Q: So...you guys are a mortgage company, right?

A: Actually, we're a mortgage BANKER. Mortgage companies, mortgage brokers, and mortgage bankers are terms often used interchangeably, yet they’re very different. A mortgage broker is pretty much a middle man. They take care of the loan application, but send out the file to underwriting and have other banks fund it. Therefore, they charge you twice—once for their services, and once for the work outsourced.
A mortgage banker (that’s us), is a company who funds and underwrites just about everything in house. Therefore, we don’t charge any additional broker fees. Also, going through a mortgage banker allows loans to close quicker and more efficiently, as our processors and underwriters are all in house. Bottom line: it’s less expensive and faster to go through a mortgage banker.

Q: Why do I have to provide a source for deposits in my bank account?

A: This has actually been a fairly common question lately as the number of foreclosures in the country has risen. Recently, lenders and government audits have found that people would take out additional personal loans so they would have enough money to close on their house. These personal loans were not disclosed to mortgage companies, and essentially, people were ‘biting off more than they could chew’ and couldn’t make their mortgage payments. So now, all deposits are required to be sourced so mortgage companies can verify the funds DID NOT come from an outside loan.

Q: I am purchasing a house and will most likely go with an FHA loan. I have my 3.5% down payment, but I may not be able to cover all closing costs. What should I do?

A: : FHA loans allow up to 6% seller concession on purchase loans. In layman’s terms, this means through negotiation with the seller, up to 6% of the sales price can go toward your closing and pre-paid costs. (Pre-paid costs are defined as your upfront home insurance policy and the escrow of your taxes/insurance.) It is a great way to achieve the dream of home ownership with less money out of pocket.

Q: What is a good faith estimate and why is it important?

A: Effective January 1, 2010, Bankers and Brokers are required to provide a Good Faith Estimate form. This form provides a timeline of how long you can stay at a given rate, as well as fees charged by the Lender at closing. For example: let’s say you ‘lock in’ at a rate 5.25% and you determine the time period to close will be one month. This means that rate of 5.25% is good for that month provided your loan closes within that time period.
If that date passes, and your loan isn’t closed, then your rate is now subject to current market trends. Your rate may be the same, or it may not. This is why we work diligently along with you to get your file done on time.
It’s really important to know that a Good Faith Estimate can only be provided once an application is complete. This includes having recent credit reports, property address, and a few other pieces of information available.