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FAQ's - Get the Facts

FAQ. The New Loan Estimate (LE) replaces the Good Faith Estimate (GFE) and the initial Truth In Lending document (TIL). The LE provides borrowers with more transparent information on loan terms and loan and closing costs estimates. The data is available to the borrower within three business days after submitting the loan application.

The Annual Percentage Rate, or APR, is the cost of your credit indicated in terms of an annual rate. When points and other closing costs are added to the payment, the A.P.R. can be compared to other loans to provide you with a fair method of comparing prices.

FAQ. The Amount financed is the mortgage loan amount applied for, not including the prepaid finance charges and any required deposit. Prepaid finance charges include:

  • Loan origination fees.
  • Commitment or replacement fee (points).
  • Adjusted interest.
  • Initial mortgage insurance premium.

The amount Financed represents a NET figure used to allow you to assess the amount of credit provided accurately.

No, when your mortgage loan is approved for the amount you applied for, the lender will credit you that amount.

The amount financed is lower than what you applied for because it represents a NET figure. For example, if $50,000 is applied for and the prepaid finance charges are $2,000, the amount financed would be $95,000, $50,000 minus $2,000.

The APR is computed from this lower figure based on your proposed payments. For a 30 year loan, adding the balance and applying an interest rate of 14% will equal a monthly payment of $592.44, including principal and interest.

The APR will be based on the NET amount to be financed instead of the actual mortgage amount. Because the payment amount remains the same, the APR will be higher than the interest rate making it 14.62%.

If the applicant's loan were approved, the $50,000 loan for a 30-year term the monthly payments at 14% or $592.44 would remain.

A disclosure statement discloses estimated payments. The interest rate will determine the monthly mortgage payment with principal and interest.

By law, lenders need to provide a Disclosure Statement. By signing, you indicate that you have received the statement with relevant information. Both you and the lender are under no obligations.

Total payments indicate paid amounts, including principal, interest, prepaid finance charges, and mortgage insurance. If the minimum required payment is altered during the loan term, this figure with change. Therefore this is an estimate based on the Disclosure Statement.

The Finance Charge is the cost of credit. The total amount of interest is calculated at an interest rate over the life of the loan; prepaid finance charges and the total amount of mortgage insurance are also added. This figure is an estimation and is provided on the Disclosure Statement.

Money loaned to you will be charged interest for the time period the money is loaned.

PREPAID finance charges along with any interest already paid are not refundable. However, if you pay off the loan early, the total amount of finance charges listed on the disclosure statement will not have to be paid. The Disclosure Statement shows an estimate of the required monthly payments through the life of the loan, but this can change loan is paid early.

A pre-qualification is the initial step to give you an idea of the amount and type of loan you most likely will qualify for.

A pre-approval is the second step where the borrower's data, such as pay stubs, bank statements, and credit reports, will need to be provided.

If the statements have the bank logo, name and correct account number, you can use them.

FAQ. When an interest rate is locked in, a commitment is made between the investor and company on the borrower's behalf regarding the mortgage loan rate. Your loan officer watches the market daily to ensure that when your interest rate is locked in, it is at the best rate for the loan

Rates can move more than daily, but rates do not move very much on a typical day. For this reason, it is vital to get a mortgage loan with the best company like Par 4 Mortgage to assist you in the optimum time to lock in the lowest rate. In addition, swings in the equity or stock market and indications from US and world market's economic position can affect interest rates.

FAQ. A target rate is the interest rate discussed initially to achieve the best and optimal rate for the mortgage.

Origination and discount points are a percentage of the loan amount initially discussed with the loan officer. They reference interest rate and the total cost of originating your mortgage loan.

There is no obligation with Par 4 Mortgage until the final signatures are on the closing documents listing the loan funds.

There is no obligation with Par 4 Mortgage until the final signatures are on the closing documents listing the loan funds.

Par 4 Mortgage will keep in touch throughout the entire application process. We will be in constant communication to discuss all information regarding loan approval, appraisals and more as these issues occur. You will be contacted 7 to 10 days before closing with additional confirmation details. Within 3 to 5 prior, Par 4 will contact you to discuss final figures and documents needed at closing.

The contract will specify where the location of the closing will be. 3-5 days before closing, Par 4 Mortgage will contact you regarding all items to bring and how much money in the form of a cashier's check is needed and made payable to the title company.

Closing costs include:

  • The loan origination fee.
  • Discount points.
  • Appraisal costs.
  • Any additional charges that are associated with the legal transfer of property.

 

Generally, these costs will range between 2 to 3 percent of the mortgage amount.

Private mortgage insurance (PMI) is required on conventional loans. Purchasing a home with as little as 5% down is doable. The loan-to-value must be above 80%, and the borrower must continue to pay all monthly insurance fees.

Yes. individual investors can sell loans and transfer them.

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