Navigating the World of Residential Loans
The world of mortgages can seem confusing. There are many different types of lending programs and each looks better then the next. So how are you supposed to know which program is best for you? You can spend a lot of time researching different programs and guess which one would best fit your needs or talk to someone who has already done the legwork.
Robert knows the mortgage world. But what makes him really stand out from the typical broker is that he also has extensive financial planning and banking knowledge. Others may fit you with whatever plan is popular at the moment without ever giving a thought to what happens after the papers are signed. Robert will actually work with you to find a plan that not only meets your current needs but takes into consideration your future financial security.
Conventional Mortgage Loan is one that is not insured by the government in any way. This is where you put 20% (or more) down and work straight through a banking institution.
FHA Loan - This mortgage is insured through the Federal Housing Administration. If the borrower defaults on the loan, the lender gets paid by the FHA.
VA Loan - This program is reserved for military service members and their families. It can be used to finance 100% of a home purchase, which eliminates the need for a down payment. If you are a military member, you should look into this loan type as an option.
USDA Loan - This type of mortgage loan is reserved for people who live in certain parts of the country. There are income restrictions as well. They are sometimes referred to as "farmer loans," due to the geographical and demographic nature of the program, but you certainly don't have to be a farmer to qualify!
Amortization
The repayment of principal from scheduled mortgage payments that exceed the interest due.
A written estimate of a property's current market value prepared by an appraiser.
A permanent buy-down is the payment of points in exchange for a lower interest rate.
Refinancing for an amount in excess of the balance on the old loan plus settlement costs. The borrower takes "cash-out" of the transaction.
On a home purchase, the process of transferring ownership from the seller to the buyer, the disbursement of funds from the buyer and the lender to the seller, and the execution of all the documents associated with the sale and the loan.
Costs that the borrower must pay at the time of closing, in addition to the down payment.
One or more persons who have signed the note, and are equally responsible for repaying the loan.
A single numerical score, based on an individual's credit history, that measures that individual's credit worthiness. Credit scores are as good as the algorithm used to derive them. The most widely used credit score is called FICO
Failure of the borrower to honor the terms of the loan agreement.
In connection with a home, the difference between the value of the home and the balance of outstanding mortgage loans on the home.
An agreement that money or other objects of value be placed with a third party for safe keeping, pending the performance of some promised act by one of the parties to the agreement.
The two Federal agencies that purchase home loans from lenders.
The form that lists the settlement charges the borrower must pay at closing, which the lender is obliged to provide the borrower within three business days of receiving the loan application.
A written document evidencing the lien on a property taken by a lender as security for the repayment of a loan.
Private mortgage insurance, as distinguished from insurance provided by government under FHA and VA
A commitment by a lender to make a mortgage loan to a specified borrower, prior to the identification of a specific property. It is designed to make it easier to shop for a house.
Compiling and maintaining the file of information about a mortgage transaction, including the credit report, appraisal, verification of employment and assets, and so on. The processing file is handed off to underwritingfor the loan decision.
Paying off an old loan while simultaneously taking a new one.
An agreement between a mortgage borrower in distress and the lender that allows the borrower to sell the house and remit the proceeds to the lender. It is an alternative to foreclosure, or a deed in lieu of foreclosure.
The period used to calculate the monthly mortgage payment.
The process of examining all the data about a borrower's property and transaction to determine whether the mortgage applied for by the borrower should be issued.