Frequently Asked Questions

1.What is a 30-year fixed rate conventional loan?
A 30-year fixed rate mortgage loan provides you with the security of a monthly principal and interest payment that never changes because the interest rate never changes during the term of the loan.

2. What makes the $ amount of the loan change when you have a fixed interest rate?
The only change could be an increase or decrease in the amounts the lender collects for mortgage insurance, real estate taxes, or property insurance (escrow payments).

3. What is a 15-year fixed rate conventional loan?
A 15-year fixed rate mortgage reduces the amount of interest paid over the life of the loan by accelerating the principal reduction.

4. What are Prepaid Finance Charges?
These are certain charges made in connection with the loan and which must be paid upon the close of the loan. These charges are defined by the Federal Reserve Board in Regulation Z and the charges must be paid by the borrower. Non-Inclusive examples of such charges are: Loan origination fee, "Points" or Discount, Private Mortgage Insurance or FHA Mortgage Insurance, Tax Service Fee. Some loan charges are specifically excluded from the Prepaid Finance Charge such as appraisal fees and credit report fees.

5. What are points?
In essence, "points" is interest paid in advance. By paying interest in advance, the payments over the term of a loan are reduced. The frequently heard term "point(s)" actually refers to that percentage of the total cash being borrowed. For example: 1 point on a $100,000 loan would equal $1,000 ($100,000 X .01). 3 points on a $250,000 loan would equal $7,500 ($250,000 X .03).

6. What should I do first: Find a home or get qualified?
There is no wrong answer to this question, however; getting pre-qualified does allow you to go house shopping with a solid idea of what you can and can not afford. It will also put you in a stronger negotiating position with the seller by informing them that you will not be denied when the time comes to get final approval for a loan.

7. What is the difference between FHA, VA, and Conventional loans?
The FHA and VA loans are loans that are insured or guaranteed by the federal government against default. These loans generally will have guidelines less restrictive than other types of loan, but they also have limits. A conventional loan is a loan that is not insured by the federal government and usually meets a generally accepted set of standards.

8. After we submit a project using your submission form, when will we hear from you?
We will call you usually within one business day after reviewing your information.

9. What are your rates?
Rates depend on the type of financing, the type of property and the credit rating of the principals.  Long-term fixed rate loan rates are generally higher than adjustable loan rates.  We can provide a range of rates if you ask, but not an actual rate until we have an opportunity to review your loan package.  Even then, rates are subject to change until you receive a lock.

10. How long does it take to close?
That depends on how quickly we can receive the information we request.  Most “delays” are actually caused by the potential borrower. If everything goes smoothly, usually within 45-60 days.   Some “low-doc” loans may be able to close in as little as 30 days. Some private equity loans can potentially close in a week

11. What does it cost to apply for a loan?
At Finance America Online, pre-approval is free.  If you decide to move forward, you will be required to deposit funds for third-party reports (e.g., appraisal, property inspections, legal, etc.).

12. What is the difference between a recourse loan and a non recourse loan?
A recourse loan means the loan is guaranteed by the borrower personally.  A non-recourse loan means a third-party organization is formed for the property, such as an LLC or corporation.  If the loan defaults for any reason, the mortgage holder would then take control of the LLC or corporation..

13. What is Net Operating Income (NOI)?
NOI is gross rent or income less expenses on the property.

14. What is ADS (Annual Debt Service)?
Annual Debt Service is the monthly principal and interest times 12 months (not including taxes and insurance in the ADS).

15. What is a CAP Rate?
CAP rate is a measurement of the rate of return on an investment.  You calculate this by taking the NOI and dividing it by purchase price.  The NOI divided by the CAP Rate = Value

16. Can I order an Appraisal or use an existing appraisal?
Finance America Online does not allow for the use of existing appraisals.  We will order the appraisal upon receipt of broker and borrower’s fully executed acceptance of Conditional Loan Approval.

17. Can a borrower take title in the name of corporation or other non-person entity?
Yes, as long as such entity is legal.

18. How fast can you close the loan?
We generally close the loan in ten (10) days from approval. We look at all scenarios and try to work with you to best suit your needs.

19. How many loans can I obtain through you?
You can obtain an unlimited amount of loans through us.

20. What are the interest rates?
We have varying loan programs with interest rates usually between 12-16% depending upon the strength of the borrower, the property, experience, past history, etc.

21. How long is the average loan for?
The average loan is for five (5) years, although we do have programs from six (6) months up to thirty (30) years.

22. Are there penalties if I pay off the loans early?
Sometimes, we will discuss with you on a case by case basis.

23. What sizes of loans do you fund?
We fund loans anywhere from $100,000 and up.

24. How do you determine what repairs are needed for the property?
An inspector will inspect your property prior to closing to determine the amount of repairs needed. This will also help to determine the appraisal amount.

25. Can Finance America Online lend to Foreign Nationals or Non-Permanent Resident Aliens?
Yes