Regional Lending Services

FAQ

Why should I use a Mortgage Broker, instead of going directly to a Bank?

Banks have massive costs of operation and advertising (who pays for all the TV ads?) which offset their advantage of buying bulk money. They have to train (continuous turnover) and pay their representatives and staff to originate and process a loan further increasing cost of doing business. Mortgage Brokers work with the wholesale side of Banks. By originating, processing and packaging the files, and delivering same to the wholesalers, Mortgage Brokers eliminate much redundancy and liability and therefore can offer the same or lower fees and rates as the Banks do directly, and offer better, more experienced, and more personal service as well.

What does PITI stand for?

This acronym stands for Principal and Interest, Taxes and Insurance. This term is used to disclose the total monthly payment. The taxes and insurance are broken down to monthly amounts by dividing the yearly total by 12. HOA dues and special assessments are not included in the above and if applicable must be added to the above PITI, to obtain the total monthly payments.

What is a “Conforming” Loan?

Conforming loans refer to conventional loans up to a maximum loan amount of $417,000*. These loans are conforming to FNMA and FHLMC underwriting standards. These loans can be set up with payoff schedules in 5 year increments, from as low as 10 year terms to as long as 30 year terms, do not have prepayment penalties, or balloon payments. Loan amounts temporarily increased to as high as $729,000 with the Economic Stimulus package through at least 12/08. Pricing slightly higher for loan amounts above $417,000.

What types of Loans are there for First Time Buyers?

With the evaporation of easy qualifying sub-prime loans, buyers must now prove and document income. There are still 100% LTV conforming loans in the few remaining “non declining market” areas. For most of the nation, however the highest loan to value conforming loan now requires a 5% down payment. FHA loans are also available and only require a 3% down payment. These loans are government insured and are very similar to conforming loans. They allow the seller to pay all or part of the closing costs, and the required down payment can be a gift from a relative or close friend. FHA loans are very lenient with regards to credit issues as well. For our Veterans, VA loans will finance 100% of the purchase up to $417,000, and the seller can pay all or part of the closing costs as well. There also some specialized “down payment assist programs” available.

What types of loans are available for Investors?

With the suddenly very attractive prices, investment properties are once again making sense. Most conforming lenders now require at least 15% down for investors, and to avoid PMI costs, down payments of at least 20% are required. Investor costs and rates are slightly higher than owner occupied loans, but otherwise Investor financing is part of the conforming family of loans.

What is PMI, and what does it do for me?