Terms and Definitions
Q: What is a loan assumption?
A: An assumption occurs when another person not currently on the existing Note takes over responsibility for the loan exactly as it is. The term, interest rate, principal balance, and monthly payments do not change. Payments are made without a lapse. The ‘new’ borrower will be required to qualify for the loan. This involves a review of the credit report as well as employment and income verification. The process can up to 45 days to complete from the time a full assumption application is received.
Q: What is lender-placed insurance?
A: When adequate homeowner’s insurance coverage has lapsed, or we have been notified of a policy cancelation, we are required to obtain hazard insurance coverage on your behalf. Often this coverage is more expensive than the coverage you are able to purchase on your own. In addition, it only covers the structure. Your personal property is not included in such coverage
Q: Can I make a payment over the phone?
A: Absolutely. Your mortgage company provides a few options for our customers to make an automated one-time draft payment from their checking account. Payments can be made online or by phone with an experienced Customer Service Representatives. Please be advised there may be a live agent payment fee. The availability of this service may depend on payment status.
Q: Do I have a grace period?
A: Payments are considered past due if not received by the due date. Most loans have a period of time after that date for payments to be received and processed prior to a late charge being assessed. Please reference your Note or your monthly billing statement for the specific late fee amount and grace period allowed associated with your loan.
Q: Do you offer an auto draft payment option?
A: Yes, our automatic payment program is a free service that will save you money on postage and eliminate the need to mail checks. Contact your mortgage company to find out how to enroll for automatic payments.
Q: If my payment is due on the 1st and I have a 15-day grace period, when will a late charge be assessed?
A: Most late charges are assessed after the close of business on the 16th of each month. If the 16th falls on a weekend or holiday, late charges are assessed after the close of business on the next business day. Refer to your Note to determine how many days you have between the due date and the late charge assessment date, not all loans allow for 15 days.
Q: Can I pay my monthly mortgage payment with a credit card?
A: No, your monthly payment must be drafted from a savings or checking account.
Q: My payment is automatically deducted – if my payment changed do I need to do anything?
A: No, the new payment amount will be automatically deducted from your account.
Q: When are my payments due?
A: Your monthly payment due date is established in your Note. Most Notes state a 1st of the month due date.
Q: Why did my payment change?
A: A change in your payment amount may be a result of an increase or decrease in your property taxes, annual insurance premium, or a recent ARM adjustment. The increase or decrease in your taxes may be due to a property reassessment, a change in tax rate, a change in an exemption status, or a special assessment.
Q: Can I change my insurance company?
A: Yes, you have the ability to choose any homeowner’s insurance carrier as long as it maintains either a B or better policyholder rating, or a 6 or better financial rating as published in the A. M. Best Company’s Insurance report. If you do change your carrier, please notify your mortgage company by sending a copy of your insurance declaration page. Some carriers may require a full year premium to be paid at time of the change.
Q: Can I pay my own insurance?
A: If you have a government loan or loan with private mortgage insurance (PMI), your insurance premium must be collected and paid via an escrow account. To request an escrow account deletion, please send in a written request and the Escrow department will review your account for deletion. Please be advised, certain requirements must be met to qualify for escrow account removal.
Q: Do I have to carry flood insurance on my home?
A: If your property is within Flood Zone A or V, then federal law requires you to maintain and provide proof of flood coverage.
Q: Do I have to carry insurance on my home?
A: Yes, the terms of your loan require you to maintain adequate insurance coverage continuously. Adequate is defined as an amount equal to the remaining loan balance or the insurance value of your property, whichever is less.
Q: How can I delete Private Mortgage Insurance (PMI)?
A: Federal law gives you the right to request deletion of PMI once the loan-to-value (LTV) ratio reaches 80%. This may occur through normal payment activity or a larger principal reduction. Proof of value will be required. PMI deletion does require a good pay history. No payment may be 30 days late in the past 12 months, and no payments may be more than 60 days past due in the last 24 months. Automatic PMI deletion will occur once your LTV reaches 78% through normal payment activity. In this instance, proof of value is not required. We are also required to follow the guidelines established by the investor of your loan. If you feel you qualify for PMI deletion based on the information above, please send a written request to the correspondence address in your billing statement.
Q: When will I receive my year end statement?
A: Mortgage Interest Statements, also known as Tax Form 1098, will be issued no later than January 31st of the following calendar year. Please contact your mortgage company if an additional copy is needed.
Q: Why are late charges included on my Mortgage Interest Statement?
A: The IRS has stated in Publication 936 that late charges paid must be shown as interest paid.
Q: Will I receive a coupon book?
A: No, Mountain West Financial, Inc. issues monthly statements for your loan. Statements will be mailed to you immediately upon the receipt of any monthly payment or fee related activity. You can opt out of receiving mailed statements by enrolling in paperless statements. This will allow you to receive all statements through your secure online portal.
Q: Will I receive notification that my payoff was received?
A: Yes, a notification letter stating that your loan has been paid in full will be mailed within 10 business days of receipt of your payoff funds. In addition, the Note and Security Instrument (Mortgage or Deed of Trust) to the property will be sent to you within the timeframe required by your state.
Q: If I am unable to make my payment, what are my options?
A: We offer several options based on individual circumstances: 1. Refinance. If you have not been 30 days past due in the last 12 months, you may qualify for a refinance. 2. Work out a repayment plan to get back on track. Call your mortgage company to explore options. 3. Request mortgage assistance by applying for a loss mitigation workout option (loan modification, forbearance, short sale, and deed-in-lieu of foreclosure).
Q: How long does it take to receive my escrow balance after my loan is paid in full?
A: Once your loan is paid in full, the escrow/surplus balance, if any, will be refunded and sent to the mailing address within our system within approximately 10 business days from the date of the payoff transaction. If you are moving, it is important that you provide us a new mailing address to ensure receipt of any refund as a result of the payoff.
Q: What should I do if I receive a tax bill?
A: If you have an escrow account for taxes and the bill is for the current tax due, please mail or fax your tax bill to the correspondence address in the monthly billing statement.
Q: Why did I receive an escrow overage check?
A: An overage check can be a result of your annual insurance premium, taxes or both being less than originally expected. The Escrow Analysis Statement included with the check should show how the overage was calculated. Federal law requires that we return any surplus over $50 directly to you. However, if you would like to return the overage check to us and have it applied as a principal reduction, please do so by endorsing the back of the check to the mortgage company on your billing statement.
What is the difference between a shortage vs. a deficiency in my escrow account?
A shortage means an amount by which a current escrow account balance falls short of the target balance at the time of escrow analysis. If your escrow account analysis discloses a shortage of less than one month's escrow account payment, then we may require you to repay the shortage amount within 30 days. If your escrow account analysis discloses a shortage that is greater than or equal to one month's escrow account payment, then we may require you to repay the shortage in equal monthly payments over at least a 12-month period. A deficiency is the amount of a negative balance in an escrow account. If your escrow account analysis confirms a deficiency, then we may require you to pay additional monthly deposits to your account to eliminate the deficiency. If the deficiency is less than one month's escrow account payment, then we may require you to repay the deficiency within 30 days. If the deficiency is greater than or equal to one month's escrow payment, we may require you to repay the deficiency in two or more equal monthly payments. Please see your Escrow Analysis Statement for further details.
What if I want to pay my escrow shortage in full?
The repayment option allowing for payment over 12 months for shortages that are greater than or equal to one month's escrow account payment is derived from federal regulations governing escrow shortages and deficiencies. Although a lump sum payment is not a required option, the mortgage company will allow for it upon customer request.
Year End Tax Statement
Is the ‘Year-End Statement’ the same as my IRS Form 1098, Mortgage Interest Statement?
Yes! However, you may also have a second ‘Year-End Statement’ entitled 1099INT if the property for your loan is located in a state that requires interest to be paid on the balance in your escrow account. If your state requires interest on escrow to be paid, you will see that a 1099INT statement is available to you online. These statements will also be mailed on or before January 31st each year.
Can I obtain a duplicate copy of my IRS Form 1098, Mortgage Interest Statement or 1099INT (if applicable)?
Yes! You can log into your online account and view or print a copy of your IRS Form 1098, Mortgage Interest Statement or 1099INT (if applicable).
Why didn't I receive an IRS Form 1098, Mortgage Interest Statement?
Although there could be several reasons why you may have not received your Year-End Statement, the most popular reasons are either your mailing address has changed, or you had not yet paid interest on your mortgage loan on or before December 31st. If you believe your mailing address on file is incorrect, please contact your mortgage company. It is also possible that you may be exempt from receiving an IRS Form 1098, Mortgage Interest Statement. Please consult your tax or financial advisor if you have questions related to exemptions.
Why does the ‘interest’ box on my IRS Form 1098, Mortgage Interest Statement not show the interest I expected for a calendar year?
If your loan was serviced by another loan servicer between 1/1/19 and 12/31/19, you may receive an IRS Form 1098 Mortgage Interest Statement from them as well. Please contact your previous loan servicer to verify if you can expect a second statement. If any payments on your account were received on or after January 1st, 2020, the interest for those payments is not reportable to the IRS until the next reporting period in 2020. If any payments on your account were received on or before December 31st, 2019, the interest for those payments would have been included in your 2019 IRS Form 1098, Mortgage Interest Statement.
Are there any deductions that I can claim on my income tax return?
In general, mortgage interest on first and second homes can be deductible for taxpayers who itemize deductions on their tax returns. However, please consult your tax or financial advisor or visit www.IRS.gov for IRS Form 1098, Mortgage Interest Statement information.