Providing Affordable Mortgages 

Applying for a mortgage can be a complex process that requires a lot of documentation and information. Here are some of the key pieces of information you may need to provide when applying for a mortgage:

  1. Personal information: This includes your full name, current address, social security number, and date of birth.
  2. Employment information: You will need to provide details about your current job, including your employer's name and address, your job title, and your salary.
  3. Income and assets: You will need to provide documentation of your income, including recent pay stubs, W-2s, and tax returns. You may also need to provide information about any assets you have, such as bank account statements, investment account statements, and retirement account statements.
  4. Debts and expenses: You will need to provide information about any outstanding debts you have, including credit card balances, car loans, and student loans. You may also need to provide information about your monthly expenses, such as rent or mortgage payments, car payments, and utility bills.
  5. Property information: If you have already found a property you want to buy, you will need to provide information about it, including the address, purchase price, and any repairs or renovations that may be needed.
  6. Credit history: Your lender will review your credit history, so you will need to provide authorization for them to pull your credit report.

Keep in mind that the specific information you need to provide may vary depending on the lender and the type of mortgage you are applying for. It's a good idea to speak with a mortgage broker or loan officer to understand the specific requirements for your situation.

The maximum origination fee that a mortgage broker can charge varies by state and is subject to federal regulations.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, mortgage brokers and loan officers must follow guidelines set by the Consumer Financial Protection Bureau (CFPB) when it comes to charging fees for mortgage origination services.

The CFPB's "Qualified Mortgage" rule prohibits lenders, including mortgage brokers, from charging origination fees that exceed 3% of the total loan amount for mortgages that are considered "Qualified Mortgages." However, some states may have their own regulations that cap origination fees at a lower percentage.

It's important to note that the origination fee is only one of the many costs associated with obtaining a mortgage. Other costs may include appraisal fees, title insurance, credit report fees, processing fee and more. Therefore, it's crucial to carefully review all fees associated with obtaining a mortgage and to compare offers from multiple lenders or brokers to ensure you're getting the best deal.

When you take out a mortgage, there are several fees that may be charged by the lender, some of which may vary depending on the lender, location, and type of mortgage. Here are some common fees that may be charged:

  1. Application fee: Some lenders charge an application fee to process your mortgage application. This fee can vary widely and may not be refundable.
  2. Appraisal fee: Before approving your mortgage, the lender may require an appraisal of the property to determine its value. You may be responsible for paying this fee.
  3. Origination fee: This fee is charged by the lender for processing your mortgage application and creating the loan. It is usually a percentage of the total loan amount.
  4. Title search and insurance: The lender may require a title search to ensure that there are no liens or other claims on the property. You may also be required to purchase title insurance to protect against any problems that may arise with the title.
  5. Homeowner's insurance: Most lenders require you to have homeowner's insurance to protect the property against damage or loss.
  6. Private mortgage insurance (PMI): If your down payment is less than 20% of the purchase price, you may be required to pay for PMI, which protects the lender in case you default on the loan.
  7. Closing costs: These include various fees associated with closing the loan, such as attorney fees, document preparation fees, and other expenses.

It's important to review and understand all the fees associated with a mortgage before agreeing to the terms of the loan. Some of these fees can be negotiated, while others may be non-negotiable. Be sure to ask your lender for a breakdown of all fees associated with your mortgage.

Closing costs include:

  • Underwriting fee: This varies based on what lender we determine is the best fit for your needs
  • 3rd party service costs: Appraisal, title insurance fees, inspections, warranty, survey, processing, etc.
  • Other costs and prepaids: Prepaid Interest, hazard insurance and property tax escrows

Closing cost estimates are specific to each loan scenario, and fees do change from time to time based on market conditions. We will provide fee and cost estimates with every loan pricing result. Additionally, once you apply for a loan you will receive an official Loan Estimate (which is a legally required disclosure document) that also summaries the fees and costs. Finally, before closing your loan you'll also receive a Closing Disclosure (a similar legally required disclosure to the Loan Estimate) which will show the finalized fees, costs, and prepaids.

There are several types of residential mortgages available to homebuyers, including:

  1. Conventional Mortgages: These are the most common type of residential mortgages. They are not backed by the government and are offered by private lenders. They usually require a down payment of at least 5% of the home's purchase price.
  2. FHA Loans: These are government-backed mortgages that are insured by the Federal Housing Administration. They are designed for low- to moderate-income borrowers and require a down payment of only 3.5% of the home's purchase price.
  3. VA Loans: These are mortgages that are guaranteed by the Department of Veterans Affairs and are available to eligible veterans, active-duty service members, and their surviving spouses. They usually require no down payment.
  4. USDA Loans: These are mortgages that are guaranteed by the U.S. Department of Agriculture and are available to low- to moderate-income borrowers in rural areas. They usually require no down payment.
  5. Jumbo Loans: These are mortgages that exceed the conforming loan limits set by Fannie Mae and Freddie Mac. They are designed for high-end properties and may have stricter credit and income requirements.
  6. Fixed-Rate Mortgages: These are mortgages that have a fixed interest rate for the entire loan term, which is typically 15 or 30 years.
  7. Adjustable-Rate Mortgages (ARMs): These are mortgages that have an initial fixed interest rate for a set period, after which the interest rate adjusts periodically based on market conditions.

The type of mortgage that is best for a homebuyer depends on their individual financial situation and needs. It's important to speak with a lender or mortgage broker to determine the best option.

Non-QM mortgages, also known as non-qualified mortgages, are home loans that don't meet the Consumer Financial Protection Bureau's (CFPB) qualified mortgage (QM) guidelines. Non-QM loans are typically considered riskier than QM loans because they don't meet the strict requirements designed to ensure that borrowers can afford to repay their loans. However, there are different types of non-QM mortgages available to borrowers, including:

  1. Bank statement loans: These loans allow self-employed borrowers to use their bank statements as proof of income, rather than traditional income documentation such as tax returns and W-2s.
  2. Asset-based loans: These loans are secured by the borrower's assets, such as real estate, stocks, or other investments, instead of their income.
  3. Interest-only loans: These loans allow borrowers to make interest-only payments for a specified period, typically 5-10 years, before the loan converts to a traditional principal and interest payment.
  4. Jumbo loans: These loans exceed the conforming loan limits set by Fannie Mae and Freddie Mac and are typically offered to borrowers with high credit scores and substantial down payments.
  5. Non-prime loans: These loans are designed for borrowers with credit scores below 620 or with a history of bankruptcy or foreclosure.
  6. Foreign national loans: These loans are designed for non-U.S. citizens who want to purchase property in the United States.
  7. Portfolio loans: These loans are held by the lender and not sold to investors, allowing the lender to set their own underwriting standards and loan terms.

Your ability to qualify for the loan depends on a wide range of factors, here is a bit of text from the U.S. Government Agency called the Consumer Financial Protection Bureau.

Lenders are required to verify and document that ... the consumer has a reasonable ability to repay the loan, considering such factors as the consumer’s income or assets and employment status (if relied on) against:
  • The mortgage loan payment
  • Ongoing expenses related to the mortgage loan or the property that secures it, such as property taxes and insurance you require the consumer to buy
  • Payments on simultaneous loans that are secured by the same property
  • Other debt obligations, alimony, and child-support payments. The rule also requires you to consider and verify the consumer’s credit history.

In addition to the above, the lender must have a reasonable expectation that the income that is being relied upon to support the approval will continue for the foreseeable future.

There are others programs called Non-Qm and are easier to qualify and don't have to follow these rules.

A Community Development Financial Institution (CDFI) mortgage is a type of mortgage loan offered by CDFIs, which are specialized financial institutions that provide affordable credit, capital, and financial services to underserved communities and populations.

CDFI mortgages are designed to help low-income borrowers and those living in economically distressed areas to access affordable housing financing. These mortgages often have more flexible underwriting standards, lower down payment requirements, and reduced closing costs than traditional mortgages.

CDFI mortgages are typically funded through a combination of private capital, government grants, and philanthropic donations. The CDFI lending model is intended to promote economic development in underserved communities by providing financing to support affordable housing, small businesses, and community facilities.

It is the appraiser's responsibility to adequately research the local real-estate market and to determine which comparable sales best represent the value characteristics of the subject property. A comparable sale is a property that has recently sold and is like the subject property in most respects, including size, location and amenities. Value of subject property is determined after all factors and market adjustments are taken into consideration.

You would want to refinance to improve your current situation where that improvement exceeds the costs. The improvement(s) could be:

  • A lower payment
  • A lower interest rate
  • Change to a fixed rate
  • Get access to cash to make a purchase or pay down higher rate debt

To the extent that any of these improvements exceeds the cost of the refinance transaction, then it would be beneficial to refinance.

The costs of a refinance can be in the form of cash paid to the lender, an increase in your loan balance, and/or included in the interest rate that you select. How the costs are paid does matter, but what matters most is to include all of the costs as you consider the value of the improvement to your current situation against those costs.

Send a Message

We appreciate your interest in our mortgage services. To help us better understand your unique mortgage needs and provide you with tailored assistance, we kindly request that you send us a brief message outlining what you are looking for in a mortgage. Please include your name, email, and phone number so that our team can reach out to you promptly. Whether you're seeking information on interest rates, down payment options, or any other mortgage-related inquiries, your message will assist us in providing you with the most relevant and helpful guidance. We look forward to hearing from you and assisting you on your journey to securing the ideal mortgage for your goals.

I represent clients who authorize me to do so. I do not work for or represent the interest of any mortgage lender or other duly authorized entity to whom I may submit a mortgage application on behalf of a Client. My services are provided in a Mortgage Broker capacity and I am not authorized to approve or deny a mortgage loan request. NMLS 1691763 / NMLS 1322774