Frequently Asked Questions:

Broker v. Bank: As a mortgage broker, we have access to over 250 lenders that are competing for your business. Instead of calling or going to various retail banks that offer retail rates and a limited scope of mortgage products, you can ask us to shop over 250 lenders offering wholesale rates and thousands of products. This ensures that you will obtain the lowest rate and best loan for you. At American Mortgage Specialists, you will receive advice and education from industry experts on all of your options. We also offer the advantage of already knowing where your mortgage can be processed quickly and painlessly to deliver the lowest cost mortgage so you can begin saving and making money on your investment.     Back to top

Integrity:The majority of people that we serve come to us with nightmare stories from their mortgage past. With a priority focus on you, we deliver the results that you expect from the outset. Once you have learned about your options and found the right mortgage for you, we will efficiently deliver what you expect and notify you of any potential changes in advance. At American Mortgage Specialists, you will always know exactly where you stand and never have any surprises along the way.

With years of experience servicing mortgage clients, we know what is important to you. Your interest rate, closing costs, and all terms of your loan will never change without your knowledge and authorization. Your privacy is also protected. For more information, please see our privacy policy.       Back to top

Guarunteed Best Service: Best service to us means the the lowest rates, payments, costs, daily availability via phone, email, or in person, same day responses, quick mortgage processing, informed clients, and delivering on our promise. We understand that your home is usually your largest and most important investment and we understand the corresponding stresses involved in refinancing or purchasing your home. With life-long mutually beneficial relationships our objective with all of our clients, you will feel the difference in working with us. American Mortgage Specialists...beyond expectation.     Back to top

Who and what we know: The adage "it's not what you know, but who you know," is partially true. Our mortgage industry links are unparalleled. It provides us the power to shop lenders for you and deliver the lowest cost financing available. It also allows us to create the most efficient streamlined process to take the head-ache out of mortgage transactions and deliver savings into your lap quickly. Who we know also includes a refined list of available realtors to help you find and/or sell your home, title companies that value service as highly as we do, and quality appraisers that will work around you to provide your home valuation appraisal quickly.

However, we believe that what you know is equally important. Our industry experts can help you create sound financial decisions regarding your mortgage that will create extra cash flow for you. We are not simply content to save you money in one transaction, but to wholistically analyze your needs and lifestyle to create a long term strategy to mortgage lending. This wholistic approach has saved our clients thousands of dollars in interest over the years. Without our ability to listen, understand, and provide sound advice to our clients, these savings might have never been realized.     Back to top

The Mortgage Process

Submission: Once all of the loan disclosures have been signed and documentation provided, we will submit your loan to the lender. An appraiser will contact you directly to schedule your appraisal and title work will be ordered for you. On average, your loan will be reviewed by the lender in 24-48 hours.     Back to top

Conditional Approval: After your loan has been reviewed by the lender, they will issue a conditional approval. This is a list of conditions that we need to meet in order to close your loan, and may require us to ask you for additional information. Once the required conditions are received, they will be submitted to the lender to await for final approval. On average, a lender will review these conditions in 24 hours. In some cases, the additional information may spark the lender to ask for further conditions, in which case, we may ask you to supply further information which will push back final approval another 24 hours.    Back to top

Final Approval: When a final approval is issued we will send in our order for loan documents to be drawn. On average, a lender will draw loan documents in 24 hours. Those loan documents will be sent to your title company to create the final loan documents that will be signed.     Back to top

Closing: After the title company has created your final loan documents, your closing appointment will be scheduled. You can choose to go to the title company to sign your documents, or have a notary of the public arrange to meet you at a more convenient location (such as your home or office). During this appointment you will see many of the same documents that you signed when you applied for the mortgage. There will also be additional information regarding the specifics of your loan transaction. At American Mortgage Specialists, we always ensure that you are prepared for the closing and know all of the information that will be presented to you ahead of time. The closing appointment usually takes about 30 minutes.     Back to top

Funding: Your loan will be funded anywhere from a few hours to 4 days after your closing appointment depending on your transaction. For purchases, the funding happens the simultaneously or the same day as your closing if your closing happened early enough in the day for the lender to wire the funds. For refinances of your primary residence, there is a 3-day right of recision period that must pass before your loan funds.     Back to top

How long with this take? On average, it take about 2 weeks to complete the entire transaction. However, there is a wide range of factors that can lessen or increase the amount of time it takes to close and fund your loan. Since there are several parties potentially involved in each transaction, such as realtors, home inspectors, contractors, appraisers, title companies, lenders,etc. each of these parties can help or hinder the process. Additionally, the promptness with which you supply us with required documentation can affect how fast your loan closes. And as mentioned above, the type of transaction can affect how soon after closing your loan will fund.     Back to top

What will be required of me?

POTENTIAL DOCUMENTS REQUIRED FOR MORTGAGE TRANSACTIONS

Last 2 year's W2s Last 2 years tax returns (all schedules) One month pay stubs 2 month's bank statements or other asset accounts (all pages) Homeowner's insurance agent name & number or declarations page Social Security Awards Letter (if applicable)

Pension/Retirement income statements Mortgage Note from last signing Bankruptcy discharge papers Divorce/Child support papers Homeowner's Association name & number (if applicable) Copy of the Purchase Contract Copy of Rental/Lease Agreement

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Interest Rates

FACTORS THAT CAN AFFECT YOUR INTEREST RATE

Credit Income Assets Loan-to-Value (LTV) Property Type

Occupancy Loan Type Loan Term Loan size Length of Rate Lock

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Quote me a Rate: Due to our comprehensive access to over 250 lending institutions, we guaruntee the lowest rates. In order to accurately quote you an interest rate, we will need some information from you, which you can submit to us here.     Back to top

Costs

What are prepaid items? Prepaid items are at least the prepaid interest that you will need to pay on your loan. Whenever you refinance or purchase, the lender will collect interest per day for the remaining number of days in the month in which your loan funds. The amount of your prepaid interest depends on your interest rate and the number of days left in the month. Additionally, if you decide to escrow your real estate tax and homeowner's insurance with your monthly mortgage payment, your lender will also collect a certain amount of prepayment for these items to ensure that there will be enough money in the escrow account to pay for them.     Back to top

How much are closing costs? Since closing costs are generally dictated by your title company and lender, the amount of closing costs can vary drastically. An accurate quote on closing costs requires a closer look at your loan application which you can begin here.     Back to top

No Closing Costs: No closing cost options are widely popular among consumers today. Many retail banks advertise for loans with no closing costs and many consumers take this bait without fully understanding what is at stake. What most people do not know is that paying closing costs could have reduced their interest rate significantly. For more info, please see paying points below.     Back to top

Paying Points: Points (1 point = 1% of your loan amount) can be paid up front to buy down your interest rate. It is essentially the same concept as paying or not paying closing costs (paying closing costs will "buy" you a better interest rate than not paying closing costs). Spending money up front for a lower rate is only advisable if you plan on holding onto your mortgage for a certain period of time. A loan officer from American Mortgage Specialists, can help you decide if this is the right decision for you.     Back to top

Payments:

Paying less to us also means making more. At American Mortgage Specialists we can show you how to use creative financing to create secondary income for yourself without you lifting a finger. Many of our clients follow strategies that entail always being financed to 100% (or more) of their homes value. This works because they have found their source for low cost financing at American Mortgage Specialists, and can invest their equity and generate a higher return than the interest they pay in borrowing. We work closely with a team of financial planners to help them realize this goal. To discuss your options in letting your mortgage make money for you, please call Chris at (480) 983- 6966.     Back to top

Deferred Interest: Perhaps the most undiscovered secret of the mortgage industry, a deferred interest mortgage (sometimes called a negative amortization mortgage) allows the most flexibility and savings of any mortgage on the market. The loan offers you the option to pay deferred interest at a low payment rate (as low as 1%) wherein the interest that you do not pay is added to your principal balance. This immediately turns many people off, but those people also usually end up having to get a home equity line of credit (2nd mortgage which adds to the principle balance) to get cash out of their home that they need for debt consolidation, home improvements, or any number of different reasons. The lines of credit payments can adjust quarterly whereas a deferred interest loan can have a fixed payment for up to 5 years. If those borrowers had obtained a deferred interest loan, not only would they have lowered their payment, but they would have eliminated their need for the line credit as the much lower payment = cash flow. The flexibility of the loan allows you to pay more and not defer any interest if you choose (it actually gives you 4 payment options each month), even in a lump sum payment at the end of the year to increase one's tax deduction if desired.

With record breaking home sales reporting at the end of last year, this loan is well complemented by the nationally increasing home values as the amount deferred never exceeds the rate of appreciation. The loan is complex, and requires a discussion of the full pros and cons with an experienced loan officer that understands and is not afraid of the product. Most loan officers and borrowers avoid this loan due to a lack of understanding, and though it is not a fit for everyone, it is especially useful for many. The bottom line is: pay the least amount for the same return (appreciation of your homes value).     Back to top

Interest Only: Interest only loans are very popular and its logic follows the same premise as the deferred interest mortgage, though with a bit less flexibility. This payment is exactly what it sounds like. You pay only the interest due on your loan, with the option to pay additionally towards principle if you choose. Interest only loans offer you control over your money. If you wish to pay your principle balance down, you can. If you have a tight month and need cash to use elsewhere, pay only the interest and use your money where you see fit. Many of our borrower's have refinanced to interest only loans and used the additional money for investments, including those who have employers that match their contributions to retirement accounts. In these cases, not only have they saved money, but they have used the money saved to increase their income or further their retirement.

With options to pay interest only on Adjustable Rate Mortgages (ARMs) to Fixed Rate Mortgages, its benefits have reached all types of borrowers. Many of our clients realize that they do not plan (at least not in their current home) to own their home free and clear, and that sinking their money into principle reduction (which is just money that they will pull back out when they sell or refinance) is a poor alternative for them to investing that money elsewhere. In fact, many of these clients have drastically increased their income by maintaining high loan-to-values (LTV: the percent of their loan compared to their home's value) and using the ever-increasing equity in their home for investments. They realize that there are few alternatives to borrowing money that offer such low rates and the benefit of a tax deduction as home mortgages do.     Back to top

Principle and Interest: This is the traditional payment that requires some amount of principle reduction be made with each monthly interest payment. These payments are set up so that the mortgage will be completely paid off by the end of the term or life of the loan. These payments fit those who plan on owning their home free and clear. This is the highest of the three payment options outlined above.     Back to top

What will my payments be? Obviously that depends on your payment type and interest rate, which in turn is dependent on a number of factors. Please call Chris at (480) 983-6966 and he will help you answer this question. He is available early in the day to late at night 7 days a week. Or you can submit your information over our secured website here. We can give you an accurate payment quote within 24 hours (usually less).     Back to top

When is my first payment? Usually, you will make your first payment after 1 full month has passed from the time that your loan funded (not including the month in which you loan funded). For example, if your loan funded in January, your first payment would not occur until March.     Back to top

What are escrow payments? Escrow payments are set up so that you do not have to pay your real estate taxes or homeowner's insurance on your own. It is an effective way to budget as both are otherwise collected in lump sums (taxes are paid twice a year and insurance once a year) and the escrow payment allows you to pay gradually (monthly) into an account that the lender manages. The lender then will pay both for you when they are due. Many lenders incent borrowers to escrow their tax and insurance payments by offering slightly better interest rates.     Back to top

Will I pay mortgage insurance? Usually no, at least not if you come to American Mortgage Specialists. Mortgage insurance can be charged by lenders when they lend on one loan to more than 80% of your home's value (80% Loan-to-Value or LTV). Not all lenders charge it and there is a way around it. Instead of getting one loan >80% LTV, you can get 1 loan to 80% LTV and a 2nd mortgage for the remaining amount. Though 2nd mortgage rates are higher, we usually do not advise paying mortgage insurance for 2 reasons:
            1. Payments are usually lower by splitting into 2 mortgages
            2. Mortgage insurance is not tax deductible whereas (higher) interest paid on your home is tax deductible.
Some loans, such as FHA, require mortgage insurance and may offer other advantages that make obtaining a mortgage with mortgage insurance payments a good idea. For help in deciding what type of loan you should pursue, and whether paying mortgage insurance is a good idea for you, please call Chris at (480) 983-6966.     Back to top

Types of Mortgages:

Adjustable Rate Mortgages: ARMs generally have a fixed interest rate for a certain period, followed by an adjutable rate period wherein the rate fluctuates according to an index. The index is determined during the application process. There are several different indexes, such as the LIBOR, Treasury, MTA, COFI and prime. Each index follows different market conditions and have shown different trends in their histories. For more information regarding the different indexes, please call Chris at (480) 983-6966 or email us.

Most ARMs have a 30 year term, and when compared to a 30 year FRM, the interest rates are generally lower. How much lower depends on the length of the fixed rate period. Whereas a FRM requires a reduction in term to reduce the interest rate (which consequently increases your payment since the loan must be paid in a shorter period of time) an ARM requires a reduction in the fixed rate period to reduce the interest rate and the term remains the same. ARMs can have fixed rate periods from 1 month (lowest interest) to 10 years (highest interest). Matching the length of time you will stay in a home, or more importantly, the length of time in which you will stay in a loan without refinancing, to an ARM with an appropriate fixed rate period has helped our borrowers save hundreds of dollars each month. Most people do not realize, especially in areas with high rates of home appreciation, that it will be beneficial for them to refinance in a short period of time, and that they have been overpaying interest on FRMs or ARMs with fixed rate periods longer than they require.     Back to top

2nd Mortgages:

Fixed Rate 2nds: Fixed rate seconds do not offer interest only payments and are generally at higher rates of interest than HELOCs. Terms range from 5 - 15 years. The lowest payment fixed rate second is called a 15 year balloon or a 30 due in 15 as the payment is calculated as if it had a 30 year term, but in actuality, the loan is due in 15. This would leave the borrower with a balloon payment at the end of the 15 years. However, most people find that they have refinanced their home before this 15 year period expires.     Back to top

Avoiding Mortgage Insurance: Most often, it is beneficial to obtain a 2nd mortgage whenever you are borrowing more than 80% of the value of your home. This ratio is referred to as Loan-To-Value or LTV. Many conforming lenders (those lenders that offer the most attractive rates to borrower's with good credit) charge mortgage insurance (MI or PMI) if your LTV > 80%. This is a non tax deductible payment in addition to your principle and interest payment. Obtaining a 2nd mortgage for any LTV amount above 80% allows you to avoid paying MI. Though a 2nd mortgage will usually have a higher rate of interest than a 1st, that interest is tax deductible and the overall payments are usually lower.     Back to top

Purchase

Renting v. Owning: We have helped several renters begin enjoying the benefits of home ownership that never thought they could qualify for a mortgage or even afford one. Many people never even look at their options because they think that they will need money to close on a mortgage (which is not a necessity). Aside from the quality of life improvements that home owning affords, a home is a tremendous financial tool that can make you tens of thousands of dollars a year. Take a moment to submit your information here and let us provide you with some information on what you can expect to pay, and what you can expect to earn by purchasing a home.     Back to top

How much can I borrow? There are a number of factors that determine how much money you can borrow including your gross annual income, your credit score, and your monthly liabilities. Submit your information to us here, and we will respond to you immediately with a pre-qualification for a home.     Back to top

How much money will I need? If you do not have money to use to close on a house, it's ok! We have funded many purchase transactions wherein the borrower did not bring in any money to close. However, usually, an earnest money deposit is required by seller's to initiate the purchase agreement as a sign of good faith that you plan on purchasing the home. The amount of the earnest money can be negotiated through a realtor that we can recommend to you, and can be refunded upon the funding of your purchase.     Back to top

Refinance

A better question is how soon after I purchase can I obtain a higher appraised value than my purchase price? This depends on the real estate market in your area, and how quickly home values are appreciating. Fortunately, we have hit a national record for home sales which is helping to increase the rate at which homes are are appreciating, or how quickly you are gaining equity in your home. You can obtain a higher appraised value as soon as the market shows appreciation in your home through increased sales of similar homes. To determine if you have equity in your home and if you would benefit from a refinance now, start by submitting your information here and we will provide a free market analysis of your home's value for you upon request.     Back to top

Can I get cash out? If you have equity in your home, you can get that cash out for a number of beneficial purposes such as debt consolidation which lowers your monthly payments, consolidates your payments, and gains you an increased tax deduction. Pulling cash out for investments is another great financial strategy that many of our borrowers employ. Your home is a great money maker. Borrowing that money at a low and tax deductible rate of interest allows you to invest even in the most conservative of investments for a return greater than the cost of borrowing. Maximum profits are at your fingertips with American Mortgage Specialists being your vessel for the lowest cost access to investment money.     Back to top

What are the advantages of debt consolidation? Consolidating debt with a low cost 1st or 2nd mortgage can not only lower your monthly payments and generate additional cash flow, but increase your tax deduction and provide you the convenience of one low payment.     Back to top

Tax Considerations