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.

What is a FICO score?

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

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.

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.

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.

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.

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.

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. 43. 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:
48 States Alaska & Hawaii
SFR House or Condo$417,000$625,500
2-Unit Property$533,850$800,775
3-Unit Property$645,300$967,950
4-Unit Property$801,950$1,202,925

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.

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.

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.

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.