Frequently Asked Questions.

What are the different types of mortgage loans?

Fixed Rate Mortgages

• Rates are fixed for the life of the loan and are available for various amortization periods: 15 years, 20 years, 25 years, 30 years.

Adjustable Rate Mortgages (ARM)

Two-steps

• 5/25: Rates adjust once at end of first 5 years then remains fixed for 25 years
• 7/23: Rates adjust once at end of first 7 years then remains fixed for 23 years

Balloons

• 5/25 or 7/23: Rate is fixed for first 5 years or 7 years

How do I know what my loan rate will be?

Rates vary primarily based on the type and purpose of the loan, your credit history and income, loan amount, value of the property and the number of points you are willing to pay.

How do I calculate my-loan-to-value ratio(LTV)?

The loan-to-value ratio (or LTV) is one of the most important factors in your loan process. It is used to determine the limits within which your housing and debt ratios must fall for you to be approved. It can also determine which fees you will be charged for your loan and the amount of these fees. It will also determine whether you must pay Private Mortgage Insurance (PMI) and use an impound/escrow account.

Your LTV is simply the amount you are borrowing divided by the value of the subject property you are purchasing or refinancing. This gives you a simple ratio.

For example, a house valued at $100,000 which you intend to purchase with an $80,000 loan (and a $20,000 down payment of your own cash) is said to have an LTV of 80 percent ? that is, the loan represents 80 percent of the value of the house.

The value of your property is its appraised value OR the amount you pay for the property (the market value), whichever is lower. In the initial stages of qualification and approval, your property's value is understood to be an estimate. It will be confirmed, if necessary for your particular loan, by a professional appraiser.