We want to tell you what you need to expect from a mortgage lender and what to avoid when securing your loan. When working with ABC, you'll be able to know every step of the way, what to expect-with no surprises.

Here is our process:

1. We take your application
2. Pull your credit bureau report at the same time, getting you pre-approved for your loan. Since we know your time is valuable, we will streamline the process.
3. We'll call and discuss your options with you. We won't put you in a loan that will cost you more money in the long run, or does not make financial sence.
4. We deliver all loan disclosures to you within three business days.

Myths and Falsehoods; "Your Mortgage I.Q."

Here are some common myths and misconceptions about the mortgage process. We hear these daily and want to make sure you find out about them before you fall into this trap.

1. Q: Is paying an upfront application fee customary and wise?
   A: Certainly not in todays market! These are often charged to simply "lock" you into a loan with rates and fees that are not optimal. If you pay the upfront application fee to one bank or mortgage company, you cannot take advantage of shopping around to get the best program for your situation. In addition, upfront fees are non-refundable. [TOP]
   
   
2. Q: Are "real fees associated with my loan" actual charges by outside parties? (appraisal, title search, credit report)
   A: Yes, it has been deemed an acceptable practice to charge more than the actual fee for such actions as appraisal, title, credit report, closing, and commitment fees. However, lenders often falsely claim that they are not charging any points. You must be attentive and not get caught up in a "no point" sales pitch that could cost you more than paying a discount point. [TOP]
   
   
3. Q: Will finding a $0-$350 total closing cost refinance save me money?
   A: There is no such thing as a no closing cost loan because there are "real fees" associated with obtaining a mortgage loan. In addition, the cost of closing a loan does not vary significantly between brokers and lenders. Although you might save around $1500 in fees, 99% of the time the additional interest paid over the term of the loan will greatly exceed this amount. In other words, only seek a loan with a low closing cost refinance and a higher rate if you expect to be in your home for less than two years. [TOP]
   
   
4. Q: Will speaking with my account representative after the closing, for questions or concerns, be as easy as before? (If it only was!)
   A: For the majority of companies, attracting, hiring, training, and retaining employees is a primary challenge. The turnover rate in the mortgage business is an astonishing 25-30%! Therefore, with a large company, you have no way of knowing whether your sales representative will be there in two years, two months, or even two days! In order to be assured that your company and representative will be there for you throughout all of your future needs, it is in your best interest to go with a smaller and ethical lender. [TOP]
   
   
5. Q: Is sending my application, (in a shotgun approach) to several lenders a good way to comparatively shop?
   A: No. If you want to get the most competitive rates on loans and the most honest information, you need to come to a broker like ABC. In order to compare lenders more effectively, you should do so after you are approved and have a good faith estimate. Still, remember that the original value you are given is only an estimate and the results depend on the mortgage company and its ethical practices. Look for a company with a good reputation of consistently delivering on its estimates among other things. Individuals often get "paralyzed" by the many numbers and figures they receive from using a shotgun approach. Brokers work through multiple channels, so it is in your best interest to take this approach and find a lender you can trust. We at ABC do make a living at combating "paralysis by analysis" in order to make the entire process easier for you. [TOP]
   
   
6. Q: Will I pay more money if I use a broker instead going direct to a traditional lending institution?
   A: Absolutely not! At Assurance Banc Corp. we have intentionally limited our overhead and passed on the savings to you. We build our image on the services we provide, not on expensive offices or other expenditures. Remember, rates are not specifically tied to the size of a company, but they are tied to their expenditures. [TOP]
   
   
7. Q: Can I believe that my good faith estimate will be "reasonably accurate" with final figures?
   A: Once again, this is only an estimate. If it looks too good to be true, it probably is! We eliminate closing table horror stories and pride ourselves in doing what we say. [TOP]
   
   
8. Q: Is buying my first home with a FHA loan my most economical and smallest down payment option?
   A: Not necessarily. Many 0% down payment loans are available today. Many of the programs available are more cost-effective than an FHA loan. The lowest cost approach all depends upon such factors as your credit and the amount of time that you plan on owning your home. [TOP]
   
   
9. Q: Do bigger companies get better rates?
   A: There is no difference in cost based upon the size of the company. In other words, bigger companies do not necessarily get better rates and smaller companies do not get worse rates. Larger companies do have lower costs due to their volume of production, but also use expensive mediums that offset basic costs. Keep in mind that nothing is done for free in the mortgage business. Be cautious of deals that are too good to be true. Predatory lenders are dishonest lenders who advertise their services to people in need. Smooth talking sales people lure consumers into loans with high interest rates and outrageous fees. Predatory lenders make money by charging excessive fees every time they refinance a loan. [TOP]
   
   
10. Q: Is purchasing "points" ever a good idea?
    A: Absolutely, but it depends on how long you plan on living in your house. Points can increase your savings if you plan on being in your house for a long period of time. Depending on your future property plans and future equity position, points can even save you thousands in total repayable! However, if you believe you will stay in your home for a smaller period of time (usually less than 3-5 years), you should not purchase points. Your lender must be astute enough to explain why it may be in your best interest to permanently buy down your mortgage. Oftentimes, this is more beneficial than a 2-1 buy down where you only buy down your loan for the first 1-2 years. [TOP]
    
    
11. Q: Will "splitting a loan" to avoid PMI (Private Mortgage Insurance) save me $$$?
    A: It depends. Splitting a loan will allow you to have two separate loans, one fixed and often one variable. Splitting a loan helps you avoid paying PMI. Oftentimes, the second mortgage will remain with you for the term of the loan or until you pay to refinance it, whereas PMI can often be dropped when your house appreciates and you pay the balance down. Factors that affect the possibility of splitting a loan include how long you will own the property, the appreciation in the area you are purchasing, and the lender's specific regulations regarding dropping PMI. [TOP]
    
    
12. Q: Is it in my best interest to know what type of prepayment penalty is customary for
    my loan?
    A: Definitely! Prepayment penalties are usually a percent of the outstanding balance at time of prepayment, or a specified number of months of interest. Usually, the penalty is to prevent you from paying off the loan before its full term. Most penalties decline or disappear overtime. Often, you can submit a partial prepayment up to 20% of the balance of your loan in any one-year. There are two types of prepayment penalties, referred to as a hard penalty and a soft penalty. A hard prepayment penalty is applied to a borrower whose credit is under repair. Since this borrower represents a higher risk of defaulting on the loan, a lender applies a prepayment penalty to assure a certain return over the life of the loan. A soft prepayment penalty is for borrowers with excellent credit to insure a certain return over the life of the loan. Often if you accept a soft prepayment penalty, you can secure a lower interest rate. [TOP]
    
    
13. Q: Does locking my interest rate (fixed rate) cost me money?
    A: Sometimes, but it shouldn't have to! Lenders want people to pay upfront to lock in an interest; they figure borrowers who lock in a rate will be less likely to leave them for another lender. We stress to our customers that they be certain they want to move forward before committing to an interest rate. In addition, we never charge an upfront fee to lock borrower's interest rates. [TOP]
    
    
14. Q: Is receiving disclosures prior to closing standard and required by law?
    A: Yes, several loan disclosures must be sent to the borrower within only a few days of application. These forms are provided to outline such information as estimated fees, prepayment penalties, and programs. Do not move forward in "blind faith" without these forms because you can get stuck with a loan for which you did not bargain. The forms basically consist of:
    
    A. Good Faith Estimate
    B. Truth-in-Lending Disclosure
    C. Transfer Servicing
    D. Broker Agreement
    E. Right to Receive an Appraisal
    F. Borrowers Signature for Authorization
    G. State-Specific Forms  [TOP]
    
    
15. Q: What percentage of my loan amount is too excessive to pay in total fees?
    A: Again, this is largely dependent upon such factors as your loan size, program, and credit history. Typical costs on a mortgage loan are between three and six percent, though the percentage is often much smaller for larger loans. For the most part, the real fees associated with a loan do not fluctuate with size. [TOP]
    
    
16. Q: Is selecting a fixed rate option on my loan the best choice?
    A: You pay a premium to have your rate fixed for 30 years. We see too often people concerned they do not have a 30-year fixed loan, but this is not for everyone. If you are not certain how long you will be living in your home, we can figure out whether an ARM (Adjustable Rate Mortgage) would better suit your needs. An ARM begins with a lower rate than a fixed rate mortgage. The typical ARM is 1-3, 5, or 7 years. In addition, if a fixed rate 30-year loan does not fit into your budget due to various factors, it may be hurting your financial picture- not improving it. If it is your first home and you want to upgrade to a larger home in the future, an ARM may help save additional money to do so or build a safety net (savings) for your family.  [TOP]

CALL US TO FIND OUT THE REAL TRUTHS BEFORE YOU SECURE YOUR LOAN.

We'll be updating this area of the website periodically, so check back. We don't want you to fall victim to "bait and switch" or predatory lending practices.

Click, here to free copy of our latest booklet, How to Avoid Trip-ups and Traps When Securing or Refinancing Your Home Loan. Here you'll find everything you ever wanted to know about securing a mortgage, even if you're a first-time homebuyer.