How can you offer such low rates?
Since 1983, EmpireAmerica has worked hard to create the most efficient loan origination system in the industry.
As a direct lender offering mortgages via the Internet, our system eliminates the need for commissioned loan officers, a high cost component of mortgage lending.
We lend in multiple States from a single location eliminating the cost of brick and mortar branches.
We utilize state of the art technology, including online pricing engines, online cost estimates, online loan applications and automated underwriting systems that provide you with free loan pre-approval upon the submission of your online application and documentation.
Is there a fee or any obligation if I apply?
There’s no cost for completing an online application and obtaining loan pre-approval. Upon receiving your loan pre-approval, you will be given an opportunity to lock your rate.
What happens after I apply?
Upon submission of your online application, you will receive an email from your Loan Processor no later than the end of that business day. The email will list the supporting documentation required to pre-approve your loan request (paystubs, bank statements, etc.). Attached to the email will be a fax coversheet to be used, if you prefer to fax the documentation.
You will receive a call from an appraiser no later than three business days of submitting your application. It is important that you schedule the appraisal inspection as quickly as possible to keep the process moving forward.
On purchase transactions, your loan documents will be sent to your closing agent for signing. On refinance transactions, your loan documents will be sent to the escrow officer for assignment to a notary who will contact you to arrange a convenient time to come to your home for signing.
What supporting documentation is required?
You will be asked to support your income with recent paystubs and the prior year’s W-2 form. Self-employed borrowers will be asked to support their income with the prior two years’ tax returns. Funds needed to close the transaction will typically be supported with a copy of a recent bank statement. If proceeds from the sale of another property are being used for the down payment, an estimated closing statement on that transaction will be required prior to closing.
How quickly can you close my loan?
Our standard lock period is 30 days. We are confident we will close your loan in this timeframe as long as you send in your supporting documentation within three days of request and schedule your appraisal inspection in a timely manner. Because we are a direct lender, we have control over the approval process, drawing loan documents and funding the loan.
What is your rate lock policy?
We offer rate locks for 30, 45 and 60 day periods. Refinance transactions may be locked at the time of loan application. Purchase transactions may be locked once you have an accepted offer on a property. You may apply and request rate lock online, 24/7.
Are Any fees collected when I lock?
You will be asked to submit a $400 appraisal fee by credit card at the time you lock your rate ($540 if 2-4 units).
What If Rates Drop After I’ve Locked?
At the time we are ready to draw your loan documents, if our posted rates are at least .25% lower than the rate and price that you locked (for the same or less points, or the same or more rebate), you may float down your rate to the current rate plus .125%.
What Happens if the Loan Process Takes Longer Than My Lock Period?
Your processor will contact you and calculate the number of additional days necessary to close your loan.
If the delay was caused by us, or a third party service provider selected by us, we will extend your lock for the additional days required at no cost to you.
If the delay was caused by you and current rates are the same or lower, we will extend your lock for the additional days required at no cost to you.
If the delay was caused by you and current rates are higher, your loan will be extended at current daily lock extension fees.
Delays caused by you include delays caused by the subordination of an existing second mortgage or home equity line, not supplying supporting documentation within three days of our request or delaying appraisal inspections or document signing appointments.
Can I Choose a Different Program or Rate After I’ve Locked?
You may but your rate and points (or rebate) will be based on the pricing that was in place on the day of your original lock, plus a small fee. Please take the time upfront to choose the program and rate that is best for you.
Can I Relock My Rate if I Cancel and Reapply?
If you cancel your application and reapply within 60 days, your rate and points (or rebate) will be based on the worst case between the pricing in place on the date of your original lock or the date of your new lock. Please take the time upfront to choose the program and rate that is best for you.
What happens if I let my rate lock expire?
If you let your rate lock expire and relock within 60 days, your rate and points (or rebate) will be based on the worst case between the pricing in place on the date of your original lock or the date of your new lock.
If rates fall after I’ve locked, will you lower my rate?
At the time we are ready to draw your loan documents, if our posted rates are at least .25% lower than the rate and price that you locked (for the same or less points, or the same or more rebate), you may float down your rate to the current rate plus .125%.
Should I lock or float my rate?
On a refinance transaction, if the savings you will achieve with the new lower rate will recapture the closing costs of the loan in a relatively short period of time, you should probably go ahead and lock your rate and close your loan. Trying to time the bottom of an interest rate cycle is tricky and each month you delay costs you in the form of carrying a higher interest rate on your old loan. If rates fall further, you can always refinance again.
On purchase transactions, in times of stable interest rates, most of our customers lock when they are within 30 days of closing. Locking for a period longer than 30 days increases the cost of the loan slightly but is sometimes a good idea if rates are volatile. If your closing is more than 30 days out, we recommend you compare rates and points on our website for 30, 45 and 60 day locks and make your decision accordingly.
What is an escrow/impound account?
An escrow account, known as an impound account in California, is an account set up at the time you close your loan for the payment of your property taxes and homeowner’s insurance. You pay 1/12 of your annual taxes and insurance along with your mortgage payment each month and the funds are placed in the escrow/impound account. Your loan servicer pays your taxes and insurance out of the escrow/impound account when they come due. You receive an Escrow/Impound Analysis Statement each year, showing the activity and balance remaining in the account.
You are not required to have an escrow/impound account unless the Loan-to-Value ratio on your loan is over 80% (89.99% in California). However, if you decide not to have an escrow/impound account, your price will be .15% higher.
What are included in your closing costs and prepaids?
EmpireAmerica fully discloses all closing costs online. You may view a breakdown of closing costs online, 24/7.
Closing Costs are “one-time costs to obtain a mortgage, paid at closing” and include the following:
Guaranteed Lender Fee: We charge one all-inclusive Guaranteed Lender Fee, which includes processing, underwriting, doc prep and funding.
Guaranteed Discount Points OR Guaranteed Rebate: You may elect to pay discount points to buy down your interest rate. Or you may choose a slightly higher rate and obtain a rebate to offset some or all of your closing costs. Perform an online rate search to view all combinations of rates, points and rebates.
Guaranteed Appraisal Fee: Your appraisal fee is collected in advance on a credit card. Appraisal fees are guaranteed on both purchase and refinance transactions.
Guaranteed Tax Service Fee: This is a service that notifies the lender if the property taxes have been paid and any liens are placed on the subject property for the life of the loan.
Guaranteed Flood Cert Fee: This is a service that notifies the lender if the subject property is located in a FEMA designated Flood Zone. Flood Insurance may be required if it is determined that the subject property is located in a designated flood zone.
Guaranteed Closing Agent and Title Insurance: Closing agent (or attorney) and title insurance fees are guaranteed if you use the national service provider we contract with to provide these services in your state. You will notice that these fees are extremely competitive due to the high volume of business that we provide to these service providers.
Guaranteed Government Recording Charges: The county recorder’s office will charge a recording fee to record your new mortgage or deed of trust.
Guaranteed Government Transfer Taxes: In some states, counties and cities charge a transfer tax (also known as a Mortgage Tax or Tax Stamps) when you purchase a property or refinance a mortgage.
Prepaids are “recurring costs of homeownership, partially prepaid at closing” and include the following:
Initial Escrow/Impound Account Deposit: If an escrow/impound account is to be established for the ongoing payment of your property taxes and homeowner’s insurance, funds will be collected at close to make an initial deposit into the account so that sufficient funds will be available to pay these recurring expenses as they become due.
Prepaid Interest: Your mortgage payment due date will be the first of each month, if your loan is closed on any day other than the first of the month, prepaid interest will be collected at closing, calculated from the date of closing through the end of the month.
First Year Homeowner’s Insurance Premium: If your loan is a purchase transaction, your first year’s homeowner’s insurance premium will be collected at closing and paid to your insurance company.
What is a Guaranteed Lender Fee?
We charge one all-inclusive Guaranteed Lender Fee, which includes processing, underwriting, doc prep and funding.
Our pricing model is different from other lenders in that our profit is primarily built into this flat fee. We can then pass on the pricing we receive in the secondary market directly to our borrowers. Most lenders add points to the pricing they receive in the secondary market and offer the “marked up” pricing to the borrower.
In comparing lenders, we suggest you compare total lender points and fees for the same interest rate. If you compare our total points and fees to the total points and fees charged by another lender for the same rate, we are confident our total costs will be much lower for any given interest rate.
Should I pay discount points?
Each discount point is equal to one percent of the loan amount. Discount points are paid to obtain a lower rate. Whether you should pay discount points depends on your tax situation and how long you expect to be in the property. To calculate how many years it takes to “break even” on the amount paid for points, divide the difference in points by the difference in rate.
There may also be tax advantages to paying points. For most taxpayers, points paid on purchase loan transactions are tax deductible in the year the home is purchased and points paid on refinance transactions are tax deductible over the life of the loan. Tax consequences vary so we encourage you to consult your tax advisor.
What is a rebate?
A rebate is a credit to the borrower by the lender for taking an interest rate higher than the zero point rate. The lender hopes to recapture the amount paid by collecting a higher interest rate over the life of the loan. Rebates may be used to offset any non-recurring closing costs, including the guaranteed lender fee, appraisal, closing agent, title insurance, recording and/or transfer taxes. Rebates may also be used to offset prepaid expenses, such as prepaid interest, initial escrow/impound account deposit or homeowner’s insurance premium.
Can I prepay the loan without a penalty?
You can pay off your mortgage any time with no additional charges.
When will I hear from someone?
If you apply and lock during regular business hours, you will receive a Lock Confirmation by email the same day. If you apply and lock after hours or on the weekend, you will receive your Lock Confirmation by the end of the next business day.
What is your minimum credit score requirement?
Our system is designed to deliver the very best rates and fees available to qualified borrowers. Our loans are underwritten by an automated underwriting system and, in most cases, FICO scores below 640 will not be approved by our system.
Do you have any programs that don’t require income documentation?
We do not currently offer loan programs for borrowers who are not able to document their income.
Can I apply before I find a property and get pre-approved?
Yes, it’s important to know how much you qualify for before you begin your home search. Complete our online application anytime, 24/7. Your application will be run through our Automated Underwriting System, reviewed by one of our underwriting staff and a Free Online Pre-Approval will be issued. Our Pre-Approvals are free of charge and no advance deposit is required. You are under no obligation to obtain a mortgage from our company.
Should I consider a loan with private mortgage insurance (PMI)?
Private Mortgage Insurance (PMI) makes it possible for you to buy a home with less than a 20% down payment by protecting the lender against the additional risk associated with low down payment lending. The PMI insurance premium is based on the loan-to-value ratio and other factors such as credit score and is included in your monthly payment.
On a 1-unit primary residence or second home, federal regulations require that PMI be automatically cancelled when your loan balance reaches 78% of the original property value at the time the loan was secured. Depending on the loan program, you may be able to request in writing that PMI be removed sooner, based on an increase in the property value as determined by a new appraisal to be ordered by the servicer. Generally, PMI must have been in place for at least two years and you must have a good payment history for PMI to be cancelled under this scenario.
What is the minimum down payment required on a purchase mortgage?
We offer loan programs with as little as 5% down. However, significant savings may be achieved with a down payment of 10% or 20% so we encourage you to run multiple loan scenarios on our website if you can afford a greater down payment. On condos, the best rates are obtained with a 25% down payment.
What is the maximum percentage of my home’s value that I can borrow on a refinance loan?
The percentage of your home’s value that can be borrowed on a refinance loan (known as the maximum Loan-to-Value ratio) varies by loan program.
What is the maximum debt-to-income ratio allowed?
Maximum debt-to-income ratios are determined by an automated underwriting system that takes many factors into consideration, including your credit score, loan-to-value ratio and cash reserves.
On conventional loans, the maximum debt to income ratio is 38% to 50% depending on the loan program.
Is paying off an existing second mortgage or home equity line considered cash out?
If your existing second mortgage or home equity line was not obtained in conjunction with purchasing your home, then paying it off with a new mortgage is considered cash out.
Can I keep my existing second mortgage or home equity line and refinance my first mortgage?
Yes, but this does complicate the refinance transaction somewhat. The holder of your second mortgage or home equity line will have to sign what is known as a subordination agreement, subordinating their existing lien position to the new first mortgage. Generally, they will be willing to do so provided the amount of the new first mortgage is no more than the remaining balance of the existing first mortgage.
Your second mortgage lender will ask us to provide some documentation such as a copy of the mortgage note you’ll be signing and the appraisal before they provide the subordination agreement. We won’t be able to schedule your loan closing until we receive the subordination agreement.
When subordinating an existing second mortgage or home equity line, EmpireAmerica recommends you take down a 45 day lock to avoid potential lock extension fees.
If my loan application isn’t pre-approved, does that mean you can’t provide me with financing?
About 70% of applications submitted are pre-approved. Those that aren’t pre-approved are assigned to a Loan Consultant who performs a complete review of the information you submitted. Often times, the problem has to do with how your information was input into our website and the Loan Consultant is able to obtain an approval for the loan program you applied for. If the Loan Consultant is unable to obtain an approval for the program applied for, he or she will research what other options may be available.
Can EmpireAmerica finance the purchase of a property through a short sale?
Yes, the only special requirement is that all lienholders approve the terms of the sale in writing before the rate is locked in.
Am I able to refinance a property that was recently listed for sale?
For a No Cash Out refinance, the only requirement is that the home is not listed for sale at the time of loan application. For a Cash Out refinance, if the home was listed for sale in the past six months the maximum loan to value allowed is 70% of the appraised value.
What is the difference between a conforming loan, a super conforming loan and a jumbo loan?
A conforming loan is one that is less than the maximum loan amounts set by Fannie Mae and Freddie Mac. The loan amounts are revised each year to reflect the change in the national average cost of a home. The current conforming loan amount limits are:
2-Unit Property $533,850
3-Unit Property $645,300
4-Unit Property $801,950
A super conforming loan is a temporary loan category that was created by the Economic Stimulus Act of 2008. The Act allows Fannie Mae and Freddie Mac to purchase mortgages in “high cost” housing markets through December 13, 2013. These “Super Conforming” limits are set equal to 115 percent of local median house prices up to a maximum of $625,500. To view a list of “high cost” housing markets and the maximum super conforming loan amount allowed in each, click on “Super Conforming Loans” under the “Loan Programs” tab.
Jumbo loans are loans which exceed conforming and super conforming limits.
What is an ARM?
An adjustable rate mortgage, or an “ARM”, is a loan type that offers a lower initial interest rate than most fixed rate loans. Against the advantage of the lower payment at the beginning of the loan, you should weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. For some people, an ARM may be the right mortgage choice, particularly if you only plan on being in the home for less than three, five, seven or ten years.
Here’s some detailed information explaining how ARM’s work.
Adjustment Period: The interest rate and monthly payment are fixed for an initial time period, generally three, five, seven or ten years. After the initial fixed period, the interest rate can change every year.
Index: Interest rate changes are tied to changes in an index rate. The current values of the indices used on our ARM programs are published weekly in the Wall Street Journal and shown on our website. At each adjustment date, if the index rate has moved up, so will your mortgage rate, and you will have to make a higher monthly payment. On the other hand, if the index rate has gone down, your rate and monthly payment will decrease.
Margin: To determine the new interest rate on an ARM, at each adjustment date, a pre-disclosed amount, called the “margin”, is added to the index to determine the new interest rate.
Interest Rate Caps: An interest rate cap places a limit on the amount an interest rate can increase or decrease at each adjustment. ARMs have three types of caps: an initial cap, which limits the interest rate increase or decrease at the first adjustment; a periodic cap, which limits the interest rate increases or decreases at all following adjustments; and a lifetime cap, which limit the interest rate increase over the life of the loan.
Please see “Program Descriptions” under the “Loan Programs” tab for information on our ARM programs.
What is a subordination agreement?
A subordination agreement is a document prepared by a second mortgage lender agreeing to remain in second position when a first mortgage is refinanced. Without such an agreement, the second mortgage holder would move into a first lien position when the existing first mortgage was paid off. The second mortgage lender usually charges a fee to process the subordination agreement, which is incurred by the borrower. Additionally, this process often increases the amount of time necessary to process a first mortgage refinance transaction, so an applicant wishing to subordinate a second mortgage may want to take down a 45 day lock to ensure sufficient time to obtain the subordination agreement.
What is a three day right to cancel?
On refinance transactions, Federal law mandates that you have three days, after signing your loan documents, in which to cancel your loan. This three day period includes Saturdays, but excludes Sundays and holidays. Your loan will not be funded until this period has expired.
What is title insurance and why do I need it?
The function of title insurance is to make sure your rights and interests to the property, and those of your lender, are fully protected. Title companies issue two types of title policies: an Owner’s Policy which covers the homeowner and a Lender’s Policy which covers the lending institution. If the loan is for a home purchase, both types of policies are issued at the time of closing. If the loan is a refinance, you already have an owner’s policy that was issued when you purchased the property, so only a lender’s policy will be issued.
Once a title policy is issued, if any claim covered under your policy is ever filed against your property, the title company will pay the legal fees involved in the defense of your rights. They are also responsible to cover losses arising from a valid claim. This protection remains in effect as long as you or your heirs own the property.
What is prepaid interest?
Prepaid interest is paid at the time of closing of your loan to cover the interest that will accrue on your new loan for the remaining days of the month in which it is funded. You will make no payments in the month immediately following the month in which your loan funds. You will then begin making payments on the first of each month for the prior month’s interest.
What is the difference between a Rate and an APR?
The note rate is used to calculate your interest payment each month. The APR (Annual Percentage Rate) is a calculation based on standardized federal regulations. In addition to the interest rate, it factors in points and loan-related fees in an attempt to better show the total cost of the financing over the scheduled life of the loan. The APR is designed to help borrowers fairly compare different lenders and loan options. Please note that the loan amount will influence the APR calculation, with higher loan amounts reporting lower APR calculations. Our website allows you to input your loan amount and calculate an accurate APR.
What are some tips for completing the online application?
Our online application is very user friendly. You will not be asked for any account numbers and can estimate loan payment amounts, bank account balances, etc.
The application is broken down into sections and you can track your progress through each section at the top of each screen. It should take less than 10 minutes to complete the application.
Move through the application by using the back and next arrows at the bottom of each screen. Don’t use the back and next button on your browser while you’re completing the application.
If you need additional help answering a question, click on the question mark at the end of the question for more information.
What types of disclosures will be provided online?
Federal and state laws require that mortgage lenders provide certain disclosures at the time a customer completes an application. Those laws apply to online lenders as well as traditional lenders. Some of the most common disclosures include information about certain loan types and information about the rate, points and fees being charged. These disclosures are sent to you for signing electronically through Docusign. You are able to save and print them at any time.
What do I do if I can’t retrieve or print out the electronic disclosures, or have some other problem with them?
If you have any problem whatsoever with our electronic disclosures, just call one of our Senior Loan Processors at 866-411-3621. Our technical assistants will assist you in viewing the disclosures online or mail them to you at no cost to you.
What if I’m not sure about the property value, sales price or amount I want to borrow?
If you’re not sure about exact amounts, please make an educated best guess. Websites such as Zillow.com may be helpful. The appraisal (and sales contract, if purchase) will ultimately be used to determine the value of the property. Prior to drawing your loan documents, your processor will send you an estimated closing statement and you will have an opportunity to adjust your loan amount as you deem appropriate.
Why do you need to know the year I purchased the property and the original purchase price? What if I don’t remember?
On a refinance application, the year you purchased the property and the price you paid for it are provided to the appraiser to assist them in finding data about your home through local public records. In addition, if you purchased your home in the last year some of the loan programs we offer require us to compare the original purchase price to the current appraised value so that any large increases in value can be justified.
If you don’t remember the exact year and purchase price of the property an estimate will work just fine.
What should I do if I’m not sure about the annual real estate taxes?
If you’re not sure about the annual real estate taxes for a property you are purchasing, estimate them at 1.25% of the purchase price. If you’re not sure about the annual real estate taxes for a property you are refinancing, use your best estimate. Don’t let this hold up your application. The appraiser and title company will provide us with the exact amount later.
What should I use for my estimated closing date?
On a refinance transaction, estimate your closing date to be three weeks from the date you are applying.
On a purchase transaction, use the estimated closing date agreed to in your purchase contract.
On a pre-approval (do not have property located and/or signed contract with seller), use your best estimate as to when you will have located a property and allowed sufficient time to close (normally 30 days from signing contract).
Why are you requesting the name of my real estate agent?
On a purchase transaction, one of the first things we’ll do after your loan is approved is to contact your real estate agent to discuss the items required for closing that the agent or seller is responsible for. Though there is some variance across the country, generally the agent is involved in ordering the title policy and scheduling the appraiser’s inspection of the home. We’ll make sure that everything necessary has been taken care of so that your closing happens as efficiently as possible.
I’m selling my current home to purchase this home. What type of documentation will be required?
We’ll require a copy of the settlement statement on the sale of your current residence to verify that you’ve received sufficient funds for our closing. If the closing of your current home is scheduled for the same day as the closing of your new home, we’ll ask the closing agent on that transaction to provide an estimated settlement statement.
What will be required if I withdraw money from a 401(K) account for my down payment?
If you’ll be withdrawing funds from a 401(K) or retirement account to fund your down payment, we’ll ask you to provide evidence that you have the funds available by providing a recent statement. If repayment is required, we’ll consider that monthly payment as well when calculating your debt-to-income ratios.
Is a gift from someone else an acceptable source of my down payment?
Gifts are an acceptable source of down payment, if the gift giver is related to you or your co-borrower. We’ll ask you for the name, address, and phone number of the gift giver, as well as the donor’s relationship to you. If your loan request is for more than 80% of the purchase price, we’ll need to verify that you have at least 5% of the purchase price in your own assets. Prior to closing, we’ll verify that the gift funds have been transferred to you by obtaining a copy of your bank receipt or deposit slip to verify that you have deposited the gift funds into your account.
What if I don’t know the exact values of some of my other assets?
The information we need about additional assets that you own does not have to be exact. Estimated values are all we’ll need.
Why do you need information about other properties I own?
We need information about all the real estate you own to ensure we have a reasonable estimate of your net worth and debt-to-income ratios. If you don’t know the exact value of your real estate holdings, provide your best guess. In most cases that is all we will need to process your new mortgage request.
What is an installment debt?
An installment debt is a loan that you make payments on, such as an auto loan, a student loan or a debt consolidation loan. Do not include payments on other living expenses, such as insurance costs or medical bill payments. We’ll include any installment debts that have more than 10 months remaining when calculating your debt-to-income ratios.
I have student loans that aren’t in repayment yet. Should I show them as installment debts?
All student loans should be included in the application. If you are not exactly sure what the monthly payment will be at this time, enter an estimated amount.
I’ve co-signed a loan for another person. Should I include that debt here?
Generally, a co-signed debt is considered when determining your qualifications for a mortgage. If the co-signed debt doesn’t affect your ability to obtain a new mortgage we’ll leave it at that. However, if it does make a difference, we can ignore the monthly payment of the co-signed debt if you can provide verification that the other person responsible for the debt has made the required payments, by obtaining copies of their cancelled checks for the last 12 months.
Will my overtime, commission, or bonus income be considered when evaluating my application?
In order for bonus, overtime, or commission income to be considered, you must have a history of receiving it and it must be likely to continue. We’ll usually need to obtain copies of W-2 statements for the previous two years and a recent pay stub to verify this type of income. If a major part of your income is commission earnings, we may need to obtain copies of recent tax returns to verify the amount of business-related expenses, if any. We’ll average the amounts you have received over the past two years to calculate the amount that can be considered as a regular part of your income.
If you haven’t been receiving bonus, overtime, or commission income for at least one year, it probably can’t be given full value when your loan is reviewed for approval.
We will always attempt to approve you for the loan without using these sources of additional income to reduce the amount of documentation you need to provide.
Will my second job income be considered?
Typically, income from a second job will be considered if a two-year history of secondary employment can be verified.
How will you verify income on a self-employed applicant?
Generally, the income of self-employed borrowers is verified by obtaining copies of personal (and business, if applicable) federal tax returns for the most recent two-year period. However, based on your entire financial situation, we may not need full copies of your tax returns. We’ll review and average the net income from self-employment that’s reported on your tax returns to determine the income that can be used to qualify. We won’t be able to consider any income that hasn’t been reported as such on your tax returns. Typically, we’ll need at least one, and sometimes a full two-year history of self-employment to verify that your self-employment income is stable.
I am retired and my income is from pension or social security. What will I need to provide?
We will ask for copies of your recent pension check stubs, or bank statement if your pension or retirement income is deposited directly in your bank account. Sometimes it will also be necessary to verify that this income will continue for at least three years since some pension or retirement plans do not provide income for life. This can usually be verified with a copy of your award letter. If you don’t have an award letter, we can contact the source of this income directly for verification.
If you’re receiving tax-free income, such as social security earnings, in some cases we’ll consider the fact that taxes will not be deducted from this income when reviewing your request.
Do I have to provide information about my child support, alimony or separate maintenance income?
Information about child support, alimony, or separate maintenance income does not need to be provided unless you wish to have it considered for repaying this mortgage loan.
I have income from dividends and/or interest. What documents will I need to provide?
Generally, two years personal tax returns are required to verify the amount of your dividend and/or interest income so that an average of the amounts you receive can be calculated. In addition, we will need to verify your ownership of the assets that generate the income using copies of statements from your financial institution, brokerage statements, stock certificates or Promissory Notes.
Typically, income from dividends and/or interest must be expected to continue for at least three years to be considered for repayment.
We will always attempt to approve you for the loan without using these sources of additional income to reduce the amount of documentation you need to provide.
How will rental income be verified?
If you own rental properties, we’ll generally ask for the most recent year’s federal tax return to verify your rental income. We’ll review the Schedule E of the tax return to verify your rental income, after all expenses except depreciation. Since depreciation is only a paper loss, it won’t be counted against your rental income.
If you haven’t owned the rental property for a complete tax year, we’ll ask for a copy of any leases you’ve executed and we’ll estimate the expenses of ownership.
How should I complete the application if I am relocating to a new job that I haven’t started yet?
Complete the application as if this were your current employer and indicate that you have been there for one month. The information about the employment you’ll be leaving should be entered as a previous employer.
How do I complete the application if I was in school before obtaining my current job?
Enter the name of the school you attended and the length of time you were in school in the “length of employment” fields. You can enter a position of “student” and income of “0.”
What if my homeowners insurance is up for renewal?
On a Single Family Residence or PUD, there must be a minimum of 60 days of coverage remaining on your policy from the time of funding. On a condo, your association Home Owners Insurance policy must be current.
What is a credit score and how does it affect my application?
Credit scores (FICO scores) are based on information collected by credit bureaus and information reported each month by your creditors about the balances you owe and the timing of your payments. A credit score is a compilation of all this information converted into a number that helps a lender to determine the likelihood that you will repay the loan on schedule. The credit score is calculated by the credit bureau, not by the lender. Credit scores are calculated by comparing your credit history with millions of other consumers. They have proven to be a very effective way of determining credit worthiness.
Some of the things that affect your credit score include your payment history, your outstanding obligations, the length of time you have had outstanding credit, the types of credit you use, and the number of inquiries that have been made about your credit history in the recent past.
Credit scores used for mortgage loan decisions range from approximately 300 to 900. Generally, the higher your credit score, the lower the risk that your payments won’t be paid as agreed.
Will the inquiry about my credit affect my credit score?
An abundance of credit inquiries can sometimes affect your credit scores since it may indicate that your use of credit is increasing. But don’t overreact. The data used to calculate your credit score doesn’t include any mortgage or auto loan credit inquiries that are made within the 30 days prior to the score being calculated. In addition, all mortgage inquiries made in any 14-day period are always considered one inquiry. Don’t limit your mortgage shopping for fear of the effect on your credit score. If a lender gives you this advice, it is probably because they do not offer competitive rates and are afraid you will discover this by shopping for a mortgage with other lenders.
How do I dispute an item on my credit report?
You must contact the credit agencies directly and dispute the reported item. Following is the information on how to contact the agencies:
Transunion Consumer Relations
PO Box 1000
Chester, PA 19022
Equifax Consumer Relations
PO Box 105873
Atlanta, GA 30348
Experian Consumer Relations
PO Box 2002
Allen, TX 75013
Where can I turn for help cleaning up my credit?
Several non-profit agencies offer free counseling to assist you in this regard. Consult the yellow pages or the Internet under the heading Credit Counseling Services to find a counseling service in your area.
What steps should I take if I become a victim of identity theft?
If you have been a victim of identity theft, you have certain rights under the law. You should provide a copy of a valid police report to the credit reporting agencies and request that they block the reporting of the information that appears on your credit report as a result of identity theft. The law provides guidance to the credit reporting agencies on when to block and unblock such information.
How can I obtain a Free Credit Report?
The Fair and Accurate Credit Transaction Act of 2003 (FACTA) provides that every consumer is entitled to a free credit report every 12 months from each of the three national repositories: Equifax, TransUnion and Experian. Customers may obtain their personal credit report through the following website: www.annualcreditreport.com
What is an appraisal and who completes it?
An appraisal report is a written description and estimate of the value of a property. National standards govern not only the format for the appraisal; they also specify the appraiser’s qualifications and credentials. In addition, most states now have licensing requirements for appraisers evaluating properties located within their states.
The appraiser will create a written report for us and you’ll be given a copy prior to closing. The report will compare the qualities of your home with other homes that have sold recently in the same neighborhood. These homes are called “comparables” and play a significant role in the appraisal process. Using industry guidelines, the appraiser will try to weigh the major components of these properties (i.e., design, square footage, number of rooms, lot size, age, etc.) to the components of your home to come up with an estimated value of your home. The appraiser adjusts the price of each comparable sale (up or down) depending on how it compares (better or worse) with your property. If your home is for investment purposes, or is a multi-unit home, the appraiser will also consider the rental income that will be generated by the property to help determine the value.
What is the cost of the appraisal and how is it collected?
An Appraisal Fee Form for a credit card debit of $400 is requested when you receive your initial disclosures ($540 if 2-4 units). This form is used by the Appraisal Management Company (AMC) to pay for the cost of the appraisal and you are entitled to a copy of your appraisal.
How long does it take for the appraisal to be completed?
We order the appraisal as soon as the disclosures are received. Generally, it takes 5-7 days before the written report is sent to us. If you are refinancing, the appraiser will contact you to schedule a viewing appointment. If you don’t hear from the appraiser within three days of the order date, please inform your Loan Processor. If you are purchasing a new home, the appraiser will contact the seller’s real estate agent to schedule an appointment to view the home.
If my property’s appraised value is more than the purchase price can I use the difference towards my down payment?
Underwriting guidelines require us to use the lower of the appraised value or the sales price to determine your down payment requirement.
Will you lend on homes that require repairs?
We will lend on a home that requires repairs. Certain repairs may need to be performed before closing for items such as broken windows, missing appliances, damaged walls and other items which may affect the value of your home. Upon receipt of your appraisal, our underwriting department will make a determination as to which repairs are required to be made. In addition, the appraisal must indicate the condition of the home to be “average” or better.
Can you use an appraisal I already have?
Our quality control procedures prohibit us from using any appraisal not ordered directly by us from one of our Appraisal Management Companies in your area. The appraisers we utilize prioritize our work and will complete the assignment quickly.
Will I get a copy of the appraisal?
As soon as we receive your appraisal, we’ll update your loan with the estimated value of the home and send it directly to you.
Are there any special requirements for loans on condominiums?
For a loan on a condominium, it is necessary that the common areas of the project, or at least the phase that your unit is located in, are complete. In the event all common areas are not yet complete, your builder will have a program to finance your purchase. Their rates will probably not be as low as ours so keep your closing costs to a minimum and you can refinance through us once the common areas are complete.
In addition, in most cases an HOA certification is required and must be completed by your HOA. The certification must meet all underwriting guidelines. There may be a fee assessed by your HOA, which we will collect from you to send directly to the HOA for completion of the certification.
When do you require flood insurance on a property?
Federal Law requires all lenders to investigate whether or not each home they finance is in a special flood hazard area as defined by FEMA, the Federal Emergency Management Agency. This is to help to ensure that you will be protected from financial losses caused by flooding. We use a third party company who specializes in the reviewing of flood maps prepared by FEMA to determine if your home is located in a flood area. If it is, then flood insurance coverage will be required, since standard homeowner’s insurance doesn’t protect you against damages from flooding.
Do you provide financing for mobile homes?
No, by offering financing only on traditional 1-4 family residential properties, we are able to be more efficient and offer the best possible pricing to our customers.
Do you provide financing for lots or large tracts of land?
We do not currently offer land loans.
What happens at the loan closing?
To ensure there are no surprises at closing, your Loan Processor will send you an estimated closing statement prior to your scheduled signing appointment so you can review your final fees, loan amount, first payment date, etc.
On a purchase transaction, the closing will take place at the office of your closing agent or Title Company. On a refinance transaction, a mobile notary will be sent to the location of your choice. You will be reviewing and signing several loan documents. The most important documents include:
Note: This is the document you sign to agree to repay your mortgage loan. The Note will provide you with all of the details of your loan including the interest rate and length of time to repay the loan. It also explains the penalties that you may incur if you fall behind in making your payments.
Mortgage or Deed of Trust: This document pledges your property to the lender as security for repayment of the debt. The Mortgage restates the basic information contained in the note, as well as details the responsibilities of the borrower.
Truth-in-Lending Statement (TIL): This document provides a full disclosure of the terms and conditions of your mortgage, including the annual percentage rate (APR) and other fees.
HUD-1 Settlement Statement: This document provides an itemized listing of the final fees charged in connection with your loan.
If your loan is a refinance of a primary residence, Federal Law requires that you have three days to decide positively that you want a new mortgage after you sign the documents. This means that the loan funds won’t be disbursed until three days have passed (excluding Sundays and Federal Holidays). The closing agent will provide more details at the closing.
How can you close my loan if you are not in my area?
The Internet, fax machines and overnight mail services have eliminated the need for proximity to process and close a loan.
On a purchase transaction, we work with the closing agent you and the seller have selected. On all transactions, we utilize a professional signing service to bring the loan documents to your home or business for signing. We wire transfer your loan funds to your closing agent prior to closing so that they’ll have plenty of time to prepare for your closing.
Can I select my own closing agent and title insurance company?
By law, you have the right to select your own provider for these services. Certain providers used regularly by us have agreed to a guaranteed fee schedule, as shown on our website. If you wish to use a different provider and agree to pay the fee charged by them, we will be happy to work with them.
I won’t be able to attend the closing. What other options are there?
If you won’t be able to attend the loan closing, contact your Loan Processor to discuss other options. If someone you trust is able to attend on your behalf, you can execute a Power of Attorney so that this person can sign documents on your behalf. In other cases, we’re able to mail you the documents in advance so that you can sign them and forward them to the closing agent. We’re sure to have a solution that will work in your circumstances.
Can I close my loan in the name of a Trust?
Loans may be, in certain instances, closed in the name of a Trust. However in most cases the settlement agent will prepare a grant deed removing the property from the trust prior to recording your new loan.
Can I close my loan in the name of an LLC?
Loans may not be closed in the name of an LLC. If the title of your home is vested in an LLC, the title must be changed prior to submitting a loan application.
How soon after I sign loan documents will my loan close?
On a purchase transaction or a refinance of a second home or rental property, we can typically close within three days (one day to review the docs, one day to fund the loan, and one day for the loan to record). On a refinance of a primary residence, there is also a three-day rescission period that must pass before your loan can fund.
If I am receiving cash out at the end of the transaction, how will I receive my proceeds?
The closing agent will issue a check and mail it to you. You can also arrange for the funds to be wired directly into your bank account.
If my loan is closing around the first of the month, should I still make my payment to my current lender?
We always recommend that you make your payment to avoid any late charges.
What happens to my loan after it closes?
EmpireAmerica is a direct lender, also known as a mortgage banker. As such, we make loans with our own funds and close the loans in our name. After the loan is closed, it is sold to a secondary market investor, freeing up the funds for additional lending. Loans sold into the secondary market may be sold “servicing-retained” or “servicing-released” referring to whether the rights to service the mortgage are retained by us or released to the secondary market investor at the time of sale. Our decision to retain or release the servicing rights depends on a number of factors, the most important being which method allows us to offer the lowest rates and points to our customers.
You will be notified at the time you sign your loan documents regarding the servicing of your loan and be given instructions on where to make your mortgage payment. We sell loans servicing-released to only the largest mortgage investors in the country and are confident that your loan will be properly serviced whether we sell it servicing-retained or servicing-released.
Can I make my monthly payments with an automated debit from my checking account?
All of our servicers allow you to set up a direct debit to make your monthly payment. Upon receiving notification regarding the servicer for your loan, contact the toll-free number provided to set up your direct debit.
Can I make a bi-weekly payment?
Most of our servicers allow you to set up bi-weekly payments. However, you should seriously weigh the merits of this program before setting it up. A bi-weekly payment program pays off the mortgage early by making 13 payments each year (52 weeks in a year divided by 2 equals 26 half-payments or 13 full payments). By simply paying an extra 1/12 of a payment each month, you will pay your mortgage off faster and avoid any administration fees associated with the biweekly payment program.