Mortgage FAQ

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Buying

 

Whether you are a first time home-buyer or not, purchasing a home is a big decision. Putting an offer on a home and deciding what is best for you can be a stressful event. In order to make this process easier, you should consider getting a free prequalification for a loan.

 

After being pre-qualified, you can go out and start looking for homes with more bargaining power. The seller will know that you are serious about the home because you have already taken the initiative to get pre-qualified for your loan. You will be more knowledgeable about how much you can afford and how the home-buying process works. If you decide to purchase a home for the first time, upgrade to a different home, obtain a second home, or get an investment property, we can make your mortgage transaction fast and easy.   

 

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Refinancing

 

Refinancing your current home loan has many possible benefits. Depending on the situation that you are in, it may be an action that you want to take. Some reasons to refinance are as follows:

 

Get cash-out up to 125% of your home’s value 

Debt consolidation 

Get money for home improvements 

Lower your interest rate and make your payments smaller 

Eliminate mortgage insurance 

 

Contact us and we can tell you what benefits you would receive from refinancing in your situation. Or, if you are already interested in refinancing, fill out the free prequalification form.

 

What are the types of Mortgage Programs Available?

We understand that each person has a unique situation. To accommodate this, Our mortgage partners offer a large spectrum of loan programs that can be customized to fit each buyer’s needs. Using our knowledge of the market situation, we will be able to find the mortgage that is right for you. Some of the loan programs commonly offered are as follows:

 

30, 40, 50, 15, and 20 year fixed 

ARMs 

1% Option ARMs 

Interest Only 

10/30 Interest Only 

FHA min 3.5% down

2/28 or 3/27

5/1 and 3/1 LIBORS 

Balloons 

 

These loan programs can be accompanied with the following conditions:

 

Stated income 

Stated assets 

No doc 

100% financing 

 

What do all these Mortgage Terms mean? 

 

Amortization: The payment of a debt distributed over a given amount of time. 

 

Negative Amortization: A condition in which the value of your loan exceeds the initial value of the loan.

 

ARM (adjustable rate mortgage): A mortgage in which the rate is based on a fixed margin which is added to the current index to give the complete rate. This mortgage has fixed caps which allow the mortgage to increase only a certain amount in a given time frame.

 

PMI (private mortgage insurance): Insurance which is required to be purchased if the loan amount is more than 80% of the property value. This insurance can be avoided by obtaining two loans (such as an 80/20).

 

LTV: Given in a percentage, it is the amount of your loan divided by the value of the property.

 

CLTV: This is a percentage value that describes the total amount borrowed divided by the value of the property. This ratio will take into account each loan for the property.

 

P & I (principal and interest): A regularly scheduled payment which is structured to pay down both principle and interest over the life of the loan.

 

No Doc Loans: No documentation is required to verify employment, income, or assets.

 

Stated Income: No documentation is provided to prove your monthly income, but documentation is required to prove that you are employed.

 

Stated Assets: No documentation is required to prove your assets (such as bank accounts).

 

100% financing: A loan type in which you are required to come in with no money down. In order to avoid mortgage insurance, the loan is normally structured as an 80/20 where you have two loans. One loan has a value of 80% of the property and the other has a 20% value.

 

Fixed loans: A mortgage in which your payment is fixed throughout the life of the loan. These can be amortized over 15, 20, 30, and 40 years.

 

Interest Only: A mortgage in which you are only required to pay interest. The payment is much lower than the P & I payment.

 

10/30 Interest Only: A 30 year fixed loan with interest only payments available for the first 10 years of the loan.

 

1% Option ARMs*: An ARM which has an introductory rate of 1%. After the introductory period, the rate adjusts monthly according to a fixed margin and the index. This loan re-amortizes each month and gives you four payment options: interest only, 30- year, 15-year, and negative amortization payment.

 

2/28 and 3/27: A mortgage which is fixed for the first 2 or 3 years and then switches to an ARM.

 

5/1 and 3/1 LIBORS: A mortgage which is fixed for the first 5 or 3 years. After that term, it switches to an ARM which adjusts every year based on the LIBOR index.

 

* 1.152% APR, may result in negative amortization.