FAQs

General Mortgage Questions

  1. What is a lock commitment?
  2. When can I lock my rate?
  3. Can I change my loan’s rate or loan program once I have already locked?
  4. What happens to my rate if the loan does not fund within the lock period?
  5. How can I check the interest rates Provident Funding is currently offering?
  6. Who locks my rate?
  7. How long is my rate locked?
  8. Can the rate lock period be increased or decreased after I have selected a rate lock period and locked a rate on my purchase loan?
  9. Other lenders or mortgage brokers have been able to offer a "float down rate option" after I lock in a rate, why don't you?
  10. What are third party fees?
  11. What are closing costs?
  12. Do I have to pay closing costs if I am an existing Provident Funding customer?
  13. What is an escrow/impound account?
  14. When do I have to carry flood insurance?
  15. Do I need an escrow/impound account?
  16. Will I receive a better rate or price by selecting to have an escrow/impound account with my loan?
  17. How long does the loan process take?
  18. Can I choose the appraiser?
  19. Can I receive a copy of the appraisal?
  20. Can I receive a copy of my credit report?
  21. Does Provident Funding charge an upfront fee/deposit?
  22. What is the loan-to-value ratio (LTV)?
  23. What is private mortgage insurance?
  24. Can I select a higher rate in lieu of paying PMI?

1. What is a lock commitment?
A lock commitment is a written agreement between you and Provident Funding, entitled a Rate Lock Confirmation, which guarantees a specific interest rate at a particular price based on the loan characteristics selected if the loan closes within a set period of time.

2. When can I lock my rate?
On Refinance transactions, after the loan is approved by Provident Funding’s Automated Underwriting (AU) system, you may lock your rate online or over the phone with a Mortgage Consultant (MC).

On Purchase transactions, once your application has been submitted and approved by Provident Funding’s Automated Underwriting (AU) system and you have a fully executed purchased agreement for the house you are buying, you have the option of using Provident Funding's online lock tool or contacting your Mortgage Consultant (MC) to lock your loan.

Once your loan is locked, you must close and fund within that lock period for your rate lock to be guaranteed. When you choose to lock in your rate, you will be provided with a Rate Lock Confirmation via email or fax from your Provident Funding Mortgage Consultant (MC). Your Rate Lock Confirmation will detail the loan terms you have selected.

3. Can I change my loan’s rate or loan program once I have already locked?
If for some reason you want to select another rate on the same or a different loan program, Provident Funding will accommodate your request. Provident Funding will use the rate sheet from the day you first locked to determine the price (points/credit) associated with your newly selected rate and/or loan program. Such changes may result in the re-approval of your loan and/or a longer processing time. As a result, if your loan does not fund by the lock expiration date, Provident Funding reserves the right to re-price your interest rate and/or lender origination points/credit.

4. What happens to my rate if the loan does not fund within the lock period?
Upon locking your interest rate, you will have agreed to specific tasks and due dates in order for us to approve and fund your loan within the rate lock period. If your lock commitment expires prior to funding due to delays in our receiving the documentation and/or information necessary to approve and fund your loan, your loan will be subject to worse case pricing. Worse case pricing is calculated by comparing pricing from the original lock date to current pricing and then selecting the higher of the two.

5. How can I check the interest rates Provident Funding is currently offering?
You can view daily interest rates online at www.provident.com or by calling Provident Funding where you will be put in contact with a licensed Mortgage Consultant at (888) 547-4050.

6. Who locks my rate?
After the loan is approved by Provident Funding’s Automated Underwriting (AU) system, you may lock your rate online or over the phone with a Mortgage Consultant (MC).

On Refinance transactions, after the loan is approved by Provident Funding’s Automated Underwriting (AU) system, you may lock your rate online or over the phone with a Mortgage Consultant (MC).

On Purchase transactions, once you submit your loan application, your loan is approved by Provident Funding’s Automated Underwriting (AU) system, and you have a fully executed purchase contract for the home you are buying, you have the option of using Provident Funding's online lock tool or contacting your Mortgage Consultant (MC) to lock your loan.

Provident Funding will not honor rate lock requests left in a voicemail or requested via email as rates are subject to change throughout the day. The rate and price you receive will be based upon the current rate at the time when you speak with your Mortgage Consultant (MC).

7. How long is my rate locked?
Refinance rate locks are valid for 30 days. For more details please consult your Mortgage Consultant.

Purchase rate locks are valid for 30, 45 or 60 days, depending on the rate lock period selected at the time of locking.

8. Can the rate lock period be increased or decreased after I have selected a rate lock period and locked a rate on my purchase loan?
Your rate lock period may be extended; however, you will be subject to Worse Case Pricing. Worse Case Pricing is calculated by comparing pricing from the original lock date to current pricing and then selecting the higher of the two.

9. Other lenders or mortgage brokers have been able to offer a "float down rate option" after I lock in a rate. Why don't you?
Lenders and mortgage brokers who offer a "float down rate option" often do not offer the best possible price initially. Mortgage brokers may also cancel their rate lock with the initial investor/lender and lock in with a new lender when rates fall. This practice increases rates for the entire industry because locked loans that do not fund cost lenders a lot of money. Provident Funding's business model is designed to offer you the best possible price every day and that is why we do not offer a "float down rate option."

10. What are third party fees?
Third party fees are any fees associated with the loan that are charged by parties other than Provident Funding. Generally, third party fees may include appraisal fees, title and closing fees, notary fees, recording fees, delivery/courier fees, or transfer taxes.

11. What are closing costs?
Closing costs are expenses incurred by borrowers (and sellers in the case of purchase transactions) when obtaining a new mortgage loan and transferring property ownership. Non-Recurring Closing Costs (NRCC’s) are costs that are only charged in connection with obtaining a new mortgage loan. Examples of NRCC’s would include: origination fee, title insurance fee, settlement agent fee, notary fee, commitment/administration fee, or appraisal fee. Recurring Closing Costs include costs that not only may be charged in connection with obtaining a new mortgage loan, but are also charged on an ongoing basis. Examples of Recurring Closing Costs would include: prepaid interest, property taxes and hazard insurance. Other fees may be included depending on the transaction or your property state.

12. Do I have to pay closing costs if I am an existing Provident Funding customer?
Yes, closing costs have to be paid on all loans. However, depending on your loan terms and the selected loan program, Provident Funding may pay for some or all of your closing costs in exchange for selecting a higher interest rate.

13. What is an escrow/impound account?
This is an account established with Provident Funding to pay your property taxes, homeowner’s insurance, flood insurance (if required) and mortgage insurance (if required) when they become due. If you have an escrow/impound account, then your regular monthly mortgage payment will include principal, interest and an escrow payment. Your escrow payment is based on 1/12th of the annual estimated payments for your property taxes, homeowner’s insurance, flood insurance (if required) and mortgage insurance (if required).

14. When do I have to carry flood insurance?
If your property lies within Flood Zone "A" or "V", federal law (FEMA) requires you to maintain and provide proof of flood insurance coverage. The Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 prohibit Federal agency lenders, such as Provident Funding, such as Provident Funding from originating home loans in Flood Zone "A" or "V" unless flood insurance has been purchased by the homeowner and is maintained during the term of the loan.

15. Do I need an escrow/impound account?
Provident Funding only requires an escrow/impound account when your loan-to-value ratio exceeds 80%. If your property is in California, we will only require an escrow/impound account for your taxes and insurance when your loan-to-value exceeds 90%.

16. Will I receive a better rate or price by electing to have an escrow/impound account with my loan?
No. Provident Funding's pricing remains the same, whether or not you choose to establish an escrow/impound account when applying for a loan with Provident Funding’s Retail division.

17. How long does the loan process take?
For a refinance loan, the process should take 30 days or less from the time you lock in your interest rate to the time your loan is funded. Upon locking your interest rate, you will have agreed to specific tasks and due dates in order for us to approve and fund your loan within a 30 day period.

For a purchase loan, the process usually takes 30 days to complete. However, the timeline may vary based on the previously agreed upon close of escrow date between you and the seller, the loan program you select and the state in which your property is located. Upon locking your interest rate, you will have agreed to specific tasks and due dates in order for us to approve and fund your loan within the rate lock period and on your previously scheduled signing date.

18. Can I choose the appraiser?
Provident Funding does not allow customers to choose their own appraiser. We will order all required appraisal services from one of our national appraisal vendors to ensure a quality product is provided at a competitive price.

19. Can I receive a copy of the appraisal?
Yes. Once the appraisal is complete a copy will be e-mailed to you directly.

20. Can I receive a copy of my credit report?
No. Provident Funding will not be able to provide you with a copy of your credit report. However, you may request a copy of your credit report by contacting your credit reporting agency (CRA).

21. Does Provident Funding charge an upfront fee/deposit?
Provident Funding charges a $600 or $850 upfront deposit (depending on the loan program you are applying for) on all loans that require a new appraisal. The deposit will be refunded when the loan is closed.

22. What is the loan-to-value ratio (LTV)?
Loan-to-value (LTV) is a ratio that is determined by comparing the loan amount against the value of the property or the sales price, whichever is less. The LTV is one consideration in qualifying you for a loan. To calculate the LTV, divide the amount you are borrowing by the value of the subject property or the purchase price, whichever is less. For example, if you are purchasing a property that is selling and appraising for $200,000 and you would like to borrow $100,000, the LTV is 50%.

23. What is private mortgage insurance (PMI)?
Private mortgage insurance (PMI) is a type of insurance that protects the lender in the event a borrower does not make their payments in a timely manner, resulting in loan default and potentially foreclosure. For most loan programs, PMI is required if the loan-to-value ratio is greater than 80%.

24. Can I select a higher rate in lieu of paying PMI?
Provident Funding does not offer this option.

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Other Frequently Asked Questions:
Purchase Transaction
Rate & Term Refinance
Cash-out Refinance