Judy Shao 邵菊芳 新美貸款銀行資深金牌貸款專員-Summit Mortgage Bankers: 908-392-5266, 1876 Route 27, #206; Edison, NJ 08817
Judy Shao 邵菊芳 新美貸款銀行資深金牌貸款專員-Summit Mortgage Bankers: 908-392-5266, 1876 Route 27, #206; Edison, NJ 08817

Frequently Asked Questions

What is the closing costs?
a. Bank application fee- Total about $1000. (Loan Origination Fee, Loan Discount Fee, Commitment Fee, Appraisal Fee, etc). (We have special program $668 for single family, condo unit, requires credit score above 740).
b. Settlement Service Fee (Attorney Fee, Title Insurance Fee, Title Search/Survey).
c. Recording Fee, Escrow account & Homeowner insurance.

What documents should be prepared for mortgage application?
a. US citizen - copy of the US passport. Green card - copy of the green card front & back. H1 Visa - copy of the H1 approved notice, entry visa & China passport.
b. Copy of the SSN card / Driver's license.
c. Most recent one month pay stub / Year to date.
d. Most recent one month bank statement (all pages).
e. Most recent two year W2 (If filed extension/proof needed).
f. Credit report / Fico score / Above 740.

What are discount points?
Discount points are equal to the percent of the mortgage amount. So if you have 2.5 discount points that is equal to 2.5% of the mortgage. If your mortgage is $150,000 and you have 2.5 discount points that is equal to $3,750. The more discount points you pay the lower your interest rate will be.

What is a credit score?
Credit score is a number credit bureau's use to keep track of your credit. They keep track based on how you pay your bills, if you pay them on time, how much you pay or if you pay them at all. A credit score ranges from 350-850. The lower the score you have, the greater risk you are. All mortgage lenders use your credit rate to determine how much your interest rate should be and if they should even offer you a loan. With the Fair Credit Reporting Act all consumers are allowed one free credit report a year, if you access more than one your credit score will be lowered each time you view it.

What is a debt ratio?
A debt ratio is your percentage of debt, it is determined by dividing your total debt over your total assets. A debt ratio is a determinant of your borrowing power. Banks will not accept anyone with a 38% debt ratio or higher. If you make $3,000 dollars a month and have $800 a month in debt, your debt ratio would be 26%. Since your debt ratio is 26%, the bank will only allow you to have a mortgage up to $360 a month, or 12% because that would equal the 38% maximum. Banks usually want people in the 16-19% debt ratio range.

Why should I get an interest only mortgage?
An interest only mortgage makes since if you expect your income to decrease. You could take out a larger mortgage then you normally would, pay less for the first ten years and by the time the interest only portion of the mortgage is up you will have enough income to pay the increased costs. This only works if your income will increase in the future.

How large of a down payment should I make?
Mortgages with a larger down payments have less to pay off over the length of the loan. However much you are comfortable putting down now will help you in the long run.

What is better, a 15 year mortgage or a 30 year mortgage?
This depends on what suits you the best. 15 year mortgages usually have lower interest rates but higher monthly payments. 30 year mortgage rates take longer to pay off, but that means lower monthly interest rates. There is also the likelihood that your income will increase during the time of your mortgage, meaning it could be easier to pay in twenty years then it would to be in the first fifteen years.

What is a mortgage?
A Mortgage (also called a home loan) is a legal contract made between a lender and a borrower that uses property as collateral to secure the loan. The lender can take possession of the property if the borrower fails to pay the prearranged home loan payments.

What is a mortgage refinance?
occurs when borrower uses the money from a refinanced loan to pay off an existing home loan. Borrowers typically do this to extend their home loan period, apply for a lower interest rate, or to use some money out of their equity.

What is a home loan?
Home loan: see definition for mortgage

What is a home equity loan?
A is a type of loan that allows a homeowner to obtain cash loans based on the present value of their property minus the mortgage amount still left to be paid off. Homeowners often apply for home equity loans to pay for expenses such as home remodeling, debt consolidation, college education, and other long-term investments.

What is a home equity line of credit or HELOC?
Home equity lines of credit or HELOCs give homeowners access to an open line of credit, where only the outstanding balance accrues interest. HELOCs provide flexibility by allowing borrowers access to money on an as needed basis.

What is a second mortgage?
A second mortgage is a type of mortgage refinancing that allows you to acquire a second loan on your home in addition to your first home loan.

What is a reverse mortgage?
Reverse mortgages are loans that allow homeowners to transfer some of their home equity into cash. In contrast to traditional home loan mortgages, reverse mortgages do not require borrowers to repay their home loan until the homeowner no longer lives primarily at that residence, although he or she stills owns the residence.

What is a mortgage lender?
A mortgage lender is a financial institution that provides prospective homeowners with the funds over a long-term period to pay off their home loan mortgage. Borrowers are required to pay monthly installments to their lender which includes principle, interest, and additional lender fees. Examples, mortgage bankers and mortgage brokers.

What is the difference between a mortgage broker and a mortgage banker?
A mortgage broker is the middleman who helps match borrowers with lenders based on corresponding needs and standards. Mortgage brokers arrange more the 80% of all transactions between borrowers and lenders, yet mortgage bankers actually finance and distribute the largest portion of home loans compared to all other lenders.

What is a mortgage principle?
The mortgage principle is the amount of loan money that a homeowner borrows excluding the interest.

What does APR mean?
Annual Percentage Rate ( APR ) is the percentage used to figure out the total cost of your cash advance loan by taking into account all fees charged by your lender in addition to your loan principle and interest.

What does the word ?naviscreen? mean?
Naviscreening is the concept of directly connecting (mortgage) buyers with regionally specific, prescreened, and competent lenders through the simple completion of a universal and secure form.

What is a fixed rate mortgage?
A fixed rate mortgage is a home loan with steady interest rates and monthly payments that do not change throughout the life of the loan.

What is the adjustable rate mortgage?
(ARM) have monthly payments that change periodically due to fluctuations in market interest rates.

What is an interest-only mortgage?
are loans that require the borrower to pay only interest on the principle in monthly installments for a fixed period.

What is an amortized mortgage?
Amortized Mortgages refers to loans that are paid in installments comprised of both principle and interest, and which is paid off (or amortized) over a fixed period of time.

How do you calculate LTV or loan-to-value ratio?
The loan-to-value (LTV) ratio of your home is calculated by dividing the fair market value of your home by the amount of your home loan.

What are lender fees?
These fees usually range anywhere from 2 to 5 percent and may include, but are not limited to, things such as appraisal costs, document preparation, and application costs.

What is the Truth in Lending Act?
The Truth in Lending Act is a federal law that was enacted as part of the Consumer Protection Act. This law requires lenders to reveal all information to the borrower and detail all costs associated with the transaction.

邵菊芳-新美貸款銀行資深金牌貸款專員 (Judy Shao-Summit Mortgage Bankers, Gold Ribbon Loan Officer)
E-mail: judy.shao@smb-mortgage.com; Tel: (908) 392-5266; Fax: 732-601-4339
NMLS #247708; 1876 Route 27, #206, Edison, NJ 08817