Loans Flashcards
If credit is low and wants cash out:
Offer FHA loan
- Lower rate, but now has to pay mortgage insurance
- Can refinance back into conventional and remove MI when credit has improved
What do you always ask the borrower?
- What is your goal?
- What are you trying to accomplish?
- How long do you plan to stay in your home?
VA loan:
Offer a Interest Rate Reduction Refinance Loan (IRRRL)
First option FHA Streamline refinance:
Reduced documentation program which allows for quick processing
- No appraisal or income documentation required
- No minimum credit score to qualify
- FHA requires us to reduce your interest rate by at least a minimum of 0.5%
2nd Conventional loan refinance:
One benefit is that is this allows you to remove the mortgage insurance when certain conditions exist
- Requires full documentation, which means we collect and verify income, assets, and credit, as well as an appraisal to determine the property value
FHA Streamline portfolio:
Not required:
- No Min FICO
- No Appraisal
- No Income
- No Max LTV/CLTV
- No AUS
Required:
- Signed disclosures
- Utility bill (primary residence only)
- $100 application fee (credited to closing costs)
FHA Streamline - What to say?
- Do you know how the FHA Streamline works?
- FHA requires all lenders to reduce your interest rate by a minimum of 0.5%
- Since PennyMac is your current lender, we will make the process much easier for you
- We will not require any income documentation
- We will not require another appraisal, we will use your original
- We can use whatever’s in your current escrow account and apply it towards the payoff on your new loan, this would normally keep your loan balance lower depending what’s in your escrow
- We require a copy of your utility bill for proof of residence and a $100 application fee
- The only thing about FHA Streamline is that closing costs cannot be rolled in, so let’s put a proposal together and get you some accurate numbers
VA IRRRL Portfolio:
Not required:
- No Min FICO
- No Appraisal
- No Income
- No Max LTV/CLTV
- No AUS
Required:
- Signed disclosures
VA IRRRL - What to say?
- I see you have a VA loan with us currently
- Thank you for your services
- Do you know how the IRRRL program works?
- VA requires all lenders to reduce your interest rate by a minimum of 0.5%
- Since Pennymac is your current lender, we will make the process much easier for you
- There is no appraisal required
- No documentation required on your end, just the signed disclosures back
- We can use whatever’s in your current escrow account and apply it towards the payoff on your new loan, this would normally keep your loan balance lower depending what’s in your escrow
- So lets put a proposal together and get you some accurate numbers
Conventional:
- Tri-merge all 3 bureaus, need all 3 scores, always use the middle score. Minimum credit score is 620
- Owner occupied max LTV 80%, any higher add mortgage insurance. Rate and Term only
- Owner occupied cash out 80% LTV max
- Closing costs can be rolled in
Objections - Rebuttals:
I don’t want my loan balance to increase!
I wouldn’t worry about the increase, it’s about how you’ll be paying back over the life of the loan
(Go over their current loan and new loan)
Objections - Rebuttals:
My cash to close is too high!
I can give you a higher rate with less cost?
Objections - Rebuttals:
My closing costs are too high!
State the recoupment and go back to their savings/benefit. Closing costs include 3rd party fees and escrows lumped into one cost
Objections - Rebuttals:
I don’t want to go back to 30 years!
That’s fine fortunately we have flex terms, we can do whatever term you like
Objections - Rebuttals:
Not enough savings!
How much were you expecting?
