Mortgage & Finance

Equal Housing Lender. ©2023 Cinch Funding. Loan programs not available in all states, or to all consumers. All loans are subject to availability at the time of application and for terms that meet each individual consumer’s needs and qualification information. Loan applications are subject to credit and property approval. Cinch Funding encourages all consumers to consult with a tax advisor concerning the tax implications for the type of mortgage sought.

4050 W Park Blvd, Ste 110, Plano TX 75093 | 972-599-2454

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1. Choosing a lender

A. Although not required, we highly recommend only one lender for financing your new Landon Home or John R. Landon Home.
B. Knowledge and expertise with settlement procedures of a Landon Home are unmatched at Cinch Funding.
C. Preferred customer discounts for Landon customers thru aggressive pricing of rates and fees without the hassle of feeling like you are shopping at a used car lot.
D. There may be additional incentives available for closing your mortgage at Cinch Funding. Please get with your Landon sales manager to learn more.
E. Life is easier when you save on money, time, and stress. Choose a lender that has proven itself on delivering happy customers to closing on time over and over again.

2. Loan products and financing options

A. Conforming

• Loan amount of $726,200 or less
• Minimum credit score of 620
• Minimum 3% down payment
• Maximum debt to income ratios up to 50%

B. Jumbo

• Loan amounts above $726,200
• Minimum credit score of 660
• Minimum 10% down
• Maximum debt to income ratios up to 43%
• Typically requires additional cash reserves after closing

C. Government FHA/VA/USDA

• FHA loan amount up to https://entp.hud.gov/idapp/html/hicost1.cfm
• VA loan up to the conforming limit at 100% loan to value
• VA high balance available with a portion of down payment
• USDA in “rural” regions https://eligibility.sc.egov.usda.gov/eligibility/welcomeaction.do
• Government insured and guarranteed loans typically allow for lower credit scores, higher debt to income ratios, and shorter time constraints after credit events.

3. Step by step guide to knowing you are on your way to closing on time

A. Pre approval

• Online appication
• Customer review

B. Updated document request

C. Rate lock

• Finalize your terms of your loan

D. Loan disclosure/re-disclosure

• Electronic disclosures that confirm the terms of your loan.
• Many of these disclosures will be part of your official closing package so if there are any mistakes, changes, or questions please do let your loan officer know so they can be addressed well before consumation of your loan.

E. Processing

• Updated documentation will be reviewed by a loan processor to ensure it is sufficient and not extraneous in preparation for underwriting.
• Appraisal ordered
• Title work ordered
• Verifications ordered for employment, IRS, credit, etc..
• Documents imaged into secure document storage
• Submit to underwriting

F. Underwriting

• Credit approval (Underwriter issues an approval on your loan with conditions to be addressed prior to closing)

G. Processing 2

• Collateral review of appraisal
• Request and review any outstanding conditions
• Obtain homeowners insurance binder from your selected agent
• Request closing disclosure
• Credit refresh verification to ensure no substantial changes
• Resubmit to underwriting for clear to close

H. Underwriting 2

• Review and clear conditional items
• Clear to close!

I. Closing preparations

• Prepare initial closing disclosure
• Work with title to finalize instructions for closing
• Send documents to title company

J. Consumation / closing

• Scheduled 1.5 hour appointment at Stewart Title for settlement of transaction.
• Wiring of funds from lender to stewart title to be held for funding.
• Certified funds needed at closing from you will need to be either a cashier’s check or wire transfer via confirmed wiring instructions from stewart title.
• Funding documents sent from title to lender for review.
• Funding authorization provided by lender to access funds.
• Funding! Title to disburse funds to interested parties.
• A landon sales team member will call to notify you that your keys are available to move into your new home. Typically this occurs about 2 hours after you leave the closing.
• Congratulations!!!

Equal Housing Lender. ©2023 Cinch Funding. Loan programs not available in all states, or to all consumers. All loans are subject to availability at the time of application and for terms that meet each individual consumer’s needs and qualification information. Loan applications are subject to credit and property approval. Cinch Funding encourages all consumers to consult with a tax advisor concerning the tax implications for the type of mortgage sought.

4050 W Park Blvd, Ste 110, Plano TX 75093 | 972-599-2454

Privacy Policy | Website By Meredith Communications

1. How is my interest rate determined?

Two challenging questions that surround every loan are – How does a lender determine my interest rate? What can I do to ensure I get the best possible rate? To answer these questions, we must consider three criteria on which a lender bases their decision

Credit Rating – The credit score is the most important point in mortgage lending. The credit score is not the only aspect considered in lending, however in most cases it is the most crucial. Lenders will also look for multiple late payment occurrences over the last two years.

Ratios – Secondly, the borrower’s monthly obligations (this does not include utilities, phone, or items generally not reported on a credit report) are calculated and reviewed by lenders. Two ratios are determined, front-end and back-end. For most lenders, a “grade A” conventional loan is one in which a borrower has a front-end ratio less than 28% and a back-end ratio less than 36%. For example, a borrower has a gross monthly income of $4,000, a car payment of $350, a credit card payment of $55, and a new house payment of $1,000. The calculations are as follows:

$4,000/1,000 = 25% Front-end Ratio

$4,000/1,405 = 35% Back-end Ratio

Down Payment – Thirdly, the lender factors in the amount of a borrower’s initial down payment. The less money spent on the down payment means a higher interest rate charged by the lender. Simply stated, more risk for the lender equals a higher rate for the borrower. Even if a borrower has perfect credit and wants to put 0% down, their rate will generally be about ½% higher than a person who puts 10% down.

Ask Cinch Funding for details on lenders who accept 0% down payment loans. After a lender has considered the three points described above, the borrower’s application must pass the specifications set by an underwriting department for the loan to be approved.

2. What are my discount points?

Lenders generally charge discount points for the following purposes. 1 discount point equals 1 percent of the loan amount. Discount points are used to lower the interest rate. The discount fee is normally charged as a line item on your HUD or settlement statement at the time of closing.

3. How much should my closing costs be?

Your closing costs depend on the type of loan you decide is best for you. Depending on your home state, you normally pay the following amounts.

• Origination Fee: 1% of the loan amount – cost of establishing a loan
• Discount Points: Used to lower the interest rate (refer to Discount Points section above)
• Appraisal Fee: Dependent  on the house size
• Credit Report Fee: Charge for pulling your credit report from the credit bureaus (Refer to Credit Report question in this FAQS section)
• Underwriting Fee: Payment to the end investor for services provided
• Processing Fee: Payment to the lender for services provided
• Flood Certification Fee: Certification that your property is not in the 100 yr. flood zone
• Title Charge: Payment to the title company for closing your loan
• Recording Fee: Payment for filing fees depending on the state

Many of these costs are third party charges and cannot be negotiated by you or the lender.

4. What is the purpose of a credit report?

An important key point a loan officer considers when helping you decide which lender/program is best for you is to view your credit. The purpose of this report is to pull your credit history from each of the three major credit-reporting agencies: Equifax, Experian, and Trans Union. Your lender is required to use outside companies to acquire your credit report, as they are impartial to the findings on your credit report. Your account balances and account history on your report are verified. You will be provided with a “credit score”.

5. What is the difference between Conventional and FHA loans?

There are many differences between conventional and FHA loans. In this portion we will outline some of the major differences for you.

On FHA loans, the minimum down payment is 3.5%. On a conventional loan, the down payment must be at least 5%. Additionally, the money on a conventional loan must be “seasoned” (60 days in the bank) prior to purchasing the home or be proceeds from the sale of your existing home.

A FHA loan requires an upfront Mortgage Insurance payment; a Conventional loan does not. Both do require monthly Mortgage Insurance premiums based on the LTV.

The taxes will be the same on either type of loan. A common mistake is that people believe is their taxes will vary depending on the loan they choose.  The title company that closes the loan submits the taxes directly to the lender. If you reside in an attorney state, your representation is the one who orders the tax certificate from the appraisal district. Taxes reported to the lender will be included in your monthly loan payment. There is no mark-up or service charge over and above the actual tax amount.

Homeowner’s insurance works the same as taxes. You pay the lender for your policy amount on a monthly basis. The lender will escrow this amount and send it to your insurance company at the end of the year when renewal is due.

Interest rate differences will vary depending on the lender you choose. Most importantly, ALWAYS ask for the lowest rate for the type of loan you are obtaining.

The principal and interest portion of the payment is calculated by configuring the loan amount (MIP rolled into the balance on FHA) and term into an amortization schedule to calculate the payment amount. Ask your Cinch Funding representative for additional information on conventional and FHA loans.

6. What documents are commonly needed for approval?

• 2 Most recent pay stubs
• Last 2 year’s W-2’s
• Last year’s federal tax returns
• Last month’s bank statements
• Last 2 month’s additional assets statements (401k, IRA, Stock, CD, Etc.)
• Driver’s License
• Cancelled earnest money checks written to Landon Homes with coordinating bank statements
• If NOT a US Citizen: Valid VISA, EAD, or permanent residence alien card
• If 25% or more Owner-Self Employed: Last 2 year’s business tax returns, K-1’s, and current profit/loss and balance sheet
• If Relocating with your company: Relocation agreement to ensure all incentives are maximized
• If Divorced: divorce decree
• If previously went through Bankruptcy: All bankruptcy paperwork including discharge
• If a United States Veteran: DD-214 Honorable discharge and certificate of eligibility

Equal Housing Lender. ©2023 Cinch Funding. Loan programs not available in all states, or to all consumers. All loans are subject to availability at the time of application and for terms that meet each individual consumer’s needs and qualification information. Loan applications are subject to credit and property approval. Cinch Funding encourages all consumers to consult with a tax advisor concerning the tax implications for the type of mortgage sought.

4050 W Park Blvd, Ste 110, Plano TX 75093 | 972-599-2454

Privacy Policy | Website By Meredith Communications