Premiere will coordinate the appraisal of your property. A qualified appraiser has
knowledge and experience in the marketplace. This ensures that you are paying
fair market value for your home. An appraisal is often required in order to underwrite
and close on your new home.
APR - What is it?
Your annual percentage rate includes both your interest rate and additional
closing costs or prepaid finance charges you may pay - such as prepaid
interest. Your APR represents the total cost of your loan on a yearly
basis, disclosed as a percentage rate. Your APR will usually be slightly
higher than your Actual Rate because it includes some of your costs
required to close.
Credit Scoring
For loans closed on or after April 1, 1997 both Fannie Mae and Freddie
Mac have subscribed to the use of credit scoring.
Credit scoring is a scientific way of assessing how likely a borrower is to
pay back a loan. A credit bureau score is based on the data available in
the borrower's credit report. The score measures the relative degree of
risk a potential borrower represents to the lender/investor. It is not a
measure of a borrower's income or assets.
The types of credit information used in the credit bureau scorecards are
typically the same item an underwriter would used to make a credit
decision. These can include:
Payment history-public record and collection items, severity, age and frequency of
delinquencies noted in trade line section.
Outstanding Debt - number of open trade lines with balances recently
reported. Average balances across all trade lines. Relationship between
total balances and total credit limits on revolving trade lines.
Credit History - age of oldest trade line.
Inquiries and New Account Openings - number of inquiries and new
account openings in the last year. Amount of time since the most recent
inquiry.
Type of Credit in Use - Number of trade lines reported for each type:
Bankcard
Travel and Entertainment cards
Department store cards
Personal finance company references
Installment debt
other
What are Closing Costs?
Closing costs include, but are not limited to the following:
*appraisal
*credit report
*flood certification
*recording fees
*title insurance
*Processing fee
*closing fee
*survey fee
What is the difference between fixed rate and adjustable rate
mortgages?
A fixed rate mortgage is a loan where the principal and interest payment
never change during the life of the loan.
Fixed rate mortgages are beneficial to those who are on a fixed income,
(adverse to interest rate change) and those who prefer fixed payment
schedules.
There are numerous adjustable rate mortgage programs. The rate may
fluctuate and increase throughout the life of the loan.
Adjustable rate mortgages are advantageous for those who do not plan to
stay in their home for a long time, for those borrowers who do not qualify
at higher fixed interest rates, and those who can financially handle
fluctuating payments.
What is mortgage insurance?
Private mortgage insurance and government mortgage insurance protect
the lender against default and enable the lender to make a loan which the
lender considers a higher risk. Lenders often require mortgage insurance
for loans when the down payment is less than 20% of the sales price. You
may be billed monthly, annually, by an initial lump sum, or some
combination of these practices for your mortgage insurance premium. Ask
your Premiere loan officer if mortgage insurance is required and how
much it will cost. Mortgage insurance should not be confused with
mortgage life, credit life or disability insurance, which are designed to pay
off a mortgage in the event of the borrower's death or disability.
What is a mortgage survey?
Premiere will arrange and contract for the completion of your required
mortgage survey. A mortgage survey determines any encroachments to
your property. A copy of your survey will be included in your closing
package. A mortgage survey is not a staked survey with which you can
make improvements to the property.
For refinances, a previous mortgage survey may be used depending on
age.
Homeowners Insurance is required prior to closing.
You are required to bring a one year paid policy to closing. Your Loan
Officer will need to know the annual premium a minimum of five days
prior to closing. Please have your insurance agent contact your loan
officer directly.
HO-3:The Essential Type of Coverage
Your second step is to select a type of coverage. Start by looking at
damage to your home itself - that's probably the biggest potential risk
you're covering. Your goal is to cover as many risks to the structure as
you possibly can. That's why you should look only at HO-3 policies.
These cover losses or damage from all risks that aren't specifically
excluded. The typical exclusions are earthquakes, floods, sewer back ups,
and war. If you're in an area prone to earthquakes, you can either take
out a rider that will cover tremor damage or get a separate policy.
Likewise, if your house could be in danger from flooding, you can get
separate coverage for that from the federal government. Unfortunately
you can't get protection from raw sewage or laser-guided munitions.
With an HO-3 policy your personal property-whether in your home,
temporarily outside your home, or with your daughter in college-is
protected from seventeen to nineteen different risks, including, fire, theft,
wind, and burst pipes. That should be sufficient...if you've obtained the
right levels of coverage.
The same HO-3 policy will also provide liability protection if someone(not
a family member)gets injured on your property or elsewhere due to
unintentional acts or damage by you, your family, and even your pets.
Even intentional acts by children under thirteen and pets are covered. But
be aware that if you've got a repeatedly rambunctious son or protective
dog, your policy may not be renewed.
Simply put: Make sure you get an HO-3 policy. Unfortunately,
determining the amounts of coverage you need isn't as simple.
*Taken from the book Die Broke by Stephen M. Pollan and financial
advisor Mark Levine
On-Line Application
The power of the Premiere web site allows you the luxury to apply when you want and
where you want. All requested documentation can be forwarded via Email or fax.
Documentation requested of you will be in direct relation to the strength of your credit.
Of course, should you desire a face to face meeting with a Premiere Loan Officer, we're
more than happy to accommodate your needs and desires.
Our approval process is simple and less complicated than the conventional mortgage
process with your on-line underwriter.
Points - what are they?
Points are a cost of securing an interest rate. Points are pre-paid interest
and may be a deduction when filing your tax returns.
On average, you will plan to live in your home a minimum of four years
to benefit from paying points.
Premiere rates - are they competitive?
Premiere delivers loans to 30 different Banks and Mortgage Companies.
We have the ability to pursue the most competitive rate and terms
available - predicated on the strength of your credit package and mortgage
program. No lender can guarantee the absolute lowest rate. Premiere
however can assure rate and terms offered to be very competitive.
Rate Lock - What is it?
Service and Interest Rates dictate the happiness of every client. Rate locks
are available in many time frames. Prior to locking your loan, clearly
discuss the day that you know you can close with your loan officer.
Locking on a 45 day rate lock does not serve a purpose if you are not
going to close for 60 days. Once you determine your closing date, we are
happy to lock your interest rate!
Title Insurance
There are two basic types of title insurance protection - one for the
mortgage lender and one for the homeowner or real estate investor.
If a mortgage is to be placed on your new home, the mortgage lender will
probably require that you purchase title insurance to protect the
institution's position as a holder of a mortgage loan. But this mortgagee's
title insurance policy doesn't protect you, the homeowner. You need an
owner's title insurance policy to protect your investment.
You pay only once. There are no renewal premiums, and there is no
expiration date on the policy. Yet the protection lasts as long as you, or
your heirs, retain an interest in the property.
What are debt ratios
Debt ratios are a calculation of your monthly obligations, including the
new house payment, in comparison to your gross monthly income. These
ratios are used as a guide to determine an allowable house payment.
What are escrow accounts and how much do I need in my
escrow account?
Escrows are payments made by a mortgagor to a mortgagee for the
purpose of paying the mortgagor’s taxes, insurance, and other payments
associated with home ownership. The mortgagee is responsible for the
timely disbursement of escrow funds to pay the mortgagor’s bills as they
come due.
Usually, a mortgage company collects funds for placement into the
mortgagor’s escrow account with the mortgagor’s periodic payment for
principal and interest. An escrow account has sufficient funds if there is
enough to pay all bills when they come due.
It is common practice for mortgage companies to hold an escrow cushion
for a mortgagor. The cushion is kept by the mortgage company to assure
that if the cost of any escrowed item were to increase in the future, there
would be sufficient funds to pay all bills as they come due.
