1. How do I know how much I can afford for a house?
Generally speaking, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value. Give us a call, and we can help you determine exactly how much you can afford.
2. Will Bi-Weekly mortgage payment save money?
Not totally correct. If your interest rate is low enough; you can pay one month ahead of time to save even more. A great idea will be: Use your tax refund. Here is the link: http://www.vlender.com/cgi-bin/calc/biweekly.cgi Plug in your number and see which way to save you more. Please keep in mind, most Bi-Weekly payment will charge you some money to set up.
3. What is the difference between a fixed-rate loan and an adjustable-rate loan?
With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest changes periodically, typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will likely change. There are advantages and disadvantages to each type of mortgage, and the best way to select a loan product is by talking to us.
4. How are index and margin used in an ARM?
An index is an economic indicator that lenders use to set the interest rate for an ARM. Generally the interest rate that you pay is a combination of the index rate and a pre-specified margin. Three commonly used indices are the One-Year Treasury Bill, the Cost of Funds of the 11th District Federal Home Loan Bank (COFI), and the London InterBank Offering Rate (LIBOR).
5. How do I know which type of mortgage is best for me?
There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, including your current financial picture and how long you intend to keep your house. Brighten Lending can help you evaluate your choices and help you make the most appropriate decision.
6. What does my mortgage payment include?
For most homeowners, the monthly mortgage payments include three separate parts:
1. Principal: Repayment on the amount borrowed
2. Interest: Payment to the lender for the amount borrowed
3. Taxes & Insurance: Monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company.
7. How much cash will I need to purchase a home?
The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply:
1. Earnest Money: The deposit that is supplied when you make an offer on the house
2. Down Payment: A percentage of the cost of the home that is due at settlement
3. Closing Costs: Costs associated with processing paperwork to purchase or refinance a house
8. What is a lock commitment?
A lock commitment is a written agreement between you and Brighten Lending, entitled a Rate Lock Confirmation, which guarantees a specific interest rate at a particular price based on the loan characteristics selected if the loan closes within a set period of time.
9. When can I lock my rate?
On Refinance transactions, after the loan is approved by Brighten Lending’s Automate Underwriting System (AUS); and Brighten Lending received all requested documents, you may lock your rate by call in and speak to a loan officer to request lock in the rate.
On Purchase transactions, once your application has been submitted and approved by Brighten Lending’s Automate Underwriting System (AUS); and Brighten Lending received all requested documents and you have a fully executed purchased agreement for the house you are buying, you may lock your rate by call in and speak to a Service Representativeto request lock in the rate.
Once your loan is locked, you must close and fund within that lock period for your rate lock to be guaranteed. When you choose to lock in your rate, you will be provided with a Rate Lock Confirmation via email or fax from Brighten Lending. Your Rate Lock Confirmation will detail the loan terms you have selected.
10. Can I change my loan rate or loan program once I have already locked?
If for some reason you want to select another rate on the same or a different loan program, Brighten Lending will accommodate your request. Brighten Lending will use the rate sheet from the day you first locked to determine the price (points/credit) associated with your newly selected rate and/or loan program. Such changes may result in the re-approval of your loan and/or a longer processing time. As a result, if your loan does not fund by the lock expiration date, Brighten Lending reserves the right to re-price your interest rate and/or lender origination points/credit.
11. What happens to my rate if the loan does not fund within the lock period?
If your lock commitment expires prior to funding due to delays in our receiving the documentation necessary to approve and fund your loan, your loan will be subject to worse case pricing. Worse case pricing is calculated by comparing pricing from the original lock date to current pricing and the selecting the higher of the two.
12. How can I check the interest rates Brighten Lending is currently offering?
You can view daily interest rates online at www.ratesondemand.com or by calling Brighten Lending where you will be put in contact with a Service Representative at (888) 551-0880.
13. Who locks my rate?
Brighten Lending will not honor rate lock requests left in a voicemail or requested via email as rates are subject to change throughout the day. The rate and price you receive will be based upon the current rate at the time when you speak with your Service Representative.
14. How long is my rate locked?
Refinance rate locks are valid for 28 days. The lock period is dependent on the type of loan transaction. For more details please consult your Service Representative.
Purchase rate locks are valid for 28 or 43 days, depending on the rate lock period selected at the time of locking.
15. Can the rate lock period be increased or decreased after I have selected a rate lock period and locked a rate on my purchase loan?
Your rate lock period may be extended; however, you will be subject to Worse Case Pricing. Worse Case Pricing is calculated by comparing pricing from the original lock date to current pricing and then selecting the higher of the two.
16. How is the "Float Down rate option" works?
Brighten Lending will consider requests by borrowers to "Float Down" certain locked loans prior to the expiration of the lock or the funding of the loan, whichever is earlier, subject to the terms in this policy. The term "Float Down" means and refers to a borrower's desire to take advantage of improvements in the market and renegotiate better loan terms than those to which the borrower previously committed at the time he or she executed a rate lock agreement. A "Float Down" is available only on a one-time basis per loan and only for fully approved loans with all conditions satisfied. "Float Downs" are not available for adjustable rate mortgages, and Brighten Lending reserves the right to decline to agree to a "Float Down" at its discretion. Any borrower desiring to negotiate a "Float Down" on an eligible mortgage loan shall be subject to the following, an additional fee: $500.00 or 0.5% of the loan amount, whichever is greater. A borrower with a 28-day lock may only "Float Down" to current 28-day pricing, and a borrower with a 43-day lock may only "Float Down" to current 43-day pricing. A "Float Down" shall not extend the original expiration date of the initial lock period. All extension costs associated with a "Float Down" shall be paid by the borrower.
17. What are third party fees?
Third party fees are any fees associated with the loan that are charged by parties other than Brighten Lending. Generally, third party fees may include appraisal fees, title and closing fees, notary fees, recording fees, delivery/courier fees, or transfer taxes.
18. What are closing costs?
Closing costs are expenses incurred by borrowers (and sellers in the case of purchase transactions) when obtaining a new mortgage loan and transferring property ownership. Non-Recurring Closing Costs (NRCC’s) are costs that are only charged in connection with obtaining a new mortgage loan. Examples of NRCC’s would include: origination fee, title insurance fee, settlement agent fee, notary fee, commitment/administration fee, or appraisal fee. Recurring Closing Costs include costs that not only may be charged in connection with obtaining a new mortgage loan, but are also charged on an ongoing basis. Examples of Recurring Closing Costs would include: prepaid interest, property taxes and hazard insurance. Other fees may be included depending on the transaction or your property state.
19. Do I have to pay closing costs if I am an existing Brighten Lending customer?
Yes, closing costs have to be paid on all loans. However, depending on your loan terms and the selected loan program, Brighten Lending may pay for some or all of your closing costs in exchange for selecting a higher interest rate.
20. What is an escrow/impound account?
This is an account established with Brighten Lending to pay your property taxes, homeowner’s insurance, flood insurance (if required) and mortgage insurance (if required) when they become due. If you have an escrow/impound account, then your regular monthly mortgage payment will include principal, interest and an escrow payment. Your escrow payment is based on 1/12th of the annual estimated payments for your property taxes, homeowner’s insurance, flood insurance (if required) and mortgage insurance (if required).
21. When do I have to carry flood insurance?
If your property lies within Flood Zone "A" or "V", federal law (FEMA) requires you to maintain and provide proof of flood insurance coverage. The Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 prohibit Federal agency lenders, such as Brighten Lending, such as Brighten Lending from originating home loans in Flood Zone "A" or "V" unless flood insurance has been purchased by the homeowner and is maintained during the term of the loan.
22. Do I need an escrow/impound account?
Brighten Lending only requires an escrow/impound account when your loan-to-value (LTV) ratio exceeds 89% for State of California. Please note: All FHA programs need escrow/impound account, regardless LTV.
23. Will I receive a better rate or price by electing to have an escrow/impound account with my loan?
No. Brighten Lending's pricing remains the same, whether or not you choose to establish an escrow/impound account when applying for a loan with Brighten Lending.
24. How long does the loan process take?
The loan process varies based upon current market conditions, the program you select and the state in which the property is located. The process generally can take as few as 15 days or as long as 40 days.
25. Can I choose the appraiser?
Brighten Lending does not allow customers to choose their own appraiser. We will order all required appraisal services from one of our national appraisal vendors to ensure a quality product is provided at a competitive price.
26. Can I receive a copy of the appraisal?
Yes. Once the appraisal is complete a copy will be e-mailed to you directly.
27. Can I receive a copy of my credit report?
Yes. Brighten Lending will provide you with a copy of your credit report when borrower requested AFTER loan closed. If the loan canceled, Brighten Lending will NOT provide you with a copy of your credit report. However, you may request a copy of your credit report by contacting your credit reporting agency (CRA).
28. Does Brighten Lending charge an upfront fee/deposit?
Brighten Lending will request you sign a Credit Card Authorization Form to prepay your credit report and Appraisal Fee and Condo Certification Fee (if apply). All those fees will include in your closing cost. For No Point No Fee re-finance; the up front payment will be refund to you after loan.
29. What is the loan-to-value ratio (LTV)?
Loan-to-value (LTV) is a ratio that is determined by comparing the loan amount against the value of the property or the sales price, whichever is less. The LTV is one consideration in qualifying you for a loan. To calculate the LTV, divide the amount you are borrowing by the value of the subject property or the purchase price, whichever is less. For example, if you are purchasing a property that is selling and appraising for $500,000 and you would like to borrow $300,000, the LTV is 60%.
30. What is private mortgage insurance (PMI)?
Private mortgage insurance (PMI) is a type of insurance that protects the lender in the event a borrower does not make their payments in a timely manner, resulting in loan default and potentially foreclosure. For most loan programs, PMI is required if the loan-to-value ratio is greater than 80%.
31. Can I select a higher rate in lieu of paying PMI?
Subject to certain program guidelines, you may select a higher interest rate and obtain the necessary credit to cover the one-time cost of PMI. This is known as upfront Lender Paid Mortgage Insurance (LPMI) or Borrower Paid Mortgage Insurance (BPMI).
32. How much will I need to pay for closing costs?
The amount you will need to pay for closing costs is determined by many factors including the loan purpose, loan type and property state. Based on the interest rate you select, there may be loan points paid to Brighten Lending or a credit paid to you to cover part of the non-recurring closing costs associated with the loan. The following is a brief summary of some typical fees incurred when closing a loan with Brighten Lending:
Fees charged by Brighten Lendings
• Administration Fee: $989.
Fees charged by third parties
• Appraisal Fee: $150 - $1,500 (price will vary based on property state, appraisal type, and property value).
• Title Insurance and Services: will vary based on loan purpose, loan amount, and property state.
• Settlement/Closing: will vary based on loan purpose, loan amount, property state, and purchase price.
• Notary, Recording, and Delivery Fees: will vary by state and county.
• Local transfer tax and similar taxes: will vary by state and county.
33. Can I get pre-approved for a mortgage?
Yes. To get pre-approved for a purchase loan, please contact Brighten Lending at: 1-888-551-0880 and we will connect you to a Service Representative. Brighten Lending recommends that you apply for a pre-approval while you are searching for a home. A pre-approval will consider your financial situation to determine if you are likely to qualify based on the estimated loan amount and purchase price. A pre-approval will provide you with security, leverage and flexibility while you are searching for a home.
34. How long does it take to get pre-approved?
Once you have submitted an application online or over the phone; and submitted all documents Brighten Lending requested. Brighten Lending can provide you with a pre-approval decision within 1 business day.
35. What is the minimum down payment allowed?
The minimum down payment Brighten Lending allows on most conforming loan programs is 5% of the current property value or the purchase price, whichever is less. To find out if you qualify please contact us at 1-888-551-0880.
36. Are rate locks transferable to a different property?
Rate locks are not transferable to a different property address. If the property address changes on a locked loan, the lock will be cancelled and a new lock will be required.
37. If I am purchasing a home that is still being built and it won’t be complete for more than 40 days from now, when should I lock in a rate?
Brighten Lending does not offer rate locks for longer than 43 days. With this in mind, you should lock in a rate when you feel certain that the house will be in a livable condition within 43 days.
38. Should I refinance my home now?
If you decide to refinance your home, you can take advantage of any or all of the following benefits:
• Lower your monthly payments with a lower interest rate
• Lock in a fixed term interest rate from an adjustable rate mortgage or vice versa
• Reduce the term of your loan
• If you have made a large principal reduction, lower your monthly payments by refinancing the existing balance
• Reduce your monthly payments by eliminating the need for private mortgage insurance (PMI)
39. Do I need a new appraisal?
Yes, you will need a new appraisal. Brighten Lending will choose one of our appraisal companies to complete the appraisal. However; there are some programs that do not need appraisal report, please contact one of Brighten Lending’s Service Representatives at 1-888-551-0880 for detail.
40. Can I combine my existing first and second mortgages?
Brighten Lending offers you the ability to lower your overall monthly housing payment by paying off an existing first and second mortgage. To find out if your new loan will qualify as a rate and term refinance or a cash-out refinance please contact one of Brighten Lending’s Service Representatives at 1-888-551-0880.
41. Can I refinance if my home is listed for sale?
No, Brighten Lending will not be able to refinance your loan unless the home has not been listed for sale within the last six months.
42. Can I refinance if my home is currently being remodeled?
While you may start the application process for a refinance, Brighten Lending will not be able to close your loan until your remodeling project is complete.
43. Can I remove a borrower from my mortgage through a refinance?
It may be possible for you to remove a borrower from your current mortgage through a refinance. For specific requirements, please contact one of Brighten Lending’s Service Representatives at 1-888-551-0880.
44. Can I add a borrower to my mortgage through a refinance?
Yes, you may apply for a refinance with additional borrowers, provided he or she qualifies according to our income and credit guidelines. Any person applying for the refinance must also be added to the title of the home.
45. What can I use my cash-out proceeds for?
Brighten Lending allows you to use the proceeds from a cash-out loan for any legal purpose. However, the creation of any new liability through the use of the cash-out proceeds must be qualified in the loan process. For example, if you want to do a cash-out refinance on your current residence and use the proceeds toward a down payment on a second home or investment property, you must qualify for the cash-out refinance with the new property mortgage liability included.
Note: Brighten Lending requires a cash-out purpose letter for any cash-out amount.
46. How much equity can I take out?
The maximum cash-out allowable on a conforming loan is $417,000 less any amount owed on the subject property. The maximum cash-out allowed on all High Balance Conforming products is $250,000. To find out more about cash-out refinances please contact one of Brighten Lending’s knowledgeable Service Representatives at 1-888-551-0880.