Get that mortgage OK'd in less time


January 21, 1996|By Michael Gisriel

Dear Mr. Gisriel: Someone told me it takes 45 days to get a mortgage approved. Is there any way to speed up the process?

John Glover


Dear Mr. Glover: Yes. According to Tom Champion of Beach Federal Mortgage, lenders offer alternative documentation programs. The bulk of time used in the mortgage process is in mailing and receiving written verification from your employer and asset accounts. Lenders now accept for income verification two years of W-2s, current pay stubs covering one month of income and verbal verification from your employer that you are still employed. Rather than a written verification from your bank or banks on the amount of cash you have for closing, the lender will accept three months of bank statements. The lender will need all pages of the bank statements and explanation for any large deposits made in the last three months. Talk with your lender and get the complete list of documents needed for mortgage application. The key to rapid mortgage approval is to come to mortgage application well prepared. Mortgage approval can be as soon as 10 days and should be no more than 30 days.

Dear Mr. Gisriel: I recently purchased a home with a fixed interest rate of 8 percent, but my Truth-In-Lending Statement says I am paying 8.25 percent APR. Why is there a difference in the two rates?

Brian Levin


Dear Mr. Levin: The 8 percent is your note rate. The note rate is the amount of interest you are paying on the outstanding mortgage balance. The interest rate on the Truth-in-LendingStatement is stated as an annual percentage rate and includes any fee you are paying in addition to the note rate. These fees may include loan origination points, discount points, funding fee, prepaid interest, mortgage insurance, buy-down funds, underwriting fee, commitment fee and document review fees. These fees must be included in the calculation of the Annual Percentage Rate, according to the Federal Truth-in-Lending Regulation. It should be noted that some of these fees are not being charged because of your Loan to Value (LTV) and type of mortgage.

The Truth-in-Lending Statement is required under Regulation Z, which requires the disclosure of the credit transaction fees so you may shop for the best credit terms. Thus, your mortgage interest rate is really still 8 percent.

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