On a conforming loan amount 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.
On a jumbo loan amount, and depnding on the loan program, paying off a second mortgage loan that is “seasoned” will not be considered a cash out refinance.
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. Generally speaking 50% is the maximum allowable debt to income ratio that can be achieved. On Jumbo loans that ratio is slightly lower.
The percentage of your home’s value that can be borrowed on a refinance loan (know as the maximum Loan-to-Value ratio) varies by loan program.
For a refinance where you are simply paying off an existing 1st mortgage loan (plus closing costs if desired) there may be no limit as to the loan to value. So even if you have little equity or even or negative equity in the property, we may have options for you.
For a “cash out” refinance, this also will vary based on loan program and will depend on certain factors like occupancy status, credit score and # of units. In general, the maximum loan to value on a “cash out” refinance will be as high as 85% of the property appraised value.
We offer loan programs with as little as 3% down payment however, significant savings may be achieved with a down payment of 10% or 20% so we encourage you to look at multiple loan scenarios if you can afford a greater down payment.
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 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.
Yes, it’s important to know how much you qualify for before you begin your home search. Complete our online application anytime, 24/7. 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.
We do not currently offer loan programs for borrowers who are not able to document their income.
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 620 will not be approved by our system BUT with an FHA loan you may be able to secure loan approval with a little as a 580 credit score.
You will receive an email and phone call from your Loan advisor/Loan processor no later than the end of the next business day after applying. If you need contact sooner, just pick up the phone and call us.
Yes… You can pay off your mortgage any time in whole or in part with no additional charges or penalty
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 not be used to offset prepaid expenses, such as prepaid interest, initial escrow/impound account deposit or homeowner’s insurance premium.
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 months it roughly takes to “break even” on the amount paid for points, divide the difference in points ($dollar amount in cost) by the difference in monthly payment.
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.
At Shoreline Mortgage, we fully disclose all closing costs and prepaids.
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 also known as “Origination Charge” , which includes processing, underwriting, doc prep, funding and wire transfer fee. This is guaranteed at time of your loan application.
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. This is guaranteed at time of your rate lock and depends on your choice of interest rate.
Guaranteed Appraisal Fee: Your appraisal fee is collected in advance on a credit card. The funds are used to pay for your appraisal, a service performed by an independent third party. Appraisal fees are guaranteed on both purchase and refinance transactions.
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: 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. Government transfer taxes are guaranteed and per government requirements are based on loan amount. That said, they will only change if the loan amount changes.
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.
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.
An escrow account, also known as an impound account, 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%. However, if you decide not to have an escrow/impound account, your closing costs may be higher. Talk to your loan advisor for more details.
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 with your loan advisor for 30, 45 and 60 day locks and make your decision accordingly.
NOTE: Rates are currently at historic lows. If you are applying for a refinance transaction or a purchase in escrow, we recommend you lock your rate as soon at time of application. If rates drop further while your loan is in process, you can take advantage of our float down policy. However, if rates suddenly shoot up (which they can do very quickly on unexpected economic news), you will wish you had locked your rate when you applied.
At the time we are ready to draw your loan closing documents, if our posted rates are at least .25% lower than the rate 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%
Our standard lock period is 30 days. We are confident we will close your loan in this timeframe as long as you fax or email your supporting documentation within three days of request and schedule your appraisal inspection in a timely manner. We can close a purchase transaction in as few as 10 days if needed to meet a tight closing deadline. Because we are a direct lender, we have control over the approval process, drawing loan documents and funding the loan. Additionally, the third party service providers we work with, such as appraisers and title insurance companies, prioritize our orders because we provide them with a high volume of quality business.
You will be asked to support your income with a recent paystub and the prior year’s W-2 form. Self-employed borrowers will be asked to support their income with the prior one or 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.
Because everyone looks a little bit different on paper with respect to their income sources, asset accounts and credit history, a more complete checklist will be emailed to you once you complete the online application.
Making Application
Upon submission of your online loan application, our team will move into action. No later than the end of the next business day, a Loan Advisor will contact you to introduce themselves and to answer any questions you may have. Your Loan Advisor is a mortgage expert and will provide help and guidance along the way. Depending on the strength of your application, we may even secure your approval that same day!!
We’ll Send You an Application Kit and Prepare Your Loan for Closing
A complete set of application forms will be prepared inserting your personal information and transaction numbers. To expedite things as quickly as possible the application forms will be sent to you via email. The email will contain papers for you to sign and a checklist of items we’ll need to verify the information you provided about your finances during the on-line application. Typically this includes documents relating to your income and asset accounts like last year’s W-2 form, recent paycheck stub, and bank statement.
If you prefer regular mail over email we can use a one day delivery service to get your application forms to you. We’ll even include a priority mail envelope to make it as easy as possible for you to return the papers.
There is no loan application fee but you will be paying for your property appraisal using a credit card or even a bank debit card. We accept Visa, MasterCard, Discover or American Express.
We’ll order the appraisal from a licensed appraiser who is familiar with home values in your area. Depending on your finances and the loan amount requested, different types of appraisals are used. Sometimes the appraiser will need to view the home; sometimes they are able to do their evaluation from the street.
Title insurance will be necessary, if you are purchasing a home we’ll work with the Real Estate Broker or seller to insure the title work is ordered as soon as possible. If you are refinancing we’ll take care of ordering the title work for you. We’ll use the title insurance policy to confirm the legal status of your property and to prepare the closing documents.
Your assigned Loan Advisor will keep you informed every step of the way via telephone or e-mail.
We’ll Contact You to Coordinate Your Closing Date
After we receive your application kit, the appraisal, and the title work, we’ll contact you to schedule your loan closing.
The closing will take place at the office of a title company or attorney in your area who will act as our agent. A few days before closing your Loan Advisor will contact you to walk through the final information so that there won’t be any surprises at closing.
That’s all there is to it! Apply Now you will be on your way to the most convenient home loan ever!
There’s no cost or obligation for completing an online application.