Frequently Asked Questions

What is the difference between preapproval and prequalification?

The preapproval process is much more complete than prequalification. For prequalification, the loan officer asks you a few questions and provides you with a pre-qual letter. Preapproval includes all the steps of a full approval, except for the appraisal and title search. Preapproval can put you in a better negotiating position, much like a cash buyer.

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When does it make sense to refinance?

Usually people refinance to save money, either by obtaining a lower interest rate or by reducing the term of the loan. Refinancing is also a way to convert an adjustable loan to a fixed loan or to consolidate debts. The decision to refinance can be difficult, since there are several reasons to refinance. However, if you are looking to save money, try this calculation:

Calculate the total cost of the refinance.
Calculate the monthly savings.
Divide the total cost of the refinance (#1) by the monthly savings (#2). This is the "break even" time. If you own the house longer than this, you will save money by refinancing.

Since refinancing is a complex topic, consult a mortgage professional.

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What is a rate lock?

A rate lock is a contractual agreement between the lender and buyer. There are four components to a rate lock: loan program, interest rate, points, and the length of the lock.

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What's the difference between a mortgage broker and a lender?

A mortgage broker counsels you on the loans available from different wholesalers, takes your application, and usually processes the loan, which involves putting together the complete file of information about your transaction, including the credit report, appraisal, verification of your employment and assets, and so on. When the file is complete, but sometimes sooner, the lender "underwrites" the loan, which means deciding whether or not you are an acceptable risk.

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Will I save money going directly to a mortgage lender?

Not necessarily. In fact, if you are a reasonably astute shopper, you will probably do better dealing with a mortgage broker. Mortgage brokers do not add any net cost to the lending process, because they perform functions that would otherwise have to be done by employees of the lender. Furthermore, because mortgage brokers deal with multiple lenders -- in a typical case, 25 to 30, sometimes more -- they can shop for the best terms available on any given day. In addition, they can find the lenders who specialize in various market niches that many other lenders avoid, such as loans to applicants with poor credit ratings, loans to borrowers who do not intend to occupy the property, loans with minimal or no down payment, and so on.

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What is a full documented loan?

Both income and assets are disclosed and verified, and income is used in determining the applicant's ability to repay the mortgage. Formal verification requires the borrower's employer to verify employment and the borrower's bank to verify deposits. Alternative documentation, designed to save time, accepts copies of the borrower's original bank statements, W-2s, and paycheck stubs.

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What are the other types of loans?

Stated income/verified assets: Income is disclosed and the source of the income is verified; but the amount is not verified. Assets are verified and must meet an adequacy standard such as, for example, 6 months of stated income and 2 months of expected monthly housing expenses.

Stated income/stated assets: Both income and assets are disclosed; but not verified. However, the source of the borrower's income is verified.

No ratio: Income is disclosed and verified but not used in qualifying the borrower. The standard rule that the borrower's housing expenses cannot exceed some specified percent of income is ignored. Assets are disclosed and verified.

No income: Income is not disclosed, but assets are disclosed and verified and must meet an adequacy standard.

Stated assets or No asset verification: Assets are disclosed but not verified, income is disclosed, verified, and used to qualify the applicant.

No asset: Assets are not disclosed, but income is disclosed, verified, and used to qualify the applicant.

No income/No assets: AKA: NO DOC: Neither income nor assets are disclosed.

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What is a good faith estimate?

The list of settlement charges that the lender is obliged to provide to the borrower within three business days of receiving the loan application.

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What is a conforming loan?

A loan eligible for purchase by the two major Federal agencies that buy mortgages, Fannie Mae and Freddie Mac. The loan limit is currently $333,700 for a single-family house.

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What is a jumbo mortgage?

A mortgage larger than the maximum eligible for purchase by the two Federal agencies- Fannie Mae and Freddie Mac- currently $333,700.

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What are points?

An upfront cash payment required by the lender as part of the charge for the loan, expressed as a percent of the loan amount; e.g., "2 points" means a charge equal to 2% of the loan balance.

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What is a prequalification?

The process of determining whether a customer has enough cash and sufficient income to meet the qualification requirements set by the lender on a requested loan. A prequalification is subject to verification of the information provided by the applicant. A prequalification is short of approval because it does not take into account the credit history of the borrower.

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We work to get you the best loan possible. Our qualification process is simple and fast!

Fill out our easy online loan application!

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FORT LAUDERDALE, FL 33319
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PHONE: 954-978-3100
FAX: 954-671-6858

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