
How much money will I save by choosing a 15-year loan rather than a 30-year loan?
Is there a fee charged or any other obligation if I complete the online application?
When can I lock in my interest rate and discount points?
Are there any prepayment penalties charged for these loan programs?
What is your Rate Lock Policy?
Tell me more about closing fees and how they are determined.
What is title insurance and why do I need it?
What is mortgage insurance and when is it required?
What is the maximum percentage of my home's value that I can borrow?
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Interest rates fluctuate based on a variety of factors, including inflation, the pace of economic growth, and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will almost always lead to low interest rates, while concerns about rising inflation normally cause interest rates to increase. Our nation's central bank, the Federal Reserve, implements policies designed to keep inflation and interest rates relatively low and stable.

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An adjustable rate mortgage, or an "ARM" as they are commonly called, is a loan type that offers a lower initial interest rate than most fixed rate loans. The trade off is that the interest rate can change periodically, usually in relation to an index, and the monthly payment will go up or down accordingly
For many people in a variety of situations, an ARM may be the right mortgage choice, particularly if your income is likely to increase in the future or if you only plan on being in the home for up to five years.

We strongly urge you to consider the increased risk associated with ARMs when deciding what loan to select. Interest rates on ARMS could double and even triple during a loan term, causing your payment to increase significantly. If you are interested in an ARM we recommend you discuss the option with one of our Mortgage Loan Originators.


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Discount points are considered a form of interest. Each point is equal to one percent of the loan amount. You pay them, up front, at your loan closing in exchange for a lower interest rate over the life of your loan. This means more money will be required at closing, however, you will have lower monthly payments over the term of your loan.

To determine whether it makes sense for you to pay discount points, you should compare the cost of the discount points to the monthly payments savings created by the lower interest rate. Divide the total cost of the discount points by the savings in each monthly payment. This calculation provides the number of payments you'll make before you actually begin to save money by paying discount points. If the number of months it will take to recoup the discount points is longer than you plan on having this mortgage, you should consider the loan program option that doesn't require discount points to be paid.

If you'd prefer not to make this calculation the "old-fashioned way," we have a discount points calculator!

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The Annual Percentage Rate(APR) is designed to present the actual cost of obtaining financing, by requiring that finance charges are included in the APR calculation. These fees in addition to the interest rate determine the estimated cost of financing over the full term of the loan.

You can use the APR as a guideline to shop for loans but you should not depend solely on the APR in choosing the loan program that's best for you. Since most people do not keep the mortgage for the entire loan term, it may be misleading to spread the effect of some of these up front costs over the entire loan term.   Look at total fees, possible rate adjustments in the future, and consider the length of time that you plan on having the mortgage, and discuss you intentions with your Mortgage Loan Officer to make sure you understand how your APR relates to your loan.

Don't forget that the APR is an effective interest rate--not the actual interest rate. Your monthly payments will be based on the actual interest rate, the amount you borrow, and the term of your loan.


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Mortgage interest rate movements are as hard to predict as the stock market and no one can really know for certain whether they'll go up or down.

If you have a hunch that rates are on an upward trend then you'll want to consider locking the rate as soon as you are able. Before you decide to lock, make sure that your loan can close within the lock-in period. It won't do any good to lock your rate if you can't close during the rate lock period. If you're purchasing a home, review your contract for the estimated closing date to help you choose the right rate lock period. If you are refinancing, in most cases, your loan could close within 30 days. However, if you have any secondary financing on the home that won't be paid off, allow some extra time since we'll need to contact that lender to get their permission.

If you think rates might drop while your loan is being processed, take a risk and let your rate "float" instead of locking. After you apply, you can lock in by contacting your Mortgage Loan Officer by telephone.

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With a 15-year mortgage you'll pay less than half the total interest of the traditional 30-year mortgage and you will have your mortgage paid off in half the amount of time. This is possible because the rates for a 15-year mortgage are typically lower than a 30-year mortgage, and your payments are about 15% higher.


Use the "How much can I save with a 15 year mortgage?" calculator in our Resource Center to help decide if a 15-year mortgage is right for you.

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There's no cost at all for completing our application on line.

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You can lock in your interest rate and discount points as soon as your loan is approved and you pay the application deposit to cover the cost of your appraisal and final credit report. The application deposit is not another fee, it's actually just the appraisal cost estimate and will be credited to the actual appraisal cost at your closing. If you complete your application today, and your request is approved online, you'll have the opportunity to pay the application deposit via credit card and can lock in your great rate immediately.

If we need to review your information before providing your loan approval, a Mortgage Loan Officer will contact you and you'll have the opportunity to lock your rate and fees then.

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None of the loan programs we offer have penalties for prepayment. You can pay off your mortgage any time with no additional charges.

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General Statement

The interest rate market is subject to movements without advance notice. Locking in a rate protects you from the time that your lock is confirmed to the day that your lock period expires.

Lock-In Agreement

A lock is an agreement by the borrower and the lender and specifies the number of days for which a loan's interest rate and discount points are guaranteed. Should interest rates rise during that period, we are obligated to honor the committed rate. Should interest rates fall during that period, the borrower must honor the lock.

When Can I Lock?

In some cases, your online application will provide all the information needed and you will have the option to lock immediately after loan approval. Otherwise, you will be invited back to lock after we have reviewed your documentation and credit package. We will notify you via email when you are able to request the lock.

Fees

We do not charge a fee for locking in your interest rate.

Lock Period

We currently offer 30 day lock-in period on our site. This means your loan must close and disburse within this number of days from the day your lock is confirmed by us.

Lock Confirmation

Immediately after you accept a lock online, a printable confirmation page is displayed for your records. In addition, a confirmation is sent to the email address you provided during your online application.

Lock Changes

Once we accept your lock, your loan is committed into a secondary market transaction. Therefore, we are not able to renegotiate lock commitments.

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A home loan often involves many fees, such as the appraisal fee, title charges, closing fees, and state or local taxes. These fees vary from state to state and also from lender to lender. Any lender or broker should be able to give you an estimate of their fees, but it is more difficult to tell which companies are providing a complete and accurate estimate. State Bank of Southern Utah takes our quotes very seriously. We've completed the research necessary to make sure that our fee quotes are as accurate as possible

To assist you in evaluating our fees, we've grouped them as follows:

Lender Fees

Fees such as discount points, origination fees, underwriting, and loan processing fees are charged by the lender and can vary between lenders. This is the category of fees that you should compare very closely from lender to lender before making a decision.


Third Party Fees

Third party fees are for services completed as part of the loan process, but not completed by your lender. Fees that we consider third party fees include the appraisal fee, the credit report fee, the settlement or closing fee, tax service fees, title insurance fees, flood certification fees, etc.  The cost of these fees are passed on to the borrower(s).  The costs for these are fairly standard and don't vary much between lenders.

Taxes and other unavoidables

Fees that we consider to be taxes and other unavoidables are costs that you would typically pay even if you were paying cash for the home. These fees include: State/Local Taxes, recording fees, and homeowners insurance. These fees will most likely have to be paid regardless of the lender you choose and the cost is not effected at all by the lender or your loan. 

Escrow accounts

If your loan has an escrow/impound account, there may be some initial deposits into this account so that your lender has the funds needed to pay your taxes and insurances when they are due.





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If you've ever purchased a home before, you may already be familiar with the benefits and terms of title insurance. But if this is your first home loan or you are refinancing, you may be wondering why you need another insurance policy.

The answer is simple: The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and especially your mortgage lender, want to make sure the property is indeed yours: That no individual or government entity has any right, lien, claim, or encumbrance on your property.

The function of a title insurance company is to make sure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly, and that your interests as a homebuyer are fully protected.

Title insurance companies provide services to buyers, sellers, real estate developers, builders, mortgage lenders, and others who have an interest in real estate transfer. Title companies typically issue two types of title policies:

1) Owner's Policy. This policy covers you, the homebuyer.

2) Lender's Policy. This policy covers the lending institution over the life of the loan.

Both types of policies are issued at the time of closing for a one-time premium, if the loan is a purchase. If you are refinancing your home, you probably already have an owner's policy that was issued when you purchased the property, so we'll only require that a lender's policy be issued.

Before issuing a policy, the title company performs an in-depth search of the public records to determine if anyone other than you has an interest in the property. The search may be performed by title company personnel using either public records or, more likely, the information contained in the company's own title plant.

After a thorough examination of the records, any title problems are usually found and can be cleared up prior to your purchase of the property. Once a title policy is issued, if any claim covered under your policy is ever filed against your property, the title company will pay the legal fees involved in the defense of your rights. They are also responsible to cover losses arising from a valid claim. This protection remains in effect as long as you or your heirs own the property.

The fact that title companies try to eliminate risks before they develop makes title insurance significantly different from other types of insurance. Most forms of insurance assume risks by providing financial protection through a pooling of risks for losses arising from an unforeseen future event, say a fire, accident or theft. On the other hand, the purpose of title insurance is to eliminate risks and prevent losses caused by defects in title that may have happened in the past.

This risk elimination has benefits to both the homebuyer and the title company. It minimizes the chances that adverse claims might be raised, thereby reducing the number of claims that have to be defended or satisfied. This keeps costs down for the title company and the premiums low for the homebuyer.

Buying a home is a big step emotionally and financially. With title insurance you are assured that any valid claim against your property will be borne by the title company, and that the odds of a claim being filed are slim indeed.

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Mortgage insurance makes it possible for you to buy a home with less than a 20% down payment by protecting the lender against the additional risk associated with low down payment lending. Low down payment mortgages are becoming more and more popular, and by purchasing mortgage insurance, lenders are able to finance home with little down payment.

The mortgage insurance premium is based on loan-to-value ratio, type of loan, borrower(s) credit profile, and amount of coverage required. Usually, the premium is included in your monthly payment.

In some cases, mortgage insurance, is only required for a certain period of time. This will depend on the type of loan you are requesting. Make sure you discuss your options for mortgage insurance with your Mortgage Loan Officer.

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The maximum percentage of your home's value depends on the purpose of your loan, how you use the property, and the loan type you choose, so the best way to determine what loan amount we can offer is to complete our online application!