SELECTING A LENDER

1. What is the difference between a direct lender and a mortgage broker?

Direct Lenders work directly with borrowers and fund loans in their own names. Mortgage brokers take applications, collect supporting documentation and then submit the information to a lender to fund the loan. Mortgage brokers traditionally charge a 1% commission for their services. This may be collected from the borrower in the form of an origination fee or from the lender who passes the cost on to the borrower in the form of a higher interest rate.

2. How should I compare rates offered by different lenders?

When comparing lenders, it is important to compare total costs for the same interest rate and lock period. Because rates change daily, it is important that you compare all lenders you are considering on the same day. It is also important that you ask whether the loan has a prepayment penalty.

OUR LOAN PROCESS

3. Can I obtain a pre-approval before finding a property?

Yes. It's always a good idea to know the amount of financing you qualify for before you begin shopping for a home. Additionally, having a lender pre-approval in hand will strengthen your offer in the eyes of the seller. Our pre-approval will help you determine the monthly payment you can afford and the amount of cash required to close the transaction.

4. Is there an application fee or any up-front costs?

A $300 Appraisal Fee is collected at the time you lock in your interest rate or request an appraisal be ordered. The funds are maintained in a trust account and used to pay for your appraisal -- a service performed by an independent third party. Appraisals are generally ordered on the first day of the loan application process and our appraisers charge a $100 cancellation fee on any cancelled appraisals. If you withdraw your application, this $100 cancellation fee will be paid to the appraiser from the $300 deposit. In the event your loan is declined or withdrawn, any funds remaining after payment of your appraisal costs will be refunded to you. You are entitled to a copy of your appraisal.

5. What supporting documentation will I be required to provide?

You will generally be asked to support your income with a recent paystub and the prior year's W-2 Form. Self-employed individuals must support their income with the prior one or two years' tax returns. Funds needed to close the transaction are supported with a copy of a recent bank statement. If proceeds from the sale of another property are being used for the down payment, an estimated closing statement on that transaction will be required to support the necessary funds to close. To view a list of required supporting documentation, please click here. Some transactions may require additional documentation.

6. How long does it take to close my loan?

Our normal processing time is approximately three weeks. We can close a loan faster if necessary.

7. Can you use an appraisal I already have?

Our quality control procedures prohibit us from using any appraisal not ordered directly by us from one of our preferred appraisers in your area. Our appraisers prioritize our work and will complete the assignment quickly.

8. Who is my contact person?

Upon receipt of your loan application, a Loan Processor is immediately assigned to your loan. The day your application is received, you will be called or emailed with the name of your Loan Processor who will be your primary contact throughout the loan process.

9. When can I lock my interest rate?

On purchase transactions you must have an accepted offer on a property before you can lock a rate. On refinance transactions, you may lock your rate at the time of application.

10. How do I lock my interest rate?

To lock your rate, complete the Secure Online Lock-in Agreement on our website. Upon submission, a printable Online Lock Confirmation will appear, giving you a record of the terms you have locked in. The Online Lock Confirmation will show the loan program, loan amount, rate and points or rebate. Your lock terms are subject to obtaining a loan approval.

11. When is the best time to lock a purchase transaction?

In times of stable interest rates, most of our customers lock between 15 and 30 days before their scheduled close of escrow. Locking for a period longer than 30 days increases the cost of the loan slightly but is sometimes a good idea if rates are volatile. For a 45 day lock there is a .125 point add-on to the points and for a 60 day lock there is .25 point add-on to the points.

12. When is the best time to lock a refinance transaction?

If the savings you will achieve with the new lower rate will recapture the closing costs of the loan in a relatively short period of time, you should probably go ahead and lock your rate and close your loan. Trying to time the bottom of an interest rate cycle is tricky and each month you delay costs you in the form of carrying a higher interest rate on your old loan. If rates fall further, you can always refinance again. Our Refinance Savings Calculator will help you with this decision.

13. If rates fall after I've locked, will you lower my rate?

At the time we are ready to draw your loan documents, if our posted rates are at least .25% lower in rate for the same points/rebate that you originally locked into, you will be given the option to floatdown your rate. The new rate will be between your original rate lock and our current posted rates. For example, if you locked in at 6.75% at zero points and our posted rate is 6.50% at zero points, your rate would most likely be 6.625% at zero points.

14. What happens if I switch loan programs after I have locked my rate?

You will receive the rate and point combination from the day you locked in or the day you switched programs, which ever is higher. Therefore, it is important that you carefully consider the different programs before locking in a program and interest rate.

15. What happens if my loan process takes longer than my lock period?

If the delay is caused by us or a third party service provider selected by us, we will extend the lock at no cost. However, if you cause the delay, you will be required to pay for the cost of the lock extension. Examples of delays caused by you are incomplete information submitted on your application, requesting subordination of an existing second mortgage, not supplying supporting documentation in a timely manner, delaying appraisal inspections or document signing appointments or other actions that delay the timely processing and funding of your loan.

In the event the lock extension must be paid for by you, a 7-Day Lock Extension may be purchased before the original lock expiration date by adding .125 to your points. Additional lock extensions require that the loan be re-priced at the worse-case scenario between the rate you originally locked into and current rates.

16. How soon after I sign loan documents will my loan close?

On all purchase transactions and on rental property refinance transactions, we can typically close within three days (one day to review the docs, one day to fund the loan, and one day for the loan to record). On primary residence and second home refinances, there is also a three-day rescission period that must pass before your loan can fund.

17. If I am receiving cash out at the end of the transaction, how will I receive my proceeds?

Escrow will issue a check and mail it to you. You can also arrange for escrow to wire the proceeds directly into your bank account.

18. What happens to my loan after it closes?

After your loan closes, it will be sold on the secondary market to a major mortgage investor who will assume the responsibility for servicing the loan. We sell our loans to some of the largest mortgage investors in the country and we are confident that your loan will be properly serviced by our mortgage investors.

19. Does my homeowners insurance need to be current at the time my loan closes?

On a Single Family Residence or PUD, there must be a minimum of 60 days of coverage remaining on your policy from the time of funding. On a condo, your association Home Owners Insurance policy must be current.

20. What is your appraisal process and will my appraisal state the current value of my home?

Our streamlined system is designed to value your home in the most efficient manner possible. Your loan application will be run through an automated underwriting system to determine the type of appraisal required. Depending on the characteristics of your loan, the appraiser may not need to inspect the interior of the property, saving you the inconvenience of having to be available for an appointment. The appraiser may also be able to prepare a report agreeing with your estimated value rather than arriving at his/her own value. This technology allows us to close your loan more quickly and conveniently.

21. What additional procedures are required of lenders by the new USA Patriot Act?

To comply with the USA Patriot Act, we must implement certain customer identification programs to verify each applicant's name, address, date of birth and identification number. We may request a copy of a social security card on all applicants who will be on the loan but who are not currently employed (for employed borrowers we can generally obtain the social security number off paystubs or W-2s so it is not necessary to obtain a copy of their social security card). In addition, depending on your situation, we may also request additional documents to help us verify your identity.

22. Can I select my own title and escrow company?

By law, you have the right to select your own provider for these services. Certain providers used regularly by us on refinance transactions offer very competitive fees, as shown on our website. If you wish to use a different provider and agree to pay the fee charged by them, please advise your Loan Processor and we will be happy to work with them.

PROGRAM GUIDELINES

23. Do your loans have prepayment penalties?

None of the loan programs shown on our website have prepayment penalties, meaning you have the ability to prepay your loan and refinance if rates fall. If you do not qualify for a website program, our Loan Consultants will review alternative programs that are available to you. If a loan program with a prepayment penalty is offered to you, you will also be offered the same loan without a prepayment penalty so you can compare rates and decide which option is best for you.

24. Do I have to have an impound/escrow account for the payment of my taxes and insurance?

You are not required to have an impound/escrow account unless the Loan-to-Value ratio on your loan is over 90%. Electing not to have an impound/escrow account will not affect the interest rate on your loan but the points will be increased by .25.

25. What is the minimum down payment required?

We offer conforming loan programs with as little as zero down and jumbo loan programs with as little as 5% down. However, significantly lower rates are available with a down payment of 10% or greater.

26. What is the maximum debt-to-income ratio?

On conforming loans, there is no maximum debt to income ratio. With good compensating factors, we have approved loans with ratios as high as 70%. On jumbo loans, the maximum debt to income ratio is 38% to 50% depending on the loan program.

27. Do you lend on Mobile Homes or Manufactured Homes?

No. By offering financing only on traditional 1-4 family residential properties, we are able to be more efficient and offer the best possible pricing to our customers.

28. Can I set up a direct debit to make my monthly payment?

All of our servicers allow you to set up a direct debit to make your monthly payment. Upon receiving notification regarding the servicer for your loan, contact the toll-free number provided to set up your direct debit.

29. Can I make a bi-weekly payment?

Many of our servicers allow you to set up bi-weekly payments. However, you should seriously weigh the merits of this program before setting it up. A bi-weekly payment program pays off the mortgage early by making 13 payments each year (52 weeks in a year divided by 2 equals 26 half-payments or 13 full payments). By simply paying an extra 1/12 of a payment each month, you will pay your mortgage off faster and avoid any administration fees associated with the biweekly payment program. Use our Amortization Table Calculator to set up a prepayment schedule that is right for you.

30. If my loan requires Private Mortgage Insurance (PMI), when can I have it removed?

On a 1-unit primary residence or second home, federal regulations require that PMI be automatically cancelled when your loan balance reaches 78% of the original property value at the time the loan was secured.

Depending on the loan program, you may be able to request in writing that PMI be removed sooner, based on an increase in the property value as determined by a new appraisal to be ordered by the servicer. Generally, PMI must have been in place for at least two years and you must have a good payment history for PMI to be cancelled under this scenario.

31. What about easy qualifier loans that don't require as much supporting documentation?

We offer Stated Income (EZ Qual) loans for self-employed and commissioned borrowers. Stated Income is available on our 30-year fixed, 10/1 ARM, 7/1 ARM, 5/1 ARM and 3/1 ARM programs. When searching rates on our website, simply answer "No" on Question #9, "Can you document your income?"

32. Can I refinance my home if it has been listed for sale in the last twelve months?

If your home was listed within the past twelve months but is not presently on the market, you may still refinance, however you must provide a letter of explanation and you may not select a rate with rebate pricing.

33. Can I close my loan in the name of a Trust?

Loans may not be closed in the name of a Trust. Escrow will prepare a grant deed removing the property from the trust prior to recording your new loan.

34. When is paying off my current second mortgage considered cash out?

If your current second mortgage was not obtained in conjunction with purchasing your home, then paying it off with a new mortgage is considered cash out. Please see Program Guidelines for any possible add-ons for cash out transactions.

35. Can I subordinate a Third Lien?

Yes, you can subordinate multiple liens provided the combined loan to value is within the Program Guidelines.

MORTGAGE TERMS

36. What is a Three Day Right to Cancel?

On refinance transactions, Federal law mandates that you have three days, after signing your loan documents, in which to cancel your loan. This three day period includes Saturdays, but excludes Sundays and holidays. Your loan will not be funded until this period has expired.

37. What is a FICO score?

A FICO score is computed based upon a statistical analysis of your credit history and patterns.

38. What are loan points?

Points are paid to reduce the interest rate you pay on a loan. Each loan "point" is equal to one percent of the loan amount. Your decision on whether or not to pay points depends on how long you plan to keep the loan, your tax situation, and other factors.

39. Are loan points tax deductible?

For most taxpayers, points paid on purchase loan transactions are tax deductible in the year the home is purchased and points paid on refinance transactions are tax deductible over the life of the loan. Upon request, we can convert your Guaranteed Loan Fee to points. Tax consequences vary depending on the specifics of the transaction and the taxpayer. We encourage you to consult your tax advisor regarding your tax situation.

40. What are loan fees?

Loan fees are fees paid in conjunction with closing a mortgage loan. Instead of charging borrowers for every small fee associated with the loan, we charge a flat Guaranteed Loan Fee. We can convert the Guaranteed Loan fee into points if that makes a difference to you. There are other fees paid to third parties such as Appraisal, Escrow and Title Insurance. Click here to receive a Good Faith Estimate of Closing Costs.

41. What is a rebate?

Rebates are credits paid to the borrower by the lender for taking an interest rate higher than the zero point interest rate. The lender hopes to recapture the rebate paid by collecting the higher interest rate over the life of the loan.

42. What is a "no cost loan"?

A no cost loan is created by using lender rebates to offset all non-recurring closing costs. To obtain the rebates, the borrower must take a higher interest rate and the lender hopes to recapture the waived fees in the form of additional interest earned over the life of the loan.

43. What is PMI?

Private Mortgage Insurance is charged on loan amounts exceeding 80% of the purchase price or appraised value of a home. The mortgage insurance protects the lender against loan default.

44. What is the difference between a conforming loan and a jumbo loan?

A conforming loan is one that is less than the maximum loan amounts set by Fannie Mae and Freddie Mac. Jumbo loans are loans which exceed these limits. The loan amounts are revised each year to reflect the change in the national average cost of a home. The current conforming loan amount limits are:

45. What is prepaid interest?

Prepaid interest is paid at the time of closing of your loan to cover the interest that will accrue on your new loan for the remaining days of the month.

46. What is the difference between the rate and the APR?

The note rate is used to calculate your interest payment each month. The APR (Annual Percentage Rate) is a calculation based on standardized federal regulations. In addition to the interest rate, it factors in other finance charges such as certain loan fees, to show the total cost of the financing over the scheduled life of the loan. The APR is designed to help borrowers fairly compare different lenders and loan options. Please note that the loan amount will influence the APR calculation, with higher loan amounts reporting lower APR calculations. To get a true comparison, the same loan amount must be used.

47. What is a subordination agreement?

A subordination agreement is a document prepared by a second mortgage lender agreeing to remain in second position when a first mortgage is refinanced. Without such an agreement, the second mortgage holder would move into a first lien position when the existing first mortgage was paid off. The second mortgage lender usually charges a fee to process the subordination agreement, which is incurred by the borrower.

48. What is Title Insurance?

Title insurance protects you and your mortgage lender by insuring that no individual or government entity has any right, lien, claim or encumbrance to your property. Once a title policy is issued, if any claim which is covered under the title policy is ever filed against your property, the title company will pay the legal fee involved in defense of your rights, as well as any covered loss arising from a valid claim.

CREDIT REPORT QUESTIONS

49. How can I obtain a Free Credit Report?

The Fair and Accurate Credit Transaction Act of 2003 (FACTA) provides that every consumer is entitled to a free credit report every 12 months from each of the three national repositories: Equifax, TransUnion and Experian. Customers may obtain their personal credit report through the following website: www.annualcreditreport.com

50. Where can I turn for help cleaning up my credit?

Several non-profit agencies offer free counseling to assist you in this regard. Consult the yellow pages or the Internet under the heading Credit Counseling Services to find a counseling service in your area.

51. How do I dispute an item on my credit report?

You must contact the credit agencies directly and dispute the reported item. Following is the information on how to contact the agencies:

Transunion Consumer Relations		Equifax Consumer Relations		Experian Consumer Relations
PO Box 1000 Chester, PA 19022 800-888-4213 www.transunion.com		PO Box 105873 Atlanta, GA 30348 800-685-1111 www.equifax.com		PO Box 2002 Allen, TX 75013 888-397-3742 www.experian.com

52. What steps do I take if I become a victim of Identity Theft?

If you have been a "Victim of Identity Theft" in California you have certain rights under the law. In order to protect yourself you may provide a copy of a valid police report or a valid investigative report made by a Department of Motor Vehicle investigator with peace officer status to a credit reporting agency. The credit reporting agency must promptly block the reporting of any information that you allege appears on your credit report as a result of a violation of Section 530.5 of the Penal Code and shall ensure that information is unblocked only upon a preponderance of the evidence establishing one of the following facts: (1) The information was blocked due to a material misrepresentation of fact by you or fraud; or (2) You agree that the blocked information, or portions of the blocked information, were blocked in error; or (3) You knowingly obtained possession of goods, services, or moneys as a result of the blocked transaction or transactions or you should have known that you obtained possession of goods, services, or moneys as a result of the blocked transaction or transactions.

PIGGY-BACK SECOND MORTGAGES

53. What is a Piggy-Back Loan?

One of our most popular programs for purchasing a home is our Piggy-Back loan program. With this financing structure, an 80% 1st Mortgage and a 10%, 15% or 20% 2nd Mortgage are closed concurrently, eliminating the need for Private Mortgage Insurance (PMI). Learn more.

54. How much can I borrow on a Piggy-Back Second Mortgage?

We offer second mortgage programs up to $500,000. The best available rate allows for loan amounts up to 90% of the value of your home. Loan amounts up to 95% or 100% of the value of your home are permitted at a slightly higher rate.