Loan Programs, Rates & Fees

Nations Choice Mortgage wants to help our customers better understand some of the common questions that may arise when choosing a Mortgage Lender. Please review our lists of Frequently Asked Questions for information about the Nationís leading mortgage lender.








How can you offer such low rates?
What is an adjustable rate mortgage (ARM)?
Should I pay discount points?
What is the difference betweeen a Rate and an APR?
Should I lock or float my rate?
How much money will I save by choosing a 15-year loan rather than a 30-year loan?
Is there a fee or any other obligation if I apply?
When can I lock in my interest rate and discount points?
What is your Rate Lock Policy?
Can I prepay the loan without a penalty?
What is included in your closing costs and prepaids?
What is title insurance and why do I need it?
Should I consider a loan with private mortgage insurance (PMI)?
How do I lock my rate?
What is the maximum percentage of my home's value that I can borrow on a refinance loan?
If rates fall after I've locked, will you lower my rate?
What is the maximum debt-to-income ratio allowed?
What is the difference between a conforming loan, a super conforming loan and a jumbo loan?

Since 1994, NationsChoice Mortgage has continuously worked to create the most efficient loan origination system in the industry.

* As a direct lender offering mortgages via the Internet, our system eliminates the need for a highly commissioned loan officer, the highest cost component of a mortgage transaction.

* We lend throughout the country from a centralized operations location eliminating the cost of brick and mortar branches and duplication of management overhead.

* We utilize state of the art technology, including online rate quotes, online good faith estimates, online loan applications, online disclosures and an automated underwriting system that provides you with a free online loan approval immediately upon the submission of your online application.

An adjustable rate mortgage, or an "ARM", is a loan type that offers a lower initial interest rate than most fixed rate loans. Against the advantage of the lower payment at the beginning of the loan, you should weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. For some people, an ARM may be the right mortgage choice, particularly if you only plan on being in the home for less than three, five, seven or ten years.

Here's some detailed information explaining how ARM's work:

Adjustment Period: The interest rate and monthly payment are fixed for an initial time period, generally three, five, seven or ten years. After the initial fixed period, the interest rate can change every year.

Index: Interest rate changes are tied to changes in an index rate. The current values of the indices used on our ARM programs are published weekly in the Wall Street Journal and shown on our website. At each adjustment date, if the index rate has moved up, so will your mortgage rate, and you will have to make a higher monthly payment. On the other hand, if the index rate has gone down, your rate and monthly payment will decrease.

Margin: To determine the new interest rate on an ARM, at each adjustment date, a pre-disclosed amount, called the "margin", is added to the index to determine the new interest rate.

Interest Rate Caps: An interest rate cap places a limit on the amount an interest rate can increase or decrease at each adjustment. ARMs have three types of caps: an initial cap, which limits the interest rate increase or decrease at the first adjustment; a periodic cap, which limits the interest rate increases or decreases at all following adjustments; and a lifetime cap, which limit the interest rate increase over the life of the loan.

Please see "Program Descriptions" under the "Loan Programs" tab for information on our ARM programs.

Each discount point is equal to one percent of the loan amount. Discount points are paid to obtain a lower rate. Whether you should pay discount points depends on your tax situation and how long you expect to be in the property. To calculate how many years it takes to "break even" on the amount paid for points, divide the difference in points by the difference in rate.

There may also be tax advantages to paying points. For most taxpayers, points paid on purchase loan transactions are tax deductible in the year the home is purchased and points paid on refinance transactions are tax deductible over the life of the loan. Tax consequences vary so we encourage you to consult your tax advisor.

The note rate is used to calculate your interest payment each month. The APR (Annual Percentage Rate) is a calculation based on standardized federal regulations. In addition to the interest rate, it factors in points and loan-related fees in an attempt to better show the total cost of the financing over the scheduled life of the loan. The APR is designed to help borrowers fairly compare different lenders and loan options. Please note that the loan amount will influence the APR calculation, with higher loan amounts reporting lower APR calculations. Our website allows you to input your loan amount and calculate an accurate APR.

On a refinance transaction, if the savings you will achieve with the new lower rate will recapture the closing costs of the loan in a relatively short period of time, you should probably go ahead and lock your rate and close your loan. Trying to time the bottom of an interest rate cycle is tricky and each month you delay, costs you in the form of carrying a higher interest rate on your old loan. If rates fall further, you can always refinance again.

On purchase transactions, in times of stable interest rates, most of our customers lock when they are within 30 days of closing. Locking for a period longer than 30 days increases the cost of the loan slightly but is sometimes a good idea if rates are volatile. If your closing is more than 30 days out, we recommend you compare rates and points on our website and make your decision accordingly.

A 15-year fixed rate mortgage gives you the ability to own your home free and clear in 15 years. And, while the monthly payments are somewhat higher than a 30-year loan, the interest rate on the 15-year mortgage is usually a little lower, and more important - you'll pay less than half the total interest cost of the traditional 30-year mortgage.

However, if you can't afford the higher monthly payment of a 15-year mortgage don't feel alone. Many borrowers find the higher payment out of reach and choose a 30-year mortgage. It still makes sense to use a 30-year mortgage for most people.

Who Should Consider a 15-Year Mortgage?

The 15-year fixed rate mortgage is most popular among younger homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. They own more of their home faster with this kind of mortgage, and can then begin to consider the cost of higher education for their children without having a mortgage payment to make as well. Other homebuyers, who are more established in their careers, have higher incomes and whose desire is to own their homes before they retire, may also prefer this mortgage.

Advantages and Disadvantages of a 15-Year Mortgage

The 15-year fixed rate mortgage offers two big advantages for most borrowers:

  • You own your home in half the time it would take with a traditional 30-year mortgage.
  • You save more than half the amount of interest of a 30-year mortgage. Lenders usually offer this mortgage at a slightly lower interest rate than with 30-year loans - typically up to .5% lower. It is this lower interest rate added to the shorter loan life that creates real savings for 15-year fixed rate borrowers.

The possible disadvantages associated with a 15-year fixed rate mortgage are:

  • The monthly payments for this type of loan are roughly 10 percent to 15 percent higher per month than the payment for a 30-year.
  • Because you'll pay less total interest on the 15-year fixed rate mortgage, you won't have the maximum mortgage interest tax deduction possible.

Compare Them Yourself

Use the "How much can I save with a 15 year mortgage?" calculator in our Resource Center to help decide which loan term is best for you.

There's no cost for completing an online application and obtaining an online loan approval. Upon receiving your online loan approval, you will be given an opportunity to have your appraisal ordered to get the ball rolling. If you wish to do so, you will be asked to submit a $495 application fee by credit card on all conforming and high balance conforming transactions. These funds will used to defray a portion of the upfront expenses we incur. You will not be asked to pay for the upfront appraisal until your loan closes. Additionally, the $495 application fee will be credited back to you at the closing of your loan, and is part of the initial guaranteed fee quoted, not in addition to.

You can request to lock in your interest rate and discount points as soon as your loan is approved and you pay the application fee. The application fee is not another fee, and will be credited to the actual costs quoted, at your closing. If you complete your application today, and your request is approved online, you'll have the opportunity to pay the application fee via credit card and your loan will be requested to be locked immediately during normal business hours on a refinance transaction for 30 days, unless you request otherwise. Purchases will float until we have the purchase contract in hand and are instructed by you to lock the loan.

If we need to review your information before providing your loan approval, a Loan Advisor will contact you and you'll have the opportunity to lock your rate and fees then.

We offer online locks for 30, 45 and 60 day periods. Refinance transactions may be locked at the time of loan application. Purchase transactions may be locked once you have an accepted offer on a property. You may apply and request a lock online, 24/7.

How Do I Lock?

When you submit your online application, it will be analyzed by our Automated Underwriting System while you wait and, in most cases, be immediately approved. A rate chart will then appear showing all available rates for your loan request, along with the related points or rebates. You will select the rate you wish to lock. You will receive a Lock Confirmation by email the same day it is locked (or the next business day if you lock after hours or on a weekend). In the event our Automated Underwriting System is not able to provide an instant online approval, your application will be forwarded to a Loan Advisor who will contact you the same business day to resolve any issues with your loan application.

Are Any Fees Collected When I Lock?

No, we do not have any fees to lock your loan.

What If Rates Drop After Iíve Locked?

At the time we are ready to draw your loan documents, if our posted rates are more than .25% lower than the rate you locked (for the same or less points, or the same or more rebate), you may float down your rate to the current rate plus .125%.

What Happens if the Loan Process Takes Longer Than My Lock Period?

Your processor will contact you and calculate the number of additional days necessary to close your loan.

- If the delay was caused by us, or a third party service provider selected by us, we will extend your lock for the additional days required at no cost to you.

- If the delay was caused by you and current rates are the same or lower, we will extend your lock for the additional days required at no cost to you.

- If the delay was caused by you and current rates are higher, your loan will be re-priced at current rates.

Delays caused by you include delays caused by the subordination of an existing second mortgage or home equity line, not supplying supporting documentation within 48 hours of our request or delaying appraisal inspections or document signing appointments.

Can I Choose a Different Program or Rate After Iíve Locked?

You may but your rate and points (or rebate) will be based on the pricing in place on the date of your original lock. Please take the time upfront to choose the program and rate that is best for you.

Can I Relock My Rate if I Cancel and Reapply?

If you cancel your application and reapply within 60 days, your rate and points (or rebate) will be the based on the worst case between the pricing in place on the date of your original lock or the date of your new lock. Please take the time upfront to choose the program and rate that is best for you.

What happens if I let my rate lock expire?

If you let your rate lock expire and relock within 60 days, your rate and points (or rebate) will be the based on the worst case between the pricing in place on the date of your original lock or the date of your new lock.

Should I Lock or Float my Rate?

On a refinance transaction, if the savings you will achieve with the new lower rate will recapture the closing costs of the loan in a relatively short period of time, you should probably go ahead and lock your rate and close your loan. Trying to time the bottom of an interest rate cycle is tricky and each month you delay costs you in the form of carrying a higher interest rate on your old loan. If rates fall further, you can always refinance again.

On purchase transactions, in times of stable interest rates, most customers lock when they are within 30 days of closing. Locking for a period longer than 30 days increases the cost of the loan slightly but is sometimes a good idea if rates are volatile. If your closing is more than 30 days out, we recommend you compare rates and points on our website and make your decision accordingly.

You can prepay your mortgage any time with no additional charges.

NationsChoice Mortgage is a Certified Upfront Lender meaning we fully disclose all closing costs and prepaids online. You may view a breakdown of closing costs and a complete good faith estimate online, 24/7.

Closing Costs are "One time costs to obtain a mortgage, paid at closing" and include the following:

Guaranteed NationsChoice Fee: We charge one all-inclusive Guaranteed Lender Fee, which includes processing, underwriting, doc prep, funding and tax service fees.

Guaranteed Discount Points/Rebate: You may elect to pay discount points to buy down your interest rate. Or you may choose a slightly higher rate and obtain a rebate to offset some or all of your closing costs. Perform an online rate search to view all combinations of rates, points and rebates.

Guaranteed Appraisal Fee: Appraisal fees are collected when the loan closes. Appraisal fees are guaranteed on both purchase and refinance transactions.

Guaranteed Closing Agent and Title Insurance: Closing agent (or attorney) and title insurance fees are guaranteed if you use the national service provider we contract with to provide these services in your state. You will notice that these fees are extremely competitive due to the high volume of business that we provide to these service providers.

Guaranteed Government Recording Charges: The county recorder's office will charge a recording fee to record your new mortgage or deed of trust.

Guaranteed Government Transfer Taxes: Some states, counties and cities charge a transfer tax (also known as a Mortgage Tax or Tax Stamps) when you purchase a property or refinance a mortgage.

Prepaids are "Recurring costs of homeownership, partially prepaid at closing" and include the following:

Initial Escrow/Impound Deposit Account: If an escrow/impound account is to be established for the ongoing payment of your property taxes and homeowner's insurance, funds will be collected at close to make an initial deposit into the account so that sufficient funds will be available to pay these recurring expenses as they become due.

Prepaid Interest: Your mortgage payment due date will be the first of each month. If your loan is closed on any day other than the first of the month, prepaid interest will be collected at closing, calculated from the date of closing through the end of the month.

First Year Homeowner's Insurance Premium: If your loan is a purchase transaction, your first year's homeowner's insurance premium will be collected at closing and paid to your insurance company.

The function of title insurance is to make sure your rights and interests to the property, and those of your lender, are fully protected. Title companies issue two types of title policies: an Owner's Policy which covers the homeowner and a Lender's Policy which covers the lending institution. If the loan is for a home purchase, both types of policies are issued at the time of closing. If the loan is a refinance, you already have an owner's policy that was issued when you purchased the property, so only a lender's policy will be issued.

Once a title policy is issued, if any claim covered under your policy is ever filed against your property, the title company will pay the legal fees involved in the defense of your rights. They are also responsible to cover losses arising from a valid claim. This protection remains in effect as long as you or your heirs own the property.

Private Mortgage Insurance (PMI) makes it possible for you to buy a home with less than a 20% down payment by protecting the lender against the additional risk associated with low down payment lending. The PMI insurance premium is based on the loan-to-value ratio and is included in your monthly payment.

On a 1-unit 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. Generally, PMI must have been in place for at least two years and you must have a good payment history for PMI to be cancelled under this scenario.

On a refinance your loan lock is automatically requested for 30 days upon online approval and submission of the application fee. If you wish to float please contact your Loan Advisor within 24 hours. On purchases, your rate lock will not be requested until you communicate your desire to do so, as we need to incorporate the close of escrow date on your purchase contract.

The percentage of your home's value that can be borrowed on a refinance loan (known as the maximum Loan-to-Value ratio) varies by loan program. Please review loan programs under the "RefinanceĒ tab or simply search rates for the loan you want and the pricing engine will tell you if the Loan-to-Value you desire is available.

At the time we are ready to draw your loan documents, if our posted rates are more than .25% lower than the rate you locked (for the same or less points, or the same or more rebate), you may float down your rate to the current rate plus .125%.

Maximum debt-to-income ratios are determined by an automated underwriting system that takes many factors into consideration, including your credit score, loan-to-value ratio and cash reserves.

On jumbo loans, the maximum debt to income ratio is 38% to 50% depending on the loan program.

A conforming loan is one that is less than the maximum loan amounts set by Fannie Mae and Freddie Mac. The loan amounts are revised each year to reflect the change in the national average cost of a home. The current conforming loan amount limits are:

SFR/Condo: $417,000 ($625,500 in Alaska & Hawaii)

2-Unit Property $533,850 ($800,775 in Alaska & Hawaii)

3-Unit Property $645,300 ($967,950 in Alaska & Hawaii)

4-Unit Property $801,950 ($1,202,925 in Alaska & Hawaii)

A super conforming loan is a temporary loan category that was created by the Economic Stimulous Act of 2008. The Act allows Fannie Mae and Freddie Mac to purchase mortgages in "high cost" housing markets through December 31, 2012. These "Super Conforming" limits are set equal to 115 percent of local median house prices up to a maximum of $625,500 (higher limits permitted for 2-4 unit properties and properties located in Alaska and Hawaii). To view a list of "high cost" housing markets and the maximum super conforming loan amount allowed in each, click on "Super Conforming Loans" under the "Loan Programs" tab.

Jumbo loans are loans which exceed conforming and super conforming limits.

Instant Mortgage Rate Help

Loan Amount: How much do you want to borrow? Example: 150,000 (You can borrow up to 100% of the purchase price of your home. You will find better interest rates at 95%, 90%, and 80% progressively.)

Property Value: This is the purchase price of your property or your best estimate of the appraised value of the property. Example: 175,000.

Loan Type: Selecting Refinance WITH CASH OUT may increase your rate. If you want some extra cash to pay the closing costs on your new loan, this would NOT be considered receiving extra cash.

Escrow/Impounds: Allows you to pay 1/12 of your annual property taxes and homeowners insurance with your mortgage payment each month. Escrowing your taxes and insurance will lower your points by .25%

Property State: Specify the State where the property is located

Property County: Specify the County where the property is located


Todays Rates: These rates are based on the following criteria..

Instant Mortgage Rates:


Loan Amount
Property Value
Loan Type
Loan Purpose  
Property Type
State
City
Zip
 

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