How do I get rid of private mortgage insurance?
Your mortgage insurance will be dropped when you retain a 22% equity position. It may be dropped at a 20% equity position if you contact the lender and request it to be dropped. You may also eliminate mortgage insurance when you refinance, if you owe less than 80% of what it is appraises for.

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Do I have to have an escrow account for taxes and insurance?
Yes, you are required to carry an escrow of taxes and insurance if you have less than a 20% equity position. If your equity position is greater than this you maybe able to eliminate the account; however, some lenders charge additional fees to eliminate an escrow account.

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What is a yield spread program?
A yield spread premium is what the lender is paying the mortgage broker to deliver your loan to them. It is their commission for the services they perform and must be disclosed to you on your settlement statement. Mortgage bankers are lending you the money themselves and then selling your loan to a lender, therefore they do not have to disclose what they are being paid because they are paid after your loan is closed.

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What is an APR?
Quite simply the APR is calculated by calculating your payment and subtracting all of your prepaid finance charges from the loan amount and recalculating your interest for the term. This formula was derived for you to shop various interest rates that are quoted to ensure you are getting the best deal. The closer the APR is to the actual interest rate, the better the deal. In addition to this, the APR, by law, is not allowed to vary from a selected tolerance from application to settlement.

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What is a prepayment penalty?
A prepayment penalty is paid to the lender if you terminate you loan early. You should be aware of prepayment penalties and always ask your lender if the exist. None of our A-paper loans carry prepayment penalties.

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What is prepaid interest?
This is the amount of interest that accrues from the date of settlement until the day of your first mortgage payment. If you close on a purchase on the first of the month, a full 30 days will be due. If you close on the 30th day of the month, one day would be due.

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How much of a down payment do I need to make?
We have programs available that will let you borrow 100% of the sales price of a home, and often even more. However, to borrow this much money requires mortgage insurance and often is very credit score driven.

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If I have a bankruptcy, can I still get approved for a mortgage?
Depending on the type of loan you apply for different rules will apply. Generally the rule is two years discharged for FHA and four years discharged for conventional loans. However, Omega Financial Services, Inc. has a B/C lending department that may be able to locate programs that are less stringent.

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When is the best time to lock in an interest rate?
Trying to predict what interest rates are going to do form one day to the next is nearly impossible. Interest rates move with financial markets and the economy. Your best bet is to lock an interest rate that you are comfortable with and also fits your monthly payment goals. Find out from your broker what kind of market we are in - stable, declining or increasing - and what the 30 day average is. If it is a stable market you could reasonably expect to get the 30 day average interest rate. If it is an increasing market you should be able to lock a rate within a + .25% variance of the average. A decreasing market is were most people make mistakes. They hear this and get greedy - holding out for the best interest rate. This, however, is a dangerous market because history has proven that once the bottom is reached, rates will increase rapidly past the 30 day average. In this market is is advised to get a 60 or 90 day average, if the 30 day average is significantly lower than this, you are lucky to get the 30 day average.These, however, are just a rules of thumb and even the most skilled mortgage professionals cannot predict the market, so how can you expect to? Lock in an interest rate that leads to a comfortable payment. Three possible outcomes can occur: rates get better, worse, or stay the same. If you lock in your interest rate two out of the three outcomes can rule in your favor, whereas if you float, you only have one outcome that can rule in your favor.

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Please email us at omega@omegafsi.com or give us a call toll free at 1-800-797-0760 if you have a question not answered
on this page.