Mortgage Classroom

Find important mortgage related information and answers to your questions right here. The more you know about the mortgage process, the better prepared you will be to consider when to refinance.

Available Options

Tell Me About the Mortgage Process

Knowing how the mortgage process works results in a mortgage that works better for you. We have simplified everything down to four easy steps:

  1. Finding the right mortgage - Conveniently search and compare a variety of mortgage products and programs online to find the best match for your financial situation. View More Options to learn more.
  2. Applying - When you find the mortgage that's right for you, simply start your application online. After you Start Application , a dedicated Mortgage Representative will contact you to complete the application and continue the process. Your Mortgage Representative will answer any questions you may have about the mortgage process, interest rates and product information. You can also apply by phone or in person at your nearest Citi branch.
  3. Processing - We will send you a Welcome Package and prepare your mortgage for closing.

    Depending upon the type of transaction you apply for, we will order the appraisal from a licensed appraiser who is familiar with home values in your area. Different types of appraisals are used for different types of financing and mortgage amounts. Most often the appraiser will need to view both the inside and outside of the home, while other times they are able to do an evaluation from the street.

    Title insurance will be necessary if you are purchasing a home. Your Mortgage Representative will work with the real estate broker or seller to insure the title work is ordered as soon as possible. If you are refinancing, we will order the required title information. The title insurance policy is used to confirm the legal status of the lien on your property and to prepare the closing documents.

  4. Closing - Your Mortgage Representative will contact you to coordinate your closing date. Your mortgage closing date will be scheduled when we receive your completed Welcome Package forms, the appraisal, and the title work. We will arrange a location convenient to you to have you sign the necessary closing documents.

We make the mortgage process simple. Put the process to work for you today and find the mortgage that is right for you.

If you have any questions, call 1-800-248-4638 to talk to our experienced Mortgage Representatives. Notice: Calls are randomly monitored and recorded to ensure quality service.

Fixed Rate Mortgage - An Interest Rate That Never Changes

With a fixed rate mortgage you never worry about your interest rate going up and raising your mortgage payment. That means you're able to budget better.

With Fixed Rate mortgage products you can choose from a variety of mortgage repayment terms and enjoy a set interest rate for the life of your mortgage. Use the chart below to compare fixed loan rates.

Compare Fixed Rate to Adjustable Rate Loans.

Are you ready for a new mortgage? Start your mortgage application here. The process will be completed with the help of our experienced Mortgage Representative after you have provided your information.

If you have any questions, call 1-800-248-4638 to talk to our experienced Mortgage Representatives. Notice: Calls are randomly monitored and recorded to ensure quality service.

What you should know about ARMs

With an Adjustable Rate Mortgage (ARM), you experience a lower, fixed interest rate for a set period of time then the rate adjusts based on financial markets for the remainder of the mortgage term. So, your monthly payments are lower at first, but then down the road may increase if interest rates go up.

Changes in payments are due to the fact that the interest rate on your mortgage is not fixed. Instead, it changes over time according to a formula and an adjustment schedule. The formula is typically a base rate ("index") plus a certain percentage ("margin"). As an example, a LIBOR index (London Market Interbank Offered Rates) rate of 2.00% plus a margin of 2.25% results in a "fully indexed rate" of 4.25%. So if the base/index interest rate has increased when it is time for a scheduled rate adjustment, your interest rate and monthly payment will also increase.

Some ARMs have a reduced interest rate (start rate) for an initial period of time. This rate is less than the current index plus the margin (the "fully indexed rate"). This means that your interest rate and monthly payment will be lower than normal for that initial period, but are likely to increase when that period is over, even if the index rate does not change. Your interest rate and monthly payment will increase even more if the index rate rises.

Citi has a choice of ARMs with a variety of initial fixed rate periods. In addition, we also offer an interest only ARM where you only pay the interest on your loan plus any applicable taxes and insurance. An interest only mortgage requires payment of only the interest amount for the first few years of the loan. If the interest only payments are made, then at the end of the interest only period you can expect:

  • The original principal amount borrowed will still be owed.
  • Payments will increase even if the interest rate stays the same.

Compare Fixed Rate to Adjustable Rate Loans.

Are you ready for a new mortgage? Start your mortgage application here. The process will be completed with the help of our experienced Mortgage Representative after you have provided your information.

If you have any questions, call 1-800-248-4638 to talk to our experienced Mortgage Representatives. Notice: Calls are randomly monitored and recorded to ensure quality service.

Fixed rates vs Adjustable Rates Table
Fixed Rate Adjustable Rate
Benefits Fixed Rates Benifits
  • Your interest rate stays the same for the entire life of your mortgage.
  • You know the amount of your monthly payments.
Adjustable Rates Benefits
  • Your start rate is usually lower than the interest rate on a Fixed Rate mortgage.
  • Your interest rate may decrease or stay the same when it is adjusted.
Risks Fixed Rates Risk
  • Your interest rate is usually higher than the start rate on an Adjustable Rate mortgage.
  • The interest rate stays the same for the entire life of the mortgage, even if market interest rates decline.
Adjustable Rates Risk
  • If the index increases, your interest rate and monthly payment will increase. There are limits on how much your rate can increase or decrease at each adjustment and over the life of the mortgage.
  • If your start rate is less than the fully indexed rate, your interest rate and monthly payment may increase significantly at the first adjustment - even if the Index does not change. Your interest rate and monthly payment will increase even more if the Index rises.

Get into a Loan with the Lowest Down Payment

If you meet the qualifications, you may be eligible for a mortgage that requires little or no down payment. FHA (Federal Housing Administration) and VA (Veteran's Administration) mortgages are government-backed programs that offer fewer restrictions than conventional mortgages.

For first-time homebuyers and active or veteran military personnel, an FHA or VA loan can be a great mortgage solution with benefits that include:

  • Low down payments (FHA offers as low as 3% of the purchase price)
  • Larger mortgages to finance larger homes
  • Options for seller to pay the purchase points or closing costs
  • Cash gift allowed for down payment
  • Availability of 15 or 30-year term

FHA mortgages are available as both fixed and adjustable rate mortgages. The VA offers mortgages that are fixed rate only.

If you have any questions regarding a FHA or VA mortgages or want to know how to qualify, call 1-800-248-4638 to speak with our experienced Mortgage Representatives. Notice: Calls are randomly monitored and recorded to ensure quality service.

Community Lending

Citi has long been committed to making the communities in which it operates better. We live up to this commitment through a variety of community lending programs designed to extend the dream of home ownership to everyone.

Ask your Mortgage Representative about our homeownership education and counseling programs by calling 1-800-248-4638. Notice: Calls are randomly monitored and recorded to ensure quality service.

Insurance Rates

The cost of borrowing money is interest. Your interest rate, along with the term and amount of your mortgage, determines the size of your monthly principal & interest payment.

Interest rates vary across the different types of mortgages we offer, as well as how much you are borrowing compared to the value of the home. Interest rates may also vary based on other factors such as whether the home will be a primary or secondary residence.

You can "buy down" the interest rate on your loan by paying points. A point is calculated as 1% of the loan amount so if you are borrowing $100,000, 1 point is equal to $1,000. If you have the cash, buying down the rate is a great way to reduce the total amount of interest you pay over the life of your loan.

APR (Annual Percentage Rate)

An annual percentage rate (APR) shows the total annual cost of a mortgage (including closing costs, interest, fees, lender points) over its full term, expressed as a yearly rate.

APR is a good way to compare mortgages as it reflects the true cost of the loan.

Identifying the right down payment option for you

We can help you understand and select a down payment option that best fits your situation. This is an important decision as the amount of your down payment impacts:

  • Eligibility for certain loan products
  • Loan amount and size of your monthly payments
  • The amount of cash available for other home buying costs

The standard down payment amount is 20% of the home's purchase price. Down payment amounts typically range between 3% and 20%, depending on the mortgage product. This amount is paid in cash to the seller. The higher your down payment, the lower your loan amount. For example, a 20% down payment on a $200,000 property is $40,000. Your mortgage loan amount on the $200,000 property would be $160,000.

If you don't have 20% to put down, you may apply for a mortgage that requires mortgage insurance - in addition to your regular payment, you pay a mortgage insurance company to insure the lender against nonpayment or default on a mortgage

If you have any questions or would like us to walk you through the various options, call 1-800-248-4638 to talk to our experienced Mortgage Representatives. Notice: Calls are randomly monitored and recorded to ensure quality service.

Compare Fixed rates vs Adjustable Rates
Fixed Rate Adjustable Rate
Benefits Fixed Rate Benifits
  • Your interest rate stays the same for the entire life of your mortgage.
  • You know the amount of your monthly payments.
Adjustable Rate Benifits
  • Your start rate is usually lower than the interest rate on a Fixed Rate mortgage.
  • Your interest rate may decrease or stay the same when it is adjusted.
Risks Fixed Rate Risks
  • Your interest rate is usually higher than the start rate on an Adjustable Rate mortgage.
  • The interest rate stays the same for the entire life of the mortgage, even if market interest rates decline.
Adjustable Rate Risks
  • If the index increases, your interest rate and monthly payment will increase. There are limits on how much your rate can increase or decrease at each adjustment and over the life of the mortgage.
  • If your start rate is less than the fully indexed rate, your interest rate and monthly payment may increase significantly at the first adjustment - even if the Index does not change. Your interest rate and monthly payment will increase even more if the Index rises.

"Should I Pay Points?"

One point is equal to one percent of the loan amount. If you choose to pay points you can lower your interest rate.

Escrowing My Taxes and Insurance

We require an escrow amount on all mortgages for the payment of taxes, special assessments, hazards, flood and/or mortgage insurance. You will normally be expected to prepay (into your escrow account) your first 6 months of taxes and your first 2 months of homeowner's insurance.

Call 1-800-248-4638 to talk to our experienced Mortgage Representatives. Our experienced Mortgage Representatives will help you understand if paying points or using an escrow account makes sense for you. Notice: Calls are randomly monitored and recorded to ensure quality service.

Insurance

There are typically three types of insurance policies involved in getting a mortgage and owning a home.

Title Insurance

Title insurance insures property owners as well as lenders against any title disputes that may arise in the future.

Homeowner's Insurance

Homeowner's insurance protects you not only against property damage caused by a fire or a severe rainstorm, but can also shield you against theft, vandalism, as well as for stolen cash and personal items.

Basically, the more coverage you want, the higher your monthly premium will be. If a catastrophe does happen, homeowner's insurance should cover the costs to rebuild your home. If you live in an area that' prone to natural disasters, like earthquakes and floods, you'll need separate policies.

Mortgage Insurance

Mortgage guarantee insurance is an insurance policy (often called MI or PMI) that insures the lender against nonpayment or default on your mortgage. If you do not put down at least 20% of the purchase price of your new home, we typically require you to purchase mortgage insurance. Mortgage insurance payments are included in your monthly payment.

It may be possible to cancel private mortgage insurance at some point, such as when your loan balance is reduced to a certain amount. For loans on single family principal residences, federal law requires automatic termination of mortgage insurance for many borrowers when their loan balance is scheduled to reach 78% of the original property value.

Notice: Calls are randomly monitored and recorded to ensure quality service.

Closing Costs

Simply put, closing costs/fees are the various costs associated with closing a loan. The different types of closing costs can include:

  • Lender Fees - These are the fees that are paid to us to cover the costs of processing your loan. Typically, we charge an application fee to cover costs associated with checking your credit, underwriting your loan, as well as other activities done to prepare for your closing.
  • Third-party Fees - These are fees that are paid to third parties performing services in connection with the closing of your loan, for example to a title company to obtain a title insurance policy on the home or to an appraiser to ascertain the value of the home.
  • Impound/Escrow Amounts - These amounts are collected when we will pay your property taxes and homeowner's insurance on your behalf. Typically, we require you to put a certain portion of funds in your escrow account at closing to ensure there is enough to pay your taxes and insurance when they are due. Thereafter, additional impound/escrow amounts will be collected with each monthly mortgage payment.