What's this "Combination % Loan" all about?
We believe our new 'Combination % Loan' will revolutionize the lending process, as we know it today. In the past, the entire mortgage lending industry has focused on a bandage approach to helping customers. All media advertising has been centered on "refinance, refinance, refinance." Looking only at the rate of interest on a customer's existing mortgage, and how a refinance loan would improve that - and that alone. This approach is what's created the 'refinance frenzies' we've seen in our business - like a roller coaster ride! This new program looks at all the family finances, not just the mortgage alone. A first mortgage refinance only partially helps families. Since some account interest rates are high (like credit cards), and some are lower (like a mortgage), most people don't know all together the average interest rate they're paying - and that's key to getting back on track - paying out less money on interest expenses every month. Our new custom made calculator (on the main page of this website), gives customers the opportunity to see for themselves, how a 'Combination % Loan' can benefit their family finances.

What's your Rate?
A commonly misused customer question we are frequently asked is “what’s your rate?” Mortgage rates are not set up as "one size fits all," they are risk based - some people pay more and some people pay less. That means without having your present day tri-bureau merged credit report readily available to review (your tri-bureau merged credit report contains your secret credit bureau ranked "credit score") AND knowing what Loan-to-Value (the appraised value of your home vs. the dollar amount of the proposed new loan, as a percentage) you may qualify for - it is IMPOSSIBLE to give you a Rate Quote that's straightforward. Without the credit score "number", anything is simply a speculation. Step one in the mortgage lending process these days, is for the lender/loan agent to obtain the complete tri-bureau merged credit report with your (and your spouse/co-borrower) credit scores immediately after receiving your application, so you can get answers that are meaningful, PLUS answers that apply to YOU and your specific situation. Since there's really no such thing as an Emergency Mortgage Loan "absolutely MUST have an answer in 20 minutes" - take the time to do it correctly and get a factual answer - QUICK is of no value.

Can we get a REAL LOW Interest Rate like the ones we see in the newspaper, on television, highway billboards, and on some Internet sites?
Of course you can, those quoted rates exist! Here's some of the CONSERVATIVE standards customers generally need to meet to end up with those quoted "conforming" rates. First of all, you need a good credit score. The loan must be on a modest priced single-family, owner occupied, residence in a subdivision tract. If you're buying a home, you'll need to have a down payment of 20% (or 20% equity if a refinance or home equity loan) with a first mortgage loan size usually between $175,000 and $322,700; sufficient and verifiable assets & financial reserves, stable and established income, a debt load showing you can easily afford the new loan payment - conditions like that. Approximately 40% of Americans qualify for those "conforming" loan programs. Now, what about YOU? Many people don't end up with those "quoted" low-ball rates due to many reasons; i.e., the need for more liberal lending standards, average or lower credit scores, too much debt, request for loans for more than 80% of property value, rural properties, non-owner occupied properties, condos or townhouses, self employed, heavily commissioned or undocumented incomes, larger property values, too small or jumbo loan sizes, past bankruptcy, judgments, collection accounts, income history not stable, etc.

Is it worthwhile to refinance my home if I can only save one quarter of one percent (.250%) on the interest rate on the new loan?
Of course it is! Over the life of your new loan, you'll save yourself nearly $10,000 in interest, providing your new loan is a typical $150,000 size loan. If your new loan will be larger than $150,000, you'll save even more. The potential savings far outweighs the costs to refinance today. Very FEW people actually refinance simply to reduce their interest rate; however, the latest statistics show MOST people actually end up with a new refinanced loan because they want to take out a great deal of cash at the same time! Paying off non-interest-rate-deductible consumer debts appears to be the main reason.

What is the difference between American Residential Mortgage and other mortgage bankers or mortgage brokers?
Our tradition is to obtain the very best loan available for the customer regardless of the circumstances. Normal portfolio lender types are limited to very few kinds of loans that they favor, but may not be the best for you. In addition to our own credit facilities, American Residential Mortgage works with many different institutional investor funding sources and strategic partners. Consequently, we are better able to offer a wide variety of loan programs right here on our award winning website and know how to customize a loan that is just right for you. Although some customer requests are "conforming" and fit neatly in a little box, we know many customer applications are unique and as a result require special handling. We have had a way to handle nearly every customer situation we have been confronted with and are always happy to find a solution. American Residential Mortgage has been able to tackle and handle nearly every customer situation we have been confronted with. We know circumstances arise and often times credit scores and financial situations are not ideal, but the loan officers at American Residential Mortgage are glad to find a solution that works for YOU.

FICO FICO FICO ! Tell me more about these FICO Credit Scores things ....
FICO is not the name of someone's dog. Credit Scoring (FICO) is a major issue and concern across the Country. Your credit score plays such a major role in whether a lender approves you or not.

How long does the loan process take?
The number of days from application to closing can vary from a few days to 20 or more days on a traditional residential real estate mortgage loan, depending on a number of factors. Some of the factors are loan type, whether an appraisal is needed, title clearance, etc. Time delays also occur and are often unforeseen, such as delays in appraisals, title snafus, credit problems, etc. The most important factor in ensuring a quick funding is to avoid delays between you and our office when exchanging information. Historically the time delays are caused by the borrower and/or outside suppliers/vendors.

Can American Residential Mortgage help me get a home equity or a first mortgage?
YES! Our long-experienced staff is available to discuss your funding needs. You may telephone us toll free at 800-663-5579. You may also complete our online Loan Application and submit it on this website. Stop in, send us an email, or call our office to request more information and we’ll contact you at a time convenient for you. All of our homeowner loans are tax deductible. Don’t you think it’s smart to have your home work on your behalf for a change?

Why put my trust in American Residential Mortgage to help me and my family?
Because we specialize in this particular lending industry niche, our customers have enjoyed convenient easy handling over the years. The extensive computerization of our operation, our award winning website and its fast e-service, along with our prime directive to uphold the highest standards of Integrity & Ethics, will assure your transaction will be handled in the utmost expert way. Your transaction will be handled by a friendly and trustworthy professional -not by a poorly trained or uninformed staff member.

Should I consider Credit Counseling Services?
Not necessarily. As more Americans seek assistance for serious debt problems, the National Consumer Law Center (NCLC) and Consumer Federation of America (CFA) unveiled "Credit Counseling in Crisis," a report detailing the severe threat to consumers from a new breed of credit counseling agencies. The comprehensive study found that, unlike the previous generation of mostly creditor-funded counseling services, these new agencies often harm debtors with improper advice, deceptive practices, excessive fees and abuse of their non-profit status. An estimated nine million Americans have some contact with a consumer credit counseling agency each year.

The report also concluded that creditor practices and funding reductions have caused agencies to cut back on educational services and have led more consumers to drop out of counseling and declare bankruptcy. Another key finding was that poor oversight of credit counseling agencies by the Internal Revenue Service and the states has allowed unscrupulous counseling agencies to grow and prosper. "The findings of this report show that the credit counseling industry has undergone an alarming transformation in the last decade," said Deanne Loonin, staff attorney for the NCLC. "Aggressive firms masquerading as ‘non-profit organizations' are gouging consumers. Deceptive practices and outright scams are on the rise," she said. "More consumers are getting bad advice and access to fewer real counseling options. Meanwhile, most state and federal regulators appear to be asleep at the switch."

The Better Business Bureau reported in 2002 that complaints about credit counseling agencies nationwide had increased to 1,480, up from 261 in 1998. Types of problems adversely affecting consumers:

• Deceptive and Misleading Practices - Complaints and government investigations have focused on agencies that do not make consumers' payments on time, that deceptively claim that fees are voluntary, and that do not adequately disclose fees to potential clients. The last two charges are among those cited by the State of Illinois in its lawsuit against AmeriDebt Inc.

• Excessive Costs - In an industry that rarely charged for counseling and other services a decade ago, most agencies now charge fees to set up a Debt Management Program (a debt consolidation plan known as a "DMP"), and to maintain it on a monthly basis. Some agencies charge as much as a full month's consolidated payment–usually hundreds of dollars–simply to establish an account.

• Abuse of Non-Profit Status - Some "non-profit" credit counseling agencies are increasingly performing like profit-making enterprises. Nearly every agency in the industry has non-profit, tax-exempt status. Nevertheless, some of these agencies function as virtual for-profit businesses, aggressively advertising and selling DMPs and a range of related services, maintaining close ties to for-profit firms, reaping high revenues and paying their executives salaries that are much higher than average for the non-profit sector.

Why is it, I seem to get evasive answers when I ask specific questions, from many residential real estate lender/loan agent types?
We often hear this comment, too. There are many "moving parts" in this industry, and in recent years a great number of people have flooded our business – mostly due to the explosion of computers, telecommunications, as well as the Internet. Like many other industries, training lags technology. Consequently, what you perceive as people being evasive may simply be that more experience is needed dealing with the volume of customers they’ve received.

Who dictates the costs & fees on a traditional residential real estate mortgage loan?
Many fees associated with residential homeowner mortgage loans are not dictated by the mortgage company/Lender/Broker. In many cases, local, state and federal law mandates fees. For example, the County Recorders Office will insist on assessing a percentage of the total loan that must be paid to the county to cover the cost in recording property transactions. There are also fees that must be paid to the title insurance company to research specific issues with regard to title to the property. The title insurance company will insure the title to the property is not clouded, that there is no pending litigation, etc. Mortgage insurance, if required, is another cost the mortgage company has no control over. For example, mortgage insurance is required in a real estate purchase transaction when a borrower is financing more than 80% of the purchase price and is obtaining one loan. Mortgage insurance is often required if the borrower is financing more than 80% with one loan. Unfortunately, the cost can be quite substantial. These are just a few of the costs in which the funding company has no control over. Costs and fees for home equity second mortgage loans are generally similar to those of a traditional first mortgage, but usually less. Closing costs typically average $2,300 per transaction at most firms since there are a number of various vendors/suppliers involved with mortgage loan transactions. Please ask us for details on the loan you have in mind. The federally mandated Good Faith Estimate you'll receive from us early on in the loan process (within 3 days of receiving your application package) will clearly specify the estimated costs.

What about income tax vs. costs & fees for a first mortgage or equity loan?
We encourage you to ask your personal and individual tax preparer or a qualified tax advisor for details. However, a general rule of thumb is that if you finance your loan fees, that is allow an increase in loan amount to absorb the fees, the fees are not tax deductible. On the other hand, if you finance the fees with your own money (paid outside of escrow) much of the fees and points you pay may be tax deductible. Again, we strongly recommend you consult your tax professional for specific advice.

Is the interest on my loan tax deductible on a traditional residential real estate first mortgage or equity loan??
Yes, in most instances the interest you pay on home financing is tax deductible. Some restrictions apply to investment properties and high loan-to-value transactions. Once again, we recommend you consult with your tax professional for specific advice.

Why is the Annual Percentage Rate (APR) on the Truth in Lending Disclosure higher than the "rate" shown on my note, which is the rate I thought I chose for my first mortgage or equity loan?
All consumer residential real estate lenders are required by the Real Estate Settlement and Procedures Act (RESPA) to show the rate which will be charged on the note signed at closing, including the total cost to obtain the loan. This includes, but is not limited to, the total interest paid over the life of the loan, assuming the full term is carried out at the note rate, plus certain closing costs. Closing costs could include prepaid interest, Private Mortgage Insurance/FHA Mortgage Insurance Premium/ or VA Funding fee, whichever may be applicable, and various miscellaneous costs such as an underwriting fee, tax service fee, etc., as may be charged by the lender. All of these "Finance Charges" are taken into consideration when calculating the APR to give a more accurate picture of the total cost of the loan.

What is the difference between locking or floating my interest rate on a traditional residential real estate first mortgage loan?
Both options require that the interest rate be locked; only floating allows the rate to be locked until the last possible moment. Typically a loan rate must be locked before final loan papers may be drafted. As a consumer, may wish to lock an interest rate prior to drafting final loan papers. Advance locks may be processed as soon as the initial application is taken guaranteeing a rate of interest that won’t change during the processing period. Although advance locks offer a level of security, the down side is if interest rates fall, the borrower is locked in at a rate above current market rates. When floating the interest rate for any amount of time, the borrower takes the risk of interest rates increasing during the period from application to the time of lock-in. The downside to this, of course, is if interest rates increase during this time. If this occurs, the borrower is subject to the current higher interest rates. The benefit would then be if interest rates went down, the borrower would have the option of a lower interest rate than if locked in previously. Ultimately the decision about when to lock is the consumer’s. However, the loan agent if requested by the borrower may provide professional input. Let’s be practical, though. How lucky are YOU? It's a roll of the dice either way!

Should discount points be paid to lower (buy down) an interest rate?
This question is best answered in the context of time. Long-term interests are best served by obtaining the lowest possible rate, which often means higher points. Conversely, a short-term consumer may wish to limit points at the expense of a higher rate. It is safe to summarize saying that the rate is a function of points - the lower the rate, the higher the points. Typically, the distinction of long term vs. short term is about 48 months. If you plan on keeping your mortgage for more than four years, a discounted loan (a loan with more points) may be a good idea. On the other hand, if you know you’ll keep the mortgage less than four years, a loan without points or a loan with no points and no fees may be the best option. Again, our team of loan professionals will provide various loan options so that you can make an intelligent decision.

We want to buy a house, but have very little down payment money saved, and we have very little or no credit established. Plus, what little credit we do have, it's not all that good. Can You help us?
NO, probably not. Save yourself some time. Your best bet is to save up a good down payment and work on improving your credit file. Low or No down payments loans are funded all the time, but they require at least moderate to average credit histories.

What is an escrow account?
When borrowers make their monthly mortgage payments, they generally also pay one-twelfth of the anticipated annual amount needed to pay taxes and insurance premiums. These additional funds are deposited into an escrow account (also known as an impound account), until the lender pays the taxes and insurance premiums as they come due. The borrower benefits for budgeting reasons because costs are spread through the year rather than as a lump sum. This method allows the lender greater control in avoiding tax delinquencies or lapses of hazard insurance coverage on the property. Mortgage documents often stipulate lenders establish an escrow or impound account.

Can I pay my own taxes and insurance on a traditional residential real estate first mortgage loan?
When a loan is originated, the mortgage documents specify the escrow conditions. Lenders are required to establish escrow accounts only for FHA insured mortgages. With conventional loans you typically have the option to establish an impound account or make property taxes on your own. We will present you with options at the time of financing. Choosing an impound account is often a convenient way to budget for property taxes and insurance. Some loan programs require that you "impound" or they charge you a "waiver fee" if you don't!

What is an ARM loan?
An ARM loan is an Adjustable Rate Mortgage (ARM); they are very popular these days - especially the ones that are fixed for two or three years (then adjustable after that) types. The interest rate on an ARM loan is adjusted periodically based on the terms of the mortgage documents. The most common periods are six months or one year; however, some ARM’s, most often with banks, may adjust your rate as often as monthly. The interest rate is typically based on a common index published in newspapers and adjusted by a margin. The margin is in percentage points and rides above the index rate. For instance a loan tied to the T-Bill Index at let’s say 6% and a margin of 2% would yield a rate of interest at 8%. ARMs, as opposed to fixed rates, reflect current market conditions. Given the condition of the economy this could be good or bad, and will always be unpredictable.

What benefits do I receive from mortgage insurance (MI) on a traditional residential real estate first mortgage loan??
Prior to the existence of mortgage insurance, individuals typically could not purchase a home unless they had a down payment of at least 20% of the purchase price. Mortgage insurance benefits the mortgage lender directly by reducing the costs associated with borrower default. It also benefits consumers by lowering down payments, thereby allowing more people to achieve home ownership. FHA insured mortgages require mortgage insurance premiums. Mortgage Insurance is paid monthly in addition to your mortgage and the premium is calculated as a percentage of the loan amount. Various factors determine the percentage but the most significant factor is the amount of down payment, or lack of down payment. In today’s market homes may be purchased with no money down.

On a traditional residential real estate first mortgage loan, aren't there really just two kinds of mortgages: fixed and adjustable rate?
You could say that, because all mortgages fall into one of these two categories -- that is, the interest rate you pay is either the same (fixed) for the life of the mortgage, or it can change (adjust) over the life of the mortgage. However, within these two broad categories there are variations, such as -

Balloon Note Mortgages: This type of fixed rate has a call feature, that is, your mortgage payments may be amortized over a longer period like 30 years, yet the loan is due and payable long before the 30 years is up. The principal balance of the loan must be paid off or refinanced. This is common when lenders wish not to commit funds for a long period of time. Typically the consumer realizes improved interest rates by accepting a balloon note mortgage.

Reset Mortgages: This type of fixed rate allows for a reset of the interest rate at a specified date. Consumers will realize lower than market interest rates when accepting this type of loan. Reset terms typically are set at 5 or 7 years. Lenders classify these as the 5/25 or 7/23 loan. That is, the payments are amortized over 30 years yet they reset to prevailing market rates upon the 61st or the 85th payment. Again, consumers geared for short term and seeking the best rates may consider this financing option.

Fixed then ARMS: This type of fixed rate allows a consumer to secure a fixed rate for a specified term before it roles into an adjustable rate mortgage. This type of 30 year loan may offer a fixed rate, below current market rates, for 3, 5, 7 or 10 years, but then becomes an adjustable rate, at pre-determined terms, for the remaining life of the loan. Lenders commonly refer to these as "3/1 ARMs, 7/1 ARMS" etc. A consumer may prefer this type of mortgage when they are short-term oriented and want better rates, yet prefer the reassurance that if they keep the loan longer than they expect they will not be burdened with the down-side of a balloon note mortgage, also preferred by short-term mortgage shoppers.

Pre-Payment Mortgages: The most traditional, this type of fixed rate has a penalty if you pay it off early. Typically, they come into play to keep you from paying your loan off early, from anywhere from 1 to 5 years. The terms of pre-payment will be in defined in your note. The amount of penalty may be calculated using the formula defined in the Note. The most common formula is six months interest of 80% of the original principal balance. For instance if you were to pay off a $100,000 mortgage @ 10% interest within the pre-payment time frame you’re penalty would be calculated as follows: $100,000 x 80% x 10% x 0.5 = $4,000 penalty. It is recommended that pre-payment penalties be avoided if possible unless you are certain that the loan will not be refinanced or paid-off within the pre-payment period. Again, a consumer can expect preferred loan terms by accepting a loan with a prepay penalty vs. a loan without one.

Potentially Negatively Amortized Mortgages: This type of Adjustable Rate Mortgage has built-in features allowing optional payments. Typically this loan will offer 1-4 payment options. Options are usually classified as 1). a minimum payment option or 2). interest only option or 3). fully amortizing option for 30-year payoff or 4). fully amortizing option for 15-year payoff. The term "negative amortization" refers to loans that defer interest and thus can increase in principal balance rather than decrease.

Option 1 allowing a minimum payment is calculated per the predetermined terms of the note and may allow for deferred interest. The minimum payment option is a function of your initial payment, increasing slightly every year, and it does this independently of the adjustable interest rate associated with the loan. The market may dictate an interest rate, based on your index plus margin that yields interest at a dollar figure well above your scheduled monthly payment. For instance, a $100,000 loan with an interest rate of 8% will accrue interest of $666 a month, yet if you have a minimum payment option allowing only a $500 payment then the difference of $166 will be the deferred interest and is added to your principal balance. The following month your balance is not $100,000 but $100,166. Negatively amortized loans have pros and cons, so be sure you consult with your loan professional before selecting this type of mortgage option.

Fixed-Rate Mortgages: With this type of mortgage your monthly payments for interest and principal never change. Property taxes and homeowners insurance may increase, but generally your monthly payments will be very stable. Fixed-rate mortgages are available for 30 years, 20 years, 15 years and even 10 years. There are also "bi-weekly" mortgages, which shorten the loan by calling for half the monthly payment every two weeks. (Since there are 52 weeks in a year, you make 26 payments, or 13 "months" worth, every year.)

Adjustable-Rate Mortgages (ARMS): These loans generally begin with an interest rate that is 1-2 percent below a comparable fixed rate mortgage. This is called a "start" rate or "teaser" rate. The flip side is that the interest rate changes at specified intervals (for example, every year) depending on changing market conditions; if interest rates go up, your monthly mortgage payment will go up, too. However, if rates go down, your mortgage payment will drop also. Lenders and consumers alike prefer these types of loans since they safely reflect the prevailing market rates. A Lender hedges an increasing interest rate market with adjustables while a consumer hedges against a decreasing interest rate market. In a sense they are both betting on the loan to go in different directions.