The monthly mortgage payment includes the following items, known by the acronym PITIMI: P = principal I = interest T = taxes (real estate) I = insurance (homeowners) MI = mortgage insurance The principal and interest is what you pay back to the lender. These are the monthly payments to the lender...
Tag: Lender
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WHAT IS UNDERWRITING?
What is underwriting? Underwriting is the process of reviewing the loan package to determine whether it meets the established criteria to approve the loan. An underwriter reviews the loan package, including, the loan application, tax returns, paystubs, bank statements, retirement account statements, contract (if a purchase), title insurance, and appraisal to determine...
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ON-LINE LENDING
On-line lending tends to emphasize on closing a loan quickly and making the process automated; this approach implies that counseling to find the right mortgage is not necessary, and leaves the choice of finding the right mortgage to the customer. This approach, however, may not work for the following sample of customers who may...
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SPEC HOMES FOR PROFIT
We have products for builders who are building spec homes for profit. The minimum loan amount is $150,000 with a maximum loan amount of $3 million. For us to review your scenario we need the detailed budget, construction schedule/development phases, and architect drawings. The lender considers the following in the credit decision: ● Borrower characteristics/Total...
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CLOSING COST BREAKDOWN
Here are the typical closing costs involved in getting a loan and a quick explanation of each cost: Underwriting/Administration Fee the fee charged by the lender to underwrite the loan. Appraisal fee – lenders require a third party valuation of the property by a licensed appraiser. Credit report fee – the fee charged by...
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OUR BROKERAGE HAS THE FREEDOM TO CHOOSE A LENDER THAT IS RIGHT FOR YOU
Our brokerage has the freedom to choose the lender that is right for you. By knowing the specifics of your scenario, and the nuances of the lenders, a broker can match you with the lender that fits your needs. You may ask whether this matters; aren’t all lenders the same? No, they are...
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ARE YOU BEING CHARGED AN ORIGINATION FEE OR POINTS ON A LOAN?
You may hear people talking about “points” or charging a “point” on a loan; what does this mean? A point typically represents the origination fee charged by the lender to originate the loan; One point is 1% of the loan amount. Example: If you are applying for a $200,000 loan, a point would be $2,000,...
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WHAT DOES THE CLOSING DISCLOSURE CONTAIN?
The CD also contains the loan amount, interest rate, monthly payment, and amount due at closing. The Closing Disclosure (“CD”) is the latest version of the costs and prepaid expenses on the loan. The numbers on the CD are intended to be the final figures for closing. The CD must be acknowledged (typically by email)...
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WHY USE A RESIDENTIAL LOAN TO FINANCE A BUSINESS?
How can you use a residential loan to finance a business? And, why would you? Business loans tend to have higher rates and costs than residential loans, and may be adjustable. The residential loan can be fixed. For instance, if you have equity in your home, or other residential properties, you could...
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PROPERTY VALUATIONS CAN BE MISLEADING
An appraisal is typically required when applying for a mortgage. Many people will look to the price per square foot when valuing a home, however, this valuation could be misleading. If you are purchasing a home, the lender will base the loan amount off of the lesser of the sales price or the appraised value....