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1.	What are the different loan documentation types? Answer
2.	What is the difference between a fixed-rate loan and an adjustable-rate loan? Answer
3.	How is an index and margin used in an ARM? Answer
4.	How do I know how much house I can afford? Answer
5.	How do I know which type of mortgage is best for me? Answer
6.	What does my mortgage payment include? Answer
7.	How much cash will I need to purchase a home? Answer
8.	Can You Explain the Pay Option ARM to Me? Answer

Q :	What are the different loan documentation types?
A :	There are several different types of loan documentation. Below is a synopsis of each: Full Doc - Provide the last 2 years worth of W2s and/or 1099s and last two paystubs. Employment, income, rental/mortgage history, and assets are verified. Debt-to-Income ratio is calculated to determine qualification for a particular loan product. Alternative Doc - Same as full doc, except the last 12 to 24 months worth of bank statments are used to document past and present income. Debt-to-income ratio is calculated to determine qualification for a particular loan product. State Income/Verified Assets (SIVA) - Employment/Source of income is verified but dollar amount of income is not. Rental/Mortgage history and assets are verified. Debt-to-Income (DTI) ratio is calculated to determine qualification for a particular loan product. Stated Income/Stated Assets (SISA) - Income and Assets are stated on the application. Source of income is verified, but dollar amounts and assets are not. Debt-to-Income ratio is not calculated. No Ratio - Same as Stated Income/Stated Asset except that income data is omitted from the loan application. Debt-to-Income (DTI) ratio is not calculated. No Doc - Employment and assets are stated on the loan application. Income is omitted, thus Debt-to-Income (DTI) ratio is not calculated. Sufficient income is stated to cover down payment, closing costs and 2 to 4 months Principal, Interest, Taxes and Insurance (PITI). Super No Doc - Neither employment, income, assets or liabilities are stated on the application. Schedule of Real Estate Owned with mortgages must be included, but rents are not. Debt-to-Income (DTI) ratio is not calculated. No Income/No Asset (NINA) - Same as Super No Doc where neither employment, income, assets or liabilities are stated on the application. Schedule of Real Estate Owned with mortgages must be included, but rents are not. Debt-to-Income (DTI) ratio is not calculated.

Q :	What is the difference between a fixed-rate loan and an adjustable-rate loan?
A :	With a fixed-rate mortgage, the interest rate and payments stay the same, either during a particular period of the loan or for the life of the loan. With an adjustable-rate mortgage (ARM), the interest changes periodically, typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage will remain stable for the duration of the fixed period, payments on an ARM loan will likely change at particular intervals. There are advantages and disadvantages to each type of mortgage. Please apply online using our secure server, or call or email us to allow us to help you decide which product is best for your situation.

Q :	How is an index and margin used in an ARM?
A :	An index is an economic indicator that lenders use to set the interest rate for an ARM. Generally the interest rate that you pay is a combination of the index rate and a pre-specified margin. Three commonly used indices are the One-Year Treasury Bill, the Cost of Funds of the 11th District Federal Home Loan Bank (COFI), and the London InterBank Offering Rate (LIBOR).

Q :	How do I know how much house I can afford?
A :	Generally speaking, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value. With options such as interest-only payments and by selecting adjustable rate mortgages, you can often afford more house than the calculations the figures above would provide. Please apply online using our secure server, call or email us and we will be glad to help you determine exactly how much you can afford!

Q :	How do I know which type of mortgage is best for me?
A :	There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, including your current financial picture and how long you intend to keep your house. D & J Loans can help you evaluate your choices and help you make the most appropriate decision. Please apply online using our secure server, call or email us and we will be glad to help you determine which type of mortgage is best for you!

Q :	What does my mortgage payment include?
A :	For most homeowners, the monthly mortgage payments include three separate parts: Principal: Repayment on the amount borrowed Interest: Payment to the lender for the amount borrowed Taxes & Insurance: Monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company. If the option to pay taxes and insurance yourself is selected, then your mortgage payment includes only the principal and interest as specified above. Should you choose the interest-only option for your mortgage payment, then the mortgage payment pays only the interest on the loan. This option is PERFECT for helping you to qualify for more home than you could otherwise afford, and it should also be considered because the value of the property will almost ALWAYS appreciate faster than the rate at which you can pay down your mortgage. Thus, you can let the equity build up in the home pay the balance, while you use "your" funds for other more important or quality of life items. Please apply online using our secure server, call, or email us and we'll be happy to show you the options of what your mortgage payments include and help you to determine the best option for you!

Q :	How much cash will I need to purchase a home?
A :	The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply: Earnest Money: The deposit that is supplied when you make an offer on the house Down Payment: A percentage of the cost of the home that is due at settlement Closing Costs: Costs associated with processing paperwork to purchase or refinance a house With many of our programs, and the proper structuring of your transaction, we help you purchase your home with no out of pocket expenses, or have those expenses reimbursed to you at closing! Please apply online, call, or email us, to enable us to provide you a Good Faith Estimate of those costs.

Q :	Can You Explain the Pay Option ARM to Me?
A :	What is a Pay Option ARM? A Pay Option ARM is an Adjustable Rate Mortgage that gives borrowers the flexibility of choosing how much to pay each month between 4 payment options. Each month, the borrower may choose from any of these 4 payment options based on their needs. What Type of Borrower's Benefit Most From a Pay Option ARM? Self-Employed and Commissioned Borrowers - They can adjust their monthly payments according to their monthly earnings. Borrowers with Consumer Debt - Lower home payments allow these borrowers to pay off higher interest debt. Move-Up Homebuyers - Low Start Rate and Interest-Only option gives buyers more home purchasing power. How Does a Pay Option ARM Work? The Pay Option ARM works by giving borrowers the choice of 4 different payment options each month. Each option has unique advantages and borrowers can select the best option for their needs on a month to month basis: Interest-Only - A low payment option that keeps monthly payments manageable while paying all accrued interest. No part of the payment is applied toward principal. 15 Year Fully Amortized Payment - Provides fastest equity buildup and SUBSTANTIAL savings on interest. Pays off mortgage, (principal and interest) in full, in 15 years in roughly equal payments. 30 Year Fully Amortized Payment - Traditional loan payment, designed to pay off mortgage, (principal and interest), in 30 years. Minimum Payment - The lowest payment option that includes principal and interest. Frees up money and keeps monthly payments low. If amount is not sufficient to pay minimum interest due, negative amortization will occur.