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Mortgage Disclosure

Two-Steps & Convertible ARMs

• Before You Apply

What to do to prepare up to a year in

advance of your mortgage application.

• Can You Trust Your Loan Officer?

Who does your loan officer really work

for, and how do you find the best one?

• Lender, Broker, or Bank?

What type of loan Provider is right for

you?

• Types of Mortgage Loans

The types of mortgage loans and

their advantages and disadvantages.

• Types of Documentation

Your options for disclosing how much

you make and where it comes from.

• Underwriting

What does an underwriter look for

when analyzing your loan application?

• Pre-Approval

What it is and isn't and how it saves you

time and heartache.

• Credit

What it is, and how it affects your life.

• Income & Employment

How much you need to make and for

how long in order to qualify.

• Assets/ Down Payments

How much, where from, and what kind

of money will work.

• Down Payment Assistance

How much, where from, and what kind

of money will work.

Short on funds? Learn about your

options and explore these resources.

• Processing

What happens to your application after

you sign it and before you close?

• Title

What is it, what does it mean, and how

does it work?

• Appraisals

What is your home worth, why you

should bother to find out, and how

does it affect your loan?

• Alternate Financing

Facing rejection? Time to get creative.

• FHA

Low down payment, forgiving

qualifications. A great loan option.

Two-Step Mortgage

Two-Step mortgages have a fixed rate for a certain time,

most often 5 or 7 years, and then interest rate changes to a

current market rate. After that adjustment the mortgage

maintains new fixed rate for the remaining 23 or 25 years.

Convertible ARMs

Some ARMs come with option to convert them to a fixed

-rate mortgage at designated times (usually during the first

five years on the adjustment date), if you see interest rates

starting to rise. The new rate is established at the current

market rate for fixed-rate mortgages.

The conversion is typically done for a nominal fee and

requires almost no paperwork. The disadvantage is that the

conversion interest rate is typically a little higher than the

market rate at that time.

The other kind of convertible mortgage is a fixed rate loan

with a rate reduction option. If rates had dropped since the

time of closing it allows you, under some prescribed

conditions, for a small conversion fee to adjust your

mortgage to going market rate. Generally the interest rate or

discount points may be a little higher for a convertible loan.