Are you a direct lender? Yes, we underwrite, close and fund all of our loans.
Can you shop my loan just like a mortgage broker? Actually, yes. One of the privileges of being a bank and a mortgage banker is that due to our net worth we can fund the loans with our money and sell the loans to another entity if it makes sense to do so. This allows us the flexibility to offer a huge variety of mortgage programs in just the same way that a mortgage broker does except that we have complete control of the process from application to funding...and having this control helps eliminate potentially unwelcome surprises that can sometimes occur if you are not dealing with a direct lender.
I am a mortgage broker, can you work with me? Unfortunately, we cannot. We only lend direct to the consumer.
Are stated income, no income, no doc and no ratio loans REALLY still available? Yes and no. It depends on your definition of some of these terms. If you have verifiable employment or self-employment there are still options in the way of stated income loans, stated income/stated asset loans , no income verification loans.
Do you offer commercial loans? Yes, we offer commercial loans through the bank's commercial division nationwide.
Do you offer hard money loans? No, but we may be able to refer you to a reputable lender that offers hard money loans if you have no other alternatives.
Underwriting
What is “Payment Shock?” Payment shock is a term used by mortgage underwriters to refer to how much your new payment is going up from what you are currently paying for your housing expense. It is typically a very important factor in an underwriter’s decision regarding a loan.
What is a “debt to income ratio” or DTI? This is the ratio of your monthly payments to your GROSS monthly income. In other words, if the total of your monthly payments including your mortgage is $2000 and your gross monthly income is $6000 then your debt to income ratio is 33%. Only debts listed on the credit report and any child support, alimony or child care are typically counted in the ratio.
Credit and Credit Scores
What is a FICO score? FICO scores were developed by Fair Issac Corporation as a tool to help lenders evaluate the creditworthiness of consumers. Essentially, they represent the quality of your credit in a number. The higher the number the better your credit and they are an absolutely crucial element of any mortgage file – especially a stated income or no income loan.
What is a middle credit score? Mortgage lenders use the middle of the 3 FICO scores that we get from each of the credit bureaus – not the average of the three – so if you have a 679 from Equifax, a 680 from Experian and 681 from Trans Union we will use 680 as our representative score.
How come the credit reports I get online don’t give me the same credit scores that lenders use? Good question. Mortgage lenders use FICO scores and it is a mystery to those of us in the lending community as to why the credit bureaus give out anything but FICO scores since it does nothing but create confusion for all involved.
Piggyback second mortgages and PMI
Is Private Mortgage Insurance (PMI) tax deductible? Yes, if it is paid in connection with the purchase/acquisition of a property, but there are limitations so please refer to either IRS publication 936 or check with your trusted tax advisor.
What is a “piggyback” second mortgage? A piggyback second mortgage (or equity line) is a way around a 20% down payment and PMI. In the days before private mortgage insurance you had to have at least 20% down to buy a house. PMI made 100% financing possible with the creation of an insurance policy paid by the borrower to protect the lender in the event of default. PMI has limitations, so many banks created “purchase money” second mortgages to enable those who either did not want PMI (prior to 2007 it was not tax deductible) to be able to buy a home with a smaller down payment. It is also used to avoid paying a premium for a jumbo mortgage by combining it with a first mortgage at the “conforming limit” enabling borrowers to
What is the definition of “loan to value”? Loan to value is the relationship (expressed as a percentage) of your loan vs. the value of your property. If you owe $95,000 on a home valued at $100,000 then you have a 95% “loan to value.” The lower the loan to value the less risk there is for the lender.
What is the definition of “combined loan to value”? Combined loan to value is a term used to when you have more than 1 mortgage on the property. For example, if your home is valued at $100,000 and you have a first mortgage of $80,000 and a second mortgage of $15,000 then you have a combined loan to value of 95% (80 + 15 = 95).
Closing Costs
What is a discount point? A discount point is 1% of a loan amount.
What is an Origination Fee? An origination fee is a fee charged by some mortgage lenders and brokers as compensation for processing and closing your loan.
Are mortgage “discount points” tax deductible? In most cases, yes, but please refer to IRS publication 936 for details. It should be pointed out that points for a refinance can usually only be deducted over the life of the line.
How much can the builder or seller pay towards my closing costs and points?
Yes, but how much depends on how much you are putting down. For the purchase of a primary residence with 5% down the seller can typically pay 3% of the loan amount(s) towards your closing costs/discount points and they can typically pay up to 6% with a 10% down payment.
* There are a few counties and some states where cannot offer a few of our mortgage programs.
