Residential Loan
・Residential Loan
Interest rate and cost for residential mortgage varies depending on the lender. The most important things are credit history and score. Depending on the score, the rate, cost, required down payment and documentation varies. There is a fixed and an adjustable loan. Your monthly payment is calculated by the loan amount and term. We recommend consulting with a loan officer as to which program is the most suitable for you based on your assets, employment, purposes and credit score.
・Outline
| Purpose |
Purchase |
Refinance |
Equity Loan |
| Property |
New property, Second House, 1-4units, Investment |
To lower your payment Renovation, working capital, debt consolidation |
Renovation, vacations, purchase furniture or auto, working capital debt consolidation |
| Loan Amount |
Up to $5,000,000 |
Up to $5,000,000 |
Up to $300,000 |
| Trem |
10years、15years、20years、30years、40years、50years |
15years、30years |
| Interest rate |
Fixed; Adjustable (1 months, 3 months, 6 months, 1 year);3yrs, 5yrs, 7yrs Fixed |
Fixed, Adjustable,
Line of Credit
|
| Consultation |
Free of charge |
| Loan cost |
Depends on loan programs and credit history. Ask for details |
| Documents |
| ■Salary worker |
2yr W-2 form, pay stub for the last one month, copy of insurance Mortgage coupon/statement, bank statement, copy of IRA/401K statement, Loan application, HOA info |
| ■Self employed |
all documents for salary worker and copy of business license for 2yrs, 1040 for last 2yrs |
| ■If purchase |
Copy of purchase agreement, escrow instruction |
※Necessary documents may differ depending on program. Ask for details. |
| Special Type of Loan |
For Japanese (foreigner), no and/or few credit history, bad credit, no down payment, stated income, non owner occupied. Free estimate |
・Residential Loan Process
- Consult with loan officer
Present with loan amount, program, rate, fee based on income, assets, and credit scores
- Submit necessary documents and apply for the loan
- Open escrow
If purchased, submit purchase agreement and initial deposit to escrow
- Order appraisal report
- Submit loan packages (loan application and necessary documents) to the lender
- Approval and conditions from lender
- Lock in rate
- Sign all loan documents
- Funding
- Recording deeds
・Necessary Documents
| |
Refinance |
Purchase loan |
| Salaried person |
- W-2 Form for last 2years
- Pay stub for the last 1 month
- Copy of fire insurance
- Mortgage coupon/statement
- Bank statement for last 2 months
- Bank info. Address, account #
- Copy of IRA, 401K statement
- Auto info. Make, Year, Model
- HOA info. Address, phone #
- $70 check payable to Reavans Corporation
- Appraisal Fee $350.00-
|
- Purchase agreement
- Escrow instruction
- W-2 Form for last 2 years
- Pay stub for the latest 1 month
- Bank statement for last 2 months
- Bank info. Address, account #
- Copy of IRA, 401K statement
- Auto info. Make, Year, Model
- HOA info. Address, phone #
- $70 check payable to Reavans Corporation
- Appraisal Fee $350.00-
|
| |
Refinance |
Purchase loan |
| Self Employed |
- Business license for last 2 years
- Copy of tax return for last 2 years
- Copy of fire insurance
- Mortgage coupon/statement
- Bank statement for last 2 months
- Bank info. Address, account #
- Copy of IRA, 401K statement
- Auto info: Make, Year, Model
- HOA info. Address, phone #
- $70 check payable to Reavans Corporation for credit report
- Appraisal Fee $350.00-
|
- Purchase agreement
- Escrow instruction
- Business license for last 2 years
- Copy of tax return for last 2 years
- Bank statement for last 2 months
- Bank info. Address, account #
- Copy of IRA, 401K statement
- Auto info: Make, Year, Model
- HOA info. Address, phone #
- $70 check payable to Reavans Corporation for credit report
- Appraisal Fee $350.00-
|
・Type of Loan
Residential loan has generally two types of loans:
Fixed Rate and
Adjustable Rate Mortgage:(ARM)
- Fixed Rate
30-year and 15-year are most common and monthly payment remains same for the life of loan.
- SAMPLE
| Loan Amount |
Term |
Rate |
Monthly Payment |
| $300,000 |
30yrs |
6.000% |
$1,798.65 |
On this type of loan, there are 30yr, 20yr, 15yr, 10yr, 7yr, 5yr, 3yr, 1yr Fixed.
- ARM: Adjustable Rate Mortgage
Every 1 month, 3 month, 6 month, 1yr, rate will change based on the Index, such as LIBOR, COFI, CODI
- SAMPLE
| |
Loan Amount |
Term |
Rate |
Monthly Payment |
| Min. Payment |
$300,000 |
30yrs |
1.000% |
$964.92 |
| Interest Only |
$300,000 |
30yrs |
6.000% |
$1,500.00 |
| Full Index |
$300,000 |
30yrs |
6.000% |
$1,798.65 |
| |
Loan Amoun |
Term |
Rate |
Monthly Payment |
| Min. Payment |
$300,000 |
30yrs |
1.000% |
$964.92 |
| Interest Only |
$300,000 |
30yrs |
8.000% |
$2,000.00 |
| Full Index |
$300,000 |
30yrs |
8.000% |
$2,201.29 |
Type of Index
- LIBOR
(London Inter Bank Offering Rates) an average of the interest rate on dollar-denominated deposits (Eurodollars). BBA (British Bankers'Association) posts it at 11 am every day.
- COFI
abbreviation for 11th District Cost of Funds Index. Weighted-average interest rate paid by 11th Federal Home Loan Bank District saving institutions for savings and checking accounts. 11th District represents the savings institutions in AZ, CA, and NV.
- CODI
abbreviation for Certificate of Deposit(CD) Index. It is the 12-month average of the monthly average yields on the nationally published 3-month CD rates.
- Conforming Loan Limit 2006
These amounts will apply at the end of each year based on the national sales data between October of last year and October of this year. These limits are applied to Fannie Mae's guideline and there are other ruled limits by each conventional lender.
-
| |
Conforming Loan |
Jumbo Loan |
| 1 unit |
$417,000 |
$417,001～ |
| 2 units |
$533,850 |
$533,851～ |
| 3 units |
$645,300 |
$645,301～ |
| 4 units |
$801,950 |
$801,951～ |
・Loan Programs
- Full DOC Loan
Required all documents described in the Documents required. There is a slight difference between a salaried person and self-employed. See the detail.
- Stated DOC Loan
In most cases, this program is suitable for a self-employed individual. This allows no income verification so that you can state income. Bank statement, assets, employment will be verified.
- SISA: Stated Income Stated Assets
Income will not be verified. Bank statement and assets will not be verified as well.
- NINA: No Income No asset
Neither Income nor assets will be verified. These sections on application are not necessary.
- No Ratio
In general, to qualify for the loan, the ratio PITI: monthly loan payment (principal & interest), property tax and insurance premium divided by monthly gross income must be below 33% and the one PITI plus monthly other debt payments, such as auto, credit card divided by monthly gross income must be below 38%. On this program, you can apply and be qualified for an even higher ratio.
- No DOC
No Income, assets, employment will be verified
- Hybrid Loan
Fixed for the first 2 years, 3 years, 5 years, 7 years and adjustable thereafter. Usually, the rate for this loan is lower than the 30-year Fixed Loan. You can take advantage of lower monthly payments. However, there will be a prepayment penalty for 3yrs. If you pay in full or beyond certain amounts, that penalty applies.
- Interest Only
Usually this comes with the above-mentioned Hybrid loan. This also has prepayment penalty as well and as long as interest payment is made, the principal will not decrease.
- Minimum Payment
Rate is somewhere around 1% to 1.95%. Be cautious since this type of loan increases your principal.
・Credit Score
A credit score is a snapshot of your credit risk at a particular point in time to see your history, balance of credit card, auto, mortgage loan, how you make each payment on time or late payment etc. Any creditors, such as a credit card company and bank report a payment history to a credit bureau company* and they evaluate your credit risk and give a score.
- Up to $110,000 difference for the total 30-year payment!!
30 yr for $300,000
FICO Score Interest Rate Monthly payment Total Payment (as of 5/17/07)
-
| FICO Score |
Interest rate |
Monthly payment |
Total payment |
| 760-850 |
5.872% |
$1,774.04 |
$638,652.63 |
| 700-759 |
6.095% |
$1,817.02 |
$654,122.87 |
| 660-699 |
6.380% |
$1,872.59 |
$674,133.14 |
| 620-659 |
7.191% |
$2,034.54 |
$732,431.08 |
| 580-619 |
8.567% |
$2,321.00 |
$835,560.46 |
| 500-579 |
9.261% |
$2,470.42 |
$889,347.35 |
What a FICO Score Considers
- Payment History
- ・Payment made on time
- ・How many late for each 30day+, 60day+, 90day+.
- ・Any public record, such as Collection, Judgment, Bankruptcy, Tax Lien, Foreclosure
- Amounts Owed
- ・How close to you limit on each account
- Length of Credit History
- ・The longer your good credit history is, the higher the score is
- New Credit
- ・The number of new accounts opened in a short period of time causes your score to be lower. By requesting your own score by yourself does not count at all
- Types of Credit in Use
- ・The more you have various kinds of accounts, the better, as long as you maintain a timely payment
Type of Accounts
| Revolving account |
Credit cards |
| Installment account |
Auto loan, Student loan etc |
| Retail account |
Department store, Supermarket, Gas, and Stationary etc. |
| Mortgage account |
Mortgage loan, Line of credit |
