The following checklist will
facilitate your mortgage
loan interview. The
checklist includes most of
the information that you and
any co-borrower will need to
supply. However, some
of our loan programs may have slightly
different requirements, so
you may want to contact us before the interview
to ensure you bring the
correct types of
information.
In preparation for your loan
interview, review the
information below.
We suggest you print this
worksheet, then check each
box
after you've gathered the
required data.
ARM: Adjustable
Rate Mortgage. A loan where the interest
rate is variable. Can go up or down,
depending on the index used.
80/20 Loan:Refers to a combination of
loans for financing of a property. 80 would
be the first loan, and is 80% of the LTV. 20
would be the second, or piggyback, or
sub-financing, and is 20% of the LTV.
80/10/10 Loan: Similar
to the 80/20, but however this term also
includes a down payment. 80 is the first, 10
is the second, and the last 10 is the down
payment from the borrower.
80/15/5 Loan: Much
like the 80/10/10, but with a 15% LTV second
and 5% down payment. Similar items would be
70/20/10, 75/15/10, 90/10, etc.
MTA:
Monthly Treasury ARM. This is a fancy name
for an ARM loan. Simply fill in all
applicable items on the REG-Z to make it
calculate. These items will be provided by
the lender to be properly disclosed.
Option ARM: See
MTA, just another name for an ARM loan.
HELOC: Home
Equity Line of Credit. A loan that is made
where the borrower can pull a loan, and at
their choosing, take money from the bank.
For example, a $50,000 HELOC could be loaned
to a borrower. The borrower can take from $0
to $50,000 at their choosing. If they
initially take $10,000 they can later take
up to the $40,000 remaining at their
choosing. Treat this as an ARM loan. Some
lenders do Simple Interest HELOCs, but this
is getting rare.
LTV: Loan-To-Value.
A fraction or percentage found by dividing
the loan amount by the lower of the
appraised value or purchase price. For
refinances, it's the loan amount divided by
the appraised value.
CLTV/TLTV: Combined
LTV or Total LTV, used when multiple loans
will be done (see 80/20 for example).
HCLTV/HTLTV: HELOC
Combined/Total LTV. Used when a HELOC is
attached to a property that is not fully
funded. For example, a person does a cash
out refi and gets a $50,000 HELOC loan. They
only take $10,000 of the available funds.
However, their maximum amount available
($50,000 in this case) is used to calculate
the HCLTV/HTLTV.
NegAm: Negative
Amortization. A loan feature that lets the
loan amount exceed the initial value. IE, a
person with a $200,000 loan that allows 125%
negative amortization could make a payment
below the amortized amount, that would cause
the balance to rise to a maximum of
$250,000. This would make the client be
$50,000 negative on the initial balance. The
recast period is the length of time that the
NegAm can continue, until the payment will
be recalculated with the new balance. The
'Stop' period is the point at which the
broker can no longer allow the balance to
increase, the loan is recast, and they must
start paying down the loan at its regularly
amortized payment. This information is
supplied by the lender.
APR: Annual
Percentage Rate. The cost of credit
expressed as a yearly rate. The APR includes
the interest rate, points, broker fees, and
certain other credit charges that the
borrower is required to pay. The broker can
find out what items are considered APR fees
by contacting their lender.
Amortization: To
provide for the gradual extinguishment of
(as a mortgage) usually by contribution to a
sinking fund at the time of each periodic
interest payment. Basically, it is the
calculated payment required to pay off a
loan within a certain period.
YSP: Yield
Spread Premium. A bonus paid to an
originator by a lender for selling at higher
rate loan. For example, if "par" note rates
are 6% and a Loan Officer sells their client
a 6.25% note rate, the lender might pay them
.5% of the loan amount in YSP. Also commonly
called a Rebate. This can be disclosed on
the GFE in the "Compensation to Broker not
paid out of Loan Proceeds" (fields 1662,
1663, 1664, and 1665).
Re-subordinate: A
process where an existing second loan is
kept when the first is refinanced. For
example, a person with a first at 9% and a
HELOC second at 5% decides to refinance just
the first loan. The HELOC would be
re-subordinated to the new first loan.
Point or Points: A
point is 1% of the loan amount. On a
$200,000 loan, one point is $2,000. Two
points would be $4,000, etc.
