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How do I determine which loan, line of credit or mortgage product will meet my needs?
How do I determine which loan, line of credit or mortgage product will meet my needs? |
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How much money can I borrow?
Lenders use specific criteria to determine if you qualify for a loan and the amount you can qualify for. You can use our calculator tools to determine whether you can qualify for a loan, the types of loan products that are best for you, and many other things. Equity United Mortgage Corporation allows you to apply and get pre-approved right here online - it's fast, easy, and free (Equity United Mortgage Corporation charges no application fee). If you qualify, the minimum home equity line is $20,000 and home equity fixed loan is $15,000. |
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I have bad credit. Can I still get a loan?
A less-than-perfect credit history doesn’t have to stand in your way of reaching your homeownership goals. Equity United Mortgage Corporation has helped thousands of individuals move beyond credit challenges into homes of their own. |
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What if I want to talk to a loan agent?
You can talk to a loan agent at any time by calling 866.828.1500 |
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Why is the loan-to-value ratio (LTV) important and how do I calculate my LTV?
The loan-to-value ratio (or LTV) is one of the most important factors in your loan process. It is used to determine the limits within which your housing and debt ratios must fall for your loan to be approved. It can also determine which fees you will be charged for your loan and the amount of these fees. It will also determine whether you must pay Private Mortgage Insurance (PMI) and use an impound/escrow account.
Your loan-to-value ratio (LTV) is simply the amount you are borrowing divided by the value of the subject property you are purchasing or refinancing. This gives you a simple ratio. For example, a house valued at $100,000 which you intend to purchase with an $80,000 loan (and a $20,000 down payment of your own cash) is said to have an LTV of 80 percent - that is, the loan represents 80 percent of the value of the house. |
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What happens after I apply for a loan online?
Our loan agent will confirm the information on your application and will contact you. He or she will then turn the application over to a loan processor, who will monitor the progress of your application until closing or will notify you in writing that your loan has been declined.
Once you submit the application, your loan will immediately begin the underwriting process. In most cases Equity United will deliver your credit decision within 24 hours. Meanwhile your loan consultant will contact you within one hour to answer any questions. |
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How do I receive and sign my loan documents?
After you complete your application with a mortgage specialist will provide you with a package in one of two ways: via e-mail with a link to your Loan Status page or via express mail. This package will contain your loan application and disclosure documents. |
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How quickly can I get a loan approved?
Loan approval can come as quickly as within 24 hours. The average time for closing a loan varies, but generally loans close within 15 to 20 business days. You can close a loan within 10 business days if you are pre-approved. |
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What if I have trouble filling out a section of the online
application?
You can talk to a loan agent at any time by calling 866.828.1500. |
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Can I change my application after I've submitted it?
Yes, just talk to your mortgage specialist. |
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What kind of information do I need to provide to qualify for a loan or line of credit?
You will need to provide credit, income, asset, and liability information, including your income, residence, and personal identification. That information will include:
Your employment and salary history for the past two years, addresses of your residences for the past two years (as well as landlords names and phone numbers if you rented), your social security number and that of your co-borrower(s)
Your current income including base salary, any commissions and bonuses or dividends. (income from alimony, child support or separate maintenance payment need not be revealed if you prefer)
The numbers and locations of your bank accounts
Your bank or investment account numbers, balances, and names of the institutions holding them
You can save time and expedite your application by collecting all this before you begin the process.
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What if I’m self-employed or my co-borrower is? Do we still
qualify for a loan?
Equity United Mortgage Corporation provides loans to individuals who are self-employed. If you are self-employed or compensated by commissions, you will need to supply your federal tax returns for the two most recent years you filed |
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What kind of security does your Web site have?
Your privacy and security is very important to us. Equity United takes stringent measures to keep our communications and transactions with you both safe and private. That's why we have obtained a certified Secure Server ID from a trusted third party
Secure Server IDs are also known as digital certificates. They bind an identity, in this case Equity United Mortgage Corporation, to a pair of electronic keys that can be used to encrypt and sign digital information. Our unique Secure Server ID ensures our authenticity to you, assuring that you are really dealing with Equity United and not an imposter. It also allows our communication with you to be encrypted so that no third parties can access it. It guarantees that only EquityUnited.com will be able to see the personal information you exchange with our site. |
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What kind of loan fees will I have to pay?
There are no fees to apply. There may be fees due at loan closing and/or “points” added on to the loan, depending on the type of loan you choose and the state in which the collateral property is located. |
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Are there extra fees for getting a loan online?
Stearns fees are the same regardless of application method. |
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What are points and how many do I have to pay?
Generally speaking, points are fees added onto loans. One point is equal to 1 percent of your loan amount. Points are paid when the loan closes, not at the time you apply for the loan.
When you get a loan, you'll have the opportunity to "buy down" the interest rate by paying discount points - essentially paying a fee to lower your interest rate. By lowering your interest rate, you will be lowering your monthly payment and the amount of interest you'll be paying over the life of the loan. You pay more at the beginning of your loan but will save money in the long run. Keep this in mind as you determine whether to pay points.
Paying points requires a higher immediate expenditure, so it may not be for you. In that case, let the loan do its job - allowing you to borrow the money you need and pay it back as fast as you can. |
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Should I roll the fees into my loan?
Again, the choice basically comes down to "pay now" or "pay later." If you have the funds now, it makes sense to cover the expenses out-of-pocket and save through lower loan payments and interest costs on a smaller loan. On the other hand, if your budget is currently tight, rolling in the costs with your loan amount makes sense because it allows you to get the loan without immediate expense. Equity United Mortgage Corporation gives you the option of rolling these funds into your loan amount. This allows you to get your loan with no out-of-pocket expense, but your loan amount will be slightly higher. The alternative to rolling the costs into your loan is to provide these funds yourself when the loan closes. You'll be borrowing a smaller loan than with a roll-in, but you will incur immediate out-of-pocket
expenses. |
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Will the interest on my loan or line of credit be tax deductible?
The interest you pay on a mortgage is usually tax deductible. Please consult your tax preparer for specifics of how your taxes will be affected. Interest on credit cards or automobile loans is not normally tax deductible. In most cases the interest on your home equity line of credit is deductible as long as your home equity debt is $100,000 or less and the total debt on your home is less than or equal to your home's appraised value. Any mortgage debt above your home's appraised value may not be tax deductible. |
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What is a FICO score?
Developed by Fair Issac & Co., a FICO is a credit score that is used to determine the likelihood that credit users will pay their bills. This credit score is expressed as a single number with the higher the number, the better the score. Three nationwide credit bureaus--Experian, Trans Union and Equifax – calculate consumer FICO scores.
Your credit scores are determined by these bureaus after they analyze your credit history and consider such factors as:
The amount of time credit has been established
The amount of credit available versus the amount of credit used
Length of time at present residence
Employment history
Late payments
Negative credit information such as bankruptcies, charge-offs, or referrals to collection agencies
Some lenders look at your score from only one bureau, others look at all and pick the middle of the credit bureau scores. |
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Why isn’t my credit score higher?
Below are the top ten most frequently given score reasons for a less than desirable score.
Serious delinquency.
Serious delinquency, and public record or collection filed.
Derogatory public record or collection filed.
Time since delinquency is too recent or unknown.
Level of delinquency on accounts.
Number of accounts with delinquency.
Amount owed on accounts.
Proportion of balances to credit limits on revolving accounts is too high.
Length of time accounts have been established.
Too many accounts with balances. |
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Does my income affect my credit score?
Income might affect your ability to get a loan, but it does not affect your credit score. Only your credit history — such as timely payments and how much you owe — affects your score. Regardless of income, if you manage your debt responsibly, you can have a high score. |
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Will my FICO score drop if I order my credit report?
Self-inquiries do not affect your score, as long as you order your credit report directly from the credit reporting agencies, or through an organization authorized to provide credit reports to consumers. It's a good idea to check your credit report once a year. |
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Is credit scoring discriminatory?
Scoring considers only credit-related information. Factors like gender, race, nationality, and marital status are not included. The Equal Credit Opportunity Act (ECOA) prohibits lenders from considering this type of information when issuing credit. Because the credit score is mathematically calculated, it treats all borrowers the same. |
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Will a low score prevent me from getting a loan?
No it will not. Equity United Mortgage Corporation works with all types of credit. |
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How can I increase my FICO score?
Increasing your credit score isn’t an overnight process, but here are some tips on how to improve your score over a period of time:
Pay your bills on time. Late payments and collections can have a serious impact on your score.
Do not apply for credit frequently. Having a large number of inquiries on your credit report can worsen your score.
Reduce your credit-card balances. If you are "maxed" out on your credit cards, this will affect your credit score negatively.
If you have limited credit, obtain additional credit. Not having sufficient credit can negatively impact your score.
Correct any errors on your report by reporting them to the credit bureau. The three major bureaus in the U.S., Equifax (1-800-685-1111), Trans Union (1-800-916-8800) and Experian (1-888-397-3742) all have procedures for correcting information promptly. |
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How do I know how much equity I have in my property?
Equity is the value of a homeowner's interest in real estate. Equity is computed by subtracting the total of the unpaid mortgage balance and any outstanding liens or other debts against the property from the property's fair market value. A homeowner's equity increases as he or she pays off his or her mortgage or as the property appreciates in value. When a mortgage and all other debts against the property are paid in full, the homeowner has 100 percent equity in his or her property. |
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Must I occupy the residence I'm using as loan collateral?
You do not have to occupy the residence you are using as collateral unless you are requesting a home equity loan or line of credit to access more than 80% of your available equity. |
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What is the difference between a home equity loan and a home equity line of credit?
A home equity loan is closed, meaning you get all your money up front and make payments until it is paid if full. In many cases, a home equity loan’s interest rate is fixed and your loan payments stay the same each month over the life of the loan til you draw on it.
For both equity loans and lines, you can only be charged interest on the outstanding principal balance. |
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Are there any restrictions on how I can use my equity line of credit?
There are no restrictions. You may use the money for whatever you choose. It is entirely up to you. |
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What are the terms or repayment periods available?
Home equity loans offer terms between five and 30 years. Home equity lines of credit can be drawn on for 10 years. Equity United Mortgage Corporation offers a wide range of products to meet every need. |
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Can I convert my home equity line of credit to a fixed rate loan?
Yes you can. Equity United Mortgage Corporation will help you refinance quickly, possibly with little or no out-of-pocket costs (depending on the program you choose). |
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Why would I want to refinance my home?
The most common reason for refinancing is to save money. Saving money through refinancing can be achieved in two ways: (1) By obtaining a lower interest rate that allows one's monthly mortgage payment to be reduced, or (2) By shortening the term of the loan, thereby saving money over the life of the loan.
For example, refinancing from a 30-year loan to a 15-year loan might result in higher monthly payments, but the total interest paid during the life of the loan can be reduced significantly.
Some people refinance to convert their adjustable loans to fixed loans. The main reason for doing this is to obtain the stability and the security of a fixed loan. Fixed loans are very popular when interest rates are low, whereas adjustable loans tend to be more popular when rates are higher. When rates are low, homeowners refinance to lock in low rates. When rates are high, homeowners prefer adjustable loans to obtain lower payments.
A third reason why homeowners refinance is to consolidate debts and replace high-rate loans with a low-rate mortgage. The loans being consolidated may include second mortgages, credit lines, student loans or credit cards. In many cases, this kind of debt consolidation results in tax savings, since consumer loans are not tax deductible, while a mortgage loan is usually tax deductible. |
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If I refinance, how large an amount should I borrow?
The amount of the new loan will depend on your financial needs -- whether you want to borrow the same amount as the current mortgage or whether you also want some extra cash to pay off bills, etc.. In addition, it will depend on your home’s appraised value. We have loans that allow you to borrow up to 97% of your property’s appraised value. |
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How do I calculate the value of my property?
Since a mortgage is a loan secured by a piece of real property, a crucial factor is in the correct value of the property in question. The value of your property is its appraised value or the amount you pay for the property (the market value), whichever is lower. In the initial stages of qualification and approval, your property's value is understood to be an estimate. It will be confirmed, if necessary for your particular loan, by a professional appraiser hired by Equity United Mortgage Corportaion. |
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Will I have to pay for a new appraisal for my home?
It depends on how old the last appraisal is on your home. If your last appraisal is fairly recent, you may be able simply to provide a list of comparable real estate sales in your neighborhood. |
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Isn’t it easier to refinance through my existing lender?
While your existing lender may not require a new property appraisal, you may still have most, if not all, of the closing costs to pay again. Plus your existing lender may not have the best rates and programs.
There is a general misconception that it is easier to work with your current lender. In most cases, your current lender will require the same documentation as other companies. This is because most loans are sold on the secondary market and have to be approved independently. Even if you have made all your mortgage payments on time, your existing lender will still have to verify assets, liabilities, employment, and other information all over again. |
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Is it smarter to wait to refinance until interest rates drop to at least two percent below my current interest rate?
Let’s say you have a 30-year fixed rate loan. A loan officer calls up and says you can refinance to a rate 0.5% lower than your current rate, and there will be no points, no appraisal fee, no title or escrow fees. He’s offering a No Cost loan, with a lower rate, lower payment and your loan balance stays the same.
This is not a scam. Thousands of homeowners have refinanced using a zero-point/zero-fee loan. Some refinanced multiple times in a single year.
This works due to rebate pricing, also known as yield-spread pricing or service-release premium pricing. You pay a higher rate in exchange for cash up front, which is then used to pay the closing costs. You are financing the closing costs by paying a higher rate. A zero point loan, with the borrower paying the closing costs would be 0.25 to 0.5% lower than the no cost loan.
On a $200,000 loan, the loan officer can offer you a rate with a cost of -1 point (rebate), which is a $2,000 credit towards your closing costs. A mortgage broker can use rebate pricing to pay for your closing costs and keep the balance of the rebate as profit. A no cost loan would need to have enough rebate points to cover all your closing costs, plus the broker’s profit margin. |
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