What is a point?
A point is another way of quoting a fee.
Simply put, 1 point equals 1%. Points are paid by the borrower for origination
costs or as a way to obtain a lower interest rate (discount). Bethpage will
allow the member to pay discount points to buy a particular (usually lower)
rate. For example, if rates were at 6.75% with 0 points and the member wanted a
lower rate of 6.5%, we could do so with a hypothetical charge of .875%. NOTE:
The lower the rate, the higher the discount point. Typically, you should quote
the rate closest to zero discount points.
Selling the property of
refinancing prior to this break-even point will result in a net financial loss
for the buyer, while keeping the loan for longer than, this break-even point
will result in a net financial savings for the buyer. The longer you keep
the property financed under the loan with purchased points, the more the money
spent on the points will pay off. If the intention is to buy and sell the
property of refinance in a rapid fashion, buying point sis actually going to end
up costing more than just paying the loan at the higher interest
What is the annual percentage rate (APR)?
APR - The actual cost of a loan stated as a yearly rate; including such items
as interest payments, principal payments, loan insurance, processing, credit
reports, appraisals and loan origination fee (points).
Does Bethpage do FHA or VA loans?
Bethpage does FHA loans but currently we do
not offer VA loans at this time.
How high can the rate on an ARM go?
This would depend on the rate cap which
varies by program. A cap on a loan can be 2.2.6, 5.2.6 or 2.6.12. A loan
that has a 2.2.6 cap would have a 2% first adjustment cap, 2% annual adjustment
cap, and a 6% total adjustment cap from initial loan rate. A loan that has a
5.2.6 cap would have a 5% first adjustment cap, 2% for the annual adjustment as
a cap, and a 5% total cap from the initial loan rate.
Explain an ARM?
ARM, or Adjustable Rate Mortgage, is a loan
that permits the lender to adjust its interest rate periodically. The amount of
the adjustment is based on the type of loan. A 3/1 ARM is means that the loan
rate is locked for the first three years and then may adjust every year for the
term of the loan. How does an ARM adjust? Good question. Bethpage's ARM's are
based on the "1 year treasury using a constant maturity" plus a margin of
Can my rate go down on an ARM?
Yes. If the 1-year treasury declines, your
rate could also decline. NOTE: Adjustments are only made after the initial lock
period. For example, a 3/1 would not adjust until after three years.
What do I need for down payment?
We require a 5% down payment or a max LTV of
95% for purchases (90% on a condo). This can be accomplished many different ways
and if you would like to speak to a mortgage professional please go to the
"contact us" screen.
When should a member do a fixed rate vs. an ARM?
Fixed rates are good for member's who are
planning on living in their current home for a longer period of time. ARM's are
good for members who are either planning on moving within the next 7 years, or
if the member needs a lower payment for a period of time.
What is a jumbo loan?
A jumbo mortgage is for loan amounts over
$417,000. It is considered a jumbo loan because it is not conforming to Fannie
Mae's maximum loan amount.
What are impounds/escrows?
Impounds and escrow means the same thing.
Mortgage escrow accounts are special accounts set up in which money is held to
pay for property taxes, hazard insurance premiums, mortgage insurance premiums,
and other escrow items. Escrow accounts ensure that these items are paid in a
timely fashion. They are a guarantee that there is always enough money to pay
these bills when they are due so that the homeowner avoids the risk of lapsed
insurance coverage or delinquent taxes.
Does Bethpage have any prepayment penalties on 1st Mortgage loans?
No, we do not charge a prepayment
Does Bethpage do 1st Mortgage loans on investment property (rentals) or vacation/2nd homes?
No. At the present time we only will do a
loan on an owner occupied home or 2nd homes.
How much of a down payment should I make?
There is no easy answer to this question. The higher your down payment,
the less interest you will pay over the life of the loan. However,
interest on mortgages is tax deductible, and a higher down payment would mean
you would be giving up that potential tax savings.
The answer to this question oftentimes is determined by your current
financial situation: e.g. just because you have the funds for a large payment
doesn’t always mean you should withdraw funds from current investments to make
it. The best advice we can give is to consult with a financial advisor or
tax consultant, allowing them to review your situation and advise