MORTGAGES : NEWPORT BEACH, CALIFORNIA- MORTGAGE AND REAL ESTATE COMPANY

Mortgages are legal documents that pledge a property to the lender as security for payment of a debt. The term Mortgage is a generic term referring to debt obligations secured by real estate. As you know there are many brands of photo copying machines currently available, yet many of us still refer to the process of making a copy as Xeroxing, due to the fact that Xerox produced the first widely available good quality copy machine. In the same manner, we refer to debt obligations secured by real estate as Mortgages, even though many states, including Alaska, do not use Mortgages. The term Mortgage is an English common law term and was a form of security instrument used for hundreds of years before the formation of our country.

JUMBO MORTGAGE LOAN CALIFORNIA

A mortgage that is larger than the maximum eligible for purchase is called as Jumbo mortgage.

Points- It is an upfront cash payment required by the lender as part of the charge for the loan, expressed as a percent of the loan amount; e.g., "2 points" means a charge equal to 2% of the loan balance. This is the process of determining whether a customer has enough cash and sufficient income to meet the qualification requirements set by the lender on a requested loan. A pre-qualification is subject to verification of the information provided by the applicant. A pre-qualification is short of approval because it does not take account of the credit history of the borrower.

Pre-qualification starts the loan process. Once a lender has the complete information of a borrower’s income and debts, a determination can be made as to how much the borrower can pay for a house. A borrower has been pre-qualified since there are different loan programs which results in different valuations. There are two key factors that mortgage companies consider while approving homebuyers for mortgage.

a) Borrower’s ability to repay the loan.

b) Borrower’s willingness to repay the loan.

Ability to repay the mortgage is verified by the customer’s current employment and total income. Normally mortgage companies prefer consumers to have been employed at the same place for at least two years, or at least be in the same line of work for few years. The borrower’s willingness to repay is determined by examining how the property will be used. For example, will you be living there or just renting it out? A check on the willingness is also closely related to how a customer has fulfilled previous financial commitments, thus the emphasis on the Credit Report and/or your rental payment history.

It is important to know that there are no tough rules. Each applicant is handled on a case-by-case basis. So even if you come up a little short in one area, your stronger point could make up for the weak one. Mortgage companies couldn’t stay in business if they didn’t generate loan business, so it’s in everyone’s best interest to see that you qualify. A jumbo mortgage loan offers 30 and 15 year fixed rate mortgage and competitive ARM products with full document, alternate documentation and limited documentation. Cash out and No cash out refinance are allowable. Single family detached, Condo’s, PUD’s and single-family second homes can be financed with no prepayment penalty. Newport Mortgage & Investments offers jumbo mortgage loan at the best rate in Southern California and are mortgage lenders in Southern California.

Creating a Credit Report

A Credit Profile refers to a consumer credit file, which is made up of various consumer credit reporting agencies. It is a picture of how you paid back the companies you have borrowed money from, or how you have met other financial obligations. There are five categories of information on a credit profile:

• Identifying Information
• Employment Information
• Credit Information
• Public Record Information
• Inquiries

This is not included on your credit profile that is race, religion, health, driving record, criminal record, political preference, or income. If you have had credit problems, be prepared to discuss them honestly with a mortgage professional who will assist you in writing your "Letter of Explanation." Knowledgeable mortgage professionals know there can be legitimate reasons for credit problems, such as unemployment, illness or other financial difficulties. If you had problems that have been corrected (reestablishment of credit), and your payments have been on time for a year or more, your credit may be considered satisfactory.

   The mortgage industry tends to create its own language and credit rating is no different. Credit scoring is a statistical method of assessing the credit risk of a mortgage application. The score looks at the following items: past delinquencies, derogatory payment behavior, current debt levels, length of credit history, types of credit and number of inquires.

Improve your credit score

The following items are some of the ways that you can improve your credit score:

• Pay your bills on time.
• Keep Balances low on credit cards.
• Limit your credit accounts to what you really need. Accounts that are no longer needed should be formally cancelled since zero balance accounts can still count against you.
• Check that your credit report information is accurate.
• Be conservative in applying for credit and make sure that your credit is only checked when necessary.

A borrower with a score of 680 and above is considered an A+ borrower. A loan with this score will be put through an "automated basic computerized underwriting" system and be completed within minutes. Borrowers in this category typically qualify for the lowest interest rates and their loan often can close more quickly than borrowers with lower scores .A score below 680 but above 620 may indicate underwriters will take a closer look in determining potential risk. Supplemental documentation may be required before final approval. Borrowers with this credit score may still obtain "A" pricing, but the loan may take several days longer to close.

Borrowers with credit scores below 620 are normally locked into the best rate and terms offered. This loan type usually goes to "sub-prime" lenders. The loan terms and conditions are less attractive with these loan types and more time is needed to find the borrower the best rates. All things being equal, when you have derogatory credit, all of the other aspects of the loan need to be in order. Equity, stability, income, documentation, assets, etc. play a larger role in the approval decision. Various combinations are allowed when determining your grade, but the worst-case scenario will push your grade to a lower credit grade. Late mortgage payments and Bankruptcies/Foreclosures are the most important. Credit patterns, such as a high number of recent inquiries or more than a few outstanding loans, may signal a problem. Since an indication of a "willingness to pay" is important, several late payments in the same time period is better than random lates.

Appraisal Basics
An appraisal of real estate is the valuation of the rights of ownership. The appraiser must define the rights to be appraised. The appraiser does not create value. The appraiser interprets the market to arrive at a value estimate. As the appraiser compiles data pertinent to a report, consideration must be given to the site and amenities as well as the physical condition of the property. Considerable research and collection of data must be completed prior to the appraiser arriving at a final opinion of value. Using three common approaches, which are all derived from the market, derives the opinion, or estimate of value. The first approach to value is the cost approach. This method derives what it would cost to replace the existing improvements as of the date of the appraisal, less any physical deterioration, functional obsolescence and economic obsolescence. The second method is the comparison approach, which uses other "bench mark" properties (comps) of similar size, quality and location that have recently sold to determine value. The income approach is used in the appraisal of rental properties and has little use in the valuation of single family dwellings. This approach provides an objective estimate of what a prudent investor would pay based on the net income the property produces.

Underwriting
Once the processor has put together a complete package with all verifications and documentation, the file is sent to the lender. The underwriter is responsible for determining whether the package is deemed an acceptable loan. If more information is needed the loan is put into "suspense" and the borrower is contacted to supply more information and/or documentation. If the loan is acceptable as submitted, the loan is put into an "approved" status.

Closing: - Once the loan is approved, the file is transferred to the closing and funding department. The funding department notifies the broker and closing attorney of the approval and verifies broker and closing fees. The closing attorney then schedules a time for the borrower to sign the loan documentation.

At the closing the borrower should:

• Bring a cashier to check for your down payment and closing costs if required. Personal checks are normally not accepted and if they are they will delay the closing until the check clears your bank.
• Review the final loan documents. Make sure that the interest rate and loan terms are what you agreed upon. Also, verify that the names and address on the loan documents are accurate.
• Sign the loan documents.
• Bring identification and proof of insurance.

After the documents are signed, the closing attorney returns the documents to the lender who examines them and, if everything is in order, arranges for the funding of the loan. Once the loan has funded, the closing attorney arranges for the mortgage note and deed of trust to be recorded at the county recorders office. Once the mortgage has been recorded, the closing attorney then prints the final settlement costs on the HUD-1 Settlement Form. Final disbursements are then made.

A typical "A" mortgage transaction takes between 14-21 business days to complete. With new automated underwriting, this process speeds up greatly. Contact one of our experienced Loan Officers today to discuss your particular mortgage needs or Apply Online and a Loan Officer will promptly get back to you.