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Frequently Asked QuestionsIndexMortgageEase Questions MortgageEase QuestionsWhy use a mortgage broker instead of a bank or conventional lender?When you seek a mortgage through a bank or mortgage company, your contact is limited to the company’s loans, lending programs and must adhere strictly to the company’s lending guidelines. A professional MortgageEase broker isn’t limited. The broker will know the full range of lending programs at multiple lending institutions ranging from traditional mortgage companies, trust companies, and chartered banks to insurance companies, corporate and private pension funds. Your MortgageEase consultant will shop around for the loan program, lending guidelines and interest rate that best fits your financial circumstances and mortgage needs. Since our independent mortgage brokers aren’t affiliated with any one company, the broker represents you and will work to get you the best loan and best rate possible. In fact, many MortgageEase borrowers benefit from our relationships with private lenders, who provide creative mortgages only through independent brokers. How should I compare rates offered by different companies?As a borrower, you’ll want to compare total costs for the same interest rate and lock period. You’ll also want to know if prepayment penalties apply and if the lender requires an impound account for taxes and insurance. Since rates fluctuate daily—and sometimes even several times in one day—you’ll want to look at total costs among brokers and lenders on the same day and at the same if the market is rapidly fluctuating. Do I need to find a MortgageEase office in my location?No, technology and our professional relationships enable us to serve as your mortgage professional, in the following States (CO, CT, DC, DE, FL, GA, MA, MD, MI ,VA & WV). Like us, even lending institutions right next door to you are using e-mail, the Internet, fax machines and rapid mail delivery to process mortgage loans and documents between offices and parties involved in the transaction. For on-site requirements, such as your appraisal, we work with licensed, independent third-party appraisal companies just like most conventional lending sources do. We also work with local escrow companies and title companies and use a professional, certified signature service that delivers documents and your loan package right to your home or office—at your convenience. Who is my MortgageEase consultant?Once we receive your loan application, a specialized loan professional is selected based on your mortgage needs, then assigned to work with you throughout the entire process. You’ll have the comfort of knowing that your consultant is not only familiar with your needs, but also familiar and experienced with lending programs and solutions of borrowers like you. How frequently am I updated regarding the status of my loan?Once we’ve initiated your loan process, you can monitor progress every step of the way. Just use the secure login feature on the Home Page of the MortgageEase.com web site. You can get a real-time loan status of, regardless of where we are in the process. You’ll also be continually apprised of the process and progress via e-mail, through our automated communications update system. Of course, if you have any questions about an update, simply contact your primary, personal MortgageEase consultant. Who manages and services my loan?After closing, our work is done. But we expect you’ll be pleased with the final transaction of your loan. Through our relationships with multiple financial firms, your loan isTransferred to a reputable mortgage investor or lending mortgage institution. You can expect this company to service your loan promptly and professionally. Pre-QualifyShould I get a loan pre-qualification before searching for a home or property?Certainly! The MortgageEase pre-qualification process helps you decide how much house and mortgage you can afford and estimates any cash you may need for a down payment, fees or any closing. Being pre-qualified is a tremendous benefit—and a timesaver. Not only will you know your price range when shopping for a home, you’ll be ready to make a viable offer immediately, and the seller will know your offer is serious since you’ve already pre-qualified. What documents do I need to provide for my actual loan application?Documentation requirements are different for different loan programs. But as a rule, you’ll need to document your income with a recent paycheck or pay stub, earnings declaration or even a letter from your employer that documents your earnings or income. You’ll also need a copy of your W-2 Form to show your income over the previous calendar year. If self-employed, your prior 1-2 years’ tax returns are generally sufficient. You can demonstrate cash on hand for closing with a copy of your recent bank statement or documentation of other cash assets. If you plan on buying one property after selling another—with the proceeds planned as the down payment—you can request an estimated closing statement to show the proceeds as assets available for closing. How quickly will my loan be approved?Once all your documents are in order, most loan applications are approved within two days, or 48 hours. However, the approval doesn’t finalize until your appraisal and preliminary title report is reviewed and approved. Is there an application fee or any up-front costs?A $300 deposit is required when you lock in your interest rate or request the property appraisal, which is usually ordered immediately to ensure it’s in place long before closing. of your home or property. This $300 deposit is secured in a trust account to cover the appraisal costs and are drawn when the appraisal is paid for. AppraisalI already have an appraisal. Can you accept it?Unfortunately not, and this is a quality-control measure adopted by most lenders, conventional lending sources and mortgage brokers. We must order the appraisal and monitor the process, ensuring it’s done by a licensed, preferred appraiser in your location. Rest assured though, MortgageEase appraisers are on-call and give our orders prompt attention and priority—as a borrower you can count on a certified, sound and reliable appraisal that’s done quickly and conveniently. What is your appraisal process? Will it give the current value of my home?The process and appraised value depend on your home and your financing needs. First, your application is screened by a technological underwriting system, which will direct the type of appraisal needed. The appraiser starts with this report, and then validates the information or determines the need for support. Sometimes, the appraiser may be able to confirm your stated value using technological validation and market research without the need for an intensive on-site review. Even when an on-site inspection is required for the appraisal, technology enables us to move appraisals quickly and efficiently. And we make every attempt to schedule appraisals at your convenience. Titles and Title InsuranceCan I select my own title and escrow company?Of course. Choose whichever company you like, but be sure and advise your MortgageEase consultant. However, please note that we often use preferred-companies for refinance transactions and these companies provide us with a guaranteed—and often discounted—fee schedule. So compare rates—you may save title and escrow costs by working with our providers. What is Title Insurance? Do I need it?First, think of function of the property title. It’s a legal declaration of ownership and will identify delinquent mortgage payments, debts, or liens on the property. As a rule, sellers pay for the title report since they must guarantee clear title. As a buyer, you can get information about property by ordering a preliminary title report, called a title search, which will also indicate previous owners and sales. Title companies compile this information from public records. The title insurance is a way to guarantee the findings, and many lenders require it. But often, the seller pays for it. It protects the buyer and mortgage lender since the title company is bound to pay legal fees that result from a claim and any covered losses. ClosingHow long will it take to close my loan?Whether your loan is a refinancing loan or new mortgage, MortgageEase can usually close the package in as little as 10 days. Then, once all signatures are in order, your loan will officially close. This typically takes 20 days, plus a three-day rescission period mandated on new purchases and investment property refinancing. How are cash proceeds disbursed at closing?If you’re receiving cash at closing, you can arrange for the settlement company or escrow manager to mail you a check or make an electronic deposit directly to your bank account. What is the three-day rescission period?By law, after signing all loan documents at closing, you have three days to cancel a refinancing loan transaction. This period is also called ‘the three-day right to cancel.’ The loan funds after this period expires—provided you don’t change your mind. The period counts Saturdays, but not Sundays or holidays. Can I redraw my loan documents if needed?You can ask for your documents to be redrawn for a $300 fee. However, if you carefully review the Estimated Closing Statement and make necessary changes then, you’ll likely avoid extra costs and fees! PaymentsCan I make bi-weekly mortgage payments?Many of our service providers do allow customers to make bi-weekly payments, which enables borrowers to pay their mortgage early by making 13 payments annually. But sometimes there are fees. You can probably accomplish the same goal by paying an additional amount each month—1/12 of your payment—and save any applicable fees attached to a bi-weekly payment schedule. Just check with your loan service provider. Do your loans have prepayment penalties?Usually, no. So you’ll be able to prepay your loan and refinance easily if interest rates decline, since most MortgageEase loans aren’t subject to prepayment penalties. Sometimes, loan programs with prepayement penalties are available, but any penalties and the terms are always clearly disclosed. Do you require an impound account?Unless the loan-to-value ratio exceeds 80%, our loan programs do not require impound accounts. What down payment do you require to qualify?Sometimes, no down payment is required! Many conforming loan programs require nothing down and these are loans that fall under Fannie Mae and Freddie Mac guidelines. Jumbo loan programs of more than $322,700 are available for as little as a 5% down payment. A MortgageEase consultant can advise you best on whether your circumstances and loan program require a down payment. RefinancingMy refinancing loan will close around the time my current payment is due. Should I make the payment?Of course. Not only will you avoid late fees and protect your credit rating, but you also have an important obligation to your lender to maintain your payment schedule. My home was for sale a few months ago. Is it eligible for refinancing?If your home isn’t currently for sale—even if you had it on the market over the past year—you’re eligible for a refinancing loan. Your lender will require a statement or letter of explanation, and you won’t be eligible for any loan programs that offer rebates. Locking RatesWhat is a lock and why might I want to use a lock policy?Interest rates change—and change often! And even the smallest change can mean thousands over the life of your loan. That’s why MortgageEase offers a Lock Policy, which enables us to lock in, or guarantee an interest rate for borrowers once written confirmation of the rate is provided. This protects your promised rate—a rate you decide during the loan process—regardless of fluctuating interest rates and market changes. Your rate is secure from the day your lock is confirmed until the day your lock period expires. When can I lock my interest rate? How do I lock it?If you are purchasing a home, you must have a specific closing or settlement date inorder to lock in your interest rate. If we’re working with you on refinancing your existing mortgage, you can lock your interest rate within a reasonable time period, but no later than 3 days prior to closing. To lock a rate, just make the lock request to your MortgageEase consultant. Usually, a lock is confirmed on the day of your lock request. But be aware that volatile market periods can have repeated rate changes during a single day, and this activity can impact your lock request. You’ll know for certain that your rate is locked when you receive written notice by e-mail or fax. When is the best time to lock my rate on a new mortgage?When the market is stable, most borrowers lock their interest rate 15-30 days before closing. During highly fluctuating market periods when rates are volatile, prudent borrowers often request a longer lock-in period. If your lock period surpasses 30 days, the loan may cost you a bit more, but you can save thousands over the life of the loan. Basically, the date you lock a rate is up to you. So be sure and talk with your consultant and review detailed information about lock rates and the lock policy. When is the best time to lock a refinancing interest rate?To help you determine the savings that refinancing can deliver, use our Refinance Savings Calculator. You’ll be able to look at a payment schedule and compare the current interest rate vs. the rate you’re currently paying. You’ll want to consider the costs of your current payment at a higher rate against the savings you’ll get at a lower rate, even if the lower rate might not be the lowest over a rate cycle. How much will a delay cost? And do know that any projections are only projections. And if a lower rate comes to fruition, you always have the option to refinance again for additional savings. What happens if my lock period expires before my loan process is completed?If we cause a delay that results in the expiration of your lock period, we’ll extend your lock without fee or penalty. But if the delay is created by the borrower, we must then process or finalize your loan at the original lock terms or current market interest rate, the higher of the two. How do borrowers cause delays in the loan process?There are many ways you can delay your loan application—so it’s important to adhere to your processing schedule as much as possible. To ensure that your loan and any related documents are processed on-time and on-track, your application must be returned to us within four days after you submit it for application. Maintaining this timeframe will help you protect your lock rate. You’ll also want to make sure you provide and submit all information documents requested, follow through on your appraisal schedule and provide any supporting documents we request. You’ll also want to make sure you’re available to sign all documents required in your loan package. Be aware too, that delays can occur when borrowers request subordination of a current second mortgage. Can I relock my rate if I reapply?No, you can’t relock your rate if you withdraw your application and make another application. I’ve selected a loan program and locked my rate. What happens if I change to a new rate and point combination or change loan programs?You’ll want to be sure the first loan program and rate and point combination you choose is the right one for you. If you change your selected options, you’ll receive the higher of these two: either the rate and point combination the day you choose your lock or the applicable rate on the day you change programs. Subordination AgreementsWhat is a subordination agreement?This is a document prepared by a second mortgage lender, and usually the borrower pays a fee for processing a subordination agreement. What does it mean? The lender agrees to remain in a secondary position when a first mortgage is refinanced,or to be subordinate to the first mortgage. In other words, if you default, the primary lender is paid first when your property is sold and the subordinate lender is paid second. Without this agreement, the second mortgage holder advances to primary lien position when the existing first mortgage is paid. Can I subordinate my existing second mortgage?If all lenders agree. What does debt-to-income ratio mean, and what is the maximum ratio?The ratio is determined by weighing your total debt against total income. For example, if your income is $100,000 annually and your debt totals $30,000, then your debt-to-income ratio is 30%. There is no maximum debt-to-income ratio on conforming loans and 38% to 50% on jumbo loans—the range depends on the loan program. In some cases, MortgageEase has approved loans with that hover at 70%. CreditWhat is a FICO score?The FICO credit score provides a numerical snapshot of someone’s credit at a point in time. It reflects your credit risk level—the higher the number, the lower the predicted risk. Low numbers indicate greater risk. The FICO comes from the most commonly used scoring system, and is a credit bureau risk score generated by information from your credit report only. Credit scores aren’t stored, or part of a credit profile, and may change from lender to lender since calculation factors vary. The score does change every time credit information changes in your credit report and a new or minimal credit history means it may not be possible to calculate a score. What is the minimum FICO score?At MortgageEase, we make mortgages easy, even for borrowers with a FICO score of 560, which is the minimum qualifying score in most cases. But we also offer alternative loan programs to borrowers with lower scores. If you fall into this category, you’ll want to be sure and contact a MortgageEase consultant since it’s likely other lenders have turned down your credit requests. Details and pricing are readily available by calling our toll-free number. My credit isn’t very good. Is there help?Yes, in fact we can often help you get your credit and financial management back on track. Learn more on our web site, by reviewing the MortgageEase Challenged Credit Loan program. You might also find debt consolidation and credit counseling services available in your area. Many nonprofits offer these programs; just check your local Yellow Pages for credit counseling or consumer credit counseling services. But be wary of for-profit companies that offer a credit fix for fees. Many of these companies are not legitimate, so make sure the service or program you consult is certified and legitimate. My credit report is incorrect. Can I dispute a credit issue or credit flaw?Of course, but you must contact the credit bureau or credit agency which provided the information. Just contact the primary credit-data agencies at: Equifax Consumer Relations Experian Consumer Relations Transunion Consumer Relations PointsWhat are loan points?Points are calculated on the loan amount, and each point is equivalent to 1% percent of the loan. Generally, points are fees you agree to pay in exchange for a lower interest rate. Basically, more points, less interest and no points or fewer points equals higher interest. You’ll pay more up front, but you may save a bundle over the life of the loan. You’ll want to weigh several factors when considering points—the interest rate, the amount of points, the length of your loan term, along with the benefits of tax-deductible interest. There may be other factors you’ll also want to consider. Are loan points tax-deductible like mortgage interest?Most borrowers realize tax-deductible benefits from points paid on a new mortgage, during the year the points were paid. Points paid on a refinanced mortgage are usually tax-deductible over the life of the loan. Of course, tax circumstances differ from one borrower to another, so it’s best to ask your tax advisor or financial manager to help you determine your specific tax benefits. Prepaid Interest and RebatesWhat is prepaid interest?Prepaid interest is collected at closing, to pay the interest for the remaining days of the month that accrues on your new loan. The loan program I’m considering has a rebate. How does the rebate work?The lender is offering you a credit—or rebate—if you agree to accept an interest rate higher than the zero point interest rate. The rebate amount is based on the amount of the loan and the lender harnesses the rebate amount by collecting it in small increments over the life of the loan. Is this like a no-cost loan?Yes, a rebate is a key factor of a no-cost loan. The lender offers rebates as credits toward closing costs but the borrower agrees to pay higher interest. So again, the rebate is recaptured in small increments over the life of the loan. Home Equity Loans (HELOCs)I’m approved for a home equity line of credit. How do I obtain proceeds?You may opt for an initial advance when the loan closes. After closing occurs, you should receive credit line checks in two weeks or so, which you can use at any time to draw on your credit line account. You can also use your equity line proceeds for any purpose. How are payments calculated on a home equity line of credit?Your minimum payment each month is calculated as an interest-only payment for the first 10 years of your loan. Thereafter, payments are calculated by multiplying the interest rate by the amount you owe, or the outstanding balance, and then dividing that total by 12. You may not obtain proceeds or withdraw funds from this account after 10 years. Is the interest tax-deductible when it’s on a home equity loan or credit line?Usually. Most taxpayers can deduct the interest paid up to 100% of the home’s value of your home. However, some restrictions may apply so it’s best to consult with your tax advisor or financial manager. Do lenders restrict how I spend the funds from a second mortgage?No, You can use these proceeds for any purpose. PMIWhat is PMI?Private Mortgage Insurance is simply insurance that protects the lender if you don’t pay your loan. It’s required by the lender if your total loan exceeds 80% of the purchase price of a new home or property, or if you’re refinancing and the total you plan to borrow will be more than 80% of the property value. One way to avoid PMI costs is to make a down payment of 20% or opt for a piggyback loan. So, what is a Piggyback Loan?A piggyback loan is sometimes arranged to eliminate private mortgage insurance and the necessity for a large down payment. Two loans — first and second mortgages — close simultaneously with the loans totaling the full price, yet neither loan exceeds the 80% cap. On a loan of 80/10/10, the first mortgage captures 80%, the second mortgage — or piggyback mortgage is loaned on 10% of value and the borrower has a down payment of 10%. In most cases, the interest rate on the first mortgage is calculated as if the borrower puts 20% down, and, PMI is eliminated. On a loan package of 80/15/5, the borrower will usually pay a somewhat higher interest rate on both mortgages. However, the borrower may still get a savings by eliminating PMI. When is PMI removed?Mortgage insurance protects the lender from losing their money if the homeowner defaults. Government regulations require that PMI automatically be cancelled when your loan balance reaches 78% of the original property value at the time you got the loan. Primary residence/second home (one unit)
Investment property/2-4 Unit primary residence
Please note: Paying on time is important when it comes to removing PMI in either of the cases above. Your payment history must show:
The USA Patriot ActDoes the USA Patriot Act affect borrowers and lenders?Yes. We must verify the identity of all loan applicants in order to comply with the Patriot Act Generally, a current driver’s license is sufficient for most criteria. Lenders must verify name, address, date of birth and Social Security identification number. For employed applicants, the Social Security number is usually included on income documentation but for unemployed applicants, we may need a copy of a social security card. Sometimes, additional documents are necessary to verify identity.
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