Age
The government monitors lending based on the age of its applicants. However, age is not an optional item. Lenders must determine if applicants are old enough to enter into a legal contract, typically age 18 or older.
Amortization
Gradual payment of a debt through regular
installments that cover both interest and principal.Amount of Loan
The amount of the loan you are requesting, rounded to the nearest $100.
Annual Percentage Rate (APR)
A measure of the total cost of credit (interest as well as other recurring charges) expressed as a yearly percentage rate. All lenders apply the same rules in calculating the annual percentage rate, giving consumers a good basis for comparing the cost of loans.
Appraised Value
An option of the value of a property at a given
time, based on facts regarding the location, improvements, etc., of
the property and surroundings.
Assets to Close
Assets to Close is the amount of cash or equivalent that can be used
for a down payment and closing cost. The figure is based on your
inputs from the application. You may use a new asset- to-close figure,
and after making a change, a new Home Buying Purchase Power will
recalculate.
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Balloon Term
Balloon loans have a payment based on a longer amortization, but are all due and payable in full after a specified period of time indicated in the Promissory Note. When the note matures, the principal balance outstanding is due in full. We can help with five and seven year balloon loans with payments based on a 30-year amortization. Please refer to conventional loan product descriptions for details about
Balloon loan programs.
Bankruptcy
There are several types of Bankruptcies (chapter 7,9,11,13, etc). Lenders want to know if you have filed a bankruptcy within the past seven years.
Bi-Weekly Mortgage Payments
Every 2 weeks, one half of your present monthly payment is
electronically debited from your bank to a Trust Account. Your
mortgage payment is then paid on your due date for you*. Over the
course of a year, by paying one half of your present monthly payment
every 2 weeks, approximately every 6 months additional dollars
accumulate in the Trust Account for you. These dollars are applied to
your principal, accelerating your equity build-up. By using this
method, you make the equivalent of 13 payments over the course of a
year.
*Interest is not credited to the client during this transaction
period.
Building Status
Is the property is existing, fully completed but never occupied, under construction or being planned for construction in the near future?
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Cash Out Refi
If applicable please indicate if you intend to receive cash back from
the refinance of your property.
Closing Costs
Closing cost vary by region and lender. The closing costs are based on
an 80% loan-to-value ratio and are 2.5% of the Maximum Loan Amount.
County
County where the property is located.
Credit Rating - (estimate)
A+ to A- Considered the best credit rating. FICO scores are generally
620 and up with no lates on mortgage and one 30 days late on revolving
or installing credit. No bankruptcy within past 2-10 years.
B+ to B- General good credit with FICO scores from
581 - 619. Two or three 30 days late on mortgage and two to four 30
days late on revolving or installment credit. Cannot have any 60 day
lates. Must be 2-4 years since bankruptcy discharge.
C+ to C-Fair credit with FICO scores from 551-580.
Three to four 30 days late on mortgage are allowed. Installment or
revolving credit can have four to six 30 days late or two to four 60
days late. Must have 1-2 years since bankruptcy discharge.
D+ to D- Overall poor credit history with FICO
scores from 550 and lower. Two to six 30 days late on mortgage or one
to two 60 days late, with isolated 90 days late. Revolving and
installment lates show poor payment record with pattern of late
payments. Possible current bankruptcy or foreclosure allowed with all
unpaid judgments to be paid with loan proceeds. Must have stable
employment.
Current Address
Current street address, city, state and zip code. P.O. Boxes are not acceptable.
Current Housing Expenses
This may be rent or the full payment to an existing mortgage lender including principal and interest, the monthly amount of taxes and insurance, any condo/homeowner fees and special assessments.
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Debt-to-Income Ratio
The ratio, expressed as a percentage, which results
when a borrower's monthly payment obligation on long-term debts is
divided by his or her gross monthly income. See housing
expenses-to-income ratio.
Down payment
Cash to be paid by the buyer at closing to
consummate a real estate transaction.
Down Payment Assistance Programs
Assistance is given the buyer for down payment, closing costs, or pre-paids for the purchase price of a home. Buyers receive the down payment funds and do not have to pay it back. Qualifying is easy and the program funds are free monies offered to homebuyers, requiring no repayments, no silent second mortgages and no recapture penalties on homes anywhere in the United States. The money given to the buyer is true gift money.
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Estimated Taxes
Most real estate is assessed an annual tax, commonly called real
property taxes. Local municipalities have various methods to calculate
real property taxes, making it difficult to accurately determine the
taxes in your area. The Home Purchase Power Calculator estimates the
property taxes, but you can input a different amount based on the tax
bill of the subject property. Make sure you divide the annual tax by
12 for the monthly amount.
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Financing Concessions
Many home purchases involve payment of a buyer's closing costs by the
seller/builder and/or real estate agent. If you have a purchase
contract for a home that contains provisions for either of these
parties to pay some or all of your loan costs, please enter the total
amount of those payments.
Foreclosures
A foreclosure occurs when a borrower is unable to make the monthly payments or otherwise defaults on the terms of a real estate mortgage and the lender, through a legal proceeding, takes ownership of the property. A Deed-in-Lieu of Foreclosure occurs when a loan is in default and the lender agrees to accept title to the property from the borrower by deed instead of going through the foreclosure process. Typically lenders ask if you have had a property foreclosed or if you have given a deed-in-lieu of foreclosure in the past seven years.
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Gender
The government monitors lending based on the sex of its applicants. Lenders are required to ask for this information, but you are not required to provide it.
Gift Funds
If this is a purchase transaction and you will be using funds from a
gift, please enter the amount of that gift. (Note: Gift funds may only
come from a family member and must not have any repayment
requirements.)
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Hazard Insurance
A form of insurance in which the insurance company
protects the insured from specified losses, such as fire, windstorm
and the like.
Homeowner's or Maintenance Fees
Payments made by property owner(s) of a condominium
or a unit in PUD to the homeowners' association for expenses incurred
in upkeep of the common areas.
Housing Expenses
These include the monthly principal and interest
payments that are stipulated on the mortgage note. In addition, the
monthly housing expenses include a monthly amount for the property
taxes and hazard insurance (1/12 of the annual taxes and insurance).
There may be other expenses, such as condominium fees, homeowners
fees, special assessments, etc., that are included.
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Income to Debt Ratios
Primary Housing Expense(PHE)/Income Ratio(I): This
ratio is the result of dividing the housing expenses for the proposed
loan by the monthly income of the borrower(s).
Total Obligations(TO)/Income Ratio(I): This ratio
is the result of dividing the housing expenses for the proposed loan
plus the borrower(s) other monthly credit obligations by the monthly
income of the borrower(s).
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Initial Interest Rate
Typically one to three percentage points lower than that of most
fixed-rate mortgages. Lower interest rates also make ARMs somewhat
easier to qualify for. The initial interest rate is tied to certain
economic indicators that dictate in part what the monthly payments
will be.
Insurance
Mortgage lenders require hazard insurance on a property used as
collateral for the loan. Insurance cost varies from region to region
and by the magnitude of coverage. The Home Purchase Power Calculator
estimates the insurance cost, but you can input a different amount
based on you your insurance coverage preference or from your current
Home Owners Policy. Make sure you divide the annual premium by 12 for
the monthly amount.
Interest Rate
The
percentage of an amount of money which is paid for its use for a
specified time.
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Lien Priority
Mortgage liens can have different priorities on residential real estate. A first lien is considered a higher priority than a second lien.
Liquid Assets
Assets that can be used for a down payment and closing cost. These assets can be converted to cash or cash equivalent. Examples are listed below:
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Checking and Savings Account
-
Money Market Accounts
-
Exchange traded stocks and bonds
-
Equity from a pending sale of real estate
-
Gifts (not to be paid back)
Loan Purpose
Purpose for which you are requesting a loan.
Loan-to-Value Ratio
The ratio of the mortgage loan amount to the properties appraised value or selling price, whichever is less.
Loan Type
Lenders can typically help with conventional, FHA and VA loan
programs. If you need further explanation, proceed to the product
descriptions for each loan type.
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Market Value
The most likely price a given property will bring
if widely exposed on the market, assuming fully informed buyer and
seller.
Minimum Payment
The minimum amount that you must pay (usually
monthly) on your account. In some plans, the minimum payment may be
"interest only." In other plans, the minimum payment may include
principal and interest.
Monthly Income
One of the most important components of the loan
underwriting process is determining the borrower's monthly income. The
income of all borrowers and co-borrowers is included in the
calculation. The income can be derived from several sources, but it
must be supported by historical documentation and have a high
likelihood of continuation.
Monthly Debt Obligations
These include monthly credit obligations, such as
installment payments, revolving charge cards or other borrower
obligations that will continue longer than 10 months. Usually, 5% of
the current balance of a revolving charge account is used for the
monthly payment.
Mortgage
A lien or claim against real property given as security for a loan. It is a two party agreement as apposed to tri-party agreement of a deed of trust.
Mortgage Loan Amount
The mortgage loan amount is based on the monthly principal and
interest payment, rate of interest, and term of the loan. Altering the
taxes, insurance, debt, interest and term will recalculate the loan
amount.
Mortgage
The lender of money or the receiver of the mortgage
document.
Mortgage Insurance
Insurance required for a loan-to-value ratio above
80.01%.
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Occupancy
Lenders provide financing on owner-occupied primary homes, owner-occupied second or vacation homes and non-owner occupied homes.
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Plan Types
Mortgage loans have a number of possible repayment structures or plans
including Fixed Rate, Graduated Payment and Adjustable Rates. Please
refer to the conventional, or FHA or VA loan product descriptions for details about these variations.
Points
Origination fees charged be the originating lender or broker and/or
discount fees charge by lenders to increase the overall yield. A point
is equal to one percent of the principal amount of your mortgage.
Prepaid interest
Prepaid
interest is the interest charged to borrowers at loan closing to pay
for the cost of borrowing for a partial month. For example, if a loan
closes on the 15th of the month and the first payment is due 45 days
later, the lender will charge 15 days of prepaid interest.
Previous Address
If you have lived at your present address for less than two years, enter your previous address including street address, city, state and zip code. P.O. Boxes are not acceptable.
Principal Loan Balance
Face amount of a loan evidencing the amount
repayable, exclusive of interest, according to the terms of the note
securing the obligation.
Principal and Interest
The principal and interest is the monthly payment
needed to repay the mortgage loan over a predetermined period. After
deducting the monthly taxes, insurance, and debt from the Total
Monthly Obligation, the mortgage payment is calculated based on a 30
year fully amortizing loan and the current 30 year mortgages rates of
Lenders with a 1 point origination fee. You may input a new rate and
term.
Property Rights
Property rights include fee simple and leasehold. Fee
simple is the highest form of ownership and is the most common form of
ownership or property right. If you need further explanation on the
types before making this selection, please review the definitions in
the glossary.
Property Tax
A tax levied by the local municipality or county on
real and personal property.
Property Type
1-4 family mortgage loans for the most common types of property, including detached homes, attached homes, units in Planned Unit Developments, Condominiums, Commercial, Investment, and Vacation homes
Purchase Price
The contract price of the subject property is the purchase price in a transaction.
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Race
The federal government monitors the ethnic mix of all loans made by
lenders to ensure there is no discrimination against any one group.
While lenders are required to request this information so it can
report it to the federal government, you are not required to provide
it. Please make your selection from the list provided.
Revolving and Installment Debt
The Home Purchase Power
Calculator used the revolving and installment debt from the
application. If the monthly debt figure is different or you believe it
will be different when you obtain a mortgage, you may input a new
figure.
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Second Trust Rolled In
If you are requesting a refinance and intend to pay off an existing
first mortgage AND an existing second mortgage please select "YES".
Sales Concessions
In some home purchase transactions, seller/builders and/or real estate
agents offer special incentives to prospective buyers (e.g., a new car
or boat; a trip; club membership dues; cash credits for upgrades in
carpeting or other buyer preference items). If you have purchase
contract for a home that contains provisions for incentives such as
these, please enter the total value of those items.
Secondary Finance
If there will be a second mortgage used to assist in financing the acquisition of the subject property, please enter the amount of that loan. Proceeds from a second can come from a loan from the seller/builder, a private party or from another lender. (Note: Special qualification requirements are applicable when secondary financing is used.)
Self Employed
If you own 25% or more of the company by which you are employed, you are considered self employed for loan purposes.
Social Security Number
If you are concerned about transmitting your social security number on this application, please leave this entry blank. Loan counselors will contact you later for this information. If you choose not to provide this information at this time, lenders will be unable to respond with an approval determination until after you are contacted.
Street Address
The address of the property for which you are requesting a loan.
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Total Assets
Including liquid assets. Examples are listed below:
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Checking and Savings Account
-
Money Market Accounts
-
Exchange traded stocks and bonds
-
Real Estate
-
Autos
-
Personnel Items such as furniture, jewelry, etc.
-
Cash Value of Life Insurance
-
Retirement Fund (IRA, 401k, etc).
Total Liabilities
Examples of liabilities are listed below:
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Revolving Credit Debt (Visa, MasterCard,
department store charge cards)
-
Installment Debt (bank loans, auto loans, boat
loans, etc)
-
Real estate loans
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Pledges, personnel notes, etc.
Total Monthly Debt
Monthly debt obligations may include monthly payments on:
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Other real estate loans, but not
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payments on loans being repaid if this is a
refinance loan;
-
payments on loans being repaid from the sale of
an existing home;
-
Installment loans;
-
Revolving accounts; and
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Child support and separate maintenance (alimony)
paid to a former spouse.
Do not include payments on rental real estate
mortgages that have been deducted from the income noted in the Total
Monthly Income section.
Total Monthly Income
Total monthly income for all persons included in a lenders application. Income can include:
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Wages;
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Workman's Compensation or permanent disability payments;
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Retirement and Social Security income;
-
Net Income from Self Employment (Schedule C net income);
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Income from Trusts, if continuing for at least
three years into the future;
-
Income from Partnerships, Professional
Corporations or Sub-S Corporations;
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Commissions;
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Bonuses, if they are continuing;
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Interest and dividends;
-
Rental income after deducting expenses and debt
payments; and
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Other investment income.
Income from child support and/or separate
maintenance (alimony) and public assistance programs need only be
disclosed if you intend to use it for loan qualification purposes.
Total Monthly Obligations
A key ratio used in the underwriting process is the relationship
between the borrower's monthly income and their total monthly
obligations. The ratio is determined by dividing the total monthly
obligations by the total monthly income. There are many factors used
in the underwriting process and mortgage lenders generally follow the
underwriting guidelines of FNMA and FHLMC. Typically this ratio should
not exceed 36% to 38%. The Home Purchase Power program determines the
total monthly obligations using a ratio of 38%. The figure is
calculated by multiplying the total monthly income by 38%. Total
monthly obligations include:
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The monthly mortgage payment (principal and
interest)
-
Taxes and insurance
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CONDO/PUD fees, if applicable
-
Monthly installment and revolving debt
-
Other recurring obligations
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Units
1-to 4- family properties (i.e., a 2-Family property is a Duplex, 3-Family property is a Triplex, etc).
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Year
The year the property was built or estimate.
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