1. April 21, 2017
Mortgage 101
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2. Quick Overview Mortgage Terms
Debt-To-Income: Monthly income divided by monthly obligations (Loan payments, Credit card payments, excludes)
Loan To Value: Amount of mortgage on property based on current market value; For Example: Mortgage $80,000 Current market value of property $100,000 LTV of 80% = 20% equity.
PITI: Principal Interest Taxes Insurance
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3. Basic Mortgage Categories
Quick Overview
Basic Mortgage Categories
Conventional Loan: Is one that is not insured by FHA VA USDA V.S. Non-Conventional loans
Under the Conventional, there are 2 types of loan Conforming (Under the loan amount $417K) and Non-Conforming (Over the loan amount $417) Also Has qualification Credit Score, LTV, Asset reserve.
Non-Conventional: Government loans, anything out of Conventional loan realm
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4. Conventional, FHA, VA, Jumbo
Mortgage Programs
*Please keep in mind loan programs and scenarios are too broad to cover, thus, most popular will be discussed on today’s agenda*
Conventional, FHA, VA, Jumbo
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5. Conventional
LTV: 95% max requires Mortgage Insurance, but 20% Down payment preferred to avoid Mortgage Insurance
Credit: 620 minimum
Loan amount: $417K for Conforming, if over $417K Non-Conforming
Derogatory: No Bankruptcy, Foreclosure, and Short Sale in 7 years within the application
DTI: 45%
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6. Jumbo Loan LTV: 80% max Credit: 740 minimum
Loan amount: $417K and over
Interest Only Option available
Derogatory: No Bankruptcy, Foreclosure, and Short Sale in 7 years within the application
DTI: 45%, 50% for Interest Only
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7. FHA LTV: 96.5% Minimum down payment of 3.5% Credit: 600
Loan Amount: Limit to $ 375K (OR)
Derogatory: No BK in 2 years No Foreclosure or Short Sale in 3 years
DTI: 50% Max (Compensating factor)
*Mortgage Insurance Mandatory*
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8. VA Loan LTV: 100% Financeable Credit: 600 Loan Amount: $417K
Derogatory: 2 years from the BK 5 years from the Foreclosure or Short Sale
DTI: 50% Max (Compensating factor)
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9. Process Flow Chart
 Pull Credit Report/Review income documents  Pay for the credit report and
Appraisal money ***** Non-Refundable***** Disclosures get mailed or
ed to the client within 3 days of applications need to be accurately sign and
date return to within 10 calendar days or loan cancels prefer to send it back
ASAP usually 5days  Initial Underwriter reviews/appraisal, if everything goes well 3
days Pull title and UW reviews title and appraisal report usually 3 day process  Final
UW review 3 days  Closing documents starting Oct.1 under TRID closing has to wait 3
days after the client receives .
If failed to close on designated date, clients get penalized for lock extension.
***** Average closing 22 days*****
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10. Documents List For employees: For Self-employed:
2 months bank statements showing down payment and 2 months reserves (Asset verification based on UW guideline discretion)
Most recent 2 year W-2
Most recent 30 days paystubs
Photo copies of ID front and back
For Self-employed:
Most recent 2 years of Full Tax returns including every schedule.
Asset statements
Most recent Profit and Loss statement and balance sheet
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11. Title
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12. Title
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13. Title
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14. Title
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15. Thank you!
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