the Ultimate Financial Power Tool
Take control of your finances and find the home loan that's right for you with the help of the valuable information in this guide from Countrywide Home Loans.
Find the home loan that's right for you with the help of the valuable information in this guide from Countrywide Home Loans, part of the Countrywide? Financial Corporation, America's #1 Home Lender1. With a wide range of loan options, Countrywide has one of the most powerful arrays of loan programs in the industry and can offer home loan solutions for almost any financial situation.
In fact, Countrywide created its Full Spectrum Lending division to specialize in finding flexible financial solutions for borrowers who are self-employed, have high consumer debt or less-than-perfect credit histories. Backed by Countrywide Home Loans' industry-leading expertise, resources and technology, its Full Spectrum Lending division has loan programs that are designed to help borrowers qualify quickly and easily. We've filled this home loan guide with information you need to help you choose the right loan for your situation. Our hope is that you are able to use the information presented here to enjoy the benefits and financial power of home ownership more than ever.
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Your Home - The Ultimate Financial Power Tool Choosing the Right Loan for You 8 Critical Questions to Ask when Choosing a Lender The Options You Want. The Choices You Need
--the Ultimate Financial Power Tool
For example, homeowners with high balances on multiple credit cards can often pay off those credit cards and even other debts by refinancing their existing home loan. Let's look at an example of how a refinance loan could consolidate and pay off debt, save on monthly mortgage and credit card payments, and often provide you with additional tax deductions (consult your tax advisor).
You already have access to what may be the most powerful financial tool available to help you reach your financial goals - your home. The experts at Countrywide Home Loans want to help you make the smart financial move with a home loan that lets you take control by consolidating debt and possibly even lowering your monthly payments.
Current Home Loan Credit Card #1 Credit Card #2 Credit Card #3 Total
Balance $152,000 $10,000 $12,000 $8,000 $182,000
Monthly Payment $1,132 $300 $360 $240 $2,032
New Payment $1,361 $0 $0 $0 $1,361
$670 each month!
If a homeowner with the financial scenario above consolidated his/her higher interest debt using the equity from their home, then that homeowner would have a mortgage payment each month of only $1,361, with total monthly savings of $670.75!
Note: The above scenario is based on the following: Original loan terms assume a $155,000 1st Mortgage, with 7.95% interest. Credit card payment assumes 3% of balance. The refinance loan terms assume a 3-year fixed adjustable (3/27): 3-year pre-pay, 2 points, 7.75% interest with an 8.87% APR. Does not include tax and insurance.
Choosing the Right Loan for You
Finding the right home loan for your specific situation depends on many different factors, including: ? What is your present financial status? ? Are you on a fixed income or do you receive annual pay raises and/or bonuses? ? Are your finances likely to change? ? How long do you expect to live in your house? ? Do you mind if your payment changes during the term of the loan? ? Do you have money saved for that proverbial "rainy day" and its unexpected or emergency expenses?
The financial experts at Countrywide Home Loans can help you find the answers to these questions and others you might have. To help you use the financial advantages of homeownership more effectively, here is a brief description of the basic types of home loans available:
Loan Type 1st Mortgage
Mortgage Terms Fixed Rate
How is Interest Rate Set? Interest rate is influenced by 10year Treasury bond Interest rate is tied to the Prime, LIBOR, Treasury or COFI index
Typical Terms 15, 20, 25 and 30 years
A Smart Choice For Homeowners Who: Plan to stay in their home for more than 5 years and want the confidence of long-term payment stability Want to live in their homes for a short period; and for buyers who need the lowest possible payments in the short term. May also be a good fit for those with assets to manage higher payments. This is a good option if your income will likely increase in the future.
The interest rate changes (usually after a set period of time) with a limit on how many percentage points it can increase above the original amount over the term of the loan.
Loan Type 1st Mortgage
Mortgage Terms Combination (Hybrid ARM)
How is Interest Rate Set? After the initial fixed period, interest rate is tied to the Prime, Treasury, LIBOR or COFI index
Typical Terms Allows homeowners to enjoy the stability of a fixed principal and interest payment for 3, 5, 7, or 10 years, after which the rate can usually adjust 15 years
A Smart Choice For Homeowners Who: Are burdened with a high amount of consumer debt (a combination rate typically allows for a higher %). Want an increased ability to make on-time mortgage payments which could help credit standing with the goal of refinancing at a lower interest rate later. Want a specific sum of money for a major life event need, for example: home improvement, debt consolidation, college tuition, to pay off a car loan or any other major expense. Want to access their home equity as they need it and pay as they go. This is another good choice for handling home improvement, debt consolidation, college tuition or an unplanned expense.
Interest rate is fixed and usually linked to long-term interest rates
Home Equity Line of Credit (HELOC)
Interest rate is variable and usually connected to the prime rate
Payments (like a credit card) start when the borrower uses the money. Borrowing can last from 5 years, usually capping at 10 years, starting the repayment period. 15 to 20 years
125% Loan to Value (LTV)
Interest rate is fixed and usually linked to long-term interest rates
Have no equity in their homes and need money for handling home improvement, debt consolidation, college tuition or an unplanned expense.
8 Critical Questions to Ask
Rates, lenders and conditions are not always what they seem. Ask some important questions before you choose a loan.
1 What is my APR?
The annual percentage rate (APR) reflects the effective cost of your loan on a yearly basis taking into account such items as interest, mortgage insurance, most closing costs, points and loan origination fees. Because of these other costs, this number is often higher than a quoted rate. Always ask a lender to calculate the APR in order to understand the "true cost" of your loan. If the lender will not or does not openly disclose the APR, chances are they are hiding some costs that will show up at closing. Countrywide Home Loans will show you - in a written estimate - the terms of your home loan including its APR - with no surprises, no hidden costs, no extra fees tacked onto your rate just before you sign the papers.
when Choosing a Lender:
2 Who will service my loan?
Often the company initially quoting you rates on a home loan is only a broker or middleman who represents - or will sell your loan to - other banks or lenders who actually "service" the loan throughout its term. In fact, your loan may be sold to other lenders more than once, leaving you with the uncertainty of who to make monthly payments to, where to send correspondence, new account numbers and knowing whether or not payments have been correctly applied to your loan. Countrywide Home Loans is part of the Countrywide? family - America's #1 residential mortgage servicer. We look forward to having you as a member of the Countrywide family and to providing you with excellent service for the entire length of your loan term.^
3 How many applications are approved?
Nobody likes rejection, especially when you're working hard to find financial solutions. While many of the larger banks may not even offer non-prime loans (for borrowers with less-than-perfect credit), the approval rate for this category of loan is typically lower than for other types of loans. Countrywide created its Full Spectrum? Lending division in order to say "yes" to more borrowers with less-thanperfect credit. We specialize in understanding the needs and circumstances of all types of homeowners. As such, it's no coincidence that historically we have approved 4 out of 5 submitted loan applications.**
4 How big is the institution behind my loan?
Many companies jump into the home loan market when rates are low and loan applications are plentiful, only to disappear and "sell" their loan portfolios when the opportunities tighten up. At any given time there are several newcomers making lots of "noise" about getting
you a great loan. For a lender to stay in business for the long run, however, it takes expertise, experience and resources. For over 35 years, Countrywide has earned the trust of the nation's home-buyers one loan at a time and shares a long and respected heritage of providing hard-working American homeowners with innovative, problem-solving loan options. Home loans are what we do, and we do them better.
5 What is my rate lock?
Be careful! When a loan broker quotes you a low interest rate on a 15- or 30- year fixed rate loan, be sure to ask whether that rate is locked for the entire time it takes to close the loan. Often, the rate you are quoted is at a lower, 10- or even 30-day rate - much shorter than the time typically necessary to actually complete all documents, process and close your loan. This can result in a higher rate at closing than what you were quoted originally - a potentially costly difference. Be aware that if interest rates rise and the lock has expired, you'll receive the prevailing rate. It's difficult to take control of your financial situation without any choices. Unfortunately, many lenders who offer a home loan program for borrowers with lessthan-perfect credit offer just that - a single home loan program. Take it or leave it. Leave it, and call Countrywide Home Loans. After all, we have a wide array of loan programs specifically for homeowners who need more understanding and flexibility when it comes to their home loan needs. We can often offer borrowers at least 2 or 3 options from which to choose.
6 What are my loan options?
8 Are you specialists in helping individuals with less-than-perfect credit loans? With many lenders, your past is an important part of whether or not you qualify for a new home loan. That's because most lenders aren't specialists in finding solutions for homeowners with less-than-perfect credit histories.
7 How long will it take to approve my loan?
There are few things more stressful than waiting to know if you've been approved for a loan that can change the course of your financial future.
Countrywide created its Full Spectrum? Lending division specifically to offer homeowners with different types of credit histories sound choices to help them take control of their financial lives. It's why we have such a wide selection of loan programs and have historically approved 4 out of 5 applicants.**
Once we've received your completed application our goal is to notify you within 24 hours whether or not you have been approved for a home loan.
The Options You Want
Countrywide Home Loans is the trusted mortgage lender focused on helping lower monthly debt payments at competitive rates.
? Want to lower your monthly payments? ? Want to take control of your financial life?
The Choices You Need
Call the financial freedom experts at Countrywide Home Loans today: 1-888-265-3662
Source: Inside Mortgage Finance (Feb. 4, 2005), Copyright 2005. ^ As of December 2004, Countrywide Home Loans services 97% of the loans it originates through its retail and wholesale divisions. **Based on a credit-only review of applications submitted to underwriting at Countrywide's Full Spectrum Lending Division.
1. Source: *Inside Mortgage Finance (Jan. 28, 2005), Copyright 2005
2. Refinancing may increase the total number of monthly payment and/or the total amount paid when compared to your current situation. 3. National credit card average rate as of 05/15/05, Bankrate.com
Equal Housing Lender. ? 2006 Countrywide Home Loans, Inc., 4500 Park Granada, Calabasas, CA 91302. Trade/servicemarks are the property of Countrywide Financial Corporation and/or its subsidiaries. Full Spectrum? Lending is a division of Countrywide Home Loans, Inc. Arizona Mortgage Banker License Number BK8805; Licensed by the Department of Corporations under the Calif ornia Residential Mortgage Lending Act; Georgia Reg. #5929; Illinois Residential Mortgage Licensee (# 0139) by the Of f ice of Banks and Real Estate, Mortgage Banking Division, 310 South Michigan Av enue, Suite 2130, Chicago, IL 60604, (312) 793-1409; Massachusetts Mortgage Lender License No. ML 1623; this is not an offer to enter into an interest rate lock-in agreement under Minnesota law; Licensed by the New Hampshire Banking Department; New Jersey (818) 313-6526, Licensed Mortgage Banker, NJ Department of Banking and Insurance; Licensed Mortgage Banker, NYS Banking Department; Registered with the Pennsylvania Banking Department; Rhode Island Lender's License. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved.