Mortgage Frequently Asked Questions

You may get started with your mortgage application in a number of ways:

• By phone: 844.HSBC.MTG 844.472.2684
• In person: find a local Mortgage Consultant
  

HSBC offers two types of full documentation refinancing: Limited Cash Out Refinance and Cash Out[@allcashpurchasereimbursement] Refinance.

A Limited Cash Out Refinance allows you to pay off your existing mortgage and include the closing costs in the new mortgage amount. You may use this type of refinance program to reduce your interest rate, loan term or both.

A Cash Out Refinance allows you to turn the equity you have built up in your home into cash which you can use for a variety of purposes. Some of HSBC's programs allow for cash out.

The most common mortgages are fixed- and adjustable-rate mortgages (ARM)[@arm].

Fixed-rate mortgages offer the stability of regular monthly payments over a given length of time, or term. Many people feel these are ideal because they make it easy to budget family finances and there is no risk of the rate increasing.

Adjustable-rate mortgage (ARM) programs offer you the flexibility of an initial interest rate and payment lower than a standard fixed-rate mortgage. ARM mortgages may also be a great option for home buyers who do not plan to stay in their current home for a long period of time.

An escrow account is a separate account that holds funds for the purpose of paying bills such as homeowner's insurance and property taxes. HSBC collects the funds to be deposited into the account each month along with your monthly payment and then pays the bills for you when they come due. By taking the annual amounts charged for homeowner's insurance, property taxes and other annually paid items and dividing them by 12, the escrow department establishes a payment amount that is added to your monthly principal and interest payment. Spreading the cost of these expenses over 12 months makes it easier for you to budget those expenses, and you won't have to come up with additional cash when bills are due. For some loans, escrow accounts are a requirement.

If you have homeowner’s insurance collected as part of your escrow account, HSBC will receive your insurance invoice and disburse the appropriate funds from your escrow account. Your monthly billing statement will display any disbursements.

If your mortgage is not escrowed, you will be directly billed and responsible for paying your homeowner’s insurance.

If you have real estate taxes collected as part of your escrow account, HSBC will receive your tax invoices and disburse the funds from your escrow account. Your monthly billing statement and year-end statement will display any amounts disbursed.

If your mortgage is not escrowed, you will be directly billed and responsible for paying your real estate taxes.

Supplemental bills are often issued in addition to yearly real estate tax bills and are your responsibility. They are not collected through your escrow account.

Our complimentary mortgage calculator can help you with this question.

Private Mortgage Insurance (PMI) is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Private Mortgage Insurance is generally required for a loan with an initial loan to value (LTV) percentage in excess of 80%. In most cases, this will mean that you will have to pay Private Mortgage Insurance if your down payment is less than 20% of the property value or purchase price, whichever is lower.

If you have an existing loan with PMI and have questions about cancellation please contact our Mortgage Customer Service Department at 855.527.8400 (Monday through Friday 8am to 8pm EST and Saturday 8am to 5pm EST).

Your mortgage payment due date is listed on your monthly billing statement or coupon. A late charge is assessed if the payment has not been received and processed by the date noted. It is very important that you establish and maintain good credit by making sure your payment reaches us by the due date each month. Late payments can affect your credit record.