Special Niche Programs |
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Universal Funding Offers
Special New Mortgage Programs for Your Unique Situation
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The "PMI
Eliminator" Programs
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Private
Mortgage Insurance premiums can cost homeowners up to
$2,000 per year or more in premiums attached to their
monthly mortgage payments. These premiums are used to
protect the mortgage lender from borrowers with little
equity or small down payments (less than 20%) who
default on their loans. However, paying these expensive
premiums is no longer necessary. Universal Funding
offers three effective strategies to eliminate costly
mortgage insurance premiums:
Option 1: PMI "Buyout"
This option allows borrowers to take a slightly
higher interest rate in exchange for eliminating PMI.
The exact amount of the rate increase may vary slightly
depending on your down payment amount or equity, but the
increase typically falls between the range of +.2% to
+.35%. For example: John Doe could choose a 7% interest
rate with a 10% down payment and be forced to pay PMI
every month, or John could take an interest rate
somewhere in the range of 7.2% to 7.35% and pay
absolutely no PMI. Although the slightly higher interest
rate will result in a slightly higher Principal &
Interest portion of the monthly payment, borrowers will
typically still come out significantly ahead by
eliminating the PMI portion of their monthly payment.
Another important issue to consider is that mortgage
interest IS usually tax deductible whereas PMI usually
IS NOT (consult your tax advisor).
Option 2: Combination (Subordinate) Financing
This option involves the use of a small second lien
mortgage that will allow your 1st mortgage to remain at
80% (or less) of the value of your home. This approach
is usually structured in one of three ways:
|
|
First Mortgage |
Second Mortgage |
Equity (or Down
Payment) |
|
1 |
80% |
10% |
10% |
|
2 |
75% |
15% |
15% |
|
3 |
80% |
15% |
5% |
With all
three of these breakdowns, only a 10% or less down
payment is required. However, since the amount of the
first mortgage does not exceed 80% of the value of the
house, absolutely no PMI is required. Although the
slightly higher interest rate of the second mortgage
will result in a slightly higher overall monthly
payment, borrowers will typically still come out
significantly ahead by eliminating the PMI portion of
their monthly payment. Another important issue to
consider is that mortgage interest IS usually tax
deductible whereas PMI usually IS NOT (consult your tax
advisor).
Option 3: Refinance
Your home may have appreciated since your purchase
or since last time you refinanced. This increased value
could allow for a new mortgage to remain less than 80%
of the value of the property and therefore PMI would not
be necessary on your new loan. You could be in a
position to reduce your interest rate and stop paying
PMI.
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No Points /
No Closing Costs Loans
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Universal
Funding invites you to consider one of our most popular
programs which is available on all fixed rate loans and
most ARMs. By taking a slightly higher interest rate, we
will pay all of your closing costs including all lender
fees, all title charges, credit report, and appraisal
fees. Escrow reserves and prepaid interest are expenses
that will remain the responsibility of the borrower.
This approach is very useful for borrowers who wish to
refinance without any increase to their current mortgage
balance or for borrowers looking to minimize their cash
requirements for the purchase of a home. Also consider
that our No Points & No Closing Cost option can be
combined with one our "PMI Eliminator" programs for very
creative and flexible control of your mortgage financing
dollars.
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Streamline Refinances
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Good
credit borrowers looking to refinance to reduce their
interest rate or the term of the loan may qualify for
Universal Funding's streamline refinance. This approach
utilizes Fannie Mae's computerized Desktop Underwriting
system to evaluate your application and issue loan
approvals in significantly less time than conventional
underwriting. Also, approvals that are issued through
this system typically require much less documentation.
It is not uncommon for a streamline refinance to require
(1) pay stub from each borrower, (1) W2 from each
borrower, and a quick and easy "drive-by" home
appraisal.
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No Income
Verification Loans
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For
self-employed borrowers who do not wish to go through
the hassle of gathering or documenting all the paperwork
that would be need to verify income (i.e. tax returns,
profit & loss statement, business financial statements,
etc.), Universal Funding offers No Income Verification
Loans. This approach allows the borrower to simply
"state" his or her income on the application without
having to prove it through documentation. This type of
program (a.k.a. "Stated Income," "Low Doc," or
"Alternative Doc" loans) is not without its caveats. For
example the interest rates are typically .5% - 1% higher
than income documenting programs, (which compensates for
a slightly higher risk for this style of loan). Also,
the borrower typically must document cash "reserves"
equivalent to 6 months of the monthly mortgage payment (PITI)
in addition to 20% equity in the home or a 20% down
payment.
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No Income, No Asset
Loans
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For
borrowers who do not wish to document any income or cash
"reserves," Universal Funding offers No Income, No
Asset Loans. This approach allows a borrower to leave
all of the income, checking, savings, & cash "reserves"
sections of the application completely blank. Approval
is based entirely on the borrower's credit & equity or
down payment. This type of program (a.k.a. "No Ratio,"
or "N.I.N.A.") is also not without its own caveats. For
example, interest rates are typically 2% - 3% higher
than income and asset documenting programs (which
compensates for a moderately higher risk for this style
of loan). Also 20 - 30% equity or down payment is
usually required.
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ARM Alternatives
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This
hybrid product (a.k.a. "2/1 Buy Down", or "Lender Funded
Buy Down") blends the security of a fixed rate with the
appeal of a low ARM rate. The initial start rate is
typically competitive with 1-year ARM rates. At the end
of the first year the interest rate will increase by
exactly 1%, and at the end of the second year the
interest rate will increase by an additional 1%. After
the second increase, the interest rate is FIXED for the
remainder of the term of the loan.
Example of
an ARM Alternative
|
Start Rate |
6% |
|
End of the first
year |
7% |
|
End of the second
year |
8% |
|
Third year to the
end of the loan |
8% |
This is
an excellent option for borrower looking to minimize
their monthly payment while getting settled into a new
home, but also do not want to worry about refinancing
into a fixed rate in the future.
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Second Home Financing
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Financing
for non-owner occupied homes or vacation homes is
available for most loan programs adding 1 to the quoted
points. Financing up to 90% of the property value is
available.
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Investment
Property Financing
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Financing
for rental properties is available for most loan
programs by adding 1.5 to the quoted points. Financing
up to 90% of the property value is available.
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Universal Funding, LLC is a licensed mortgage company in the states of Maryland and
District of Columbia.
©2007 Universal Funding, LLC. All Rights Reserved.
5620 St. Barnabas Rd., Suite 290, Oxon Hill, MD 20745
Phone 301.505.2515 Fax 301.505.2518 Email
info@universalfundingllc.net
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