What causes an adjustable rate mortgage to adjust? The interest rate of an adjustable rate mortgage (ARM) is linked to a particular index of economic conditions. A commonly used index is the six-month London Interbank Offering Rate or LIBOR. This index is the average of interest rates charged by major international banks to borrow U.S. dollars in the London money market. LIBOR is the British equivalent to the U.S. Prime Rate.

The LIBOR index is officially fixed once each day, although changes occur throughout the day. Changes in this index correspond to changes in the interest rate of an adjustable rate loan. Because the interest rate of an ARM is calculated by adding the index plus a "margin" (a pre-set, fixed interest rate established by the lender), a change in the index value will cause a change to the interest rate calculation. The number of times an ARM loan will adjust each year, and the maximum amount it can change, varies per loan.

What is negative amortization and how does it occur? Negative amortization occurs when scheduled monthly mortgage payments are not sufficient to repay the fully scheduled amortized payment (principal and interest) due on the loan and the outstanding balance of the loan grows larger with each payment.

What kind of documentation will I need to provide to the lender for income verification?

Every loan is as different as every borrower, so there is no single list of required documents that will apply to all borrowers. However, the following is a general list of documents you should be prepared to provide to any (remember, you should provide copies of these documents, not originals).

• Employment and Income Data:
  W-2 tax forms for the past two years
  1099s (if applicable)
  Pay stubs showing current year-to-date earnings within 30 days.
  Your employment history and any explanation of a job change within the last two years
  If Self-Employed (defined as owning 25% or more of a business)
  Business and personal federal tax returns (including all schedules) for the past two years
  Current year-to-date profit or loss statement K-1 for all partnerships
  Residence addresses for the past two years
  Properties owned

• Assets
  Bank account statements for the past two months
  Most recent investment account statements
  Most recent retirement account statements
  Signed gift letter and transfer of funds verification

• Liabilities
  
  Credit cards, including account numbers and balances
  Auto loans and leases, including account numbers and value of the car
  Explanation and paperwork for any derogatory credit in the past seven years
  Explanation letter of any derogatory credit, such as bankruptcy, collection, foreclosure or default
  Student and personal loans, including account numbers, monthly payments and balances
  Landlord address(es) for the past two years if necessary
  Property and Real Estate Agent Information
  
  
• Name and contact information of your Real Estate Agent
• Homeowner's insurance information
• Rental or lease agreement

Do I have to document my income? We offer many income documentation programs: full and stated (where not prohibited by law). Full documentation programs require that you substantiate your income with tax returns, bank statements, pay stubs, and/or other such paperwork. If you choose not to document your income, you can take advantage of our stated income programs, which requires no income verification, but you must satisfy other loan requirements.

Can I apply for a purchase loan before I've found my property? Yes, in fact I highly encourage it. You can become pre-approved for a maximum loan amount and a loan program in as little as fifteen minutes. Once you find a specific property, the specifics of the loan can be changed to suit your purchase. Please note that a rate can't be locked in until there is a specific property address.

What is the cost to submit a loan application? There is no cost to submit a loan application or to be pre-qualified for a loan. You will only incur a cost when you have accepted a loan offer and an appraisal is ordered for your property.

What is the difference between the interest rate and the APR? The Annual Percentage Rate (APR) is the yearly cost of a mortgage expressed as a percentage, and takes into account the total cost of a loan, including the interest rate and other finance changes (e.g., closing fees and points). The interest rate consists solely of the cost for borrowing a lender's money.

Using an APR allows a borrower to more accurately compare the true costs of various loans offered by different lenders, or different loan programs offered by the same lender.

Can I make changes to my application? Yes, you can make changes to your application at any time before the final approval. Any changes after the final approval may affect the time it takes to close your loan, the cost of closing the loan, the interest rate, the type of loan and sometimes the loan approval itself.

Can I apply for a purchase loan before I've found my property? Yes, in fact I highly encourage it. You can become pre-approved for a maximum loan amount and a loan program in as little as fifteen minutes. Once you find a specific property, the specifics of the loan can be changed to suit your purchase. Please note that a rate can't be locked in until there is a specific property address. What is the cost to submit a loan application? There is no cost to submit a loan application or to be pre-qualified for a loan. You will only incur a cost when you have accepted a loan offer and an appraisal is ordered for your property. How do I know what my loan rate is and when do I get it? You will be quoted an interest rate and APR when I present you with a loan offer. Additionally, Banc GROUP TM Mortgage allows us to "float down" your interest rate as the market changes at no cost to you. What is the difference between the interest rate and the APR? The Annual Percentage Rate (APR) is the yearly cost of a mortgage expressed as a percentage, and takes into account the total cost of a loan, including the interest rate and other finance changes (e.g., closing fees and points). The interest rate consists solely of the cost for borrowing a lender's money.

Using an APR allows a borrower to more accurately compare the true costs of various loans offered by different lenders, or different loan programs offered by the same lender.

Can I make changes to my application? Yes, you can make changes to your application at any time before the final approval. Any changes after the final approval may affect the time it takes to close your loan, the cost of closing the loan, the interest rate, the type of loan and sometimes the loan approval itself.

What is hazard insurance? Hazard insurance is a type of homeowner's insurance that protects against damages caused to property by fire, wind, or other common risks. Lenders require that you get a hazard insurance policy before you buy or refinance a home.

What if I have bad credit or a bankruptcy? Banc GROUP TM Mortgage offers loans to people with all sorts of credit. Whether you have good credit, credit issues, a past bankruptcy, or the need to re-establish credit, we encourage you to apply.

What is "loan-to-value" ratio? Loan-to-value ratio is a measure used by lenders to assess the relationship between the value of the property and the amount of the loan. The loan-to-value ratio is determined by dividing the loan amount by the fair market value of the property.

What loan is right for me? Many factors and personal preferences affect a borrower's choice of "the best loan," including the purpose of the loan (e.g., new purchase, debt consolidation, etc.), the length of both the loan and the ownership of the property, and the type of loan a borrower requires (e.g., a small amount of down-payment, a large amount, or no money down). I encourage you to go through the loan application to determine what kinds of loans you might qualify for depending on your specific needs.

What costs are involved in the loan process? Fees on home loans fall into the following 3 main categories:

Lender Fees -- These are fees charged by Banc GROUP TM Mortgage (and other lenders) for originating, processing, underwriting and funding your loan. These fees are set by the lender and vary by state and loan program.

3rd Party Fees -- These fees are charged by other companies which are necessary for completing your home loan. Examples include title companies, appraisers and attorneys (in certain states). 3rd parties set their own fees.

Government Fees -- These fees are charged by state and local governments. Examples include; recording, state tax, tax stamps or transfer tax. Your local and/or state governments set these fees.
For a complete breakdown of fees associated with you loan, please see your Good Faith Estimate (GFE).

What causes an adjustable rate mortgage to adjust? The interest rate of an adjustable rate mortgage (ARM) is linked to a particular index of economic conditions. A commonly used index is the six-month London Interbank Offering Rate or LIBOR. This index is the average of interest rates charged by major international banks to borrow U.S. dollars in the London money market. LIBOR is the British equivalent to the U.S. Prime Rate.

The LIBOR index is officially fixed once each day, although changes occur throughout the day. Changes in this index correspond to changes in the interest rate of an adjustable rate loan. Because the interest rate of an ARM is calculated by adding the index plus a "margin" (a pre-set, fixed interest rate established by the lender), a change in the index value will cause a change to the interest rate calculation. The number of times an ARM loan will adjust each year, and the maximum amount it can change, varies per loan.

What is negative amortization and how does it occur? Negative amortization occurs when scheduled monthly mortgage payments are not sufficient to repay the fully scheduled amortized payment (principal and interest) due on the loan and the outstanding balance of the loan grows larger with each payment.

What kind of documentation will I need to provide to the lender for income verification?

Every loan is as different as every borrower, so there is no single list of required documents that will apply to all borrowers. However, the following is a general list of documents you should be prepared to provide to any (remember, you should provide copies of these documents, not originals).

• Employment and Income Data:
  W-2 tax forms for the past two years
  1099s (if applicable)
  Pay stubs showing current year-to-date earnings within 30 days.
  Your employment history and any explanation of a job change within the last two years
  If Self-Employed (defined as owning 25% or more of a business)
  Business and personal federal tax returns (including all schedules) for the past two years
  Current year-to-date profit or loss statement K-1 for all partnerships
  Residence addresses for the past two years
  Properties owned

• Assets
  Bank account statements for the past two months
  Most recent investment account statements
  Most recent retirement account statements
  Signed gift letter and transfer of funds verification

• Liabilities
  
  Credit cards, including account numbers and balances
  Auto loans and leases, including account numbers and value of the car
  Explanation and paperwork for any derogatory credit in the past seven years
  Explanation letter of any derogatory credit, such as bankruptcy, collection, foreclosure or default
  Student and personal loans, including account numbers, monthly payments and balances
  Landlord address(es) for the past two years if necessary
  Property and Real Estate Agent Information
  
  
• Name and contact information of your Real Estate Agent
• Homeowner's insurance information
• Rental or lease agreement

Do I have to document my income? We offer many income documentation programs: full and stated (where not prohibited by law). Full documentation programs require that you substantiate your income with tax returns, bank statements, pay stubs, and/or other such paperwork. If you choose not to document your income, you can take advantage of our stated income programs, which requires no income verification, but you must satisfy other loan requirements.

Can I apply for a purchase loan before I've found my property? Yes, in fact I highly encourage it. You can become pre-approved for a maximum loan amount and a loan program in as little as fifteen minutes. Once you find a specific property, the specifics of the loan can be changed to suit your purchase. Please note that a rate can't be locked in until there is a specific property address.

What is the cost to submit a loan application? There is no cost to submit a loan application or to be pre-qualified for a loan. You will only incur a cost when you have accepted a loan offer and an appraisal is ordered for your property.

What is the difference between the interest rate and the APR? The Annual Percentage Rate (APR) is the yearly cost of a mortgage expressed as a percentage, and takes into account the total cost of a loan, including the interest rate and other finance changes (e.g., closing fees and points). The interest rate consists solely of the cost for borrowing a lender's money.

Using an APR allows a borrower to more accurately compare the true costs of various loans offered by different lenders, or different loan programs offered by the same lender.

Can I make changes to my application? Yes, you can make changes to your application at any time before the final approval. Any changes after the final approval may affect the time it takes to close your loan, the cost of closing the loan, the interest rate, the type of loan and sometimes the loan approval itself.

Can I apply for a purchase loan before I've found my property? Yes, in fact I highly encourage it. You can become pre-approved for a maximum loan amount and a loan program in as little as fifteen minutes. Once you find a specific property, the specifics of the loan can be changed to suit your purchase. Please note that a rate can't be locked in until there is a specific property address. What is the cost to submit a loan application? There is no cost to submit a loan application or to be pre-qualified for a loan. You will only incur a cost when you have accepted a loan offer and an appraisal is ordered for your property. How do I know what my loan rate is and when do I get it? You will be quoted an interest rate and APR when I present you with a loan offer. Additionally, Banc GROUP TM Mortgage allows us to "float down" your interest rate as the market changes at no cost to you. What is the difference between the interest rate and the APR? The Annual Percentage Rate (APR) is the yearly cost of a mortgage expressed as a percentage, and takes into account the total cost of a loan, including the interest rate and other finance changes (e.g., closing fees and points). The interest rate consists solely of the cost for borrowing a lender's money.

Using an APR allows a borrower to more accurately compare the true costs of various loans offered by different lenders, or different loan programs offered by the same lender.

Can I make changes to my application? Yes, you can make changes to your application at any time before the final approval. Any changes after the final approval may affect the time it takes to close your loan, the cost of closing the loan, the interest rate, the type of loan and sometimes the loan approval itself.

What is hazard insurance? Hazard insurance is a type of homeowner's insurance that protects against damages caused to property by fire, wind, or other common risks. Lenders require that you get a hazard insurance policy before you buy or refinance a home.

What if I have bad credit or a bankruptcy? Banc GROUP TM Mortgage offers loans to people with all sorts of credit. Whether you have good credit, credit issues, a past bankruptcy, or the need to re-establish credit, we encourage you to apply.

What is "loan-to-value" ratio? Loan-to-value ratio is a measure used by lenders to assess the relationship between the value of the property and the amount of the loan. The loan-to-value ratio is determined by dividing the loan amount by the fair market value of the property.

What loan is right for me? Many factors and personal preferences affect a borrower's choice of "the best loan," including the purpose of the loan (e.g., new purchase, debt consolidation, etc.), the length of both the loan and the ownership of the property, and the type of loan a borrower requires (e.g., a small amount of down-payment, a large amount, or no money down). I encourage you to go through the loan application to determine what kinds of loans you might qualify for depending on your specific needs.

What costs are involved in the loan process? Fees on home loans fall into the following 3 main categories:

Lender Fees -- These are fees charged by Banc GROUP TM Mortgage (and other lenders) for originating, processing, underwriting and funding your loan. These fees are set by the lender and vary by state and loan program.

3rd Party Fees -- These fees are charged by other companies which are necessary for completing your home loan. Examples include title companies, appraisers and attorneys (in certain states). 3rd parties set their own fees.

Government Fees -- These fees are charged by state and local governments. Examples include; recording, state tax, tax stamps or transfer tax. Your local and/or state governments set these fees.
For a complete breakdown of fees associated with you loan, please see your Good Faith Estimate (GFE).