|
Call Anytime
1-877-88ISLAND
|
|
Island
Equity Mortgage
555 Broadhollow Road
Suite 203
Melville, NY 11747 |
|
|
Organize your documents
If you are buying or refinancing a
home
- If you are salaried: provide
two years W-2 and one month of pay
stubs OR if you are
self-employed: provide two years
tax returns and a YTD profit and
loss statement.
- If you own rental property, please
provide rental agreements and two
years tax returns.
- If you wish to speed up the approval
process, please also provide three
months bank statements for each
bank, stock and mutual fund account.
- Provide recent copies of any stock
brokerage or IRA/401K accounts that
you may have.
- If you are requesting a cash out
refinance please provide a letter
explaining what you plan to do with
the proceeds.
- Provide a copy of divorce decree if
applicable.
- If you are NOT a US citizen, provide
us with a copy of your green card
(front & back), or if you are NOT a
permanent resident provide us with
your H-1 or L-1 visa.
If you are applying for a home equity loan
- If you are salaried: provide two years W-2 and one month of paystubs OR if you are self-employed: provide two years tax returns and a YTD profit and loss statement.
- If you own rental property, please provide rental agreements and two years tax returns.
- Please provide a copy of the note on your first mortgage. This will normally be found in your closing loan documents
- Please provide a signed letter explaining what you plan to do with the proceeds
- Provide a copy of divorce decree if applicable.
- If you are NOT a US citizen, provide us with a copy of your green card (front & back), or if you are NOT a permanent resident provide us with your H-1 or L-1 visa.
Get Qualified
Getting qualified before you apply
for a loan can help you understand
how much you can borrow.
When buying a house, you may get
pre-qualified or pre-approved. You
can typically get pre-qualified over
the phone or on the Internet in a
few minutes. A pre-qualification is
not as beneficial as a pre-approval
where you have to go through a more
rigorous process which includes
verification of your credit, income,
assets and liabilities. It is highly
recommended that you get
pre-approved before you start
looking for a house. This will help
you:
- Find out the maximum house you can buy, so you don't waste time looking for properties you can not afford.
- Puts you in a stronger position when you are negotiating with the seller, because the seller knows that your loan is already approved.
- Helps you close quickly, since your loan is already approved.
Shop loan programs and rates
To shop for a loan you will need to:
- Think about how long you plan to keep the loan. If you plan to sell the house in a few years you may want to consider an adjustable or balloon loan. On the other hand, if you plan to keep the house for a longer time, you may want to look at fixed loans.
- Understand the relationship between rates and points. Points are considered to be prepaid interest and are tax deductible. Each point is equal to one percent of the loan. So for example 1 point on a $150,000 loan is $1,500. The more points you pay, the lower the rate you will get.
- Compare different programs. Shopping for a loan can be difficult. With so many programs to choose from, each of which has different rates, points and fees, it's hard to figure out which program is best for you. That's where an experienced loan officer can help you make a decision that's best for you.
Obtain Loan Approval
Once your loan application has been
received we will start the loan
approval process immediately. This
involves verifying your:
- Credit history
- Employment history
- Assets including your bank accounts, stocks, mutual fund and retirement accounts
- Property value
Based on your specific situation, additional documents or verifications may be required. To improve your chances of getting a loan approval:
- Fill out the loan application completely.
- Respond promptly to any requests for additional documents. This is especially critical if your rate is locked or if you plan to close by a certain date.
- Do not make any major purchases. Do not buy a car, furniture or another house till your loan is closed. Anything that causes your debts to increase might have an adverse affect on your current application.
- Do not move money into your bank
accounts unless it can be
traced. If you are receiving
money from friends, family or
other relatives, please contact
us.
- Do not go out of town around the
closing date. If you do plan to
be out of town when your loan is
expected to close, you may sign
a power of attorney, to
authorize another individual to
sign on your behalf.
Close the Loan
After your loan is approved, you
will be required to sign the final
loan documents. This will normally
take place in front of a notary
public. Be prepared to:
- Bring a cashiers check for your down payment and closing costs if required. Personal checks are normally not accepted.
- Review the final loan documents. Make sure that the interest rate and loan terms are what you were promised. Also, verify that the name and address on the loan documents are accurate.
- Sign the loan documents.
Your loan will normally close
shortly after you have signed the
loan documents. On refinance and
home equity loan transactions
federal law requires that you have 3
days to review the documents before
your loan transaction can close.
When you see a real estate advertisement
that quotes a payment amount, it also must
include a number called the APR. That stands
for "annual percentage rate."
When you apply for a mortgage, the lender is
supposed to mail you a "good faith estimate"
and a "truth in lending statement" within
three business days. The note rate is
quoted, along with the APR.
 The APR is always higher than the note rate
you are quoted.
Why?
Partly because APR is a totally artificial
number. It is not the note rate on the loan
and does not determine your monthly payment.
It is calculated according to a formula
determined by the government and is supposed
to provide a method for comparing one
mortgage offer against another, even when
the rates, points, and costs differ.
The APR is supposed to help you determine
your "true cost" of borrowing.
What follows is a simplification of how the
APR is calculated:
The lender totals up certain specific costs
associated with the loan and the interest
rate that was quoted to you. Those costs are
subtracted from the loan amount you inquired
about. That results in a figure lower than
your loan amount. Then the payment for your
loan is calculated "as if" it were the
payment on that lower amount.
As a result, the APR is always higher than
the note rate you are quoted. The only
exception is when the lender pays for all of
your costs, which is often referred to as a
"no cost" loan. There really are costs --
the lender is just paying them for you.
Keep in mind that the explanation above is a
simplification. Computers are used to
actually calculate the APR. Loan officers do
not sit down with a pencil and paper and
figure it out, even using a calculator.
There is some guesswork involved. For
example, adjustable mortgages have an APR,
too -- but no one really knows what rates
will do in the future. Also, no lender
really knows all the costs until the loan
actually closes (a subject for a future
column) - that is why the Good Faith
Estimate is called an estimate. Since costs
affect the APR, it cannot be accurately
quoted until the end of the process.
Even then, it is still a fictional number.
A loan with a lower interest rate and higher
points could easily have a higher APR than a
loan quote at a higher note rate and lower
costs, but...
...your "true cost" of borrowing may depend
more on how long you keep the loan than
anything else. Paying more in points to get
a lower interest rate may save you more
money if you intend to remain in the
property for a long time -- even though it
has a higher APR. |
|
|
|
|
