With a fixed-rate mortgage, the interest rate stays the same throughout the life of the loan. With an adjustable-rate mortgage (ARM), the interest rate changes periodically, typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan are likely to change. There are advantages and disadvantages to each type of mortgage, and the best way to select a loan product is by talking to us.

An index is an economic indicator that lenders use to set the interest rate for an ARM. Generally the interest rate that you pay is a combination of the index rate and a pre-specified margin. Three commonly used indices are the One-Year Treasury Bill, the Cost of Funds of the 11th District Federal Home Loan Bank (COFI), and the London InterBank Offering Rate (LIBOR).

There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, including your current financial picture and how long you intend to keep your house. Diamond Residential Mortgage Corporation can help you evaluate your choices and assist you in making the most appropriate decision.

For most homeowners, a monthly mortgage payment consists of three  parts:

• Principal: Repayment on the amount borrowed
• Interest: Payment to the lender for the amount borrowed
• Taxes & Insurance: Monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company.

The amount of cash that is necessary depends on a number of items. Generally speaking, you will need to supply:

• Earnest Money: The deposit that is supplied when you make an offer on the house
• Down Payment: A percentage of the cost of the home that is due at settlement
• Closing Costs: Costs associated with processing paperwork to purchase or refinance a house

• All Borrowers
  • Last 2 years tax returns, all pages
  • Last 2 years W2’s and 1099’s if applicable
  • Paystubs for the last 30 days
  • Most recent 2 months of bank statements
  • Employment history for the last two years
  • Asset/ Investment statements: Checking, Savings, 401k, Stocks, Mutual Funds, etc.
  • Residency history over the last two years
  • Photo identification (valid Driver’s License or Passport)
  • Check or credit card information for appraisal fee
• SELF-EMPLOYED BORROWERS
  • Copies of most recent 2 years 1040s or business tax returns (with all schedules)
  • Year to date profit & loss statement and balance sheet
  • Copy of business license
• VETERAN BORROWERS
  • Veteran DD214 or Veteran Reservists DD256.
• COMMON DOCUMENTS WHICH MAY BE REQUIRED IF APPLICABLE
  • For Refinances: Copy of Note, Deed of Trust or Mortgage, and Homeowner’s Insurance information
  • Previous Bankruptcy: Copies of Petition and Discharge, including supporting schedules A—K
  • Divorce Decree and Property Settlement if applicable
  • Relocation Agreement: If relocation move is financed by employer, i.e. buyout agreement plus documentation outlining company paid closing costs benefits

• DON’T APPLY FOR NEW CREDIT OF ANY KIND
  If you apply for a credit card, your credit report will be pulled, and this will have an adverse effect on your credit score. Co-signing a loan will also lower your credit score.
   
• DON’T PAY OFF COLLECTIONS OR CHARGE-OFFS
  Don’t pay off collections unless it is required by the lender to secure the loan.
   
• DON’T CLOSE CREDIT CARD ACCOUNTS
  If you close a credit card account, it can affect your ratio of debt to available credit. This ratio can hurt your credit score. Consult your Diamond Residential Mortgage Consultant for more details about this issue.
   
• DON’T MAX OUT OR OVERCHARGE CREDIT CARDS
  Overcharging your credit cards can have a negative impact on your credit score. Once you are engaged in the loan process, try to keep your credit cards well below the available limit.
   
• DON’T CONSOLIDATE DEBT TO ONE OR TWO CARDS
  Changing your ratio of debt to available credit will complicate your loan process.
   
• DON’T RAISE RED FLAGS TO THE UNDERWRITER
  When applying for a loan, drastic measures such as changing your name, address, or occupation are discouraged. These are important underwriting considerations.
   
• DON’T FALL BEHIND ON EXISTING ACCOUNTS
  One 30-day late payment on any existing loan can negatively impact your credit score.