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In California, more than 80% of mortgage loans are provided to the consumer by mortgage professionals offering choice, convenience, expertise; consumers receive an expert mentor to lead them through the complex mortgage lending process. The broker offers the consumer extensive choices and access to affordable home loans while balancing the consumer's financial interests and goals.
Contact a Garber Financial Loan Specialist to discuss your situation via phone conference, or in person if you prefer. In most cases, clients appreciate the ease of completing the application by phone call. During this phone call, be prepared to provide property information, asset and liablity information, 2 year employment and residence history. The call typically lasts 15-20 minutes. Once all the information is obtained, a typed loan package will be delivered to you - either via email, or USPS mail service. You will be asked for supporting documentation to be returned to Garber Financial, along with the signed loan packages.
Loan costs vary depending on the loan amount, and if your transaction is a purchase or a refinance. Your Garber Financial Loan Specialist will be able to quote you accurate figures during your consultation. The loan costs can be paid from savings, from home equity on a refinance transaction, by the seller if negotiated as part of a purchase contract, or by the lender in the form of a lender credit. It is possible to obtain a loan and not pay any closing costs yourself. Please ask your specialist to find out what options there are for your unique situation!
Currently, from the time a completed application is recieved in our office, until closing, it takes 30 days for a purchase loan, and 45 days for a refinance transaction. Some HARP 2.0 loans can take up to 90 days from start to finish.
Your monthly mortgage payment is made up of several components. This housing expense is commonly referred to as "PITI", Principal, Interest, Taxes and Insurance. PMI (see below) and homeowners association (HOA) dues may also make up a portion of your total payment. HOA dues are paid directly to the Association, but must be included on the application, for qualifying purposes.
Because loans with small down payments involve substantially more risk for the lender, they need protection in case the loan goes into foreclosure. Because this insurance is available, lenders can offer loans with lower down payments. This insurance protects the lender, not the property, and is in addition to your homeowners insurance that you are also required to have. Generally speaking, if you have less than 20% equity in your property, you will be required to have PMI. Exceptions to this rule apply for the most HARP 2.0 loans, and all VA loans. PMI requires an up front fee which is payable as a part of your closing costs and it is also required to be paid monthly with your payment. The cost of PMI varies according to the amount of your down payment. FHA also charges a fee for mortgage insurance and which is called MIP or Mortgage Insurance Premium. There is both an up front fee (which may be financed) and a monthly charge. VA charges a one time, up front, funding fee, which may be financed.
An impound account (also known as an escrow account) is a trust account set up by the lender to which a portion of the monthly payment is credited so that funds will be available for the payment of taxes and insurance. This way, the lender actually pays your tax and insurance bills for you. It is held until the taxes and insurance payments are due. At that time, the lender will pay for these items instead of you.
If you have less than 20% equity, it will be mandatory to set up an impound account. If you have 20% or more equity in the property, having an impound account is optional. Many people prefer to have one, simply so that they don't have to worry about making sure the money is available to pay these items when they are due.