FAQs

Q: What is a full documented loan?

A: Both income and assets are disclosed and verified, and income is used in determining the applicant's ability to repay the mortgage. Formal verification requires the borrower's employer to verify employment and the borrower's bank to verify deposits. Alternative documentation, designed to save time, accepts copies of the borrower's original bank statements, W-2s and paycheck stubs.

Q: What other types of loans are there?

A: A number of different loans are available:

• Stated income/verified assets: Income is disclosed and the source of the income is verified, but the amount is not verified. Assets are verified, and must meet an adequacy standard such as, for example, 6 months of stated income and 2 months of expected monthly housing expense.

• Stated income/stated assets: Both income and assets are disclosed but not verified. However, the source of the borrower's income is verified.
• No ratio: Income is disclosed and verified but not used in qualifying the borrower. The standard rule that the borrower's housing expense cannot exceed some specified percent of income, is ignored. Assets are disclosed and verified.
• No income: Income is not disclosed, but assets are disclosed and verified, and must meet an adequacy standard.
• Stated Assets or No asset verification: Assets are disclosed but not verified; income is disclosed, verified and used to qualify the applicant.
• No asset: Assets are not disclosed, but income is disclosed, verified and used to qualify the applicant.
• No income/no assets: Neither income nor assets are disclosed.

Q: What is a good faith estimate?

A: It is the list of settlement charges that the lender is obliged to provide the borrower within three business days of receiving the loan application.

Q: What is a conforming loan?

A: A loan eligible for purchase by the two major Federal agencies that buy mortgages, Fannie Mae and Freddie Mac. The loan limits are currently $417,000.00 for a single family house.

Q: What is a jumbo mortgage?

A: A loan eligible for purchase by the two major Federal agencies that buy mortgages, Fannie Mae and Freddie Mac. The loan limits are currently $417,000.00 for a single family house.

Q: What are points?

A: A loan eligible for purchase by the two major Federal agencies that buy mortgages, Fannie Mae and Freddie Mac. The loan limits are currently $417,000.00 for a single family house.

Q: What is pre-qualification?

A: A loan eligible for purchase by the two major Federal agencies that buy mortgages, Fannie Mae and Freddie Mac. The loan limits are currently $417,000.00 for a single family house.