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Is there
an application fee?
Yes.
There is a $200 application fee that covers your
credit report and automated underwriting engine
costs. At closing, we'll credit your application
fee back to you.
Is there a fee to get a rate quote?
No.
There is no fee to get a rate quote.
Will you run my credit to get a rate quote?
No. We
don't ask for your social security number and will
not run your credit. We'll assume you qualify. Only
after approval of your Good Faith Estimate, and you
apply with us, then we'll begin your application. We
will obtain your credit report at that time.
Are there any upfront fees after I apply?
Yes.
An appraisal is generally required in all
cases. The appraisal is usually the only item you
will pay in advance of closing. For purchase
transactions, you may be required to pay for a
survey, home inspections, or other items required
according to your purchase contract. Once the
appraisal and/or other costs are paid, we'll show
"paid" for each item on your GFE and these
costs will not be charged at closing.
How
long does it take to close my loan?
Usually
about 2 weeks to complete the loan process. We can
have your application approved usually within a few
hours after you approve your GFE and apply.
What is the difference between pre-approval and
pre-qualification?
The pre-approval process is
much more complete than pre-qualification. For
pre-qualification, the loan officer asks you a
few questions and provides you with a pre-qualification
letter. Pre-approval includes all the steps of a
full approval, except for the appraisal and
title search. Pre-approval can put you in a
better negotiating position, much like a cash
buyer.
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When does it make sense to refinance?
Usually people refinance to
save money, either by obtaining a lower interest
rate or by reducing the term of the loan.
Refinancing is also a way to convert an
adjustable loan to a fixed loan or to
consolidate debts. The decision to refinance can
be difficult, since there are several reasons to
refinance. However, if you are looking to save
money, try this calculation:
Calculate the total cost of the refinance
Calculate the monthly savings
Divide the total cost of the refinance (#1) by
the monthly savings (#2). This is the "break
even" time. If you own the house longer than
this, you will save money by refinancing.
Since refinancing is a complex topic, consult a
mortgage professional.
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What is a rate lock?
A rate lock is a contractual
agreement between the lender and buyer. There
are four components to a rate lock: loan
program, interest rate, points, and the length
of the lock.
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What is the difference between a mortgage broker and
a lender?
A mortgage broker counsels you
on the loans available from different
wholesalers, takes your application, and usually
processes the loan which involves putting
together the complete file of information about
your transaction including the credit report,
appraisal, verification of your employment and
assets, and so on. When the file is complete,
but sometimes sooner, the lender "underwrites"
the loan, which means deciding whether or not
you are an acceptable risk.
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Will I save money going directly to a mortgage
lender?
Not necessarily. In fact, if
you are a reasonably astute shopper, you will
probably do better dealing with a mortgage
broker. Mortgage brokers do not add any net cost
to the lending process, because they perform
functions that would otherwise have to be done
by employees of the lender. Furthermore, because
mortgage brokers deal with multiple lenders --
in a typical case, 25 to 30, sometimes more --
they can shop for the best terms available on
any given day. In addition, they can find the
lenders who specialize in various market niches
that many other lenders avoid, such as loans to
applicants with poor credit ratings, loans to
borrowers who do not intend to occupy the
property, loans with minimal or no down payment,
and so on.
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What is a full documented loan?
Both income and assets are
disclosed and verified, and income is used in
determining the applicant's ability to repay the
mortgage. Formal verification requires the
borrower's employer to verify employment and the
borrower's bank to verify deposits. Alternative
documentation, designed to save time, accepts
copies of the borrower's original bank
statements, W-2s and paycheck stubs.
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What are the other types of loans?
Stated income/verified assets:
Income is disclosed and the source of the income
is verified, but the amount is not verified.
Assets are verified, and must meet an adequacy
standard such as, for example, 6 months of
stated income and 2 months of expected monthly
housing expense.
Stated income/stated assets: Both income and
assets are disclosed but not verified. However,
the source of the borrower's income is verified.
No ratio: Income is disclosed and verified but
not used in qualifying the borrower. The
standard rule that the borrower's housing
expense cannot exceed some specified percent of
income, is ignored. Assets are disclosed and
verified.
No income: Income is not disclosed, but assets
are disclosed and verified, and must meet an
adequacy standard.
Stated Assets or No asset verification: Assets
are disclosed but not verified, income is
disclosed, verified and used to qualify the
applicant.
No asset: Assets are not disclosed, but income
is disclosed, verified and used to qualify the
applicant.
No income/no assets: Neither income nor assets
are disclosed.
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What is a good faith estimate?
It is the list of settlement
charges that the lender is obliged to provide
the borrower within three business days of
receiving the loan application. We always
provide a Good Faith Estimate upfront before you
do business with us. There are no surprises at
closing with us.
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What is a conforming loan?
A loan eligible for purchase
by the two major Federal agencies that buy
mortgages, Fannie Mae and Freddie Mac. The
single family loan limit is currently $417,000.
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What is a jumbo mortgage?
A mortgage larger than the
maximum eligible for conforming loan by the
two Federal agencies, Fannie Mae and Freddie
Mac.
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What are points?
It is an upfront cash payment
required by the lender as part of the charge for
the loan, expressed as a percent of the loan
amount; e.g., "2 points" means a charge equal to
2% of the loan balance.
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What is a pre-qualification?
This is the process of
determining whether a customer has enough cash
and sufficient income to meet the qualification
requirements set by the lender on a requested
loan. A pre-qualification is subject to
verification of the information provided by the
applicant. A pre-qualification is short of
approval because it does not take account of the
credit history of the borrower.
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