A better way to buy a home.

Transcription

1 A better way to buy a home. Company NMLS :

2 ABOUT USA MORTGAGE At USA Mortgage, a subsidiary of DAS Acquisition Company, LLC., our mission is the unrelenting pursuit of perfection, and we pride ourselves on the lending excellence and the superior level of service that our status as a mortgage bank enables us to provide. USA MORTGAGE IS A FULL SERVICE MORTGAGE BANK. This means that USA Mortgage will see you through all aspects of the loan process from the time you meet one of our mortgage professionals to the day you sit at the closing table, and ultimately fund your loan with its own money no waiting for the corporate bigwigs halfway across the country to cut your check! To borrowers and Realtors, being a mortgage bank means you can expect a home financing experience free of hassles and headaches. Complete control means having in-house operations such as processing, underwriting, closing and funding. Here at USA Mortgage we follow a very organized and stable system to achieve the best results for you. We have created a routine on every file to be very efficient and accurate for your benefit. As our underwriters are reviewing the files, they may require additional information. The housing market is changing quickly and this will add more guidelines and new documents to our lending department. We will be in touch with you regarding these conditions required. The goal is to get these back to the underwriting ASAP.

3 Reza Abadi Branch Manager NMLS: MO: MLO I have been calling Columbia, Mo my home for the past 17 years. I am proud graduate from Hickman High School. I pursued a major degree in computer science and a minor in math. In 2006 my brothers and I opened Southside Pizza and Pub, which I am proud to say is still open and doing well. I am happily married to my beautiful wife, Rebecca and we have two wonderful children; Ethan and Leyla. In my spare time I enjoy spending time with my family and socializing with friends. I believe to establish a good relationship in any transaction, knowing one another is the key. It helps create trust and a sense of security. My clients are like friends and family to me. I make a conscious effort to stay in touch on a more personal level. I have come to realize it s all about the relationships we create and develop. I truly cherish all my clients and my colleagues.

4 10STEPS to become a homeowner. 1 Loan Application and Pre-Qualification The first step in the process is to complete a full loan application. Once your application is received, an experienced mortgage professional will guide you help determine which financing options are best for you! 2 Documentation Paperwork supporting the loan application must be submitted and verified. Information commonly sought includes pay stubs, two years tax returns, W2 and 1099 forms, copies of photo ID s, and bank account statements verifying the source of the down payment, funds to close, and reserves. 3 Home Shopping Begin shopping for you re your new place to call home! A licensed real-estate professional will help you determine your needs and desires, and present many options to you. Once you find the right place, the terms of the sale will be negotiated, including the price and potentially the terms of the loan being sought. 4 Begin the Loan Process After going under contract your mortgage professional will put together the best loan deal for you. The next step is to meet with your mortgage professional and their team to review the loan terms and sign the initial paperwork. Then your mortgage professional s team begins processing all your documentation. At this time they package your application and documentation together as best as possible to present your credit worthiness to a licensed mortgage underwriter.

5 5 Underwriting A mortgage underwriters job is to asses the risk of lending you, the applicant, money to purchase your home. They will consider factors such as credit history, employment history & income, and your ability to repay when determining if they will approve your file or not. 6 Inspection & Appraisal It is in your best interest to conduct an inspection of the property your are purchasing with you real-estate professional and a licensed home inspector. The home inspection will check for any possible structural and material defects in the property and then you can decide if you want to ask the sellers to have any of these items fixed before you close on the home. Lenders do not require a home inspection, but they do require an appraisal on all home sales. The appraiser job is to assess the true market value of the property to make sure the sales price and loan amount support the negotiated terms. 7 Conditional Approval After the underwriter reviews a loan applicant s file, a conditional approval is issued. This means we are approving your loan application but may need some additional documentation before final approval is issued. This is also our loan commitment, or commitment to lend the money as long as you are able to supply the extra documentation. 8 Final Approval After you supply the requested documentation to clear the conditions the underwriter placed on the file, they will review again and issue their final approval. This means we are clear to close and its time to begin finalizing settlement figures with the title company. 9 Closing Closing usually takes place at the title company. At this time all of the final loan documents are signed and the documents transferring title to your name will be recorded with the county. 10 Congratulations You are now a new homeowner.

6 LoanTypes

7 FHA This is a government loan which has been around for years and it has been taking a much bigger portion of market these days. 96.5% financing, need only 3.5% downpayment. Loan will have 1.75% up-front MI (Mortgage insurance) and this can be financed into the loan. So, the total financing would be 98.25%. Monthly MI will be charged regardless of amount of down-payment. Here is the breakdown of Monthly MI. 30 Years LTV>90% LTV<90% Monthly MI 1.35% 1.3% 15 Years LTV>90% LTV<90% Monthly MI.70%.45%

8 USDA USDA (United States Department of Agriculture) loans are very aggressive loans for rural areas. Visit eligibility.sc.egov.usda.gov to determine if a property is in an eligible location. 100% financing with no down-payment is one of the top options USDA offers. There is an up-front fee which gets financed to the loan (similar to FHA). The upfront fee for USDA is at 2.00%. USDA didn t use to have any monthly MI which made it one of the best loans in nation, but as of October 2011 there is.5% monthly MI and this amount will never go away regardless of the equity in property. Ranked #1 for USDA Loans in Missouri -USDA USDA will allow closing cost and fees to be financed to the loan as long as the appraisal value does support the addition. There is income eligibility for USDA loans which varies by county and numbers of family members. Refer to the site above for income eligibility. USDA s credit criteria is more relaxed compared to conventional loans and offer very aggressive interest rates.

9 VA This loan was designed to offer long-term financing to eligible veterans. VA loans are another government loan which offers a lot of unique benefits. 100% financing with no down payment. Up-front fee for VA varies on the status of veteran, the number of usage of VA loan in past and the purpose of loan. Typically a first time home buyer using VA will pay 2.15% up front fee which will get financed to the loan. If a veteran is disabled and the percentage of disability is within the guidelines they are not required to pay the up-front MI. There NO MONTHLY MI for VA loans, this makes the loan one of the most powerful and beneficial financings in our industry. Credit criteria are easier compare to conventional loans. Call us today to determine your eligibility! We will order the documents you need to get certification.

10 Conventional This loan is offered by private investors and it s not a government loan. 95% financing requires minimum of 5% down-payment. Interest rates in conventional loans are determined by down-payment, credit scores, debt to income (DTI) and the loan amount. There is no up-front MI required for these loans. More loans closed than any other privately owned mortgage bank in Missouri (2013) There will be monthly MI if the down-payment is less than 20% but USA Mortgage does offer alternatives for this and we can compare the different options.

11 JUMBO This is another private investor loan, designed for loan amounts above the conforming limit, which is $417,000 in most area. Options with as little as 10% down-payment for 90% financing Like conventional loans, interest rates are determined by downpayment, credit scores, debt to income (DTI), and the loan amount No up-front financed MI Same as conventional loans, there will be monthly MI if the down-payment is less than 20%, but USA Mortgage has many alternatives and we can compare the many different options

12 MHDC First time home buyer program offered by the states. MHDC down-payment assistance can be useful for Conventional and FHA products. MHDC will allow borrowers to use 4.5% down-payment assistance. There are income limits in this program. The interest rate for MHDC loans are set by the MHDC office and clients can check that online Lender of the Year -MHDC

13 RENOVATION Renovation Loans are offered by FHA with their 203k program or with conventional loans. This program is called Home Style Renovations. Allowing for refinance or purchase, these loans have all FHA features plus allowing home buyers and owners to use the future value of their home to get money for renovation. Minimum loan amount: $50,000 (Including improvements) Maximum Loan Amount $271,500 (Including improvements) or FHA Maximum loan amounts by counties for home style renovations. Loan Types: 15 years or 30 years fixed purchase or refinance loans. Conventional: For 203k renovations House must be currently be (or soon be) owner occupied. House must be at least 1 year old. Home improvement costs must be completed by approved, licensed and insured contractors. Other loan options with USA Mortgage FHA one time close construction loans. NO PMI loans with 5% down. Manufacture loans (must follow all rules and guidelines). Cash-out refinances.

14 FAQ S FREQUENTLY ASKED QUESTIONS Q: What are fixed and adjustable rate mortgages? FIXED RATE MORTGAGES These programs are typically either on a 15 year or 30 year amortization or repayment schedule. These programs provide the most security in the sense that the required monthly principal and interest payments will not change for the life of the loan. This is because the interest rate is fixed for the entire life of the loan, thus it is called a 15 or 30 year fixed program. ADJUSTABLE RATE MORTGAGE These loans are referred to as adjustable rate mortgages (ARM s), because the interest rate will change or adjust on a predetermined schedule. ARM s have an initial fixed period that the interest rate will not change or adjust. After this initial period the interest rate will change or adjust based on a market index plus a margin. The market index for ARMS may be an average one year treasury bill index as published in the Wall Street Journal or in our Hourly Market Update Section. The margin is predetermined and is typically between 2.75% and 3%. So, if the one year treasury bill index is 5.5% and your margin is 2.75% on the date of your first adjustment, your new rate would be 8.25%. There are limits to how much your interest rate can adjust in any given adjustment and over the life of your loan. A periodic rate cap, would limit the amount of any single adjustment which is 2% in rate on USA-Mortgage loan programs. Q. What is a Good Faith Estimate? This is a disclosure, required by law, that every lender must provide to the borrower within 3 days of application. This is a best estimate of all the figures associated with acquiring your property loan. USA-Mortgage. com will send this with your initial application. Q. What is a Truth-In-Lending disclosure and what does it mean for you? This disclosure shows you your Annual Percentage Rate (APR), Finance Charge, Amount Financed and Total Of Payments. The APR was discussed above. The Finance Charge is the total amount of interest calculated at the interest rate over the life of the loan, plus Prepaid Finance Charges and the total amount of any required mortgage insurance over the life of the loan.

15 Q. How does an interest rate lock work? At USA-Mortgage an interest rate lock guarantees your interest rate for 30 days from the date your application is received (unless you have specifically asked your loan officer for a 15 day lock). A lock does not obligate you to a loan, as technically you are not obligated to any loan until it closes. It just eliminates the risk of interest rates increasing. If interest rates fall, we can not re-lock with the lender at the lower rate, so if you are comfortable with an interest rate you can be assured that the interest rate will be available when you close. The purpose of a lock is to provide an opportunity for you to arrange to complete your mortgage and real estate transaction before the lock expires. This allows you to budget, plan your affordability, and purchase a home without having to worry about it changing before you actually close on your loan. Otherwise, interest rates may increase and by the time you close on your home, you may not be able to afford or qualify for the loan on your home. Interest rate locks provide needed security. Since lenders are absorbing interest rate risk they charge for taking on this risk. For instance, typically a 60 day lock interest rate is slightly higher than a 30 day lock interest rate. Therefore, when you shop for mortgages, a 7% interest rate with a 60 day lock is a better deal than a 7% interest rate with a 30 day lock. Always stand on principle... Even if you stand alone. -John Adams

16 Mortgage Terms. These are the key terms you should know.

17 Adjustable Rate Mortgage (ARM) A mortgage in which the interest rate is adjusted periodically based on a pre-selected index and margin. Amortization Means of loan payment by equal periodic payments calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance. Annual Percentage Rate (APR) The interest rate that reflects the cost of a mortgage as a yearly rate on the mortgage, because it takes into account points and other credit costs. The APR allows home buyers to compare different types of mortgages based on the annual cost for each loan, however not all lenders calculate APR the same way. Buydown The lender or/and home builder subsidize the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they increase when subsidy expires. Discount points Prepaid interest assessed at closing by the lender. Each point is equal to 1% of the loan amount, i.e, two points on a $100,000 mortgage would equal $2,000. Discount points are charged to reduce the interest rate or can be assessed as additional risk based loan level price adjustments. (LLPAs) Earnest money or Escrow Deposit Money given by a buyer to seller as part of purchase price to bind a transaction or assure payment. Mortgage Insurance (MI) Money paid to insure the mortgage when the down payment is less than 20%. PITI Also know as total monthly housing expense, this is acronym for principle, interest, taxes and insurance. Title Insurance Title insurance protects a real estate owner or lender against any loss or damage they might experience because of liens, encumbrances, or defects in the title to the property, or the incorrectness of the related search.

18 E. Broadway St. 290 Columbia, Mo Company NMLS: Missouri, Tennesee, Iowa, Illinois and Texas Resideial Mortgage Licensee