Mortgage Information

M&D Realty, PA works closely with banks and mortgage companies in coordinating programs that best suit our clients from the homebuyer to the investors to lot buyer. Our goal is to assist you from the initial application to the final closing. We have lenders to help with the mortgage program that best fits your financial profiles and needs (for example at the present we have lenders offering programs for as little as $1,000.00 to get started)

For the homebuyer, first, second or vacation home, we seek out banks that offer programs that allow the monthly payment to suit your budget. For the investor, we recommend diversity by investing in lots and /or home & lot packages in different areas of Florida. We provide data, newspaper articles, other information for our investors to make informed decisions that are best for their goals. By working closely with banks and mortgage companies, we seek programs that offer investors the best potential for return on their investment.

Frequently Asked Questions

What is a Construction-Perm Mortgage?

Construction to Permanent financing option takes the headache out of getting your new home built. This “One Time Close” program allows our borrowers to reduce the expense of two closings usually associated with building a new home. And since the buyer close upfront there is no worry about going through loan credit approval process when the home is completed. When the home is complete the loan modifies to a permanent mortgage. This is called modification. This eliminates concerns of career changes or increased debt during construction. For the homebuyer or investor this also means the home stays in “your name” and this means the prices are locked in. This also allows you to list your for sale or write a rental contract prior to completion and execute said contract as soon as you modify.

What is an Appraisal?

A survey of a property completed by a professional appraiser to determine the estimated value of the property.

What is APR (Annual Percentage Rate)?

The annual percentage rate is a measure of the cost of credit on a yearly basis.

What is an Arm (Adjustable-Rate Mortgage)?

A mortgage that has an initial rate that adjusts periodically, in accordance with a current interest rate index (a predetermined margin is added to the index to compute the interest rate). Payments can be low if interest rates are low and will increase as rates rise. CAPS govern the limit an ARM loan's rate can adjust to at one time and over the life of the loan. Generally, ARMs have lower rates than fixed-rate mortgages and are easier to qualify for - but because they're based on changing interest rates, your payment amounts can be unpredictable

What is a Balloon Mortgage?

A mortgage that has level monthly payments over a stated term but which provides for a lump-sum payment to be due at the end of a previously specified time (e.g., five and seven- year balloon mortgages, where the payment is fixed for 5 or 7 years, then the remaining balance becomes due and payable at the end of the term).

What is a “Builder’s Package”?

After you sign a contract for a home, the builder must put a package together that has the following items:

1. Final Plans and Specifications. This not only includes the plans
of your home but a survey of your property. This is needed in order
to obtain an appraisal.
2. House Contract. The paperwork you signed with the builder.
3. Lot Contract. The paperwork you signed with M&D Realty, PA
4. Property Profile. Description of all materials for your home.
5. Line Item Cost Breakdown From The Builder.
6. Copy of Builder’s License
7. Copy of Your Application and All Documents.

What are Closing Cost?

Money paid by borrowers and sellers to affect the closing of a loan. These costs usually include such items as origination fees, discount fees, title search and title insurance, survey fees, attorney's fees, appraisal fees, credit report fees, prepaid items such as taxes and insurance. Closing costs generally run from 3 percent to 6 percent of the loan amount. Most lenders generally quote a "good faith estimate" of closing costs, this only a an estimate. Also most lenders can put closing cost into the mortgage.

What is Co-Borrower?

A person who is jointly and equally liable for repayment of the mortgage obligation. A co-borrower completes an application and submits all documentation and may or may not be on the security instrument.

What is a Credit Report?

A report covering an individual's credit history and current credit standing. This report is a very important measure used in the loan approval process, so maintaining a good credit rating should be a high priority for those who plan to buy a house or land.

What is Debit-To Income Ratio?

The ratio of the borrower's total monthly obligations - including housing expenses and recurring debts - to monthly income. It's used to determine your capacity to repay the mortgage and all other debts. Your debt-to-income ratio is a crucial calculation in determining the loan amount for which you can qualify. It represents your qualifying ratio - that is, your financial capacity to assume and repay debt.

What is Equity?

The value of a investor or homeowner's unencumbered interest on real estate. Equity is computed by subtracting the total of the unpaid mortgage balance and any outstanding liens or other debts against the property from the property's fair market value. A investor or homeowner's equity increases as he or she pays off his or her mortgage and/or as the property appreciates in value. When a mortgage and all other debts against the property are paid in full, the investor or homeowner has 100 percent equity in his or her property.

What is an Escrow Account?

An account in which a portion of the monthly payment is held by the lender on the borrower's behalf for the payment of future taxes, mortgage and hazard insurance, special assessments insurance, and other on-going payments as they occur. Also called an Impound Account. Impound/escrow accounts allow one to make fractional payments for these charges as part of the monthly mortgage payments. The funds are gradually collected in the escrow account, then paid out in full when the charges become due.

What is a Home Equity Loan?

A loan in which the lender acquires an interest in one's home up to the amount of this loan, giving the borrower the funds he or she needs for a purchase opportunity, home maintenance, debt consolidation, major expenses or investments.

What is Income-to-Expense Ratio?

The ratio of your monthly income (gross unless self-employed - in which case net income) to monthly expenses. It is used to determine one's ability to repay debt and thus is a crucial consideration in determining if, and for how large a loan, one can qualify to borrow.

What is Investment Property?

A non-owner occupied residential property or vacant land used to generate income.

What is a Loan Application?

A document required by a lender before issuing a loan commitment. It includes information such as the name of the borrower, terms and amount of loan, and details of the property being mortgaged. It's the first and foremost measure of one's ability to qualify for a loan, so it's crucial that one submit complete and accurate information. The information required by banks:
1. One monthly pay stubs…most recent.
2. Tax returns for the last two years (with W-2’s) and Year To Date P&L Statement
If self-employed.
3. Last 2 months bank statements…checking, saving & money market…All Pages!!!
4. Most recent 401 statement.
5. Awards letters from Social Security and/or Pension Income.
6. Stocks, Bonds or Mutual Fund Accounts.
7. Legible copy of Driver’s Licenses and Social Security Cards.
8. Value of property or properties that you already owned.
9. Proof of citizenship if not American Born or proof of Permanent Residence. 10. Self Employment - 2 year proof of employment (licenses), schedules showing Profit and Loss, Assets and Tax Returns.

What is a Loan Commitment?

An agreement to lend money, usually for a specific amount to be repaid by a specific date. This commitment is contingent upon the accuracy of the information submitted by the applicant.

What is a Mortgage?

A note or other evidence of real property being pledged as the security for a debt - also referred to as a Deed of Trust, Trust Deed, or Security Instrument.

What is Mortgage Insurance (MI or PMI)?

Insurance that protects a mortgage lender against loss in the event of default by the borrower. This insurance allows lenders to make loans with lower down payments (loan-to-value ratios above 80 percent - that is, when a down payment is less than 20 percent of the total selling price of the property).

What is an Origination Fee?

A fee charged by the lender to prepare loan documents, inspect and appraise the house, and arrange a credit check. The fee is computed as a percentage of the loan's face value.

What is a Pre-Approval?

Mortgage pre-approval specifies the actual amount a buyer is pre-approved by a lender to borrow before a house is purchased. The buyer has to apply and qualify for the mortgage. Pre-approval allows the buyer to negotiate like a cash buyer. Even if the buyer is not granted pre-approval status, it's a helpful step to take, as it illuminates existing problems in securing a loan and allows the buyer to take steps toward resolving them.

What are Pre-Paid Items?

Items that generally must be paid for at the time of closing or modification and are generally recurring charges. Prepaid items may include taxes; first-year premiums for hazard, flood, and mortgage insurance; prorated interest, any special assessments that must be prepaid (e.g., water/sewer connection); escrow account for any of the above.

What Is Prequalification?

Providing financial information (credit ratings, employment status and income, and outstanding debts) to a lender in order to calculate a suitable mortgage for the buyer. Prequalification grants no legal rights, but is helpful in showing how large a mortgage one can handle and, by extension, how much house one can afford.

What is Refinance?

The process in which one replaces the original mortgage loan with a new one to take advantage of lower interest rates or better terms or to get cash.

What is a Survey?

A report prepared by a registered land survey professional that shows the precise location of the property.

What is a Title?

A legal document that proves property ownership.

What is Title Insurance?

A type of policy that insures a home buyer or investor against any errors made in the title search and defects in the title that were not listed in the title work or abstract. It is normally issued by a title company.

What is a Title Search?

A process providing proof of legal ownership of a property by researching municipal record - usually performed by a title company.

What is Truth in Lending?

A federal law requiring lenders to disclose the Annual Percentage Rate, finance charges, payment schedule, and other disclosures within three business days after the receipt of a loan application on certain types of loan transactions

What is an Underwriter?

An analyst who reviews the supportive documentation to determine the risk associated with the loan request. The person who gives final loan approval.

What is Underwriting?

The process used by lenders in deciding whether to make a loan to the buyer. The lender carefully examines credit history, employment, and assets to determine if and how large a loan should be approved.