Florida Mortgage

• Why should I use a mortgage broker?
• What fees can a mortgage broker charge to the customer?
• What are the typical mortgage loan fees charged by Arian and Associates?
• Does the lender also pay the mortgage broker?
• Should I work with several mortgage brokers and compare who can give me the best deal?
• How long does the mortgage loan process take?
• What does it mean to lock a loan?
• What do the different mortgage loan types mean?
• What do the terms LTV, CLTV, DTI, GFE & PITI mean?
• What are the following: Appraisal, Survey, Title and Insurance.
• What is MI or PMI?

Why should I use a mortgage broker?
A mortgage broker deals with many lenders and can “shop” for the best mortgage loan program and interest rate for your needs.
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What fees can a mortgage broker charge to the customer?
Brokers can charge an origination fee, a broker fee, an administration fee, a credit report fee, an application fee, a commitment fee and a processing fee.
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What are the typical mortgage loan fees charged by Arian and Associates?
Up to a 1% origination fee and/or broker fee (of the loan amount) and a $545.00 processing fee for a first mortgage. Second mortgages are just a $195.00 processing fee. Courier fees are added if loan applications have to be overnighted to the borrower or lender.
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Does the lender also pay the mortgage broker?
Usually. The lender pays the broker directly what is called a Yield Spread Premium. This is an amount paid by the lender with no cost to the borrower. Depending on the loan program and interest rate chosen,the lender (based on the loan amount) will pay as little as 0 (called “at par”) and as high as 4-5%.
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Should I work with several mortgage brokers and compare who can give me the best deal?
NO! Each time you give out your Social Security # to a broker, they will pull a credit report. Each time your credit is pulled your credit score can go down.
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How long does the mortgage loan process take?
For a purchase of a home, the mortgage loan process takes 3-4 weeks. For a refinance of your current property, the mortgage loan process usually can be completed in 7-10 days.
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What does it mean to lock a loan?
Lenders allow mortgage brokers to lock in a rate (usually after a loan is submitted to underwriting) for 15-60 days. Interest rates can change on a daily basis, so you and your mortgage broker need to decide when to lock.
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What do the different mortgage loan types mean?
Full document mortgage loan – paycheck, W-2’s, verification of employment, tax returns for self-employed borrowers, bank statements and retirement statements. Stated mortgage loan- SIVA – stated income, verified assets. SISA – stated income, stated assets. No Ratio mortgage loan- state your employment, but not disclose your income. No Doc mortgage loan – no stating of employment, income or assets.
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What do the terms LTV, CLTV, DTI, GFE & PITI mean?
LTV – loan to value. (if the house appraises for $200,000 and the loan amount is $160,000 – the LTV is 80%).
CLTV – combined loan to value (same example as above, but add a 2nd loan for 10% or $20,000, the CLTV for the 2 loans is 90%.
DTI – debt to income (liabilities - all credit card debt and housing debt (rent or mortgage) divided by the income (i.e.: gross monthly income is $3000, liabilities are $1200. – the DTI is 40%).
GFE – good faith estimate (the mortgage broker will give you at the time of your application as an “estimate” of the charges for your loan.
PITI – principal, interest, taxes and insurance.
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What are the following: Appraisal, Survey, Title and Insurance.
Appraisal – Performed by a licensed appraiser, it is a 17-20 page report on the property covering the legal description, photos of the exterior and interior, maps of the location, square footage of the lot and home and most importantly the value.
Survey – Performed by a licensed surveyor, it is a map of the legal boundaries of the property lot.
Title- A title search is performed for all purchases and refinances to ensure that there are no outstanding liens against a property. Once the title search is complete a title policy is issued for your protection. If a lien should surface after your policy has been issued – the lien would then be the responsibility of the title company – not yours.
Insurance – Unless you are purchasing or refinancing a condo, you will be required to purchase hazard insurance and if your property is in a flood zone, you will also be required to purchase flood insurance. Some lenders require windstorm insurance as well. On purchases, ALL lenders require 1 full year of insurance be paid prior to or at closing. I you are setting up an escrow account with the lender (lender collects and pays your taxes and insurance for you) at closing the lender will be require enough escrow reserves to be collected to be able to pay the next tax or insurance bill.
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What is MI or PMI?
Mortgage insurance or private mortgage insurance. If you obtain a loan for more than 80% LTV, some lenders require mortgage insurance. Mortgage insurance is issued by companies that are insuring your loan to the lender if you should default on your loan. It’s basically an insurance policy for the lender. As of January 2007, mortgage insurance payments are not tax deductible. Please check with your tax-preparer.
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