1. Understanding your Mortgage Presented by: Fidelity National Financial

2. Content: 1. Key Terms 2. Important Questions 3. The Loan Process

3. 1. Key Terms: Equity Equity Equity Lock-in Lock-in Lock-in LTV LTV LTV Mortgage Mortgage Mortgage Mortgage Broker Mortgage Broker Mortgage Broker Mortgage Broker PITI PITI PITI

4. Equity Value of a property minus the debt Back to terms page

5. Lock-in A lock-in, also called a rate-lock or rate commitment, is a lender's promise to hold a certain interest rate and a certain number of points for you, usually for a specified period of time, while your loan application is processed. Back to terms page

6. LTV Loan to Value The amount you will borrow compared to the total purchase price. Back to terms page

7. Mortgage Transfer of property rights as security for a loan. The mortgage assigns property rights to the bank who lets you borrow money against it. Back to terms page

8. Mortgage Broker One who, for a fee, places loans with investors, such as banks and savings and loan, but does not fund or service those loans. Back to terms page

9. PITI The total sum of a mortgage payment, including: Principal, Interest, Taxes & Insurance Back to terms page

10. 2. Important Questions To Ask Your Lender 1. What are your credentials? Why should I chose you?? Why should I chose you??Why should I chose you?? 2. How many points will your company charge me? How many points will your company charge me? How many points will your company charge me? 3. How long will the financing process take? How long will the financing process take? How long will the financing process take? 4. What interest rate do I qualify for? What interest rate do I qualify for? What interest rate do I qualify for? 5. When will I be able to ‘lock-in’ the interest rate on my loan? When will I be able to ‘lock-in’ the interest rate on my loan? When will I be able to ‘lock-in’ the interest rate on my loan? 6. Can you GUARANTEE the lowest closing costs? Can you GUARANTEE the lowest closing costs? Can you GUARANTEE the lowest closing costs?

11. 1. Why should I chose you to be my mortgage broker? The truth is that ALL mortgage companies should offer you decent service at low costs. Your goal: to discover “What can this mortgage company offer me that nobody else can?” Expect nothing less than “Exceptional” service.

12. 2. How many points will your company charge me? The right lender must answer honestly and without hesitation. Simplified, points are mortgage fees that are paid upfront to reduce the initial interest rate. Ask your lender to be very clear on how many points he is charging you on the loan he is offering you.

13. 3. How long will the financing process take? Once you have applied for the loan and it’s approved, the truth is that the loan process has just begun. Between this step and the estimated time of closing, it’s identified as the “loan in process”. It is here that your loan documents will be prepared, verified, underwritten and finally closed. The average “in process” period is approximately 30 days.

14. 4. What interest rate do I qualify for? Keep a watchful eye on advertisements that offer interest rates that are extremely low! Though everything is possible, it will come at a cost paid by you, the borrower. The suitable lender will be able to answer that “as a professional, he/she will insightfully analyze your complete history”. Furthermore, the interest rate will totally depend on each individual’s financial facts.

15. 5. When will I be able to ‘lock-in’ the interest rate on my loan? A really important point: the market will continue to fluctuate until you agree to an interest rate lock-in. The more diligently you submit your application and fulfill all your lender requirements, the faster you will be ‘locked- in’. Traditionally, a lock-in within 30 days of your estimated closing date is made at no additional cost. Return to questions page

16. 6. Can you GUARANTEE the lowest closing costs? As an educated and confident homebuyer, don’t forget to request a “good faith estimate”- it’s the law! In this fashion, you are able to compare all lenders under consideration. Return to questions page

17. 3. Loan Process Summary Interview a few lenders Interview a few lenders Select lender based on your criteria satisfaction Select lender based on your criteria satisfaction Complete an application (referred to as a 1003) Complete an application (referred to as a 1003) Based on the information provided on this application, lender can provide a pre-approval status, as well as offer a variety of loan programs Based on the information provided on this application, lender can provide a pre-approval status, as well as offer a variety of loan programs Select the loan most convenient compared to your re-payment goals Select the loan most convenient compared to your re-payment goals

18. Loan Process Continued… You will be asked to gather a series of documents for verification (process known as documentation) These are most common: Last 2 years of tax returns Last 2 years of tax returns Last 2 years of W2’s Last 2 years of W2’s Business tax returns Business tax returns Last 30 days of pay stubs Last 30 days of pay stubs Last 3 months of personal business bank statements Last 3 months of personal business bank statements Pension award letter Pension award letter Etc. Etc.

19. Loan Process Continued The lender now verifies all documentation submitted and loan goes through underwriting process (the average process is 30 days) The lender now verifies all documentation submitted and loan goes through underwriting process (the average process is 30 days) Mortgage APPROVAL takes place Mortgage APPROVAL takes place Lock-in of your rate may be suggested. However, it is your responsibility to request an interest rate lock-in to take place. Lock-in of your rate may be suggested. However, it is your responsibility to request an interest rate lock-in to take place. Lender finalizes “lender’s package” Lender finalizes “lender’s package”

20. Loan Process Continued Lender sends package to title company Lender sends package to title company Title company prepares final documentation, as directed by lender instructions Title company prepares final documentation, as directed by lender instructions Closing date and time is set Closing date and time is set Closing takes place Closing takes place

21. Congratulations! Your loan transaction has closed