North America Mortgage

Frequently Asked Questions

	Refinancing Purchasing Top 10 FAQs Consolidation Relocation Home Improvement Contract for Deed
	Refinancing Frequently Asked Questions What programs are available? What is the best term? Would I benefit from refinancing? How often do interest rates change? What is a point? How much are closing costs? Do I need to pay an Origination Fee? How much will I need to pay out of my pocket? Can I finance all of my closing costs? Are rates going up or down? Should I lock now? Why should I refinance with you? Do I get a better rate? Will you sell my loan? What is the best way to compare rates from lender to lender? How long will the loan process take? Can I pay my own taxes and insurance? I recently divorced and need to remove my former spouse from the mortgage. Do I need to refinance? Why do I need new title work; I live here already? I just had an appraisal for a home equity loan. Can I use it? What happens to the money that was already collected for taxes and insurance escrows? Do I have to qualify again? What if I make less money than I did or have changed jobs since I first obtained my mortgage? I want to borrow more money to use for repairs to my home. Can I do that? Annual Percentage Rate (APR)
	What programs are available? North America Mortgage offers a wide range of mortgage products including fixed rate (terms raging from 5 to 30 years, balloons (with 15, 20 and 30 year terms)and adjustable programs (30 years only). Our loan specialist will take you through an interview process that helps us learn about your gols and understand your objectives. It is this understanding that helps us find the best program for you. Our goal is very clear, we want to save you money. What is the best term? We recommend the shortest possible term for all mortgages. We have terms ranging from 5 to 30 years. Would I benefit from refinancing? Refinancing does not always benefit everyone in the same manor. The normal goal for refinancing is savings and there are three types of savings that need to be considered. 1) Long term savings which are usually recognized when you are able to lower your interest rate and/or shorten the remaining term. 2) Immediate monthly savings which are usually recongnized when you are able to extend the term of your exisiting loan. An interest rate reduction is not always required to see these type of savings. However, the lower the rate the more the savings will be. 3) Personal savings That allow you to accomplish personal goals may be savings enough to warrant refinancing. An example of personal savings may be an individual going through a divorce looking to remove their former spouse for the Mortgage and Deed. In this case the lowest possiable rate and the shortest term are a must, However they may acctually be higher and longer that the existing mortgage. How often do interest rates change? Interest rates change daily and sometimes several times daily based on the bond market. Rates are also dependent on the type of mortgage loan and the loan balance. What is a point? ? Points are prepaid interest which may be charged by the lender for the purpose of providing a lower interest rate. If points are paid, they are normally payable at the time of closing. Each point is equal to 1% of the principal loan amount. For example, $1,500 equals one point on a $150,000 mortgage. The more points you pay, the lower your interest rate will be, thus lowering your monthly payment. How much are closing costs? Closing costs vary from state to state, and title insurance varies from area to area. These variances, along with your loan balance will affect your final closing costs. Upon completion of your application, one of our Mortgage Loan Consultants will send you a Good Faith Estimate. Your Good Faith Estimate will give you a detailed breakdown of all costs related to your refinance. Do I need to pay an Origination Fee? The origination fee is a percent of the loan amount and covers the cost of processing and closing your mortgage loan. An origination fee can be waived as lender paid with a higher interest rate. How much will I need to pay out of my pocket? Can I finance all of my closing costs? Most of our products allow you to finance closing costs into your new mortgage loan as long as there is enough equity in the loan. You may also pay a higher interest rate to cover your closing costs. Are rates going up or down? This is the million-dollar question! The bond market changes twice daily. No one can predict fluctuations in the bond market and therefore cannot predict which way rates will go. Should I lock now? You have the option to lock in an interest rate or float at any time. Since no one person can accurately predict what rates will do, the decision to lock or float must be yours. Why should I refinance with you? Do I get a better rate? As a North America Mortgage customer, the typical refinance costs are lower. We simply do a “Streamline Refinance” which generally does not require an appraisal or a credit report. Money that is currently in your escrow account will also transfer over and will save on the escrow set-up for your new refinanced mortgage. Will you sell my loan? North America Mortgage retains the servicing on the majority of our loans. However a transfer of your servicing rights is possible. Transfer of servicing is a common business practice in the mortgage industry and is not based on personal or payment history reasons. What is the best way to compare rates from lender to lender? When shopping for rates, we suggest that you get a Good Faith Estimate from all lenders you are shopping and compare rates and fees (i.e. apples to apples). This ensures that there are no hidden costs or fees and allows for a fair comparison between lenders. You may also want to compare the APR on the Truth in Lending Statement. This indicates the total cost of doing the loan. The lower the APR the less cost associated with the loan. How long will the loan process take? It will take approximately 45 – 60 days to process your loan. Once we receive your loan application, the Client Coordinator assigned to your loan will be in continual communication with you regarding your loan status. Can I pay my own taxes and insurance? For FHA and VA loans the government requires the lender to escrow for those fees. On Conventional loans you may pay your own taxes and insurance. However, there is an additional fee. I recently divorced and need to remove my former spouse from the mortgage. Do I need to refinance? No, there are several ways to remove an ex-spouse from the mortgage. You can do a qualifying refinance to remove your ex-spouse. You can also do a qualifying assumption with a release of liability. Why do I need new title work; I live here already? A new title search is required to ensure there are no obstacles (liens or lawsuits) to obtaining clear title to the property. I just had an appraisal for a home equity loan. Can I use it? Typically these appraisals are not acceptable for a mortgage loan. Once we have received your application, you will want to discuss this issue with your Client Coordinator. What happens to the money that was already collected for taxes and insurance escrows? As a current North America Mortgage customer, your tax and insurance escrows may be rolled into your new account. This may reduce the amount you will need to bring to closing. If you are not a current North America Mortgage customer or you choose not to roll your escrows, any unused monies will be refunded within 60 – 90 days after closing depending on the lender. Do I have to qualify again? For current North America Mortgage customers, we offer an array of Streamline Refinances that require no credit qualification. If you are paying off a 1st and 2nd or taking cash from the equity in your property, you will be required to qualify. Call one of our experienced Mortgage Loan Consultants to see if you are eligible for our no credit qualification programs. What if I make less money than I did or have changed jobs since I first obtained my mortgage? Again, North America Mortgage does offer a variety of Streamline Refinance products that require no credit qualification. Call one of our experienced Mortgage Loan Consultants to see if you are eligible for our no credit qualification programs. I want to borrow more money to use for repairs to my home. Can I do that? Yes, all of our loan types do allow for cash out. However there must be sufficient equity in the property to cover the cost of the repairs and the property must appraise at an acceptable value before the repairs have been completed. Annual Percentage Rate (APR) In comparing any type of loan, whether it be a fixed rate loan to a fixed rate loan, adjustable rate loan to adjustable rate loan or fixed rate loan to adjustable rate loan, there is one way that can be used to compare apples to apples and even apples to oranges. APRs are designed to do just that. APRs are a way to calculate the annual cost of loans, taking into consideration loan origination fees (points) and the other costs associated with securing a loan. The additional costs include appraisal and credit report fees as well as processing and document fees. One confusing aspect of APRs is that the APR on 15 year loans will carry a higher relative rate due to the fact that the points are amortized over the 15 year term rather than the 30 year term. When a Regulation Z (Reg Z, the mortgage companies disclosure of cost for the loan) is prepared for a buyer/borrower the prepaid interest is also included in the APR calculation. For our illustrations we will use only the points, appraisal, credit report, processing and document fees. As a means of protecting consumers from companies who did not disclose the fees associated with a particularly low start rate on an adjustable rate loan or below market rate on a fixed rate loan, APRs give consumers a way to check the true cost of a loan. One common situation that occurs when a borrower receives a Reg Z, and a copy of their note, is the column that indicates the amount financed is less than the loan amount the borrower is actually financing. It is here that many borrowers leap before they look and call to find out why they are only receiving a $146,925 loan when they applied for a $150,000 loan. It is here that APRs enter the picture. Let's look at how APRs are calculated. For our illustration we will assume a 8.50% fixed rate interest. For a 30 year loan the monthly payments for a $150,000 loan are $1,153.37. In order to calculate the APR for this loan we subtract $2,250.00 (1.50 points), $275.00 appraisal fee, $50.00 credit report fee, $500.00 processing, document and other fees. ($150,000 - $3,0750 = $146,925). The $146,925 is then used as the present value/loan amount to determine the true cost of this loan. By solving for the new interest rate for a $146,925 loan with the same payment of $1,153.37, the APR is calculated as 8.73%. How does this compare to a 30 year fixed rate loan with a 8.00% interest rate and 3.50 points? The monthly payments for this loan is $1,100.65. In order to calculate the APR for this loan we subtract $5,255.00 (3.50 points), $275.00 appraisal fee, $50.00 credit report fee, $500.00 processing, document and other fees. ($150,000 - $6,075 = $143,925). The $143,925 is then used as the present value/loan amount to determine the true cost of this loan. By solving for the new interest rate for a $143,925 loan with the payment of $1,100.65 the APR is calculated as 8.44%.
	Purchasing Frequently Asked Questions How much of a down payment do I need? What is my maximum purchase price? How large of a payment can I afford? Can I apply for a loan before I've found my property? Why do I have to pay title insurance? What is APR? What are closing costs? When can I lock an interest rate? What does it mean to "buy down" the interest rate? Does my credit have to be perfect? What is amortization? What is an appraisal? How much do I have to pay up-front to apply for a mortgage loan? How often do interest rates change? What is an escrow payment? What is a point? Do I need to pay an Origination Fee? Are rates going up or down? Should I lock now? ? Will you sell my loan? What is the best way to compare rates from lender to lender? How long will the loan process take? Annual Percentage Rate (APR)?
	How much of a down payment do I need? 3% usually is the minimum required to close. However we do offer 100% financing programs. These programs will carry a slightly higher rate, but are extremly attractive. What is my maximum purchase price? There are 3 questions that will need to be answered. 1) How much of a payment can you afford? 2) How much of a down payment do you have? 3) What programs are available to you? It is hard to answer this question without completing an application and/or speaking with a loan officer. The pre-qualification application is designed to answer this question. We recommend you complete all sections of the application. How large of a payment can I afford? Each loan program is different, but here are some general guidelines for determining the monthly payment you can afford. 1) The new mortgage payment plus your monthly debts (car payments, installment loans, credit and store cards)should not exceed 40% of the total gross monthly income of all signers. 2) The paymnet should not exceed 28% of the total gross monthly income of all signers. This may not be a huge factor in certain programs, but is an excellant rule of thumb. Even if you are approved for a larger payment, you may not want to exceed this amount. We can give you answers specific to your situation after you complete an application and/or speaking with a loan officer. The pre-qualification application is designed to answer this question. We recommend you complete all sections of the application. Can I apply for a loan before I've found my property? ? Yes. You can obtain pre-approval for a maximum purchase price, loan amount and loan program. Once the loan has been approved, any of these variables can be changed to match the specifics of the actual transaction. However, an interest rate can not be locked until a property address has been specified. Why do I have to pay title insurance? Title insurance protects the lender and the homeowner against loss resulting from any defects in the title or claims against a property that were not uncovered in the title search and that are not specifically listed as exemptions to the coverage on the title insurance policy. What is APR? APR is abbreviated for Annual Percentage Rate. The APR is the annual cost of the mortgage expressed in the form of a yearly rate. The APR is generally higher than the note rate because the APR includes the interest rate plus related costs such as points, fees for processing the loan and other pre-paid charges. The APR can be used to compare the actual cost of different types of mortgages. What are closing costs? Closing costs cover all the charges associated with the transaction, including points, origination fee, appraisal fee, title insurance, survey, charges for credit reports, etc. Closing costs vary depending upon the loan product and the fees that are customary in your region. When can I lock an interest rate? It all depends on the loan product and the lender. North America Mortgage offers a wide range of lock-in periods depending on your needs. What does it mean to "buy down" the interest rate? Buying down the rate refers to the payment of discount points in exchange for a lower interest rate. A discount point is one percent of the loan amount. As an example, paying two discount points on a $100,000 loan requires $2,000. Does my credit have to be perfect? Your ability to purchase a home will depend, in part, on your credit history as profiled in a credit report. The information on the credit report is used to determine how responsible you are in meeting your obligations. You do not have to have perfect credit to be approved for a mortgage, but if you have a number of late payments, you may need to provide a letter explaining why those payments were late. What is amortization? Amortization is the repayment of a mortgage debt with periodic payments of both principal and interest, calculated to retire the obligation at the end of a fixed period of time. What is an appraisal? An estimate of the value of the property you intend to buy or refinance. How much do I have to pay up-front to apply for a mortgage loan? North America Mortgage requires up-front expenses for the credit report and the appraisal (this amount varies depending upon the region). How often do interest rates change? Interest rates change daily and sometimes several times daily based on the bond market. Rates are also dependent on the type of mortgage loan and the loan balance. What is an escrow payment? An escrow payment is the portion of your monthly payment held by your lender to pay the taxes and insurance associated with home ownership. Your lender or servicer is responsible for collecting and disbursing these funds as they come due. Escrows are also called impounds or reserves in some states. What is a point? Points are prepaid interest which may be charged by the lender for the purpose of providing a lower interest rate. If points are paid, they are normally payable at the time of closing. Each point is equal to 1% of the principal loan amount. For example, $1,500 equals one point on a $150,000 mortgage. The more points you pay, the lower your interest rate will be, thus lowering your monthly payment. Do I need to pay an Origination Fee? The origination fee is a percent of the loan amount and covers the cost of processing and closing your mortgage loan. An origination fee can be waived as lender paid with a higher interest rate. Are rates going up or down? This is the million-dollar question! The bond market changes twice daily. No one can predict fluctuations in the bond market and therefore cannot predict which way rates will go. Should I lock now? You have the option to lock in an interest rate or float at any time. Since no one person can accurately predict what rates will do, the decision to lock or float must be yours. Will you sell my loan? North America Mortgage retains the servicing on the majority of our loans. However a transfer of your servicing rights is possible. Transfer of servicing is a common business practice in the mortgage industry and is not based on personal or payment history reasons. What is the best way to compare rates from lender to lender? When shopping for rates, we suggest that you get a Good Faith Estimate from all lenders you are shopping and compare rates and fees (i.e. apples to apples). This ensures that there are no hidden costs or fees and allows for a fair comparison between lenders. You may also want to compare the APR on the Truth in Lending Statement. This indicates the total cost of doing the loan. The lower the APR the less cost associated with the loan. How long will the loan process take? It will take approximately 45 – 60 days to process your loan. Once we receive your loan application, the Client Coordinator assigned to your loan will be in continual communication with you regarding your loan status. Annual Percentage Rate (APR) In comparing any type of loan, whether it be a fixed rate loan to a fixed rate loan, adjustable rate loan to adjustable rate loan or fixed rate loan to adjustable rate loan, there is one way that can be used to compare apples to apples and even apples to oranges. APRs are designed to do just that. APRs are a way to calculate the annual cost of loans, taking into consideration loan origination fees (points) and the other costs associated with securing a loan. The additional costs include appraisal and credit report fees as well as processing and document fees. One confusing aspect of APRs is that the APR on 15 year loans will carry a higher relative rate due to the fact that the points are amortized over the 15 year term rather than the 30 year term. When a Regulation Z (Reg Z, the mortgage companies disclosure of cost for the loan) is prepared for a buyer/borrower the prepaid interest is also included in the APR calculation. For our illustrations we will use only the points, appraisal, credit report, processing and document fees. As a means of protecting consumers from companies who did not disclose the fees associated with a particularly low start rate on an adjustable rate loan or below market rate on a fixed rate loan, APRs give consumers a way to check the true cost of a loan. One common situation that occurs when a borrower receives a Reg Z, and a copy of their note, is the column that indicates the amount financed is less than the loan amount the borrower is actually financing. It is here that many borrowers leap before they look and call to find out why they are only receiving a $146,925 loan when they applied for a $150,000 loan. It is here that APRs enter the picture. Let's look at how APRs are calculated. For our illustration we will assume a 8.50% fixed rate interest. For a 30 year loan the monthly payments for a $150,000 loan are $1,153.37. In order to calculate the APR for this loan we subtract $2,250.00 (1.50 points), $275.00 appraisal fee, $50.00 credit report fee, $500.00 processing, document and other fees. ($150,000 - $3,0750 = $146,925). The $146,925 is then used as the present value/loan amount to determine the true cost of this loan. By solving for the new interest rate for a $146,925 loan with the same payment of $1,153.37, the APR is calculated as 8.73%. How does this compare to a 30 year fixed rate loan with a 8.00% interest rate and 3.50 points? The monthly payments for this loan is $1,100.65. In order to calculate the APR for this loan we subtract $5,255.00 (3.50 points), $275.00 appraisal fee, $50.00 credit report fee, $500.00 processing, document and other fees. ($150,000 - $6,075 = $143,925). The $143,925 is then used as the present value/loan amount to determine the true cost of this loan. By solving for the new interest rate for a $143,925 loan with the payment of $1,100.65 the APR is calculated as 8.44%.
	Top 10 Frequently Asked Questions Is the rate fixed? Is there a pre-payment penalty? What are the closing cost? Are there any points? How long does the loan process take? Can I apply over the phone? Are there any application fees? Do I need perfect credit? What is the current rate? What is my monthly payment?
	Is the rate fixed? Although we offer a full range of mortgage products, all payments quoted by this site are fixed for the term requested. Is there a pre-payment penalty? Most loan programs do not have pre-payment penalties. However, in many cases you may receive a lower rate by adding a pre-payment penalty. What are the closing cost? Closing cost average about $1,500.00 to $2,000.00. This may vary due to the loan size. In many cases these cost can be financed. Our loan specialist can work with you to understand these cost and areas they may be reduced. Are ther any points? At North America Mortgage we try to keep the cost to our customers at a minimum. We price all our conforming products with $0 in points and/or origination fees. How long does the loan process take? 10 to 25 working days. The most important factor in how long the process takes is how quickly you get documents to us to process your loan. Can I apply over the phone? Yes, in fact 80% of the entire loan process can be handled over the phone. This makes the loan process quick and painless. Do I need perfect credit? No. North America Mortgage offers a wide range of mortgage products that meet most of our customers needs regardless of the condition of there credit. North America Mortgage can even work with you to clean up items that are reporting incorrectly in you credit file. This can help qualify you for a better loan. What is the current rate? Today’s market is extremely volatile so the rates on this site are updated daily. What is my monthly payment? The payment is calcualted based on the Loan amount, the term (length of the loan in months/years) and interest rate. We need to know a few things about you and the type of loan you need. Please complete the pre-qualification application and the payment calculator.
	Consolidation Frequently Asked Questions Should I consolidate using a first or second mortgage? How do I maximize my savings? What items should or should not be consolidated?
	Should I consolidate using a first or second mortgage? This answer normally depends on which mortgage maximizes your savings. There are several factors that need to be considered to fully evaluate these savings. 1) What are you trying to accomplish? 2) What type of savings are you looking for? 3) What programs are available to you? We recommend you speak with a loan specialist to determine the answer to the questions. North America Mortgage wants to help you find the product that best fits your needs and exceeds your savings goals. How do I maximize my savings? There are three main types of savings, 1) Long term 2)Monthly 3) Personal. Each of these savings carry a differnt set of factors that need to be considered to answer this question. There are several factors that need to be considered to fully evaluate these savings. 1) What are you trying to accomplish? 2) What type of savings are you looking for? 3) What programs are available to you? We recommend you speak with a loan specialist to determine the answer to the questions. North America Mortgage wants to help you find the product that best fits your needs and exceeds your savings goals What items should or should not be consolidated? The type of savings you are looking for may decide this answer. There are three main types of savings, 1) Long term 2)Monthly 3) Personal. Each of these savings may carry a different set of factor that need to be considered to answer this question. Consolidating credit cards, finance companies, bank loans and mortgages can offer large Long term and/or Monthly savings. We do not recommend the consolidation of auto loans or student loans unless it is needed to meet your desired personal savings goal. There are several factors that need to be considered to fully evaluate these savings. 1) What are you trying to accomplish? 2) What type of savings are you looking for? 3) What programs are available to you? We recommend you speak with a loan specialist to determine the answer to the questions. North America Mortgage wants to help you find the product that best fits your needs and exceeds your savings goals
	Relocation Frequently Asked Questions If relocation plans change, can I cancel or suspend the loan process with no cost? Can the application and loan process be handled via the phone, fax and mail? Do I need to move into the area before I start the loan process?
	If relocation plans change, can I cancel or suspend the loan process with no cost? The loan can be cancelled or suspended. You would be responsible for paying any and all third party fees, i.e. appraisals, pest inspections, property surveys or title cost. You will only pay these fees if the services were actually completed prior to the cancellation. Can the application and loan process be handled via the phone, fax and mail? Yes, in fact 80% of the entire loan process can be handled over the phone. This makes the loan process quick and painless. Do I need to move into the area before I start the loan process? No, the loan process can be started and completed prior to moving into the area. The loan process can be handled via the phone, fax and mail. However, certain types of loans dictate you specify and, in some cases, modify the date you will be moving in to the area.
	Home Improvement Frequently Asked Questions Can I borrow on the future value of my home before the improvements are completed? Do I want an Equity Loan or an Equity Line of Credit? How much can I expect the improvements to raise the value of my home?
	Can I borrow on the future value of my home before the improvements are completed? Yes! When there is not enough lendable equity in you home prior to the improvements being completed, we offer a "Subject To" program. This program bases the loan amount on the future value of the property -- the value after the improvements have been made. This allows you to borrower the money needed in advance of completing the work. Do I want an Equity Loan or an Equity Line of Credit? Careful consideration of your personal objectives and/or needs is required to answer this question. These programs may appear to be very similair on the surface, but in fact they have several major differences. You will need to compare these differances in order to find the program that best fits your needs. Both are considered to be tax deductable. It is recommended you consult your tax agent to confirm this is true for your personal situation. The Equity Loan is an installment loan that normally has fixed payments, a fixed interest rate and a set maturity date. When you open the loan you receive cash and/or checks equal to the full amount borrowed. You are charged interest on this amount from day one. The amount payed towards the principal balance of your loan increases with each payment. This program tends to work best with those individuals that have a single project or intend to complete several projects at the same time. It is not uncommon for this program to be used to payoff an existing line of credit. The Equity Line normally has low interest only payments, a variable rate and a balloon balance due at muturity. When you open the equity line you receive a credit line equal to the full amount borrowed. You are only charged interest on this amount of the line in use. As you pay down your principal balance, the amount of available credit increases. This program tends to work best with those individuals that have multiple projects or goals to be completed at the same time How much can I expect the improvements to raise the value of my home? Rule of Thumb - You can expect the value of your property to increase by 50% of the amount you spend. This may not hold true when you are over-building for your area, or if the improvements are considered maintenance.
	Contract for Deed Frequently Asked Questions Do I still need a down payment? Does the Contract for Deed need to be recorded? How old does the Contract need top be before I can treat it as a refinance.
	Do I still need a down payment? If the contract for deed (aka: lease option) is over 12 months old, you should not be required to bring any funds to the closing. In many cases you may actually receive cash. Does the Contract for Deed need to be recorded? Not always, but it is certainly to your advantage to have the contract recorded. It helps prove the contract is ligitamate and may make several mortgage products available to you which are only available if the contract is recorded. How old does the Contract need top be before I can treat it as a refinance. Your credit grade is a huge factor. If you have good credit, the age of the contract may only be 1 day. Normally if there are credit issues the cotract should be at leat 6 months old. If you want to consolidate or obtain cash from the tranaction, 12 months is the magic number.