Just like we learn in training and on the job, “The only silly question is the one you don’t ask.” 

One of the most common questions we get is regarding how our mortgages for first responders™ program works.  Rather than offering a single first responder loan program, as a direct national lender and home mortgage group, we are able offer a full complement of mortgage programs, including Conventional, FHA, VA, and USDA.  And, we originate them all for you with $0.00 lender fees. This is pretty awesome, and it’s only the beginning of the overall value we offer you.

Here are the answers to some other questions you may already have about first responder loans.  We hope you find them helpful.  Just let us know what else you’d like to know. 

If we don’t have the answer on the spot, we’ll get it for you.

If we don’t have the answer on the spot, we’ll get it for you.


Who is eligible? Do I qualify?


As firefighters ourselves, we understand first-hand the challenges that come with the job, paid or not, as well as the sacrifices made by our families. We also understand that it takes many unique individuals and skill sets to make the First Responder community work the way it does.

It doesn’t matter as much exactly what you do or where you serve as it does that you’re part of our First Responder family.

We take honor and pride in helping career firefighters, volunteer firefighters, EMS personnel, medics, EMTs, dispatchers, wildland firefighters, on-call firefighters, military personnel and family members of all of the aforementioned groups. It is the mission of our home mortgage group to provide exceptional value and service to our brothers and sisters nationwide, yet with a personal touch.


What are the advantages of working with powered by Novus Home Mortgage?


All things being equal, it’s always nice for firefighters to utilize the services of other firefighters and “keep it in the family.”  We have firefighter colleagues who are skilled in a variety of trades and professions, including real estate, home inspections, contracting, etc. We refer other firefighters to them whenever we can and they know how to take care of them.

When it comes to choosing a mortgage professional for a first responder loan, knowledge and trust are probably the two most important factors. Without both of these, there are no assurances that you will get the best deal for you or that your loan will even close. This is why we are constantly educating ourselves as to the changes in today’s complex mortgage market and updating our program offerings. As far as the trust to do the right thing… we earn that every day.  We look forward to earning it from you.


What types of special programs are available to firefighters and first responders?


Mortgage programs for firefighters (paid and volunteer) and first responders come and go. Some are national, while others are only available at state and local levels. Our home mortgage group is able to participate in many of these programs in addition to offering conventional, FHA, VA, USDA, First-time Home Buyer, Down Payment Assistance, Grants and many other private sector and government mortgage programs to qualified borrowers.

Having the ability to offer a wide spectrum of mortgage programs for firefighters and first responders, as well as those for the general public, enables us to provide our members with a mortgage program most suitable to their specific needs.


Is there a local office near my house?


We have firefighter mortgage consultants located in different areas throughout the United States.  In order to work most efficiently, most of our transactions are done over the phone with the help of secure e-mail, fax and overnight mail.  We do travel around the country to different firefighter trade shows and events and have been fortunate enough to meet many of our clients in person before or after we take care of their mortgage for them.


Are your rates lower than my local bank?


Rates are often a deciding factor in moving forward with a mortgage transaction. Of course we encourage you to shop around. As long as you’re not misled by false promises, we are extremely confident that what you encounter is only going to help you appreciate what we do for you that much more.


What is your rate?


We get this question all the time.  There is a lot more to getting a mortgage transaction completed than just knowing what the rate is.  Of course it’s important, and, in some cases it’s the determining factor as to whether the transaction is even worthwhile.

There are several factors that go into calculating a rate (e.g., credit history, amount of equity, program type, lock period, special programs available, the list goes on…). We will gladly assess your individual situation and provide you with a custom quote. We’re confident that you will be very happy with the value you get here.


I’m a first-time home buyer. What do I need to know?


There’s a lot to know. We will gladly walk you through every step of the first responder loan process. Just contact us and we’ll do a complete introduction and evaluation for you. Owning a home is a great privilege and we’d like to help you get there!

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Obstacles to Financing


When it comes to financing a home, there are some issues that may cause a delay. Some points to keep in mind when you’re getting ready to start the mortgage loan process:

Stay organized: Make sure you have the official identification documents, income supporting documents, tax forms, account numbers for bank accounts and credit cards, and a record of any current debt, whether big or small.

Employment history: If there is a gap or gaps in your income history, be prepared to explain them. Documents from the state unemployment office are helpful, and sometimes it will be beneficial to write a letter explaining a gap in employment or a drop in income.

Credit: To help bolster your positive credit history, you may want to start making purchases on your credit card(s) and then paying in full and on time. This may help you establish a line of credit by showing you borrow money and are capable of paying it back promptly when required.


What are Closing Costs?


When you get a mortgage, you will need to pay closing costs, which are fees – charged by lenders and third parties — related to the purchase of the home. So, in addition to owing the lender the down payment on the home and the principal and interest related to the mortgage, you will also owe the lender and third parties closing costs, which you usually pay at the time that you close on your mortgage. Most of the time, it is the home buyer who pays the closing costs, rather than the seller, though on some loans, the seller pays a portion of these costs.  We don’t charge you lender fees, which helps keep more money in your pocket.

What charges go into your total closing costs?

Closing costs vary widely based on where you live and the property you buy. Closing costs often include things such as:

• A fee for running your credit report.
• A loan origination fee, which lenders charge for processing the loan paperwork for you.  We don’t charge you this.
• Attorney’s fees.
• Charges for any inspection required or requested by the lender or you.
• Discount points, which are fees you pay in exchange for a lower interest rate if you choose.
• Appraisal fee.
• Survey fee, which covers the cost of verifying property lines.
• Title insurance, which protects the lender in case the title isn’t clean.
• Title search fees, which pay for a background check on the title to make sure there aren’t things such as unpaid mortgages or tax liens on the property.
• Escrow deposit, which may pay for a couple months’ property taxes and private mortgage insurance.
• Pest inspection fee.
• Recording fee, which is paid to a city or county in exchange for recording the new land records.
• Underwriting fee, which covers the cost of evaluating a mortgage loan application.  We don’t charge you this, either!

How much will you pay in closing costs?

Typically, home buyers will pay between about 2 and 5 percent of the purchase price of their home in closing costs. So, if your home cost $150,000, you might pay between $3,000 and $7,500 in closing costs. On average, buyers pay roughly $3,700 in closing costs, according to a recent survey.

Lenders are required by law to give you a loan estimate (LE) of what the closing costs on your home will be within three days of when you apply for a loan. But these are just an estimate, and many of the fees listed on the LE can legally change by up to 10 percent, potentially adding thousands of dollars to your final closing cost bill.  Three  business days prior to your closing, the lender should accurately re-disclose your final costs, no surprises! Compare this to your LE and ask the lender to explain what each line item on your closing costs is and why it is needed. Often, many of the fees that make up closing costs are negotiable, and some are completely unnecessary, especially things such as high administrative, mailing or courier costs charged by your lender (not here).  If the closing costs come in high, you can walk away from the loan; there are plenty of lenders who might be willing to offer you lower closing costs (like us)!

How can home buyers avoid closing costs?

You can also avoid upfront closing costs by getting a no-closing cost mortgage, in which you don’t pay any of the closing costs when you close on the mortgage. Typically, when a lender offers a deal like this, it does end up costing you in the long run: The lender may charge you a higher interest rate on the loan for not paying closing costs, or the lender may wrap the closing costs into the total mortgage owed, in which case you end up paying interest on the closing costs. Finally, home buyers can negotiate with the seller over who pays these closing costs. Sometimes the seller will agree to assume the buyer’s closing costs if allowed by the governing laws and guidelines.


What is mortgage insurance and when is it required?


First of all, let’s make sure that we mean the same thing when we discuss “mortgage insurance.” Mortgage insurance should not be confused with mortgage life insurance, which is designed to pay off a mortgage in the event of a borrower’s death. 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 comfortable with down payments as low as 3 – 5% of the home’s value. It also provides you with the ability to buy a more expensive home than might be possible if a 20% down payment were required.

The mortgage insurance premium is based on loan to value ratio, type of loan, and amount of coverage required by the lender. Usually, the premium is included in your monthly payment and one to two months of the premium is collected as a required advance at closing.

It may be possible to cancel private mortgage insurance at some point, such as when your loan balance is reduced to a certain amount – below 75% to 80% of the property value. Recent Federal Legislation requires automatic termination of mortgage insurance for many borrowers when their loan balance has been amortized down to 78% of the original property value. If you have any questions about when your mortgage insurance could be cancelled, please contact your MLO.


How to eliminate mortgage insurance?


Once the payments you’ve made to your lender equal a certain percentage of equity of the home (usually 20%), the policy is usually cancelled because you’ve proven that you can be financially responsible for your mortgage payments for an extended period of time.

When the time comes in your payment schedule that you have built at least 20% equity, contact your mortgage servicer to determine whether your mortgage insurance payments will end.


How are interest rates determined?


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.


What is an adjustable rate mortgage?


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.

Against the advantage of the lower payment at the beginning of the loan, you should weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. It’s a trade-off. You get a lower rate with an ARM in exchange for assuming more risk.

For many people in a variety of situations, an ARM is 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 three to five years.

Here’s some detailed information explaining how ARM’s work.

Adjustment Period

With most ARMs, the interest rate and monthly payment are fixed for an initial time period such as one year, three years, five years, or seven years. After the initial fixed period, the interest rate can change every year. For example, one of our most popular adjustable rate mortgages is a five-year ARM. The interest rate will not change for the first five years (the initial adjustment period) but can change every year after the first five years.


Our ARM interest rate changes are tied to changes in an index rate. Using an index to determine future rate adjustments provides you with assurance that rate adjustments will be based on actual market conditions at the time of the adjustment. The current value of most indices is published weekly in the Wall Street Journal. If the index rate moves up so does your mortgage interest rate, and you will probably have to make a higher monthly payment. On the other hand, if the index rate goes down your monthly payment may decrease.


To determine the interest rate on an ARM, we’ll add a pre-disclosed amount to the index called the “margin.” If you’re still shopping, comparing one lender’s margin to another’s can be more important than comparing the initial interest rate, since it will be used to calculate the interest rate you will pay in the future.

Interest-Rate Caps

An interest-rate cap places a limit on the amount your interest rate can increase or decrease. There are two types of caps:

1. Periodic or adjustment caps, which limit the interest rate increase or decrease from one adjustment period to the next.

2. Overall or lifetime caps, which limit the interest rate increase over the life of the loan.

As you can imagine, interest rate caps are very important since no one knows what can happen in the future. All of the ARMs we offer have both adjustment and lifetime caps. Please see each product description for full details.

Negative Amortization

“Negative Amortization” occurs when your monthly payment changes to an amount less than the amount required to pay interest due. If a loan has negative amortization, you might end up owing more than you originally borrowed. None of the ARMs we offer allow for negative amortization.

Prepayment Penalties

Some lenders may require you to pay special fees or penalties if you pay off the ARM early. We never charge a penalty for prepayment.


Should I pay points in exchange for a lower interest rate?


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 points, you should compare the cost of the points to the monthly payments savings created by the lower interest rate. Divide the total cost of the 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 points. If the number of months it will take to recoup the points is longer than you plan on having this mortgage, you should consider the loan program option that doesn’t require points to be paid.

If you’d prefer not to make this calculation the “old-fashioned way,” we have a points calculator!


Is comparing APRs the best way to decide which lender has the lowest rates and fees?


The Federal Truth in Lending law requires that all financial institutions disclose the APR when they advertise a rate. The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all, closing fees 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. 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.

Also, unfortunately, the APR doesn’t include all the closing fees and lenders are allowed to interpret which fees they include. Fees for things like appraisals, title work, and document preparation are not included even though you’ll probably have to pay them.

For adjustable rate mortgages, the APR can be even more confusing. Since no one knows exactly what market conditions will be in the future, assumptions must be made regarding future rate adjustments.

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. Look at total fees, possible rate adjustments in the future if you’re comparing adjustable rate mortgages, and consider the length of time that you plan on having the mortgage.

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.


How do I know if it is best to lock in my interest rate or to let it float?


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.  When you’re ready, you can ask us to lock your rate and send you the confirmation.  We monitor the markets closely and can always provide you with our opinion.


How much money will I save by choosing a 15-year loan rather than a 30-year loan?


A 15-year fixed rate mortgage gives you the ability to own your home free and clear in 15 years. And, while the monthly payments are somewhat higher than a 30-year loan, the interest rate on the 15-year mortgage is usually a little lower, and more important – you’ll pay less than half the total interest cost of the traditional 30-year mortgage.

However, if you can’t afford the higher monthly payment of a 15-year mortgage don’t feel alone. Many borrowers find the higher payment out of reach and choose a 30-year mortgage. It still makes sense to use a 30-year mortgage for most people.


Who Should Consider a 15-Year Mortgage?


The 15-year fixed rate mortgage is most popular among younger homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. They own more of their home faster with this kind of mortgage, and can then begin to consider the cost of higher education for their children without having a mortgage payment to make as well. Other homebuyers, who are more established in their careers, have higher incomes and whose desire is to own their homes before they retire, may also prefer this mortgage.

Advantages and Disadvantages of a 15-Year Mortgage

The 15-year fixed rate mortgage offers two big advantages for most borrowers:

You own your home in half the time it would take with a traditional 30-year mortgage.

You save more than half the amount of interest of a 30-year mortgage. Lenders usually offer this mortgage at a slightly lower interest rate than with 30-year loans – typically up to .5% lower. It is this lower interest rate added to the shorter loan life that creates real savings for 15-year fixed rate borrowers.

The possible disadvantages associated with a 15-year fixed rate mortgage are:

The monthly payments for this type of loan are roughly 10 percent to 15 percent higher per month than the payment for a 30-year. Because you’ll pay less total interest on the 15-year fixed rate mortgage, you won’t have the maximum mortgage interest tax deduction possible.


Are there any prepayment penalties charged for these loan programs?


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


What is your Rate Lock Policy?


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 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.


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

Lock Period

We usually offer 30-day or 45-day locks. This means your loan must close and disburse within this number of days from the day your lock is confirmed by us.  Longer lock periods are available as well,  just let us know what you need!

Lock Confirmation

Once you have locked your loan, a revised LE will be sent to you via email.

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.


Tell me more about closing fees and how they are determined.


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 lenders have done their homework and are providing a complete and accurate estimate. We take quotes very seriously. We’ve completed the research necessary to make sure that our fee quotes are accurate to the city level – and that is no easy task!

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

Third Party Fees

Fees that we consider third party fees include the appraisal fee, the credit report fee, the settlement or closing fee, the survey fee, tax service fees, title insurance fees, flood certification fees, and courier/mailing fees.

Third party fees are fees that we’ll collect and pass on to the person who actually performed the service. For example, an appraiser is paid the appraisal fee, a credit bureau is paid the credit report fee, and a title company or an attorney is paid the title insurance fees.

Typically, you’ll see some minor variances in third party fees from lender to lender since a lender may have negotiated a special charge from a provider they use often or chooses a provider that offers nationwide coverage at a flat rate. You may also see that some lenders absorb minor third party fees such as the flood certification fee, the tax service fee, or courier/mailing fees.

Taxes and other unavoidables

Fees that we consider to be taxes and other unavoidables include: State/Local Taxes and recording fees. These fees will most likely have to be paid regardless of the lender you choose. If some lenders don’t quote you fees that include taxes and other unavoidable fees, don’t assume that you won’t have to pay it. It probably means that the lender who doesn’t tell you about the fee hasn’t done the research necessary to provide accurate closing costs.

Lender Fees

Fees such as tren and test points, document preparation fees, and loan processing fees are retained by the lender and are used to provide you with the lowest rates possible.

This is the category of fees that you should compare very closely from lender to lender before making a decision.  With us, you’ll pay $0.00 lender fees!

Required Advances

You may be asked to prepay some items at closing that will actually be due in the future. These fees are sometimes referred to as prepaid items.

One of the more common required advances is called “per diem interest” or “interest due at closing.” All of our mortgages have payment due dates of the 1st of the month. If your loan is closed on any day other than the first of the month, you’ll pay interest, from the date of closing through the end of the month, at closing. For example, if the loan is closed on June 15, we’ll collect interest from June 15 through June 30 at closing. This also means that you won’t make your first mortgage payment until August 1. This type of charge should not vary from lender to lender, and does not need to be considered when comparing lenders. All lenders will charge you interest beginning on the day the loan funds are disbursed. It is simply a matter of when it will be collected.

If an escrow or impound account will be established, you will make an initial deposit into the escrow account at closing so that sufficient funds are available to pay the bills when they become due.

If your loan requires mortgage insurance, up to two months of the mortgage insurance will be collected at closing. Whether or not you must purchase mortgage insurance depends on the size of the down payment you make.

If your loan is a purchase, you’ll also need to pay for your first year’s homeowner’s insurance premium prior to closing. We consider this to be a required advance.


What is title insurance and why do I need it?


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.  Our home mortgage group makes numerous efforts to simplify the process.  Just let us know what else we can do to improve the experience for you.

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