Joseph
Meerbaum, Esq. NMLS# 17281 Lionsgate Finance, Inc. NMLS# 17326 555 Fifth Avenue, 14th floor New York, NY 10017 212.378.1720 info@lionsgatefinance.com |
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Residential Mortgage FAQs
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Residential Mortgage FAQs |
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When does it make sense to refinance? |
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People seek to refinance the mortgage on their home to:
- Lower their monthly payments due to the availability of a lower interest rate
- Leverage the equity built up in their home
- Convert an adjustable loan to a fixed loan
- Consolidate debts
When refinancing to reduce your monthly payment, calculate the number of months to breakeven as follows:
Calculate the total cost of the refinancing
Calculate the monthly payment savings after refinancing
Divide the total cost of the refinance by the monthly savings. The result is the number of months it will take you to breakeven. If you intend to own the house longer than this number of months required to breakeven, then you will save money by refinancing.
Contact us to discuss when it may make sense for you to refinance.
Why do I need to use a Mortgage Broker, can’t I save money going directly to a Bank?
You will do better working with a mortgage broker. That is the conclusion of a recent study written by Dr. Gregory Elliehausen of the Georgetown University Credit Research Center, who presented his findings to a Federal Reserve Board Conference on April 7, 2005. Dr. Elliehausen’s report stated that on average, the borrowers who use the services of mortgage brokers obtain mortgages that have a lower APR than bank customers. Mortgage brokers do not add any net cost to the lending process, because we perform functions that would otherwise have to be done by employees of the lender. Furthermore, because mortgage brokers deal with multiple lenders, we can shop for the best terms available on any given day. We can focus on the lenders who specialize in various market niches that many other lenders avoid, such as loans to applicants who are self-employed, have poor FICO scores, borrowers who do not intend to occupy the property, and borrowers who seek loans with a minimal or no down payment.
What is a Full Documentation Loan?
The borrower discloses both his income and assets, with supporting documentation. This includes the borrower’s two most recent Federal Tax Returns, three most recent monthly bank and brokerage statements, two most recent W-2s, two most recent paycheck stubs, a property appraisal, title insurance, credit report, and other supporting documents that the bank uses to determine the borrower’s eligibility for the mortgage. Banks will contact the borrower's employer to verify employment and the borrower's bank to verify deposits.
What are the other types of loans? |
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Stated Income/Verified Assets: Borrower’s income is disclosed and the source of the income is verified, but the amount is not verified. Assets are verified, and must meet an adequacy standard to prove borrower can repay the loan, for example, borrower’s bank and brokerage statements must show that his accounts contain at least 6 months of stated income and 2 months of expected monthly housing expense in seasoned assets.
Stated Income/Stated Assets: Borrower’s income and assets are disclosed but not verified. However, the source of the borrower's income is verified.
No ratio: Borrower’s income is disclosed and verified but not used in qualifying the borrower. The standard rule that the borrower's housing expense cannot exceed some specified percent of income, is ignored. Borrower’s assets are disclosed and verified.
No Income Verification Loan: Borrower’s income is not disclosed, but assets are disclosed and verified.
Stated Assets or No Asset Verification Loan: Borrower’s assets are disclosed but not verified.
No asset: Borrower’s assets are not disclosed, but income is disclosed, verified, and used to qualify the applicant.
No Income/No Assets: Neither Borrower’s income nor assets are disclosed.
What is a Good Faith Estimate? |
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It is the list of settlement charges that the lender is obliged to provide the borrower within three business days of receiving the loan application.
What is a Conforming Loan?
A loan eligible for purchase by the two major Federal agencies that buy mortgages, Fannie Mae and Freddie Mac. The loan limits are currently $417,000 for a single-family house.
What are Points?
A cash payment required by the lender as part of the charge for the loan, expressed as a percent of the loan amount; each points is equal to 1% of the loan balance.
What is Private Mortgage Insurance?
This insurance protects lenders against loss due to foreclosure or loan default. Mortgage insurance is required on conventional loans with less than a 20% down payment. Cancellation requirements vary by lender.
Commercial Mortgage FAQs |
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What mortgage terms will you consider?
Terms are typically fixed for 5, 7, 10, 15, 20, or even 25 years — depending upon the mortgage loan characteristics. We offer mortgages that are fully amortized, with no balloon payments at maturity, and others that do have balloons. The advantage of a longer-term amortization is that monthly payments are lower than shorter amortization terms, and therefore help improve monthly net cash flow.
What is the Maximum Loan-to-Value you will consider?
Up to 80% of property value, depending upon property type, credit quality, and purchase price. SBA loans can offer up to 90%.
What benefit does a mortgage broker provide for the Borrower?
Most lenders only offer a single type of loan product. One of our goals is to offer a loan program customized for you and your deal. This includes not only the standard loan products but unique programs as well. Since we do not sell proprietary products, we search out the best terms and structure for our client, irrespective of which lender that is; therefore, we are able to offer the widest variety of loan programs of almost any lender in the market
Registered Mortgage Broker with the New York State Department of Financial Services. NMLS Company ID: 17326
All Loans arranged through third party lenders.