Frequently asked questions
Q. What is your minimum FICO score requirement to get a home loan?
A. Your FICO score depends on the type of loan that you are applying for. VA loans require a minimum 620 FICO score. FHA loans can be done with as low as a 580 FICO score, but you’ll pay a higher interest rate than their more preferred score of 620+. To get a conventional loan, you can also get approved all the way down to a 620 score, but to get the best rates, you need a higher score of 660-680 or above.
Q. What is your minimum down payment requirement?
A. Minimum down payments are based on the type of loan that you are applying for, and your FICO score. In general, VA loans require no down payment. FHA loans require a 3.5% down payment. And conventional loans can be done with as little as a 3% down payment (if your FICO is 720+) or anywhere from 5%-20% down, dependent on your credit score and the size of loan you are looking for. Jumbo loans require a minimum 10% down payment.
Q. Do you lend in states other than Nevada?
A. Premier Mortgage Lending is only licensed to lend in the State of Nevada.
Q. How much are your lender fees?
A. Premier Mortgage Lending does not charge any lender fees. We have no loan origination fee, no points, and no junk fees. Operating as a Mortgage Broker gives us the ability to offer “True No Fee Financing” at competitive market interest rates.
Q. So if Premier Mortgage Lending does not charge any lender fees, how do you make your money?
A. Mortgage Brokers are paid by the Lender, not by you, the borrower. The Lender that we broker your loan to pays us for the servicing value of your loan so we do not have to charge anything to our borrowers. Which can save you thousands of dollars in closing costs!
Q. Even though you charge no lender fees, there are still other closing costs. How much would those typically run?
A. Closing costs typically run around 2.5% of your purchase price. These closing costs consist of third party fees – such as appraisal, credit report, escrow and title company fees and setting up your impound account for the payment of taxes & insurance.
Q. Why do we have to provide so much paperwork to get a loan?
A. I think we all can agree that getting a home loan today is much more difficult than it used to be! The housing crash resulted in the government establishing very strict mortgage lending guidelines. Borrowers are now ‘required’ by Federal Law to prove, beyond the shadow of a doubt, that they are capable of paying the mortgage payment. We not only have to collect your W-2s, paystubs, tax returns, bank statements, etc – but now, once again by Federal Law we have to “verify the authenticity” of your documentation through independent 3rd party verification companies. I guess the good thing is, we shouldn’t see the big rash of foreclosures and short sales in the future which put a blight on the housing market and the entire world-wide economy!
Q. What is a Debt-To-Income ratio (DTI)? And what should my DTI be to get qualified for a home loan?
A. A debt to income ratio is a math equation which compares your income to your expenses. Putting it simply! We calculate two different DTI ratios when we qualify you for a home loan.
TOP RATIO: The first ratio is a relationship between your “Gross Monthly Income” and your total house payment – the PITI. The PITI should “ideally” be no more than 28%-33% of your gross monthly income.
BOTTOM RATIO: The second ratio we run adds your PITI payment + all other monthly payments (i.e. auto loans, consumer loans, your minimum credit card payments, etc.). We take that total number of ALL your monthly payments and divide that into your Gross Monthly Income. That ratio should “ideally” be at 36%-43%. But once again, we do have the ability to get you approved at a back-end ratio of up to 50%!
Q. Why do we need an appraisal? Especially when the home we are buying is new construction!
A. Appraisals are needed on all loan transactions. In the case of newly built homes, the appraisal ensures you as the buyer that the home you are purchasing has a fair market value at the sales price you are paying for the home. A homebuilder can dictate sales price, but an Appraiser is a disinterested third party who determines value based on comparable sales.
Q. What is PMI or MIP?
A. PMI is Private Mortgage Insurance. This is generally required when you are doing a conventional loan and putting down less than 20%.
MIP is Mortgage Insurance Premium. This is a requirement of an FHA loan. There are two different premiums for FHA, one is paid monthly included in your mortgage payment and second one is usually financed into your loan amount – but it can be paid in cash.
Q. Why would we use Premier instead of just going to our bank to get our home loan?
A. There’s actually a really good answer to that question! Banks, as well as Mortgage Companies, are large financial institutions. They have huge staffs, layers of Managers, and many branches – some of them profitable – others not so much. Every employee in those companies needs to get paid from the income received from your loan. And every Production Manager receives a little compensation from your loan. In contrast, Premier Mortgage Lending is a small local Mortgage Broker. We don’t need to support unprofitable branches or layers of management. Your Loan Officer receives a commission on your loan, and that’s it! A Mortgage Broker’s job is to find you the best loan for your situation at the cheapest cost. So, the answer to your question is “we will probably save you a lot of money and you’ll have a more pleasant experience dealing with Premier.”