Home    About Us    Online Financing Center    Products    FAQ    Resources  

 

1. Can I get pre-qualified or pre-approved for a home purchase loan before I’ve found my property? Answer
2. Can I make changes to my application? Answer
3. Do I have to finish filling out my application at one time? Answer
4. How do I increase and protect my credit rating? Answer
5.

How long will it be before we will know if the loan is approved or not?

Answer
6. How long will it take to close the loan? Answer
7. How will my credit score affect my loan application? Answer
8. Should I refinance? Answer
9. What are points? Answer
10. What does it mean to “lock a rate”? Answer
11. What if I have little or no credit? Answer
12. What if I have a credit problem because of an unusual situation? Answer
13. What is Annual Percentage Rate (APR)? Answer
14. What is a Conventional Loan? Answer
15. What is a Convertible ARM? Answer
16. What is a Balloon Loan? Answer
17. What is a FICO score? Answer
18. What is a Good Faith Estimate? Answer
19. What is an Adjustable Rate Mortgage (ARM) and how does an ARM work? Answer
20. What is Hazard Insurance? Answer
21. What is an Origination Fee? Answer
22. What is P.I.T.I? Answer
23. What is Private Mortgage Insurance (PMI)? Answer
24. What kind of documentation will I need to provide the lender for verification? Answer
25. What should I do to help financially prepare for a home loan? Answer

Q : Can I get pre-qualified or pre-approved for a home purchase loan before I’ve found my property?
A : Absolutely.  However, you should not confuse a pre-approval with a pre-qualification.  During the pre-qualification process, our Mortgage Consultant will ask you a few questions and hand you a pre-qualification letter.  The pre-approval process is much more complete.

During a pre-approval, our Mortgage Consultant does all the work of a full-approval, except for appraisal and title search.  When you are pre-approved, you become like a CASH BUYER and have more negotiating leverage with the seller.  In some cases (especially in multiple-offer situations), having a pre-approval can make the difference between buying a home and not buying a home.  In other instances, home buyers have been able to save thousands of dollars as a result of being in a better negotiating situation. 

Most good Realtors will not show you homes before being pre-approved because they do not want to waste your time, the seller’s time, and their time.  AMAISI will pre-approve you at minimal or no cost.  We will typically need to check your credit and verify your income and assets. 

Once your loan has been approved you can change any of these variables to match the specifics of your purchase transaction.  Please note that we cannot lock in a loan until a property address has been specified.

 
Q : Can I make changes to my application?
A : Yes, you can make changes anytime before you lock in your rate.  Keep in mind that any changes you make may extend the time that it takes to close your loan, may increase the cost of closing and may effect your interest rate.  We recommend that you complete your original loan application accurately and completely prior to submitting.  Once you receive confirmation of your rate lock, you should review the terms carefully and contact your mortgage consultant immediately if any corrections are needed.
 
Q : Do I have to finish filling out my application at one time?
A : No. AMAISI gives you the convenience of changing or finishing your application at any time before final submission to lender.  Simply call 301-622-0420 or e-mail your Mortgage Consultant to have confidential changes made to your existing application.
 
Q : How do I increase and protect my credit rating?
A :

Here are a few general tips to assist you in raising and maintaining your credit score:

  • Maintain two to three revolving charge accounts (such as Visa or MasterCard) in good standing.
  • Have a couple of other credit card accounts, such as department stores or gas cards, in good standing.
  • Avoid “finance” company credit card offers.
  • Avoid credit inquiries-they lower your credit score.
  • Don’t max out your credit cards-the ratio of available credit to your total credit balances is very important.
  • Don’t apply for multiple credit lines; this triggers an inquiry of your credit, which lowers your credit score.
  • Never co-sign a loan for someone else
 
Q :

How long will it be before we will know if the loan is approved or not?

A : If your application is received online, we can give you a preliminary pre-approval within 8 business hours.  In other instances between 24-48 hours from the time we receive your application.  However, this is dependent on your credit scores and overall file.  In some cases it could take a little longer, such as 5-8 business days.
 
Q : How long will it take to close the loan?
A : If everything goes smoothly, we should be able to close in as little as 15 days.
 
Q : How will my credit score affect my loan application?
A : Credit scoring plays a significant role when you apply for a loan. Higher credit scores help you to be eligible for more loan options. If you've had credit difficulties in the past, there are still mortgage programs available, but they will usually cost more and will vary depending on the severity of your credit problems.
 
Q : Should I refinance?
A : The significant and most common reason for refinancing is to save you money.  You can save a lot of money every month by lowering the interest rate on your current loan.  How much you can save depends on a lot of factors.  You have to consider how much it will cost in fees in order to realize the savings in your payment.   Saving money through refinancing can be achieved by obtaining a lower interest rate, which causes your monthly mortgage payment to be reduced or by reducing the term of the loan, which saves money over the life of the loan.  Even if the fees get added on to the loan balance, they're still there.  A good option for a lot of people is to get a loan with no points or fees.  But those loans come with higher interest rates. 

You may also consider refinancing in order to convert your adjustable loan to a fixed loan.  The main reason for this is to obtain stability and security offered by a fixed loan rate over the term of the loan.  Adjustable rates are popular when rates are higher whereas when rates are low most people tend to lock in for a fixed loan rate.

If your intentions are to consolidate debts and replace high interest loans with one low rate mortgage than you may want to consider refinancing.  The loans being consolidated may include second mortgages, credit lines, student loans, credit cards, consumer charge cards, or other debt you may have.  In many cases, debt consolidation saves you money by saving on taxes and avoiding paying high interest rates.  Mortgage loan interest is tax deductible whereas interest on consumer loans is not tax deductible.

 
Q : What are points?
A : An amount equal to 1% of the principal amount of a mortgage loan.  Discount points are a one-time charge assessed at closing by lender to increase the yield on the mortgage loan to a competitive position with other types of investments.  For instance, one percent of a $100,000 loan is equal to $1,000.
 
Q : What does it mean to “lock a rate”?
A : “Rate locks” are a way of protecting from a possible rise in interest rates during the processing of your loan.  With some lenders, you can lock a rate up to 90 days.  Generally speaking, if you choose to lock for an extended period of time, the cost of the loan goes up. Furthermore, if rates improve during the processing of your loan, you will still get the rate you locked. Some lenders may require a home purchase contract before they will allow you to lock an interest rate.
 
Q : What if I have little or no credit?
A : Use your good payment history on rent and utilities, as well as credit obtained through family members or friends.  Provide a year’s worth of canceled checks to validate consistent monthly payments.  This information will become part of your application for the mortgage loan.
 
Q : What if I have a credit problem because of an unusual situation?
A : If you normally pay your bills on time but failed to pay because unusual or temporary situation, write a detailed letter explaining your circumstances.  Also provide supporting documentation with your letter such as a doctor’s letter that will add credence to your case.  The information will become part of your loan application.  Your lender will be able to overlook a credit problem if you can provide a good reason for neglecting your obligation.
 
Q : What is Annual Percentage Rate (APR)?
A : The total finance charges for a loan that is expressed as a percentage.  APR takes into account the total cost of a mortgage, including interest, closing fees, lender points, and other charges over the life of a loan.
 
Q : What is a Conventional Loan?
A : A mortgage or deed of trust that is not insured or guaranteed under a government insured program.
 
Q : What is a Convertible ARM?
A : The Convertible ARM has traits similar to the ARM loan, but offers an option for the borrower to change the mortgage to a fixed-rate loan during an early interest rate adjustment period.
 
Q : What is a Balloon Loan?
A : A note calling for periodic payments which are insufficient to fully amortize the face amount of the note prior to maturity, so that a principal sum known as a “balloon” is due at maturity.
 
Q : What is a FICO score?
A : A FICO score is a credit score developed by Fair Isaac & Company.  It is a credit scoring method to determine the likelihood of credit users paying their bills.  Since the 1950s, Fair Issac & Co were pioneers in setting credit scoring standards and even today their method has become the most widely accepted and reliable scoring method used by lenders in credit evaluation. 

A credit score attempts to condense your credit history into a single number.  Credit scores analyze your credit history by considering numerous factors such as:

  • Late payments
  • The amount of time credit has been established
  • The amount of credit used versus the amount of credit available
  • Length of time at present residence
  • Employment history
  • Negative credit information such as bankruptcies, charge-offs, collections, liens, etc.

Credit scores are calculated by using scoring models and mathematical tables that assign points for different pieces of information which best predict future credit performance.

 
Q : What is a Good Faith Estimate?
A : When you file your application for a loan, the lender must, under the terms of RESPA, provide you with a Good Faith Estimate of settlement services that will likely incur.  The estimate may be stated as either a dollar amount or a range for each charge.
 
Q : What is an Adjustable Rate Mortgage (ARM) and how does an ARM work?
A : An Adjustable Rate Mortgage (ARM) is a mortgage or deed of trust, which allows the lender to adjust the interest rate periodically as agreed to at the inception of the loan.  The interest rate on an ARM is tied to a market index and is fixed for a specific period of time. Once that period of time is over, the interest rate is adjusted periodically (every 6 to 12 months) following the changes in the interest rate of index that is associated with the loan. Examples of market indexes include, but are not limited to, LIBOR, Constant Maturity Treasury, and 11th District Cost of Funds. If you are interested in an adjustable-rate mortgage, it is important to discuss all of the features and options of an ARM with our Mortgage Consultant so they can help you make an assessment of the best ARM to meet your specific needs.
 
Q : What is Hazard Insurance?
A : Hazard insurance is an insurance policy to protect homeowners against property damage.  This premium prepayment is for insurance protection for you and the lender against loss due to fire, windstorm and natural hazards.  If a catastrophe does happen, hazard insurance should cover the costs to rebuild your home.  Most Lenders often require you to get a policy before you buy or refinance a home and usually require you to pay the first year’s premium at settlement.
 
Q : What is an Origination Fee?
A : A fee or charge for work involved in evaluating, preparing and submitting a proposed mortgage loan.  For FHA and VA loans this fee is limited to 1% of the loan amount.
 
Q : What is P.I.T.I?
A : Principal, Interest, Taxes, and Insurance.  The four components of a monthly mortgage payment.  Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage.  Interest is the fee charged for borrowing money.  Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage and hazard insurance.
 
Q : What is Private Mortgage Insurance (PMI)?
A : Insurance written by a private company that protects the lender against loss if you default on the mortgage.
 
Q : What kind of documentation will I need to provide the lender for verification?
A : As each loan has different variables, there is no single list of documents needed for all applicants.  You should be prepared to provide copies of the following documents to your lender.

Employment & Income Data<?XML:NAMESPACE PREFIX = O /><?xml:namespace prefix = o /><?xml:namespace prefix = o />

  • W-2 tax forms, past two years
  • 1099's
  • Pay stub showing current year-to-date earnings (two most recent stubs)
  • Your job history and any explanation of a job change within the past two years
  • If self employed (defined as owning 25% of a business or more), you need business and personal federal tax returns (two years, including schedules), a current year-to-date profit or loss statement and a K-1 on all partnerships

Assets

  • Bank account statements, past two months
  • Investment account statements
  • Retirement account statements
  • Signed gift letter and transfer of funds verification

Liabilities

  • Credit Cards - include account numbers and balances
  • Auto loans and leases - account numbers and value of car
  • Explanation and paperwork of any derogatory credit in the past seven years
  • Explanation letter of any derogatory credit (bankruptcy, collection, foreclosure or default)
  • Student and personal loans - include account numbers, monthly payments and balances
  • Landlord address(s) for past two years and rental amounts


Property & Realtor Information

  • Name and contact information of your Realtor (business card)
  • Homeowners insurance information
  • Rental or lease agreements
  • Residence & address for past two years
  •  
    Q : What should I do to help financially prepare for a home loan?
    A :

    Here are a few tips to assist you when it comes to applying for a loan:

    • Use cash instead of credit for your purchases.
    • Avoid making any large credit purchases—the added debt could impact your ability to qualify for a loan.
    • Contact creditors immediately if you have a problem or concern about your ability to make payments on time.
    • Put money aside into savings so you'll have a financial cushion in case of an emergency.