Frequently Asked Questions
1. How can you offer such low rates?Since 1993, First Lenders Mortgage has worked endlessly to create the most efficient loan origination system in the industry.
* We utilize state of the art technology, including online rate quotes, , online loan applications, and an automated underwriting system. * Because we have very low overhead and expenses, we are then able to pass those savings directly to our clients in the way of lower interest rates and less fees using our “CLOSING COST CREDITS” program. We are typically .25% LOWER than the Major Banks.
We at First Lenders Mortgage have NO fees ourselves. We eliminated our application fees, credit reporting fees, etc a LONG time ago. We just pass on dollar for dollar the "standard" third party fees that are associated with a refinance today. They can include Appraisal fee, title fees, and recording fees. Depending on what "Bank" we submit your loan to, the Bank has their "internal" fees as well. They can fluctuate depending on the banks. While all these fees are FIXED except "Title fees" (which goes off your loan size ), often times depending on the loan size, your loan to value, and loan product, we can often help "offset" some of these fees utilizing our "Closing Cost Credit" option.
2. What are your Fees?
NOTE: The only out of pocket expense for a refinance is always the appraisal fee ($450-$750) for a single family home. All other fees are rolled into the new loan amount unless the borrower elects to pay them, in any denomination at closing.
There’s no cost or obligation for completing an online application and obtaining an online loan approval. Upon receiving your online loan approval, you will be given an opportunity to lock your rate. If you wish to lock your rate, you will be asked to submit a $450 appraisal fee by credit card ( Visa or Mastercard ) for a single family home and TWO years federal tax returns and W2's.
3. What happens after I apply?Upon submission of your online application, our automated underwriting system runs your credit and determines whether your application meets our guidelines for online approval. 95% of applications submitted are approved online. If you wish to lock your rate, you will be asked to submit a $450 appraisal fee by credit card and submit your last TWO years federal tax returns and W2's. You will receive an email from us no later than the end of the business day. The email will list the remaining documentation required to close your loan (paystubs, bank statements, etc.). You will receive a call from an appraiser within 24 hours after the appraisal is ordered..
Our standard lock period is 45 days. We routinely close our refinances within 30 days!
4. What supporting documentation is required?Please click on “Documentation List” on our home page to view
5. How quickly can you close my loan?Our standard lock period is 45 day but routinely close within 30 days as long as we receive all required documentation promptly from the client! Refinances with subordinations may take longer depending on the second lender’s turn times.
6. What is your rate lock policy?We offer online locks for 30, 45 and 60 day periods. Refinance transactions may be locked at the time of loan application. Purchase transactions may be locked once you have an accepted offer on a property and completed all home inspections.
How Do I Lock?
When you submit your online application, it will be analyzed by our Automated Underwriting System and, in most cases, be immediately approved. You will select the rate you wish to lock.
Are Any Fees Collected When I Lock?
You will be asked to submit a $450 appraisal fee by credit card at the time you lock your rate.
What if Rates Drop After I’ve Locked?
All Fannie Mae lenders do not have any float down options! Once your loan is locked... It is locked. Don't be fooled by lenders saying they offer a float down option. They are just "hoping" the rate does not change by the time they close your loan.
What Happens if the Loan Process Takes Longer Than My Lock Period?
Your processor will contact you and calculate the number of additional days necessary to close your loan.
- If the delay was caused by us, or a third party service provider selected by us, we will extend your lock for the additional days required at no cost to you.
- If the delay was caused by you and current rates are the same or lower, we will extend your lock for the additional days required at no cost to you.
- If the delay was caused by you and current rates are higher, your loan will be re-priced at current rates.
7. Is paying off an existing second mortgage or home equity line considered cash out?
According to Fannie Mae and Freddie Mac, if your existing second mortgage or home equity line was not obtained in conjunction with purchasing your home, then paying it off with a new mortgage is considered cash out and pricing adjustments will apply based on credit score and Loan To Value.
8. Can I keep my existing second mortgage or home equity line and refinance my first mortgage?
Yes, but this does complicate the refinance transaction somewhat. The holder of your second mortgage or home equity line will have to sign what is known as a subordination agreement, subordinating their existing lien position to the new first mortgage. Your second mortgage lender will ask us to provide some documentation such as a copy of the mortgage note you’ll be signing and the appraisal before they provide the subordination agreement. We won’t be able to schedule your loan closing until we receive the subordination agreement.
When subordinating an existing second mortgage or home equity line, First Lenders Mortgage will lock for 45 days!
9. What is a three day right to cancel?
On refinance transactions, Federal law mandates that you have three days, after signing your loan documents, in which to cancel your loan. This three day period includes Saturdays, but excludes Sundays and holidays. Your loan will not be funded until this period has expired.
10. What is prepaid interest?
Prepaid interest is paid at the time of closing of your loan to cover the interest that will accrue on your new loan for the remaining days of the month in which it is funded. You will make no payments in the month immediately following the month in which your loan funds. You will then begin making payments on the first of each month for the prior month’s interest.
11. What is a Closing Cost Credit?
A rebate is a credit to the borrower by the lender for taking an interest rate higher than the zero point rate. The lender hopes to recapture the amount paid by collecting a higher interest rate over the life of the loan. Rebates may be used to offset any non-recurring closing costs, including the guaranteed lender fee, appraisal, closing agent, title insurance, recording and/or transfer taxes. Rebates may not be used to offset prepaid expenses, such as prepaid interest, initial escrow/impound account deposit or homeowner’s insurance premium.
12. Why is my Loan payoff HIGHER than my current mortgage statement when doing a refinance?
There is always "trailing interest" with a mortgage loan payoff. Mortgages work the opposite of "rent". When you pay your rent, you are paying for THAT month. When you make your mortgage payment, you are paying the interest for the PREVIOUS month. So when you make your "june" mortgage payment, you are actually paying interest for the month of May. So when we order a loan payoff, that number will always be HIGHER than what shows on a current mortgage statement.
13. Where does the closing take place?
The actual closing takes place right in the comfort of your home. We can do mornings,nights and weekends depending on your availability.