Since 2001, Ability Mortgage Group, LLC, has built a relationship with many wholesale investors and banks, and since we work directly with them, there are no large overheads and commissions that are needed to pay loan officers. Thus, we pass the savings to our clients.
There are several key factors that can affect interest rates. They include credit score, loan to value, property type, and other attributing factors. Below is detailed information for each factor that may affect your interest rate.
- Credit Score: Your credit score is one of the most important factors that will determine your rate.
- Property type: There can be pricing adjustments for condos and multi-family properties as opposed to a single-family purchase.
- Loan to Value: This is your down payment for a purchase or your equity for a refinance. The lower your loan to value (LTV), the better your interest rate may be.
- Rate and Term Refinance vs. Cash-Out Refinance: A Rate and Term Refinance has a loan amount that is enough to repay the balance of your existing mortgage. You may include all third party fees, taxes, insurance, and interest into the loan amount. A Cash-Out Refinance, on the other hand, has a loan amount that exceeds your current mortgage balance. There may be a onetime fee for a Cash-Out refinance, depending upon your loan to value.
- Purchase vs. Refinance: There are times when lenders offer purchase specials, which allows Ability Mortgage Group, LLC, to offer even lower rates than we already do.
- Escrow Reserve: Paying your property taxes and homeowners insurance on your own, rather than having them included in your house payment may cost you an additional fee. Most lenders charge a onetime fee for the impound waiver.
Ability Mortgage Group, LLC, never charges for completing a loan application or getting your loan pre-approved. Once, you receive your pre-approval, you will be given an opportunity to lock-in your rate.
No. Ability Mortgage Group, LLC, does not charge a fee to lock-in an interest rate; however, when you lock-in an interest rate and the disclosures have been received by you, we will require a credit card to order the appraisal. The cost of the appraisal is generally between $350 and $550 depending on your area, loan size and specifics of your particular property.
If you decide, for any reason, to cancel your loan after your rate has been locked-in and the appraisal has been completed you will not be obligated to pay anything beyond the cost of the appraisal, and you will receive a copy of the appraisal which is yours to keep.
After your application has been submitted we will review all your documents and the loan package to ensure we have everything that is needed. Then, the completed file is submitted to underwriting for review. Underwriting will issue an approval under, which can take 2-5 days on average.
Because of the strong relationships Ability Mortgage Group, LLC has with wholesale investors and banks, your loan will have priority status, which allows us to close loans faster than many companies. We anticipate to close your loan within our standard lock period of 30 days. If your required loan documents and appraisal are returned and scheduled as advised, we are very confident your loan will close on time. In a normal market, purchases can be closed in about two weeks; however, we strongly advise against waiting this long to start the process, as appraisal turn times and unknown issues may arise.
If your loan does not closed on time due to a delay caused by us or the lender we selected, your lock will be extended at no cost to you. If your loan does not closed on time due to a delay caused by you, any applicable extension fees will be at your cost. Some examples of delays that would cause extension fees to be charged to you are as follows:
- Documentation is not provided within the required 3 days
- Delay in paying or scheduling the appraisal.
- Delay the signing of final closing documents.
- Subordination of second mortgages may cause a delay if your service provider does not get us the agreement before your scheduled closing.
- Improvements to your home that are in process and will not be completed by closing will delay your loan from closing. Your loan cannot close unless all work has been completed. An appraiser will have to certify (at a cost to you) that all work has been done according to specifications.
We make every effort to ensure that your loan closes on time, and it is very rare that our clients are needed to pay an extension fee. We stress open communication, so please, notify us of anything that may cause potential delays.
We will need to verify your income with the following supporting documentation:
- Two most recent W-2’s.
- Your most recent 30 day pay stubs.
- Your most recent two months bank statements all pages.
If you are self-employed, have commission income, rental income or earn interest and dividend income, you will be required to provide your most recent one or two years tax returns, including all schedules depending on approval requirements.
If rates are better when your rate lock expires, we are able to extend your lock for free. If rates are higher, at the time your rate lock expires, an example of extension costs are as follows:
7 days = .125 Pts
15 days = .25 Pts
30 days = .5 Pts
The extension policies may vary, depending on the lender we select for your loan, but the majority of the lenders follow the guidelines listed above.
If rates drop significantly during your transaction, we will work diligently to get your rate renegotiated with the selected lender. All of our lenders have different renegotiation policies; however, generally if the rate drops more than .375% you will be eligible for a renegotiation. The lender may charge a renegotiation fee ranging between .375-.625 points or .125-.25% in rate.
You will not have a prepayment penalty on any of the loans we offer. You can pay-off all or part of your loan and refinance at any time of the life of your loan without penalty.
Currently, all our lenders require full documentation on all loan programs.
Ability Mortgage Group, LLC, does not offer construction or land loans, at this time.
You should submit an application and get pre-approved before you begin your property search. This will give you a clear idea of what price range you qualify for and what type of loan you will be able to obtain. It will also give you a clear idea of whether you qualify for the best rates available. Since we do not charge for a pre-approval there is no risk to you. By being proactive, you will have plenty of time to research all available loan options without being rushed into making a last minute decision.
PMI is an additional premium that is required to offset the lender’s risk for lending on a property with low equity. Your PMI premium will depend on your loan type and loan to value. The higher your loan to value, the higher your PMI premium will be. Private Mortgage Insurance is required if you purchase a home with less than a 20% down payment
On a primary residence or second home, federal regulations require that PMI be automatically cancelled when your loan balance reaches 78% of the original property value, at the time the loan was secured.
Depending on the loan program, you may be able to request, in writing that PMI be removed sooner based on an increase in the property value, as determined by a new appraisal to be ordered by the servicer. The lender isnot required to remove your PMIeven if your value has increased, as it is solely done at their discretion. Generally, PMI must have been in place for at least two years and you must have a good payment history for PMI to be removed.
You are not required to pay off your existing second mortgage when refinancing your first mortgage; although, it may take longer for the loan to process. Additionally, there may be a fee charged by your 2nd lien holder and there may be overnight fees incurred. In order, to refinance your first mortgage we will need to get a subordination agreement, which is an approval from your 2nd lien holder, to allow the refinance of your first mortgage.
An Escrow or Reserve or Impound Account is set-up at closing for the future payment of your property taxes and homeowners insurance. Once, your account is set up, you will make 1/12th of your yearly tax and insurance payment with your regular mortgage payment. Your lender will then pay your yearly insurance premium and twice yearly tax payment. Generally, three to four months reserves are collected at closing. This protects your lender, in the event, you stop paying your mortgage, as this account will give them the needed reserves to keep your property taxes and homeowner’s insurance current.
An adjustable rate mortgage (ARM), is a loan that offers a lower initial interest rate than most fixed rate loans. The interest rate has a set fixed rate period that is generally lower than that of a 30 year fixed. After the fixed rate period expires, the rate converts to an adjustable rate based on a specific index.
The benefit of the lower introductory payment should be weighed against the risk that your rate may increase after your initial fixed rate period ends.
An ARM may be the right mortgage choice if you plan on being in the home for less than 3 to 5 years.
The Adjustment Period: This is the length of time the interest rate or loan period on an ARM is scheduled to remain unchanged. The rate is reset at the end of this period, and the monthly loan payment is recalculated.
The Index: ARM interest rate changes are tied to changes in an index rate. Using an index to determine future rate adjustments provides you with assurance that rate adjustments will be based on actual market conditions at the time of the adjustment. Common indexes include the 1 year London Interbank Offered Rate (LIBOR) and the 12-month Treasury Average Index (MTA).
The Margin: This is the percentage that lenders add to the index rate to determine the ARM’s interest rate in the future.
Interest Rate Caps: Caps place a limit on the amount your interest rate can increase or decrease at each adjustment.
ARM’s have 2 Kinds of Caps: The first is Periodic Caps, which limit the interest rate increase or decrease from one adjustment period to the next. The second is Lifetime Caps, which limit the interest rate increase over the life of the loan.
Prepaid Interest is paid at closing to cover the interest that will accrue on your new loan for the remaining days of the month in which it is funded. You will make no payments in the month immediately following the month in which your loan funds. You will begin making payments on the first of each month for the prior month’s interest.
The interest rate is used to calculate your interest payment each month. The APR is not your interest rate. The APR is designed to show you the consumer, the effective rate you will pay after all of the costs have been considered in the loan.
The Annual Percentage Rate (APR) is the cost of the loan in percentage terms taking into account various loan charges, of which interest is only one such charge. Other charges which are used in calculation of the APR are Private Mortgage Insurance (PMI) or FHA Mortgage Insurance Premium (when applicable) and Prepaid Finance Charges (loan discount, points, origination fees, mortgage broker fees, prepaid interest and other credit costs).
The APR is calculated by spreading these charges over the life of the loan, which results in a rate higher than the interest rate shown on your Mortgage/Deed of Trust Note. If interest was the only Finance Charge, then the interest rate and the Annual Percentage Rate would be the same.
The APR is designed to help consumers illustrate that there is a cost to getting credit that is not readily seen. The APR on an ARM loan is based on an assumption of what market conditions will be in the future, which will affect future rate adjustments. We recommend that you use the same loan program and loan amount when comparing the rates and fees of different lenders. We, at Ability Mortgage Group, LLC, also feel it’s important to note that rates change daily, so same-day comparisons are important for consistency.
The Federal Truth in Lending (TIL) law requires that lenders disclose the APR, when they advertise a rate. The APR is an attempt to identify the cost of consumer credit as a percentage rate; however, since most people do not keep the mortgage for the entire loan term, it may be misleading to spread the effect of some of these up-front costs over the entire loan term.
The function of title insurance is to ensure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly, and that your interests as a homebuyer or homeowner are fully protected.
Title companies issue two types of title policies:
- Owner’s Policy- covers the homebuyer or homeowner
- Lender’s Policy- covers the lending institution over the life of the loan.
After a thorough examination of the records, any title problems are usually found and can be cleared-up prior to your purchase of the property. If any claim covered under your policy is ever filed against the property, once a title policy is issued, the title company will pay the legal fees involved in the defense of your rights. They are also responsible to cover losses that may arise from a valid claim. This protection remains in effect as long as you or your heirs own the property.
On refinance transactions, Federal Law mandates that you have three days, after signing your loan documents to cancel your loan. This three day period includes Saturdays but excludes Sundays and holidays. Your loan will not be funded until this period has expired.
Once we have received a final approval for your loan from the lender, your loan documents will be ordered and upon completion, sent to your escrow agent. Your escrow agent can be an attorney, title company, or escrow company depending on your state and personal choice.
The escrow agent will then contact you to schedule an appointment to sign the final documents. At this time, they will let you know the exact amount of funds required to close, as well as, go over your payment options. If you have any questions during this time, you can contact us, at Ability Mortgage Group, LLC.
If this is a refinance, you will have three days right of rescission to cancel your transaction after signing your final papers. On a home purchase, your signed papers will be sent to the lender for final review, and your loan will be scheduled to close the following business day.
Technology has made the loan process seamless when working with out- of- area clients. During the transaction, all documents during can be faxed, emailed, or shipped overnight.
You may be able to set up automatic payments on your new mortgage if the lender offers this service. You can set this up after your loan closes with your lender or you may be able to request it at closing.
You will be able to schedule bi-weekly payments with your new lender if they offer this service; however, there may be additional fees to do so. If you would like to avoid the additional fees, you can also make a 1/12th additional payment every month or make one extra payment each year and have a similar result.
If you won’t be available at closing, and you let us know ahead of time, you can set up a Specific Power of Attorney for the transaction. You will want to make sure you choose someone you trust, preferably a spouse or immediate family member. If this is not possible, escrow may be able to express the paperwork to you for a fee. You will then be required to have the documents notarized and sent back to escrow. If signing will be an issue, please, notify Ability Mortgage Group, LLC as soon as possible, as to allow for sufficient time to coordinate the process.
Absolutely. You will get a copy of your appraisal, as soon as, the report is completed.
Unfortunately, we cannot use a previous appraisal, as new guidelines require that we order the appraisal through a third party management company specific to every lender. The appraisal must also be completed in the name of Ability Mortgage Group, LLC or the designated lender.
No. Unfortunately, all of our lenders require that the lower of the appraised value or purchase price be used in calculating the loan to value.
Appraisals range in cost between $350-$500 depending on the price and location of your home. Some, more complex properties including, but not limited to, waterfront and multi-family units may have higher costs. The appraisal is paid by credit card once you decide to proceed with the transaction. Once, your loan has been preapproved, we take your credit card information and give it to the third party appraisal management company at the time your order is placed. Ability Mortgage Group, LLC does not receive any portion of the fee collected for your appraisal.
Yes. Ability Mortgage Group, LLC does offer financing on investment properties; however, there will be risk based pricing adjustments associated with the loan. The minimum down payment requirement on an investment property purchase is generally 25%.
In order to dispute an inaccuracy on your credit report, we suggest that you contact the company that is reporting erroneous information directly. You should request them to provide you with written verification stating the error so that you can provide documentation of your dispute when you file your claim with the credit bureaus.
You can also dispute your claim directly with the credit bureaus below:
PO Box 34012
Fullerton , CA 92834
Equifax Information SVCS
PO Box 740241
Atlanta , GA 30374
PO Box 2002
Allen , TX 75013
Ability Mortgage Group, LLC can also assist you with providing a rapid rescore if you have written documentation from the company reporting the inaccuracies that states they were reported in error. This rapid rescore may enable you to correct your information before the loan transaction is complete, which may help you obtain better financing.
A mortgage refinancing transaction is deemed a cash-out when the new mortgage amount is greater than the existing mortgage amount and loan settlement costs. Debt consolidation, such as paying off credit cards, car loans, or other unsecured debt on the subject property is considered a Cash- Out Refinance. Paying off a second or third mortgage that was borrowed after the date of the original purchase is also be deemed as a Cash-Out Refinance.
Yes. Ability Mortgage Group, LLC is licensed by the State of Maryland and by the State of Virginia.
NMLS ID # 192444