How do we know what is the best type of financing for our particular family's situation?
Can the seller pay for my down payment?
What if I do not have any money for a down payment?
What are escrow accounts?
What is the difference between a fixed rate and an adjustable rate mortgage (ARM)?
Do I have to be in my house a year before I can refinance?
What is the meaning of PITI?
What are points?
What is private mortgage insurance?
How can I improve my credit score?
How can I lower the interest rate?
Can automated underwriting help me get a loan?
How do we know what is the best type of financing for our particular family's situation?
The best way to determine which program would best suit your family's needs is to sit down with your mortgage consultant so they can explain all of your financing options. Things to consider are: how long you plan to stay in the home, current and projected income and debts, credit history and cash available to close. Opteum is uniquely positioned to offer almost all financing options available in the marketplace.
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Can the seller pay for my down payment?
No. However, there are many programs where the down payment can be a gift from a relative or non-profit organization, or be borrowed if the loan is secured by a currently-owned asset. The seller can pay for the borrower's closing costs, if negotiated.
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What if I do not have any money for a down payment?
There are programs that offer a no down payment option in conjunction with seller contributions that can make it possible for you not to have to spend any money to buy a home. Please discuss your options with your mortgage consultant.
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What are escrow accounts?
Escrows are payments made by the homeowner to the mortgage company for the purpose of paying the homeowner's taxes, insurance and any other payment that is associated with the loan. Escrows are added onto the monthly payment amount that the homeowner pays. This makes it easier for the homeowner because it spreads the tax and insurance payments over the full year.
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What is the difference between a fixed rate and an adjustable rate mortgage (ARM)?
A fixed rate mortgage is one where the interest rate does not change over the life of the loan. An adjustable rate mortgage is one where the rate is fixed for a short period of time and then adjusts out through certain periods for the remainder of the loan term.
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Do I have to be in my house a year before I can refinance?
Usually not. However, a small percentage of programs offered do contain a pre-payment penalty clause that requires a fee be paid if the loan is paid off during the first few years of the loan. Consult your mortgage consultant to investigate the options available to you.
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What is the meaning of PITI?
PITI stands for: Principal, Interest, Taxes and Insurance. The principal and interest are kept by the mortgage lending institution each month. The taxes and insurance portion of the monthly payment are kept in an escrow account and are used to pay the homeowner's taxes, insurance payment and private mortgage insurance (if applicable), when due.
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What are points?
Points are prepaid interest on the mortgage that are charged at the time of closing. Each point represents 1% of the loan amount.
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What is private mortgage insurance?
Mortgage insurance is insurance that protects the lender against loss on loans. The homebuyer pays the private mortgage insurance monthly with their mortgage payment. Mortgage insurance can be dropped during the life of the loan based upon individual program guidelines and federal regulations. Your mortgage consultant can provide more details on this.
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How can I improve my credit score?
- Pay your bills on time
- Keep balances low on unsecured revolving debt such as credit cards
- Apply for and open new credit accounts only as needed
- Make sure the information on your credit report is correct
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How can I lower the interest rate?
- Obtain an adjustable rate mortgage
- Pay points to lower your rate
- Consider a buy down. You can pre-pay a portion of the interest due so that your payments are lower during the first few years
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Can automated underwriting help me get a loan?
Once Opteum has collected the information needed to complete the mortgage loan application, it is evaluated to determine if the loan can be approved. Until recently, this process was always done manually, with the underwriter having to review and evaluate each piece of information separately. Today, Opteum uses automated underwriting - an innovative and important tool in the mortgage industry.
Automated underwriting is a computer-based method that enables us to process loan applications in a quicker, more efficient and less costly manner.
Your mortgage consultant enters information for the borrower's application into our network. This information is then communicated electronically to an automated underwriting system, like Fannie Mae's Desktop Underwriter or Freddie Mac's Loan Prospector and a credit report is obtained. The automated system evaluates different pieces of information and gives a recommendation about whether or not the loan meets the criteria for approval. If a loan does not appear to meet the criteria for approval, it is referred to us with advice about areas where additional information could be helpful. We consider the recommendation, along with the information gathered before making a final decision. Opteum always makes the final decision, not the automated system.
The Benefits: Using an automated underwriting system streamlines and speeds up the review and approval process. Because each loan is evaluated in the same, objective way, we are able to identify more qualified borrowers and make more loans. The automated underwriting systems are able to evaluate all the provided information in a way that recognizes that a borrower's strengths in one area can offset other risk factors. As a result, more borrowers are able to qualify and receive approval for mortgage loans.
It is very important to be as accurate as possible on your application. For example, an underwriter in the past may have just looked for enough funds to close and have as reserves but would reject a loan for ratio reasons. Automated underwriting can systematically measure strong liquid assets against higher ratios, thus approving a loan that may have been rejected in the past.
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