FREQUENTLY ASKED QUESTIONS

What is an Adjustable Rate Mortgage?

An Adjustable Rate Mortgage is normally a 30-year loan that has a fixed rate for a predetermined period of time. Thereafter, the rate will adjust based on a margin and a rate index, such as the 1-year US Treasury or Libor. These loans commonly come in 6-month, 1-, 3-, 5-, 7- and 10- year fixed periods. Generally, the shorter the fixed period, the lower the rate will be on these loans.

Why would I consider an Adjustable Rate Mortgage over a 30- or 15-year Fixed Rate Mortgage?

The average home mortgage is in existence for about 7 years. Many people relocate, refinance or pay off their mortgage long before the term expires. If you are sure about moving within the "fixed" period or will be getting a disbursement from a retirement account and pay off the loan, an Adjustable Rate Mortgage is worth considering. Rates and monthly payments for these mortgage loans are generally lower then "Fixed Rate" loans.

What is an Interest Only Loan and why should I consider it?

Interest Only Loans have become very popular in our area, especially due to appreciating property values. Many customers buying beach properties as second homes with the intention of renting for part of the season look for the lowest payment possible. These loans have the stability of an Adjustable Rate Mortgage as the rate is fixed over a predetermined period of time. Furthermore, many people are more concerned with the increase in value of the property, not paying down principle. Monthly payments on these loans can be hundreds and sometimes thousands of dollars less than regular mortgage loans.

I like the idea of Interest Only but am concerned about long term rate protection.  What can I do?

Many or our lenders offer a 30 year fixed Interest Only.  This loan is interest only for the first 10 years and in the 11^th year the remaining balance is amortize over the last 20 years of the loan.  The starting rate is fixed for the full 30 years. This program is perfect for people that will be selling property and paying off some or all of the loan balance.  Our rates on this loan are only slightly higher then the regular 30 year fixed.

I recently change careers and just started my new job.  How can I qualify for a mortgage?

If you have reasonably good credit we have loans available where the income and employment is left blank on the application.  The only item we verify is your assets.  This loan is only available in 30 year fixed but the interest rate is only slightly higher then a normal full documentation loan.  We use this loan product frequently for relocating people.

How much can we borrow on our home purchase?

If qualified, we can lend up to 100% of the purchase price for a primary residence or second home.

Can we avoid PMI when we have less than 20% down?

In order to avoid PMI (private mortgage insurance), we can close two loans simultaneously. The first loan can be no higher than 80% of the purchase price. The second loan can be either a HELOC (home equity line of credit), is an interest only loan tied to the prime interest rate or a fixed rate Equity Loan.

How can I get the lowest rate on my home mortgage?

The best mortgage rates are generally quoted on full documentation loans (complete disclosure and documentation of income and assets), with 10 to 20% down payment. Mortgage loans with down payments of 0 to 5% usually incur slightly higher interest rates.

How can we eliminate supplying you with tax returns, bank and investment statements in order to get our loan approved?

We have several loan products that work with reduced documentation. These loan programs are called "Stated Income/Stated Asset", "No Ratio" or "No Doc's."

If I am self-employed and my reported income is low after deducting depreciation and business related expenses, how can I qualify for a mortgage?

If your credit scores are good, we can use one of these programs: "Stated Income/Stated Asset", "No Ratio" or "No Doc's." In these programs we either state income and/or assets but do not verify or leave all income and/or employment off the loan application. Since banks like to see 2 years of employment in the same field, one of these loans can be use when the borrower has recently changed careers.

How long will it take to close my mortgage?

Most loans will close in 30 days, although some of the "reduced documentation" loans can be closed in 21 days.

How much can I afford?

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