Frequently Asked Questions

Retail Banking Mortgage Frequently Asked Questions
What is the difference between a conventional loan and an FHA loan?

Contrary to a Conventional Loan, the FHA Loan is secured and guaranteed by an agency of the federal government and only applies to the primary residence, while a conventional loan can be used to purchase or refinance your primary residence, second home or investment.

What is a conforming loan?

A conventional loan that is eligible for being sold to investors like Freddie Mac and Fannie Mae because it meets the investors’ requirements for income, credit, property and loan amount.

The bank where I applied for the loan informs me that my property is located
in a flood zone. Is it compulsory to have flood insurance?​​

Yes, it is compulsory. If you do not insure your property against flood losses, the bank will not be able give you the requested loan, since federal regulations demand this insurance if the property is located in a flood zone. You should know that if the property suffers damages due to floods and it is not insured, you will not be eligible to receive assistance from FEMA.

What is the difference between hazard insurance and mortgage insurance?

Hazard insurance protects the owner of the property and the bank against loss caused by fire, hurricanes, or earthquakes, and it only covers the value of the structure.

Mortgage Insurance allows you to finance a larger amount, since it offers the bank an additional guarantee that covers the amount of the loan and protects it if the debtor does not meet his/her​ obligation by failing to make the payments. The amount varies depending on the financing program.

It is important not to confuse mortgage insurance with the optional insurance that pays off the mortgage in the event of the debtor’s death.

​Sometime ago I declared bankruptcy, how much time do I have to wait
to apply for credit?

The details of your bankruptcy will appear in your credit report for seven (7) years. This does not mean that during this time you cannot apply and obtain new credit. If you provide the following information, we will evaluate your mortgage loan application preliminarily and explain the procedure:

  • Letter indicating the reasons for declaring bankruptcy, including documents that provide evidence of this information.
  • Copy of the bankruptcy petition and the debts that were included.
  • Copy of the release of the Bankruptcy Court.
  • Letter of recommendation from the trustee.​​​​​​​​​​​​​​​​​​​​​​​
What form must I fill out to start the Loss Mitigation process?