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Northstar Mortgage
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Frequently Asked Questions

In the past, I have had credit problems? Will it have a negative impact on my ability to purchase a home or refinance my existing home?

NorthStar specializes in helping people who have had credit problems in the past. Obtaining or refinancing your home is possible, even with poor credit. Lenders will consider you a risky borrower if you have poor credit, so you may not be eligible for as many loan products, and interest rates may be higher. NorthStar will work with you to obtain the mortgage you need while determining steps you should take to improve past credit problems.

I have been late a few times on my bills. Does this mean I will only qualify for a high interest rate loan?

A late payment must be at least 30 days late before it will show up on your credit report. If you have been late less than three times in the past year on credit card debts, and the payments were no more than 30 days date, you have a good chance of getting a competitive interest rate. Late mortgage payments are more serious if you are thinking of refinancing or purchasing a new home. The result of late mortgage payments negatively impacts your credit score and can make it difficult to qualify for the best loan products and interest rates. The NorthStar Mortgage Team works with many lenders and most likely will be able to get you the loan you want, affordably, even with past late payments.

How do I decide between and ARM and a fixed rate mortgage?

Arms make a lot of sense for people who do not plan on being in their homes for a long period of time. Monthly savings on ARM products can be drastic. This type of loan should be considered if you are planning to move within five years. The ARM is a higher risk loan because it will adjust after the initial fixed period, which varies. Decide if the initial savings justify giving up the security of a fixed rate product. Fixed rate products offer you a fixed interest rate and payment amount for the life of your loan. The typical fixed rate products are amortized over 15 or 30 years. These loans offer you the peace of mind and stability of knowing there will be no surprises with a rising interest rate or payment amount in the future.

Can a debt consolidation mortgage help me?

A debt consolidation mortgage is a wonderful way to combine high interest debt and your mortgage into one easy monthly payment. This can save borrowers hundreds or thousands of dollars each month, and also help improve your credit score.

A debt consolidation mortgage helps you gain control of your debt, lowers your monthly payments, and help eliminate debt stress. If you fear you are in financial difficulty, you might want to act sooner than later to avoid further damage to your credit profile.

What is the NorthStar loan process?

A loan representative will take a complete residential loan application and update your credit profile. Be as specific and accurate as possible when disclosing information to your loan representative; this information will be the focal point throughout the loan process. All of the information in the application will be verified and must be deemed reasonable. Upon completion of the application, the loan representative will discuss the strengths and weaknesses of your application with you as well as your eligibility for loan programs. When you decide you are interested in a certain loan product, a loan package will be developed for you.
While you are reviewing the application, your loan representative will discuss ordering an appraisal and title work for your home. It is essential that this is ordered and scheduled in a timely manner in the event that the appraiser is not available immediately to inspect the residence. Complete loan packages cannot be submitted to the processor without a complete appraisal.
When your loan application is completed with your loan representative, your full loan application and documentation are given to the loan processor. The processor will verify that all income and asset documentation is correct on the loan application, and will at that time order title and appraisal.
Once the title and the appraisal are received, the package is then submitted to an underwriter. The underwriter does a detailed analysis of the income, assets, credit report, appraisal, title work and any automated approval that the loan representative may have included to support the file. If the file receives a "conditional approval" this means that the underwriter has approved the file based upon the conditions listed being met. The underwriter works with your loan representative to clear the conditions and schedule a closing.
The loan representative works very closely with the processor and underwriter to assist with accuracy and to guarantee an efficient turn around time.
The final step is the closing which the processor or loan representative schedules with the Title Company or Escrow Company doing the closing.

What is PMI?

PMI is private mortgage insurance. When you put down less than 20 percent of the purchase price of a home, lenders normally require you to pay private mortgage insurance for their protection if you default on your mortgage payment. When you close on the purchase of your home you may be required to pay up to a year's premium of PMI, which could be several hundred dollars or more.

The good news is PMI is not permanent. As soon as it can be proven to the lender you have 20 percent equity built up in your home, PMI will be discontinued. To terminate PMI, you will need to have an appraisal to prove the current market value to the lender. If it will save you hundreds of dollars, it is a wise investment to spend two or three hundred dollars on an appraisal to eliminate PMI.

What fees are included in closing costs?

All lenders are required to provide a "Good Faith Estimate" that gives you an estimate of any/all fees incurred with your loan. Most fees are standard but amounts can fluctuate depending on the loan program, the value of your home, or lender used. Fees you will see on a Good Faith Estimate are:

A.	Fees
Loan Origination/Discount Points Mortgage Broker Fee Credit Report Processing fee Underwriting fee Document preparation Flood certification
B.	Title Fees
Closing/Escrow fee Title insurance
C.	Miscellaneous Fees
Recording fees Prepaid interest Insurance/Tax reserves for escrow

Closing costs must be considered when refinancing or purchasing a new home, especially if you are purchasing and only have a designated amount of money to put toward the down payment and other closing costs. Depending on the loan, many times these costs can be rolled into the loan, minimizing or eliminating any out of pocket expenses.


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