| What information am I going to need?
The documentation required to process your loan depends upon the loan program you have chosen, the type of property, whether it is a purchase or refinance and other details specifically applicable to your financial situation. Each borrower will be required to supply the information requested before we can make a decision on your mortgage application. A Mortgage Consultant will go over this in detail with you when you call. The following will help you to begin accumulating your documentation.
INCOME INFORMATION
- MOST RECENT YEAR-TO-DATE PAY STUB
- SIGNED LAST TWO YEARS FEDERAL INCOME TAX RETURNS, INCLUDING ALL SCHEDULES
- LAST TWO YEARS W-2'S
- MOST RECENT PROFIT AND LOSS STATEMENT OF YOUR BUSINESS
- COPY OF YOUR SEPARATION/DIVORCE DECREE, IF RELYING ON ALIMONY/CHILD SUPPORT AS INCOME OR DEBT
- COPY OF PENSION AWARD LETTER (IF APPLICABLE)
ASSETS/LIABILITIES
- COPIES OF YOUR LAST TWO MONTH'S BANK STATEMENT (ALL PAGES)
- COPIES OF LAST TWO MONTH'S STATEMENT OF STOCK, BONDS, & INVESTMENT ACCOUNTS
- SIGNED GIFT CERTIFICATION, IF APPLICABLE
- COPIES OF LEASE, MAINTENANCE BILLS & OR TAX BILLS FOR ANY PROPERTIES YOU OWN
- MOST RECENT TWELVE (12) MONTH'S CANCELED MORTGAGE/RENT CHECKS
PROPERTY INFORMATION
- SIGNED CONTRACT OF SALE FOR HOME YOU'RE BUYING/SELLING
- COPY OF DEED
- COPY OF OFFERING PLAN WITH ALL AMENDMENTS
- COPY OF PROPRIETARY LEASE AND STOCK CERTIFICATE
- COPY OF LAST 2 YEAR'S FINANCIAL STATEMENTS & MOST RECENT FDA's
- COMPLETE CONDO/CO-OP SUPPLEMENT FORM
GENERAL INFORMATION
- FULLY COMPLETED AND SIGNED MORTGAGE APPLICATION
- RATE LOCK FEE, IF APPLICABLE
- DATED AND SIGNED RATE LOCK AGREEMENT/FLOATING RATE ACKNOWLEDGMENT
- COMPLETED PROPERTY INFORMATION CONTACT SHEET
- ADDENDUM TO LOCK-IN
- DATED AND SIGNED AUTHORIZATION TO RELEASE INFORMATION
- SIGNED STATEMENT OF OCCUPANCY FORM
- SIGNED FAIR CREDIT REPORTING LETTER
- TRANSFER OF SERVICING NOTICE
- SIGNED CERTIFICATION FORM
- RESIDENT ALIEN GREEN CARD ,IF APPLICABLE
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What is the difference between fixed rate and variable or adjustable rate mortgages?
A fixed rate mortgage is a loan where the principal and interest payment never change during the life of the loan.
A variable or adjustable rate mortgage is a loan where the interest rate can change periodically. The changes in the interest rate are tied to market rates that exist at the time the rate is subject to change. They usually offer lower interest rates than fixed rate mortgages, but can adjust upward if interest rates rise. There is a predefined cap which defines how high the interest rate can adjust.
Fixed rate mortgages are beneficial to those who prefer a fixed payment schedule.
Adjustable rate mortgages are advantageous for those who do not plan to stay in their home for a long time, for those borrowers who do not qualify at higher fixed interest rates, and those who can financially handle fluctuating payments.
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How do adjustable rate mortgages work?
There are many types of adjustable rate mortgages, but all have some common features.
One common feature of adjustable rate mortgages is an interest rate adjustment that occurs after a stipulated number of payments have been made. The interest rate can increase or decrease depending on how the new interest rate is calculated. The interest rate change is based upon a predetermined index value and a margin. If a mortgagor currently has an interest rate that is pending adjustment, the new rate would be calculated by adding the current index rate and a margin. For example, if the mortgagor’s current rate was 6.000% with a 2.750% margin, the new rate would be determined by adding the current index rate (5.000% as an example) to the margin. In this example the new interest rate would be 7.750%.
The maximum amount the interest rate can change during any adjustment period is usually fixed. This maximum adjustment is called the cap. Adjustable rate mortgages also have a lifetime cap, preventing the interest rate from exceeding a predetermined rate.
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How long does it take to receive a Mortgage Commitment?
Typically, a mortgage commitment is issued in approximately 21 - 28 days. Delays can be caused if any data requested by the bank is not delivered in a timely manner.
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What are closing costs?
Closing costs are those fees paid to effect the closing of a mortgage, such as points, title insurance fees, survey fees, attorney fees, recording fees and mortgage tax to name a few. Depending on the number of points, closing costs are usually 2-6% of the loan balance.
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What are points?
A point is equal to one percent of a loan amount. Points are usually part of the closing costs to be paid at the closing of the loan. Points are considered as part of the finance charge in computing the Annual Percentage Rate (APR).
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What are escrow accounts and how much do I need in my escrow account?
Escrows are payments made by a mortgagor to a mortgagee for the purpose of paying the mortgagor's taxes, insurance, and other payments associated with home ownership. The mortgagee is responsible for the timely disbursement of escrow funds to pay the mortgagor's bills as they come due.
A mortgage company collects funds for placement into the mortgagor's escrow account with the mortgagor's monthly payment. An escrow account has sufficient funds if there is enough to pay all bills when they come due.
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