PrimeLending, A Look Inside 2012
- 2. Core Convictions Honesty and Integrity People Centric Culture Agile Service Beyond Expectations One Team One Purpose Core Purpose Working together to have a profound and positive impact on the lives of all we serve. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE A
- 3. PrimeLending, A PlainsCapital Company About PrimeLending Headquartered in Dallas, Texas, and established in 1986 by Roseanna McGill, PrimeLending has grown from a sta of 20 producing $80 Million in annual closed loan volume to a sta of over 2,300 producing in excess of $8.7 Billion annually. In addition to the corporate o ce located in North Dallas, PrimeLending has expanded to over 200 branches across the United States and is licensed to originate and close loans in all 50 states. The goal at PrimeLending is to provide unsurpassed quality service and support throughout the entire mortgage process for every client and referral source. This proactive sales and operational philosophy simpli es and accelerates the loan process at all levels. The company’s experienced mortgage professionals are dedicated to making every customer’s home loan experience a positive and successful one. PrimeLending takes pride in being recognized as a premier mortgage lender o ering a wide array of loan products. Mortgage loan options include xed and adjustable rate FHA and VA, JUMBO loans, permanent construction nancing, re nancing options, and relocation programs -- just to name a few. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 1
- 4. PrimeLending, A PlainsCapital Company About PlainsCapital Bank Their Story Since opening its rst bank in Lubbock, Texas in 1988, PlainsCapital Corporation has experienced phenomenal growth in the highly competitive nancial services industry. Today, with primary locations in Austin, Dallas, Fort Worth, Lubbock, and San Antonio, PlainsCapital builds solid, long-term relationships with its customers throughout Texas to help them achieve nancial success. PlainsCapital’s diverse service o ering, backed by the strength of PlainsCapital Bank with more than $5 billion in assets, positions the company as the leading independent nancial services company in Texas. Relationship-building is paramount in the company culture and rooted in the company’s Lubbock beginnings—still championed today by Chairman and CEO Alan B. White. PlainsCapital’s tremendous growth is due, in large part, to White’s interest in meeting the needs of people. White is passionate about building long-term relationships with employees and customers, a passion that has evolved into a strategic advantage for the company in terms of low employee turnover and strong customer loyalty. PlainsCapital chose the bu alo as the corporate symbol in 1993 for its power and resilience. Having roamed the North American Plains more than 12,000 years, the bu alo symbolizes endurance and longevity and conjures visions of the American West—freedom, opportunity, and expansion. Its strength, stability, pride and momentum are all characteristics that embody the PlainsCapital spirit. Strength and Stability PrimeLending in recent years has ranked as a top producing mortgage company in major cities such as Austin, San Antonio, and the Dallas/Fort Worth Metroplex and continues to grow strength in other markets. PlainsCapital Bank is very well capitalized, signi cantly exceeding FDIC guidelines for “well-capitalized” banks. PrimeLending originates mortgage loans in more than 200 o ces nationwide. PrimeLending originated $8.7 Billion in loan volume in 2011. PrimeLending remains on pace for another record year for loan volume in 2012. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 2
- 5. PrimeLending, A PlainsCapital Company Customer Satisfaction Survey Statistics PrimeLending provides a customer satisfaction survey to every one of it’s clients. We pride ourselves on ful lling every aspect of the loan process, including the guarentee of our clients being completely satis ed with the service they have received. Place Your Trust In A Winning Team In these uncertain times, turn to a team you can trust to handle one of your life’s biggest and most important decisions! Our Top 50 Loan O cers...average over 10 years experience as trusted mortgage consultants, are each on track to close over $35 million in mortgages this year, and each will close over 117 home loans. Our Management Team recently completed a 360 Degree Panoramic Survey – a “How Are We Doing?” Investigation. Look what our two highest rated categories are: Demonstrates Honesty and Integrity, and Shows Compassion and Respect for Others Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 3
- 6. PrimeLending, A PlainsCapital Company Here is what our Customers think about their PrimeLending Loan O cer 97.5% 94.0% 95.0% 95.3% 95.7% 94.2% 93.0% 95.7% Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 4
- 7. WA VT MT ND ME MN OR NH ID SD WI MA NY RI WY MI CT IA PA NJ NE NV IN OH DE IL MD UT DC CA CO WV KS VA MO KY NC OK TN AR SC NM AZ MS GA AL TX LA FL Locations Ever expanding, PrimeLending locations span from coast to coast. With this national representation, we are well equipped to provide loans in all 50 states. We have a constant vision on the horizon. This forward way of thinking spreads into every area of our organization. We look for and develop new products with a goal to meet every client’s need. New strategic partnerships are formed and developed daily with a win/win approach. PrimeLending is always excited to welcome another branch into our organization which brings more families into their homes and makes our family a little bit bigger and better. We are de nitely glad and proud to be where we are, but we are thrilled and excited about where we are going. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 5
- 8. Did you know that PrimeLending currently o ers more than 400 mortgage products? FHA Loans Adjustable Rate Mortgages FHA 203k Renovation Loans Extended Locks VA Loans Interest Only USDA Loans Pool Escrows HomePath Financing Programs Escrow Waivers Exclusive Float Down Option And more! Jumbo Loans Our Float Down Option PrimeLending also provides an exclusive oat down option, allowing customers to reduce their interest rates. This program is a keystone to our people centric culture and service beyond expectations. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 6
- 9. PrimeLending, A PlainsCapital Company Things to Consider Before Buying For many people, buying a home is the single biggest investment they will make in a lifetime. The so-called “right time” is di erent for everyone. Before making a decision to buy a home, ask your loan o cer to help you answer the following questions. Can You Qualify for a Mortgage? Determine your debt-to-income ratio. If a loan program uses a 28/36 qualifying ratio, it means you are allowed to spend no more than 28% of your gross income on monthly mortgage payments, and no more than 36% on total debt. This includes debts such as car and school loans, credit cards, child support and alimony. If a person earns $60,000 per year, their monthly gross income is $5,000. Under the 28/36 guidelines, their maximum monthly mortgage payment should not exceed $1,400, while their totally monthly debt should not exceed $1,800. How Much Home Can You A ord? Down payments are generally paid in cash, due at closing, and are based on a percentage of the selling price of the home. You can make a down payment of 20% or more and avoid the cost of mortgage insurance. If you don’t have 20% to put down on a home, don’t worry. There are many a ordable mortgage programs available, including loans that require little down payment. In addition, some veterans, active-duty military personnel and reservists are eligible for zero-down-payment programs. How’s Your Credit? All lenders require a credit report that contains various personal nancial data, including loan payment information, bank and credit card accounts and more. If you are interested in obtaining a copy of yours, call your Loan O cer. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 7
- 10. PrimeLending, A PlainsCapital Company How Your Credit is Derived Developed in 1956, a Fair Isaac Score is a three digit number ranging from 300-850, according to the following risk factors: Payment History (35% of score) Payment information on many types of accounts Public record and collection items Details on late or missed payments Speci cally, how late they were, how much was owed, how recently they occurred and how many there are Amounts Owed (30% of score) Amount owed on all accounts Amount owed on di erent types of accounts Whether you are showing a balance on certain types of accounts How much of the total credit line is being used How much of installment loan accounts is still owed Length of Credit History (15% of score) How long your credit accounts have been established, in general How long speci c credit accounts have been established How long it has been since you used certain accounts New Credit & Inquiries (10% of score) What kinds of credit accounts you have and how many of each Total number of accounts you have Types of Credit (10% of score) How many new accounts you have How long it has been since you opened a new account How many recent requests for credit you have made Also visit www.my co.com Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 8
- 11. PrimeLending, A PlainsCapital Company How To Keep Your Credit Clean Follow These Steps 1. Review line-by-line: search for errors, omissions, duplications, “common name” errors. 2. Write out exactly what should be corrected and why - on disputed items, you are 3. allowed to add 100 words or less to your reports. 4. Credit Bureaus have counselors who will help you. 5. Credit Bureaus are obligated by Federal Law to contact all creditors where mistakes were made. These rms must respond in writing within 30 days. Failure to do so obligates the Bureau to remove the disputed items from your records (Fair Credit Reporting Act of 1971). 6. Work out a “deal” with merchants that you owe. 7. Chapter 13 bankruptcies will stay on your record for seven years. Chapter 7 bankruptcies will stay on record for seven years. Judgments, Garnishments, or Liens Liens, garnishments, etc., that are recent may indicate an unstable borrower. (Any judgments, garnishments, or liens must be paid in full, and a clear credit report supplement or other evidence from the creditor in paid receipt form and proof that the judgment, garnishment or lien has been cleared must be obtained prior to closing.) IRS tax liens must also be paid in full as outlined above. A satisfactory letter of explanation from the borrower is required. Delinquent Child Support Because of the seriousness of the delinquency/default, which in many states can cause incarceration, the child support payments must be brought current, and speci c documentation evidencing the fact must be in the le-NO EXCEPTIONS! There must be evidence from the credit-reporting agency that the payments have been brought current. A letter from the court or the legal authority responsible for collection in the city/state (e.g. district attorney, sheri , etc.) is acceptable. A letter from an ex-spouse and copies of personal checks are not acceptable, nor is an agreed upon, but not yet completed, payment plan. Free Annual Report - Beware of other sites and o ers. www.annualcreditreport.com Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 9
- 12. PrimeLending, A PlainsCapital Company Documents Needed for Loan Applications All Borrowers Copies of W-2’s for the last two years; Copies of paycheck stubs for the last 30 days (most current); Copies of checking and saving account statements for last 3 months (all pages); Copies of quarterly or semi-annual statements for checking, savings, IRA’s, CD’s, money market fund, stock, 401k, pro t sharing, etc.; Income Tax Forms; Copy of sales contract when rati ed; Employment history for the last two years (address any gaps of employment); Residency history over the last two years, with name, phone number, address and account number of Land or Mortgage Company. Rental property copies of leases plus mortgage information. Canceled earnest money check when it clears or corresponding bank statement, if applicable; Commissioned or bonused income -- if 25% or more of base, must have 2 year tax returns; Check for the expense of appraisal & credit report; Re nance Copy of Note, Deed of Trust, Settlement Statement, Survey, and Insurance information; Any assets used for down payment, closing cost, and cash reserves must be documented by a paper trail; If paid o mortgage in the last 2 years, need copies of HUD1; Copy of drivers license for applicant and co-applicant. Self-Employed Borrowers Copies of most recent 2 years tax returns (with all schedules including k-I’s, if applicable); Copy of current pro t & loss statement and balance sheet; Copy of corporate/partnership tax returns for most recent 2 year period if owning 25% or more of company Copies of W-2’s and/or 1099 forms. Documents Which May Be Required Relocation Agreement if move is nanced by employer, i.e. buyout agreement plus documentation outlining company paid closing costs bene ts; Previous bankruptcy, need copies of petition for bankruptcy and discharge, including supporting schedules; Divorce Decree if applicable; Documentation supporting moneys received from social security/retirement trust income, i.e. copies of direct deposit bank statements, awards letter, evidence income will continue for at least 3 years. Documents Needed For FHA/VA Loans FHA: Copy of social security card and drivers license for each applicant and co-applicants; VA: Original Certi cate of Eligibility and copy of DD214 Discharge Paper; Name and address of nearest living relative; and, Child Care information. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 10
- 13. PrimeLending, A PlainsCapital Company DO’s and DON’Ts Before Closing A Loan Below are a few reminders of “do’s and don’ts” before you close on your loan. DO bring a cashier’s check made out to the title company/closing attorney for your closing costs and down payment. bring driver’s license or valid photo ID to closing notify us if your employment, salary, or other compensation changes from what is noted on your loan application. inform us if your address changes from what appears on your original loan application. We will complete rental and mortgage veri cation for all of your residences within the last two years. obtain homeowner’s insurance with minimum coverage equal to the amount of your total loan or the replacement value of the house. Call my o ce with your agent’s name and phone number at least 10 days before closing. keep documentation (or a “paper trail”) on any large deposits into your account. A “paper trail” is composed of the copies of all paperwork necessary to prove a nancial transaction: copies of all checks, deposit slips, loan paperwork, forms to liquidate assets, etc. notify us if you move funds from one account to another. Provide a “paper trail” on transactions. make sure you have a clear termite report on the property. If the termite report is not clear, provide a receipt for treatment that shows the chemicals and the amount used for treatment. DON’T acquire any additional credit lines or make any large purchases on existing credit without rst consulting us. For example: Purchasing a car or buying appliances for your new home will change your debt-to-income ratios. change jobs without consulting us. A change in compensation may a ect your ability to qualify. Borrowers must have a two-year history of bonuses and/or commissions to be counted as income. Lenders may verify employment on the day of closing as a quality control check. co-sign with anyone to obtain a line of credit or make a purchase. The payment will show up on your credit report as an additional debt. negotiate your contract with an allowance and expect to get money back at closing. An allowance can be used to pay closing costs and/or prepaids. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 11
- 14. PrimeLending, A PlainsCapital Company Know What To Expect at Closing Closing on a new home should be an exciting time. But to some, it ends with the unwelcome surprise of cost increases. Closing costs are one of the least understood aspects of the home buying process. However, at PrimeLending, we will take the time to answer questions and walk you through the process. Closing costs tend to vary from lender to lender, but are generally considered any costs associated with the purchases of a new home. Today, these costs range from 2 and 7 percent of the home’s purchase price and include three basic categories: Prepaid Expenses Real estate taxes, ood insurance, interest from the day of closing to the rst of the month, homeowner’s insurance, mortgage insurance and costs to set up an escrow account are considered prepaid expenses. Escrow accounts are a service provided by the lender through which they will pay annual insurance premiums and various taxes on the borrower’s behalf. The amount that goes into these accounts is based on the rst year’s premiums, plus an additional amount to help build the account for future premiums. Prepaid expenses are di cult to determine because they depend on the type of property and the time of the closing. These items will change throughout the life of the loan due to changes in insurance premium and real estate taxes. Mortgage Points A mortgage point is equal to 1 percent of the mortgage loan amount. For example, depending on prevailing rates, a $100,000 mortgage might be obtained at 7.75 percent with 2 points, or at 8.25 percent with no points. Obtaining the lower interest rate would cut the mortgage payment by about $35 a month, but would require $2,000 — or 2 points — up front at closing. Out-of-Pocket Expenses Out-of-pocket expenses are fees for appraisals, attorneys, credit reports, deed recording, tax services and other miscellaneous expenses. These fees are for services usually performed by a third party and directly charged to the borrower. Most out-of-pocket fees are necessary and legitimate. However, whenever the borrower sees a fee which they don’t understand, they should ask about it. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 12
- 15. PrimeLending, A PlainsCapital Company The Loan Process Prequali cation This step gives you the early notice of being quali ed for a loan from PrimeLending, and also increases your potential by being listed as a “cash buyer” when negotiations begin. Getting the Loan PrimeLending will research all resources to nd the best nancing options for your needs. Some of the many factors that come into play during this step are: What length of time are you planning on having the loan? What type of interest rate, xed or adjustable, works for you? What kinds of costs are involved with the loan and can you a ord them? Should you pay points? What is the best time to lock your interest rate for the loan? Applying for the Loan After gathering all of the necessary information from you, your loan application will be complete. Thing to remember to give to PrimeLending are: Outstanding Debts Other Loans Additional Assets Yearly Income Submitting Paperwork Although we live in a green age, paperwork is still needed for the mortgage process. You will submit additional paperwork with the application that includes: 2 years of W2’s 2 months of bank statements 1 months of paystubs Finding Your Home Now you can start to look for your new home. Finding one can be challenging but with the knowledge of what you qualify for and the support at PrimeLending, you can focus your search. Things to consider while negotiating for the home are price, closing costs and date, seller concessions, and possible the length or term of the loan. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 13
- 16. PrimeLending, A PlainsCapital Company Appraising the Home Most mortgage lenders, including PrimeLending, require an appraisal be done on the home. This way you can know the exact value of the home, ensuring that you are not overpaying for your potential new home. Getting Home Insurance Most mortgage lenders also require home insurance that covers re and hazards. If your new home is located within a ood zone, you will also be required to have ood insurance. Getting Mortgage Insurance Not all loans do, but some require mortgage insurance if your down payment on the home is less than 20% of the sales price. The good thing is that mortgage insurance can be led as a tax deductible. Ask us for more details about this. Loan Processing With all of the nal information gathered about you and your potential new home, PrimeLending will package it together and send to our Processing department for review and approval. The Processor will look over all of the details to ensure accuracy, match numbers, check to see if the correct insurance is included, put the loan through our automated underwriting system, and see if any documents are missing. Once the review is nalized, the packet will be send to our underwriting team. Underwriting An Underwriter will look over your loan application from start to nish. Once done, they will see if any additional information is required and then make the decision to approve your loan. Closing and Funding Your Loan With the Underwriter’s approval and all of the documents packaged, the packet is sent to the attorney to be signed, funded by PrimeLending, and then led for records. You, the New Homeowner You are now the owner of your new home! Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 14
- 17. PrimeLending, A PlainsCapital Company Moving Checklist 4 Weeks Prior to Move Make a “Move” le folder. Set up a calendar for your move. Have a garage sale. Contact a local charity to donate any unneeded furniture. Gather moving supplies, boxes, tape, rope. Call a moving company or make truck rental reservations to move yourself. Collect doctors, dentists, medical and school records. Collect all nancial, tax, and employment documentation that may be needed for your loan. Contact your insurance company to transfer your policies (life, auto, homeowners). 3 Weeks Prior to Move Arrange a cut o date, and date for new service with your utility companies (telephone, gas, electric, water, garage, and cable). Call friends and relatives to let them know you are moving. Canned goods can be costly to move-you may consider donating to a local charity. Check out Voter Registration information. Send change of address forms to newspapers, magazines, and associations. Notify the post o ce of your move. Fill out a change of address card. Review tax deductions on moving expenses. 2 Weeks Prior to Move Transfer stocks, bonds, bank accounts, and contents of safety deposit boxes. Prepare a list of clothes to take with you, start separating them into suitcases. Take the time to check ALL of the previous items, you still have time. 1 Week Prior to Move Clean your refrigerator and let it air out at least 24 hours before moving. Drain outdoor equipment, water from hoses, propane tanks from barbecue grills, and gas and oil from lawn mowers. Discard any aerosol, paint, oils, and all ammable and/or toxic chemicals. Label items you need to easily access and place them in a separate room or closet. Arrange for pest control before moving into your new home-especially on new construction. Move Out Day Remember that those items packed last will be unloaded rst. Once everything is out of the house, take one last look through the house: cupboards, closets, behind doors, attics, stairwells, overhead in the garage, outside the home, and any storage sheds. Move In Day Have the house ready before the trucks arrive. Take some time, sit back, and relax. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 15
- 18. PrimeLending, A PlainsCapital Company Frequently Asked Questions What is Prequali cation? A process by which a potential homebuyer quali es for a home mortgage before making an o er on a house. A lending institution reviews documentation to determine if they can make a loan in the speci ed amount to the person it is prequalifying. My real estate agent recommended that I get a commitment letter. What is a commitment letter, and why should I get one? The lender gives a commitment letter that states the lender agrees to provide a mortgage to a homebuyer based upon certain criteria being met. Commitment letters help you set realistic goals while you’re house-hunting, provide the same negotiating ability as a cash buyer and enable you to move quickly once the perfect home is found. When mortgage lenders refer to “PITI” what are they referring to? PITI is principle, interest, taxes, and insurance: the components of a monthly mortgage. When my loan o cer asks me if I want to waive escrows, what exactly does this mean? When you waive escrows, you take the responsibility of paying your taxes and insurance rather than having them included in your monthly mortgage payment. Waiving escrows may add a small fee to your closing costs. You can only waive escrows if your loan program allows for this such as conventional loans that have a loan value of 80% or less on your rst lien. What does my mortgage lender mean by points or origination fee? One point is equal to one percent of the loan amount. Points and origination fees can be used to buy down the interest rate. How does the annual percentage rate di er from the interest rate? The APR (Annual Percentage Rate) di ers from the interest rate as it is the nancing rate calculated with the nance charges over the life of the loan. The interest rate calculates the principle and interest payment for the loan. How do I know what my interest rate will be? You discuss this with your loan o cer who advises you of the rates available for your loan product. You can then “lock” the rate with your loan o cer. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 16
- 19. PrimeLending, A PlainsCapital Company Do I need to have a certain amount of money left after I buy my home? Reserve requirements are program speci c and will be gone over with you by the Loan O cer. What is the Debt-to-Income Ratio? This is a ratio used by lending institutions to assist in determining whether a person is quali ed for a mortgage. Debt-to-Income is the total amount of debt, including credit cards and other loans, divided by total gross monthly income. What is the di erence between a FHA and a VA loan? A FHA loan is a loan guaranteed by the Federal Housing Administration. FHA issues speci c guidelines for mortgages. A VA loan is a loan guaranteed by the Veterans Administration. To obtain a VA loan, the borrower must have served in the Armed Forces for a speci c time period. What is Private Mortgage Insurance (PMI)? PMI is insurance required to help cover the lender expenses should the borrower default on the loan. It is required on certain loan products and LTVs. Do I always have to have PMI on my loan? PMI can be eliminated by having a down payment of at least 20%. Will I have two separate payments if I have a second lien? The second lien is often from a di erent lender than the rst lien. Therefore, borrowers with a second lien will make two separate payments each month - one on the rst lien and one on the second lien. What does my lender mean by “paper trail?” A “paper trail” is composed of the copies of all paperwork necessary to prove a nancial transaction: copies of all checks, deposit slips, loan paperwork, forms to liquidate assets, etc. Why did I receive a Truth-In-Lending? Truth-In-Lendings are sent to all borrowers after a loan application has been made. The Truth-In-Lending Act is a federal law requiring lenders to reveal all of the terms of a mortgage. The APR that appears on your Truth-In-Lending will be higher than the interest rate on your Real Estate Lien Note, as it is calculated based on term and nance charges. Will I get a copy of my credit report and appraisal? Yes. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 17
- 20. PrimeLending, A PlainsCapital Company What inspections are required by the lender? The lender requires an appraisal on most transactions. A clear termite report is required on many government transactions. If the appraiser recommends repairs or if repairs are mentioned in the contract, the lender will require that those repairs be done before closing. The appraiser then will perform a nal inspection to assure that the repairs were completed. If the termite report recommends treatment, treatment is required. We will need a receipt showing the name and amount of chemicals used and a clear termite inspection. When will I nd out what my nal gure is for the total costs to close? The Settlement Statement (HUD-1) is prepared by the title company/closing attorney according to closing instructions prepared by the lender. This is available 24 hours prior to closing by contacting your Loan O cer or Title Company. Where do I go for closing? Your closing will take place at the title company. The title company name and address appears in your sales contract. Call the title company to schedule a time for your closing. Where do I send my rst mortgage payment? Refer to your “First Payment Letter” in your closing documents to determine where to send your rst mortgage payment. If you receive a statement from your new lender prior to the due date of your rst payment, send your payment to the new lender. Otherwise, send your payment to PrimeLending, a PlainsCapital Company as detailed in your “First Payment Letter.” Remember to include your loan number on your check. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 18
- 21. PrimeLending, A PlainsCapital Company Mortgage Dictionary Adjustable-Rate Mortgage (ARM) A mortgage that permits the lender to periodically adjust the interest rate on the basis of changes in a speci ed index. Amortization The gradual reduction of the mortgage debt through regularly scheduled payments over the term of the loan. Annual Percentage Rate (APR) The measure of the cost of credit stated as a yearly rate; includes such items as the stated interest rate, plus certain charges. Appraisal A written estimate or opinion of a property’s value prepared by a quali ed appraiser. Balloon Mortgage A mortgage in which the borrower’s monthly payments are amortized over a longer period than the actual term of the mortgage. As a result, at the end of the loan term, the borrower must pay o the remaining balance with a single lump sum payment or re nance the loan. Cap For an Adjustable-Rate Mortgage (ARM), a limitation on the amount the interest rate or mortgage payments may increase or decrease. Debt-to-Income Ratio The relationship between a borrower’s total monthly debt payments (including proposed housing expenses) and his or her gross monthly income; this calculation is used in determining the mortgage amount the borrower is quali ed for. Default The failure to make a schedule payment or otherwise comply with the terms of a mortgage loan or other contract. Discount Point (or Point) Origination Fee A fee paid by the borrower at closing to reduce the interest rate. A point equals 1 percent of the loan amount. Equity The owner’s interest in a property, calculated as the current fair market value of the property less the amount of existing liens. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 19
- 22. PrimeLending, A PlainsCapital Company Escrow An item of value, money, or documents deposited with a third party to be delivered upon the ful llment of a condition. For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of real estate. FHA Insured Loan A loan that is insured by the Federal Housing Administration (FHA) of the U.S. Department of Housing and Urban Development (HUD). Lifetime Cap For an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate or monthly payment can increase or decrease over the life of the loan. Loan-To-Value Ratio (or LTV Ratio) The relationship between the loan amount and the value of the property (the lower of appraised value or sales price), expressed as a percentage of the property’s value. For example, a $100,000 home with an $80,000 mortgage has an LTV of 80 percent. Margin For an adjustable-rate mortgage (ARM), the amount that is added to the index to determine the interest rate on each adjustment date, as stated in the note. Mortgage Insurance (MI) Insurance that protects lenders against losses caused by a borrower’s default on a mortgage loan. MI typically is required if the borrower’s down payment is less than 20% of the purchase price. Paper Trail See #14 FAQ. Depending on the lender, this may be required by the lender. PITI An acronym for the four primary components of a monthly mortgage payment: principle, interest, taxes, and insurance (PITI). Point -- See Discount Point Prepayment Penalty A fee that a borrower may be required to pay to the lender, in the early years of a mortgage loan, for repaying the loan in full or prepaying a substantial amount to reduce the unpaid principle balance. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 20
- 23. PrimeLending, A PlainsCapital Company Prequali cation A preliminary assessment by a lender of the amount it will lend to a potential homebuyer. The process of determining how much money a prospective home buyer may be eligible to borrow before he or she applies for a loan. Principal The amount of money owed on a loan, excluding interest. Also, the part of the monthly payment that reduces the remaining balance of a mortgage. Second Mortgage A mortgage that has a lien position subordinate to the rst mortgage. Truth-In-Lending Act A federal law intended to promote the informed use of consumer credit by requiring disclosure about its terms and costs. Creditors are required to disclose the cost of credit as a dollar amount (the nance charge) and as an annual percentage rate (APR). VA (or U.S. Department of Veterans A airs) A federal government agency that provides bene ts to veterans and their dependents, including health care, educational assistance, nancial assistance, and guaranteed home loans. Honesty and Integrity | People Centric Culture | Agile | Service Beyond Expectations | One Team One Purpose A LOOK INSIDE 21
- 24. Frank J. Fuentes Senior Mortgage Loan Officer NMLS#: 49963 760.797.5607 ffuentes@primelending.com http://ffuentes.primelending.com Address: 74-199 El Paseo Drive, Suite 202, Palm Desert, CA 92260 ‹ 3ULPH/HQGLQJ $ 3ODLQVDSLWDO RPSDQ 7UDGHVHUYLFH PDUNV DUH WKH SURSHUW RI 3ODLQVDSLWDO RUSRUDWLRQ 3ODLQVDSLWDO %DQN RU WKHLU UHVSHFWLYH DI¿OLDWHV DQGRU VXEVLGLDULHV 6RPH SURGXFWV PD QRW EH DYDLODEOH LQ DOO VWDWHV 7KLV LV QRW D FRPPLWPHQW WR OHQG 5HVWULFWLRQV DSSO $OO ULJKWV UHVHUYHG 3ULPH/HQGLQJ $ 3ODLQVDSLWDO RPSDQ 10/6 QR
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