Collaborate on Terms and Conditions for Invoice Example for Mortgage with Ease Using airSlate SignNow

Terms and conditions for invoice example for Mortgage

my name is pat o'connor this is video number 18 in my national mortgage exam tutorial series i'll be giving definitions for some terminology that you need to know the information in these videos comes primarily from the study guide that i have published on amazon it has hundreds of questions and answers it's a good overview of the business in general and it has two practice exams at the end of this video there will be instructions on how subscribers can request a link to quizzes and if you follow through to the end of the video you will get those uh instructions all right let's start subordinate loans mortgage liens are usually recorded in the order in which the documents are signed so when you get a mortgage then it will be recorded and you can see it in the property tax record so if you get two mortgages at the same time for example purchase mortgage for eighty percent and then a second mortgage purchase loan for 10 the purchase loan will have a higher mortgage uh position they will get paid off first if there is a foreclosure or short sale the second purchase loan will have a subordinate position it will be underneath that purchase loan it's riskier for the lender if you are subordinate so they generally have higher interest rates than the first mortgage because there may not be enough money left for you know during a foreclosure to pay them off so they counter balance that by charging higher interest escrow accounts these are the accounts that loan servicers set up to keep the one month of property tax and one month of hazard insurance in an account borrowers may not have to have an escrow account if lenders allow them to pay for their own hazard insurance each year and to pay their own property tax each year but if they don't one month's worth will be collected along with your mortgage and interest payment a lien the lien is evidence of a debt so when you get a mortgage you have a mortgage lien if the irs comes after you you will have an irs tax lien if you don't pay your general contractor you're going to have the contractor's construction lien on the property tolerances for the purpose of the exam tolerances are the allowable differences between fees that are charged on the loan estimate versus the liens that are charged the fees that are charged on the closing disclosure so things like loan origination fees zero percent tolerance variance they have to be on the same as a loan estimate and the closing disclosure you have 10 for things like recording fees you have an unlimited amount of tolerance for items like per diem mortgage interest right it may be initially calculated on a particular closing date but by the time you get to the closing disclosure you may have had closing date extensions on the deal so it's not going to match what's on the loan estimate so those can have an unlimited amount of tolerance a rate lock agreement this locks in the interest rate and they usually have an expiration date okay so it's locked in 30 days 60 days 45 days whatever it is table funding this is where mortgage companies who are approved wholesale traditional lenders can process originate and close the loan in their own name they may not have to use any funds for this because they can assign the loan right after the documents are signed to a lender who will then fund the loan why do mortgage companies do this because the lenders will pay them an assignment fee they didn't have to worry about processing the loan they didn't underwrite the loan right the mortgage company took care of all of that and the lender obviously approved of the process and so the mortgage company will get an additional fee for this so that's called table funding and it may be illegal in some states i think i read that it's you can't do it in california yield spread premiums it's the difference between the par interest rate break-even rate and the interest higher interest rate that's charged to the borrower back in the olden days before mortgage reform loan originators if they charge a higher interest rate would receive a larger compensation from the lender but that went out with the loan origination rule so now uh yield spread premiums are the basis for lenders credits uh for the closing uh to the borrowers and we'll talk about that in a minute what a lender credit is and i'll go into that federal mortgage loans those are the fha loans that are 100 percent insured by hud and the va in usda loans that are partially guaranteed by the government so the lenders who do these loans are either 100 insured and will not lose any money on the deal are partially guaranteed and will losses will be covered up to a certain point and those are the government loans servicing transfers it's when you have a change in loan servicer could be that all the consumers were complaining they got a lot of complaints about a particular loan servicer so it was changed also the mortgage note can be reassigned or sold various times throughout the life of the loan and the new holder of the mortgage and note may then sell the servicing rights to some one other than the previous loan servicer and so that's what um servicing transfers mean lender credits this is where a lender will pay for contribute towards the closing cost of the borrower and and and it can be upfront the borrower has the choice of paying a lower interest rate a par interest rate and paying all their own closing costs or they can accept a higher interest rate and the lender may contribute the yield spread premium the difference between the two maybe two percent of the loan amount towards paying the closing cost for the borrower and that usually does not include the down payment right they want that out of the borrower's funds typically what are the closing costs title insurance attorney fees that kind of stuff discount points this is the borrower may negotiate with the loan originator if they have a lot of cash extra cash and they want to lower the interest rate below par so they want a lower interest rate than what is on the rate sheets that you as a loan originator will use they're not going to get it for free they're going to purchase discount points and a discount point is typically one percent of the loan amount how much does it lower the interest rate anywhere from an eighth to a quarter of a percent lower is it worth it it depends they can do the math and figure it out for the life of the loan or how long they intend to keep the loan they're not necessarily planning on keeping it for 30 years so they can do the math they can see if it's worth it uh it also may help them qualify if there's a lower interest rate and you guys have already been through the class before so you know like you know the death income ratios the piti depends on the interest rate right that they're paying if they can pay to lower it they can get a loan whereas they might not have been able to get a loan before so when you are qualifying them and they don't qualify but they have some extra money bring this up to them would you like to purchase discount points and you may get a deal where you might have overlooked it before a 2-1 by dam this is a an expression that means a lender will offer um two percent lower interest rate below poor for the first year and one percent interest below par for the second year and then it will go to poor why would they do this uh builders if they have their own seller financing it may be an incentive to have people use them as their uh financier rather than come to us we built the places we provide financing and we'll give you a two percent lower first year one percent lower second year okay loan to value ratio ltv if you've been through your course then this should be ingrained in you it is the loan amount divided by the lower amount of either the purchase price or the appraisal value and this is the percent um that the uh lender will finance so if the um appraisal value is lower than the purchase price then somehow the difference between the two um has to be brought as cash to the closing table okay so ltv loan to value either purchase price or appraisal value and that's the lender's position in the property percentage of ownership not ownership but financing accrued interest the monthly interest that accumulates you know mortgage interest that accumulates during the month right if you pay it off on the first then on the second you start accruing the interest finance charges charges that uh you wouldn't the borrower wouldn't pay if they were paying cash so things like your fees uh interest rate you pay cash you're not going to have interest rate so those are financing charges also called the cost of borrowing money daily simple interest now the mortgage can be calculated on mortgage interest can be calculated by dividing by 12 because there's 12 months or dividing by 365 days so the daily simple interest rate is when you have an interest rate and it's divided by 365 days and that will give you um and then you multiply that by the loan amount and that will give you the amount of the daily interest uh the daily interest simple interest mortgage is usually a little bit higher than traditional mortgage so you as a loan originator see how your lender calculates mortgage interest rate you're either going to be dividing by 365 or you're going to be dividing by 12. okay subordination uh again this is when um a higher lien mortgage loan or any loan agrees to assume a lower lean position when would they do that one example is in a short sale you have your purchase mortgage right that's typically the senior mortgage and then you might have a second money purchase money mortgage below that or heloc and for the short sale what the second lien holder may insist on for the short sale to go through and the lender to get the money and avoid the whole foreclosure mess they may insist that the senior mortgage subordinate their lien so that that second mortgage is now superior and will be paid off first from the proceeds of closing okay and if there's not enough money to completely pay off the say purchase money mortgage too bad for them all right and so i personally know some short sales are killed because of the senior mortgage holder will not agree to subordinate convenience transfer a property or a lease to another party that's all primary secondary market primary markets where the the market where the um original funding occurs borrower gets the purchase mortgage on their home well the lender is probably not going to keep that in their portfolio they're going to sell it in the secondary mortgage market maybe to fannie mae maybe to somebody else if it's not a qualified mortgage all right and then that is the secondary mortgage market so the original funding is primary any later uh assignments of the mortgage and note transfer of ownership for a fee um is the secondary mortgage market and fannie mae and freddie mac are a huge part of that third-party providers uh one of the laws prevents um you know third-party providers from contributing uh down payment costs um for the borrowers and so the third party providers not the laws but you know rules for fha and whatnot um so third-party providers in this case would be real estate agents title agents um the appraiser on the deal uh you know the people that aren't that are in the orbit of the closing but they're not the borrowers or the sellers assumable loan the new borrower can take over payments of uh the seller's mortgage and these are the government loans so the same terms fha va usda loans they're all assumable apr annual percentage rate it's the actual interest rate say okay we'll give you right now they're being quoted like five and a half percent recording this in july 2022. five and a half percent but apr is what would appear on the loan estimate it used to be part of the truth and lending disclosure was the apr because it's the quoted interest rate plus the financing charges so it would include loan origination fee maybe discount points you know those type of charges okay so right now the instructions on how to how subscribers can request the quiz should be above my head and in a few seconds you will see links show up for additional videos in this series hope you enjoyed it if you enjoyed it please subscribe tell your friends like us and i will see you next wednesday thank you bye