|
|
|
|
|
What kind of documentation will I need to provide so my loan can be processed?
Different loan programs require different types of documentation. Certain loan programs require no documentation at all. Typically, you will be required to provide all or some of the following documents:
- Contracts
- If purchasing
- A copy of the contract of sale
- If you are selling your current residence, provide a copy of the sales contract
- If refinancing
- A copy of the deed, survey and title policy
- Employment
- If you are employed
- A copy of the most recent month's paystubs
- Most recent W-2
- If you are self-employed
- Year-to-date profit and loss statements and two years tax returns
- Other Income Sources
- If you receive social security or pension income
- A copy of the entitlement letter
- Current Financial Situation
- Assets (including checking and savings accounts, money funds, stocks, bonds, investment properties, etc.)
- Copies of the statements for all accounts (all pages)
- If you are receiving a gift for any part of your down payment or closing costs, provide a gift letter
- If you are leasing your current residence, provide a copy of the lease
- Debts and liabilities (including personal loans and charge accounts, mortgages, stock pledges, etc.)
- If divorced, provide a copy of the divorce decree/separation agreement
- Other Items Needed
- Personal check to Sterling National Mortgage Company, Inc. for application fee
- Your attorney's name, address and telephone number
- If you are not a US citizen, provide a copy of your Green Card or Visa
Top of Page |
|
What is the difference between fixed rate and adjustable rate mortgages?
A fixed rate mortgage locks in at a set interest rate from the start and remains the same throughout the life of the loan.
An adjustable rate mortgage (ARM) is a loan where the interest rate changes periodically. The fluctuations in the interest rate coincide with the market rates. There is a predefined cap which defines how high the interest rate can adjust.
Top of Page |
|
How do adjustable rate mortgages work?
Adjustable rate mortgages have fluctuating interest rates which either increase or decrease depending on the market rates. The rate begins to change after a certain number of payments have been made. Typically, the interest rate change is based upon a predetermined index value and a margin. If a borrower currently has an interest rate that is pending adjustment, the new rate would be calculated by adding the current index rate and margin. For example, if the borrower's current rate was 6.000% with a 2.000% 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 7.000%.
Adjustable Rate Mortgages are available with annual and lifetime ceiling caps which prevent the interest rate from exceeding a certain rate.
Top of Page
What is an Interest Only Mortgage?
With an Interest Only loan, your initial payment goes only to the interest on the mortgage. This is for a fixed term which usually lasts 5 to 10 years. At the end of the term your payment will increase so that your principal is paid in full by the end of the loan term.
Top of Page
What is Mortgage Insurance?
Mortgage Insurance (MI) is provided by an independent mortgage insurance company. MI protects the lender from any loss due to a borrower defaulting on their mortgage. It is usually required when a borrower takes out a mortgage for more than 80% of the home value. |
|
Top of Page
|
|
What is the difference between the interest rate and the Annual Percentage Rate (APR)?
The interest rate is the simple interest on the money borrowed. The APR is the total yearly cost of the mortgage, including some closing costs, points, interest rate, and mortgage insurance (if applicable).
Top of Page |
What can I do if my credit history is not perfect?
Our Non-Conforming Lending Department specializes in assisting borrowers with imperfect credit. We have programs that can help you consolidate your debt and save money each month. As your credit improves, we can refinance you at a lower interest rate.
Top of Page |
|
What fees are included in my closing costs?
Closing costs usually include title insurance, attorney fee, government recording fee, any lender fees and escrows.
Top of Page |
What is the Truth In Lending (TIL) Disclosure?
The TIL informs you of the total cost of financing. It provides you with:
- The total cost of financing after all payments on the loan have been made, assuming you do not pay off the loan prior to the original term
- The cost of your initial monthly payments
- The annual percentage rate (APR)
- An itemization of the amount financed
Top of Page |
What is a mortgage pre-qualification?
A mortgage pre-qualification states that a buyer is able to afford a home at a certain price. This is determined by the buyer providing a loan officer with information about his/her income, employment, assets, and liabilities. The pre-qualification is based on the information presented to the loan officer and a credit report. A pre-qualification is subject to verification of all the information represented and therefore, is not a commitment to lend.
Top of Page |
What is a mortgage pre-approval?
A mortgage pre-approval is an actual mortgage commitment prior to finding a home. In this case, the buyer applies for a mortgage, all supporting documentation is verified with regard to income, employment, assets, liabilities and credit, and a written commitment is issued. However, this commitment is subject to a fully executed contract of sale and property appraisal. A pre-approved mortgage assists the buyer in their negotiations for a home because it shows the seller that they are serious and it reduces the time to closing.
If you are interested in getting pre-approval, please contact us toll-free:
1-800-345-7332
Top of Page | |
|
|
