Get Answers to Frequently Asked Questions

Get answers to your questions about mortgage loans, M&T's mortgage lending process and learn the important terms you may hear throughout the process.

Mortgage Basics

Mortgage insurance lowers the risk to the lender of making a loan to you, so you can qualify for a loan that you might not otherwise be able to get. Typically, borrowers need to pay mortgage insurance when making a down payment of less than 20 percent when purchasing a home or borrowing more than 80 percent of their home’s value when refinancing.

This insurance may enable you to borrow up to 100 percent of a sales price or home's value. As your equity grows, you may be able to cancel the mortgage insurance.

You can pay for mortgage insurance through monthly payments or a single payment which may be financed into the loan or negotiated for the seller to pay.

Title is a document that outlines the ownership of a property and the right to use it. Owner’s title insurance protects the owner against any lien, claim, right or other encumbrance on the property.

A title company checks public and other records to make sure everything is clean with the ownership of your new property. If there are any issues, the title company pays the legal fees to represent you and will cover any losses associated with a valid claim. Your title insurance protection exists as long as you own the property.

Title insurance isn't like your home or auto insurance – you don't have to pay an annual premium. It's a one-time cost typically financed into the loan.

When purchasing a home, it's important to know how much you can afford. With a pre-approval, you'll determine in advance how much you may be able to borrow and the best mortgage options for you. This will help prepare for your future budget. Also, being pre-approved shows the seller that you are a serious buyer.

There are a few key steps during the mortgage process. Understanding what happens during each step will help you prepare and will make the process go more smoothly.

Pre-Approval

It's important to know how much you can afford to borrow. Pre-approval will help during your home search and seller negotiations.
Start the Pre-Approval Process >​

Ap​​plic​ation

Your M&T Mortgage Loan Officer will discuss financing options and help you complete a mortgage application when you're ready. After you’ve completed your application, you will receive a Loan Estimate outlining all costs associated with your loan, and your application will be submitted for processing.

Loan P​​​rocessing

Your Loan Processing Team obtains third-party information (for example, a property appraisal) that is required to complete the transaction. The Loan Processor prepares your file for a credit review and decision. Your Loan Processing Team will then contact your Attorney or Settlement Agent to ensure that all parties are working toward the desired closing date.

Credit Re​​view/Underwriting

Your loan file will be reviewed and a credit decision made. If you are approved, you will receive a written Mortgage Commitment that summarizes your mortgage loan and lists any conditions that must be met.

Closing Disclosure

Your Attorney or Settlement Agent provides M&T with the information required to prepare the Closing Disclosure, which you will receive approximately 3 to 7 business days before closing.  The Closing Disclosure confirms the details of your mortgage loan including the estimated funds needed for closing. It's important to review your settlement statement and ask any questions you may have prior to closing.​

Loan Closi​​ng

Depending on the state where your property is located, your Settlement Agent or Attorney will confirm the scheduled closing date with you and review the funds needed to close. On the closing date, you will sign your paperwork and complete the loan closing.

It's a real estate closing so this will probably happen at a title company or an attorney's office.

Before the closing appointment, you’ll be able to look at many of the documents, so you’ll know about your down payment, first payment, any fees, and the exact dollar amount you’ll need for closing.

At the appointment, the closing agent will review each of the documents you have to sign, one by one.

Here are the most important documents:

Closing Disclosure: This is the final disclosure of the terms and conditions of your mortgage. It is a breakdown of all your loan fees, pre-paid taxes and insurance costs, interest rate, monthly payment and your loan’s annual percentage rate (APR).

Note: The signed piece of paper where you agree to repay your mortgage. It will outline the details of your loan, the interest rate and other terms of your loan such as penalties you may incur if you miss payments.

Mortgage/Deed of Trust: This paper states you’ve pledged your property to your lender as security for your debt. In other words, if you can't pay the mortgage, your lender can assume ownership. 

The Loan Estimate is a federally required notice that provides details of the cost of obtaining a mortgage loan and the terms of the mortgage loan for which you have applied. This notice includes the Annual Percentage Rate (APR). The APR should not be confused with the mortgage note's (interest) rate, which is used to calculate the loan payment.​

This information is being provided for informational purposes only and is neither a loan commitment nor a guarantee of any interest rate. If you choose to apply for a mortgage loan, you will need to complete our standard application. Our consideration for approval of your mortgage loan application will include verification of the information obtained in connection with your request, including but not limited to income, employment, asset, property value and/or credit information. Our loan programs are subject to change or discontinuation at any time without notice. Not all products are available in all states. Refinancing to reduce total monthly payments may lengthen repayment term or increase total interest expense. Interest rates are subject to change without notice.

If you're selling your existing home — and need the proceeds of that to fund your new home — you'll need to provide your closing statement. Sometimes, these are called settlement documents. You receive these papers at closing, and they verify that you've paid your old mortgage in full.

Be prepared for purchase contingencies. That means if you have someone ready to buy your home but they pull out, you can get your deposit back from the other home you're buying.

If you're closing on your old home on the same day as your new home, that's ok. We'll just ask you to bring your settlement paperwork with you to your new home's closing.

Appraisals

Appraisals are an official assessment of a home's value. Having a certified and unbiased third party determine the value helps ensure your home isn't over-or under-valued. It also allows the lender to figure out how much you can borrow.

Professional appraisers follow guidelines for assessing a home's value. When appraisers conduct property appraisals, they prepare an extensive, official document that includes a written assessment of the home or neighborhood, and typically photographs and measurements.

Appraisers research the age and sales history of the particular home, and then look at “comps,” or comparable homes in your area. Comps are recently sold homes, located in the same or nearby neighborhood(s), with similar features such as square footage, number of bedrooms, size of the lot, etc. 

Depending on your home and your loan program, the appraisal might include an inspection of the interior of the home, or it might just be an assessment of the exterior along with recorded sales history in the area.

As a buyer, you're permitted and encouraged to review the appraisal.

Home inspections and home appraisals sound similar, but they have very different purposes.

Property appraisals look at the big picture of what affects a home's value. A leaking roof or foundation issues can definitely affect value.

A home inspector is a construction expert. Maintenance and convenience factors are more in line with home inspections. While these issues might not affect a home's value immediately, these problems can worsen over time.

Property inspections give buyers confidence that the home they're buying has been well maintained. While the lender doesn't require an inspection, it is recommended that you get one. It's your chance to ask questions, get answers and, possibly, negotiate repairs or a lower sales price.

Yes, as the borrower you will receive a copy of the home appraisal.

The property appraisal is a thorough review of your new home. It includes an assessment of your home, your neighborhood, sales trends and more. Typically, you can expect to receive a final report within 10-14 days.

If your new home is appraised for more than the purchase price, it won't change the amount you borrow. We look at sale prices and appraisals, then use the lower of the two to determine your down payment.

When your new home appraises for more than your purchase price, that's instant equity. You can feel more confident when you move in knowing that you immediately own more of your home. 

Closing Costs

Fees, closing costs, and taxes can vary from state to state and lender to lender. We want to ensure you get an accurate estimate as early as possible. Here are the most common groups of costs:

  • Third-party fees: Appraisals, credit reports, settlement/closing services, title insurance, surveys, tax service reporting, flood certification and possibly other services are required for your real estate transaction. Fees for these services are passed on to the borrower, but can be negotiated to be paid by a seller or financed into the loan on refinance transactions.
  • Lender fees: These are fees associated with the work a lender performs to prepare, process and fund your mortgage loan.

  • Property tax, insurance and such: You might need to pre-pay some items that are due in the future. The most common are:

    • Escrow Impounds: If you elect to set up an escrow account, you’ll have a deposit due for taxes and/or homeowner's insurance at the time of closing. These deposits ensure money is available for your property taxes and homeowner's insurance when due. To learn more about escrow accounts, visit our Escrow FAQ page.

    • Per Diem Interest: Most mortgages are due on the 1st of every month. If you close your loan on the 20th, you need to pay for the days of interest that accrue until your first payment is due.

At the time of your mortgage application, you will receive a Loan Estimate – a federally required notice that provides details of the cost of obtaining a mortgage loan and the terms of the mortgage loan for which you have applied.

A few days before closing, you'll get a detailed Closing Disclosure that breaks down the total and final closing costs. This allows you to gather your funds and confirm the details of your loan. You'll know the exact amount you need to bring to closing.

Interest Rates

Points (also called discount points) are an amount paid at mortgage closing to lower the interest rate charged on your loan. Each point is equal to 1% of the loan amount. By paying points, you can lower your interest rate and monthly payment amount over the term of your loan. Points vary by loan program and market conditions. Paying points to lower your interest rate is optional.

APR is a calcuation expressing the total cost of credit as a yearly percentage. An APR must be provided to the borrower under the Federal Truth in Lending Act. APR calculation is standardized across the industry. It is a powerful tool at your disposal to help you compare our costs with other lenders.

It includes upfront costs (prepaid interest) and any other finance charges associated with obtaining the loan. Other charges included in your APR calculation are mortgage insurance (if required) and other prepaid finance charges, such as origination fees and prepaid interest. The APR is calculated by spreading these charges over the life your loan, which results in a rate that is typically a bit higher than your interest rate. 

Your individual rate is determined by adjustments made to the base rate. These adjustments are driven by your credit score, loan purpose, occupancy type, loan-to-value, any discount points purchased and other factors.

Interest rates fluctuate. Inflation, retail inventory, consumer activity and employment determine what interest you pay on your mortgage loan. With a healthier economy more money becomes available, pressure on inflation increases and rates, generally, go up.

The Federal Funds Rate is what banks charge each other to loan money. That translates to other lending transactions, such as credit cards, auto loans and mortgages.

The Federal Reserve can change the rate up to eight times a year at Federal Open Market Committee meetings. When rates change, the Fed buys or sells government treasury bonds to change the level of money available to the financial markets and the public. This means a constantly changing table of base interest rates for mortgages.

Interest rates change daily. Our expert loan advisers will help determine your best option. They will make sure your loan is set to close within your lock period based on your purchase contract closing date.

When you work with M&T, you can lock your interest rate once you complete your mortgage application, or any time afterwards up until we are ready to prepare your closing documents.

By using discount points, you get a lower interest rate for the life of your loan. A discount point is equal to 1 percent of your loan amount. For some borrowers, the option is clear: they pay the point (or points) and then enjoy the reduced rate for years.

To help you decide, compare the lower cost of your monthly payments with the cost of the discount points. You'll see how many months it takes you to break even. If you're able to save, it might be worth going for it.

Credit Considerations When Applying for a Mortgage

Credit history is considered when applying for a mortgage loan. Your credit score, also known as a FICO® score, helps determine the types of home loans you can qualify for and affects your interest rate. To assess creditworthiness, lenders review your score to see how you've handled past credit obligations. This is a good indication of how you will handle them in the future. A higher credit score may help you qualify for a better interest rate and a lower down payment.

By law, you are entitled to one free credit report per year. Visit annualcreditreport.com or contact any of the following credit reporting agencies:

If you see an error in your credit report, document it and report it quickly.

Credit scores typically represent your credit risk to a lender, or the likelihood you will pay your bills on time. We will need your credit score for the mortgage loan application process. This is a number between 300 and 900 that assesses your ability to take on and repay debt.

There are dozens of factors that go into determining your credit score. Some that may affect credit scores include your total debt, the types of accounts you have, the number of late payments, how long you've had the accounts and others. 

Knowing your credit score is part of getting pre-approved. When M&T Bank conducts a credit check for your mortgage pre-approval, there's no charge for accessing the information.

Once you’re pre-approved and determine how much you can afford, it's your choice to move forward with us and complete the loan. If you do choose to proceed with M&T, we'll add the cost of the credit report as part of your total closing costs. 

Credit bureaus gather data and then provide a score that determines your credit-worthiness. When qualifying for a mortgage, we consider credit scores as well a repayment history.

The credit bureaus provide information about what impacts your credit score. You can click on their links below to learn more:

Applying for a Loan

DTI is the percentage of your gross monthly income that goes toward paying housing and debts. It is one way that mortgage lenders measure a borrower's ability to manage monthly payments and repay debts.

For example, if your mortgage payment and other monthly debts equal $1,000, and your monthly gross income is $4,000, your DTI is $1,000 divided by $4,000, or 25%.

LTV is a comparison between the amount of your loan and the value of your property, typically expressed as a percentage. For example, if you are borrowing $80,000 for a house that is worth $100,000, your LTV is 80%.

Yes, second-job income can be considered in the mortgage application process.

Typically, employment and income are verified through a few sources: pay stubs, tax returns or W-2s. Any of these sources show you've earned the money, the duration of the employment, and what you might earn in the future.

The nature of some second jobs is more transitory. Whether it's seasonal or more subject to layoffs, so this might be taken into consideration. If you fall into this category, talk to your M&T Bank loan adviser and they can help you determine what documentation you will need to provide. 

You are absolutely still eligible to get a mortgage now that you've retired. Instead of providing pay stubs in the mortgage application process, you'll provide copies of pension check stubs, Social Security deposits or bank statements to verify income for the monthly mortgage payment of your new home.

Depending on your situation, we might need paperwork to verify how long your pension (or similar income) will continue. Typically, you can complete the income verification process with a copy of your award letter.

If you're receiving tax-free Social Security income, we may also be able to take into account the fact that taxes aren't deducted from your income when we calculate your eligibility.

Many homebuyers are still paying off student loans. That won't stop you from getting a mortgage. M&T works with you to understand your student loan debt and when your repayment starts. This helps us determine what you can afford.

Buying a condominium is like buying a single-family home, but there are differences.

You’ll want to understand the health of the community. Review the governing documents for the community, assess the sales history of the neighborhood and confirm the percentage of occupied rental properties on site.

These factors are important because common areas and homeowner groups impact the value of your potential new home.

We’ll review similar condos in your neighborhood, but also look outside the community to verify that price and value are stable.

Finally, if the condominium is new, we will also verify whether the construction is complete. When it is finished, we can best assess the value of the property.

Installment debt is a loan that you make recurring payments on. Car loans, student loans and debt-consolidation loans are all types of installment debt. Insurance payments or medical bills—typical living expenses that you're billed for—aren’t installment loans.

Mortgage Payments

Monthly mortgage payments are primarily determined by three factors: the amount of the loan, the term and the interest rate. The amount is how much is borrowed. The term is the amount of time you have to pay it back. Interest is the amount the lender charges for loaning you the money. 

Amortization is the process of paying off your mortgage through scheduled monthly payments of principal and interest. M&T does not charge any prepayment penalties so you could pay off your mortgage sooner by paying a little more towards principal each month.

P&I stands for principal and interest that makes up your monthly mortgage payment. If you elect to make only a P&I payment, you (the borrower) will need to cover taxes and insurance on your own rather than including it as part of your monthly payment.

Typically, monthly mortgage payments are broken down into four parts: Principal, Interest, Taxes and Insurance (PITI). By electing to include property taxes and homeowner's insurance in your monthly payment, you won't have to worry about saving to pay these annual bills. Each month a portion of your annual tax and insurance costs will be collected in an escrow account and M&T will process those payments for you as needed.

A mortgage escrow account allows borrowers to pay ongoing property tax and homeowner's insurance costs within their monthly mortgage payments. These additional funds accumulate in an escrow account managed by M&T Bank, and we pay property taxes, homeowner's insurance and any mortgage insurance on your behalf from your escrow account. 

Without an escrow account, the cost of property taxes and homeowner's insurance are not included in your monthly mortgage payment. Aside from that, another cost not included in your mortgage payment is Home Owner Association (HOA) maintenance dues – common with condominiums and planned unit developments (PUDs).

Depending on your mortgage program, monthly payments may change. This most commonly occurs with adjustable rate mortgages (ARMs). After the initial fixed-rate term comes to a close, the interest rate can change up or down depending on market conditions – meaning your monthly payment may increase or decrease. For instance, if after the fixed term, interest rates are lower than they were when you first bought the home, you'll likely be looking at lower monthly payments.

Payments on fixed rate mortgages typically do not change unless you have an escrow account with annual property taxes and homeowner's insurance included in your monthly payments. As your annual property tax and insurance costs change, the amount needed to cover these costs in your monthly payment changes as well. If these costs increase, you can opt to either have your future payments adjusted to cover the difference or pay the difference in full to maintain the lowest possible payment.

Extra payments to your mortgage principal loan balance can reduce your overall interest costs and shorten the term of your loan. Whether you are making one extra full payment or just a small amount each month, make sure to contact your lender to let them know you're making an extra principal payment so your funds are correctly applied.

Mortgage payments are due on the 1st of every month. Typically, you'll also have a 15 day grace period, meaning so long as your payment is received by the 15th of the month you won't see a late fee or receive a late payment notice.

Your mortgage payment is considered late if it's paid 30 days after your official due date.

Mortgage Servicing

A prepayment penalty is a fee that lenders may charge if you pay your loan off or refinance prior to a pre-determined date.

None of the mortgage programs we offer at M&T Bank have penalties for any type of prepayment. You'll be able to pay your mortgage off at any time, without any additional charges.

Your lien release or mortgage discharge will be mailed to the address we have on file 10 business days after the loan is paid in full.

A successor in interest is someone who has an ownership interest in real estate property as a result of a transfer from an original borrower/owner. You may qualify as a successor in interest if the property was transferred to you:

  • As a surviving heir, due to the death of a relative or property co-owner
  • From a living spouse or parent
  • As a result of a divorce or legal separation
  • As part of a living trust

Learn more about Successor in Interest >

Once you learn that you have a qualifying real estate property ownership interest, you will need to apply to be a successor in interest and provide us documentation to confirm your identity and your interest. The necessary documentation will vary depending on your specific situation.

You can contact us for documentation information in one of two ways:

  • Submit a written request to:
    M&T Bank
    PO Box 1288
    Buffalo, NY 14201

  • Call 1-800-724-2224 (Monday–Friday 8:30am–9:00pm ET)

Learn more about Successor in Interest >

Please send us with the following documentation:

  • A legible copy of the death certificate with a visual seal
  • A copy of the Letters of Testimony appointment an Executor of the Estate, if applicable

Documentation can be sent in the following ways:

  • Mail:
    M&T Bank
    PO Box 1288
    Buffalo NY, 14201

  • Fax: 1-866-409-4652

  • Email: mtgservice@mtb.com

If you now have an ownership interest in the property as a result of the death, learn how to apply to be confirmed a successor in interest.

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