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Finance Guide TO HOME OWNERSHIP Redefining the mortgage industry one happy homeowner at a time.

NMLS ID #86788 | www.nmlsconsumeraccess.org


Table of Contents Page 1 ................ Letter from the CEO Page 2 ................ Let’s Get Acquainted Page 3 ................ What It’s Like To Work With Us Page 4 ................ Loan Programs Page 5 ................ Loan Programs continued

OVM FINANCIAL

Page 6 ................ Do’s & Dont’s Page 7 ................ What’s Next? Page 8 ................ Documents Needed Page 9 ................ Documents Needed continued Page 10 ............... Homebuyer Dictionary Page 11 ............... Homebuyer Dictionary continued Page 12 ............... Notes Page 13 ............... Notes

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Letter from the CEO On behalf of the entire OVM Financial team, I want to take the opportunity to thank you for taking the time to learn more about OVM Financial. We are very excited about the chance to build a long-term relationship with you and could not be more committed to helping you embark on one of the largest financial decisions you will make in life. If you decide to work with OVM Financial to finance your home, you can expect to receive unparalleled service, upfront communication, and clear guidance from start to finish during your loan transaction. At OVM Financial, you're not just a number and not just a client. You and your family are at the core of everything we do. We look forward to guiding you through the home buying process. Sincerely, Adam Newman CEO NMLS#231581 #MLO-5515VA #SC MLO-231581SC #NC-I-153731 #GA 47997 #TN 129677

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Let’s Get Acquainted

OVM FINANCIAL

From our visionary opening in 2001, OVM Financial has taken what the mortgage industry has typically done and flipped it upside down - offering our customers, employees, and partners an experience like none other. Our core values of honesty, accountability, and integrity define who we are. OVM Financial is an independently owned and operated retail mortgage lender. We have several branch and satellite office locations with the bulk of our operations team located at our corporate headquarters in Chesapeake, VA. For three years running, we have been recognized by Inc. 5000 as one of America’s fastest-growing private companies.

Mission Statement

1. Accomplish each and every task with EXCELLENCE. 2. Our EMPLOYEES are the reason for our SUCCESS. 3. Without willingness to change we can't maintain our PASSION for GROWTH. 4. Approach situations PROACTIVELY and CREATIVELY. 5. Every CUSTOMER has a name and every name matters at OVM.

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What It’s Like To Work With Us NO CALL CENTERS. PERIOD.

KEEPING YOU INFORMED.

CLOSING DATES YOU CAN TRUST.

Don’t waste time speaking with someone in a different time zone. Your local Loan Officer is your single point of contact.

We are committed to being available to you throughout the entire mortgage process. Your loan officer knows your situation, and they are there to guide you through the process from day one through closing.

Your closing date is too important to leave to chance. When OVM Financial gives a closing date, it’s one you can rely on.

“OVM was awesome with helping us secure a home loan. We would recommend them to anyone! They were always available to answer questions and ease our worries. Great for first time buyers!”

- Adam P.

Want to see more? Check out hundreds of 5-Star reviews on our Zillow, Facebook, and Google profiles.

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Loan Programs

Find The Right Loan For Your Unique Needs. VA Loans - The Veteran’s Affairs (VA) home loan is an excellent option that assists our nation’s veterans and eligible surviving spouses with obtaining homeownership. Insured by the Department of Veteran Affairs, a VA loan often offers a no-down-payment purchase loan. Additional features include having 2 VA loans at once, flexible guidelines, and loans up to $1,000,000.

OVM FINANCIAL

FHA Loans - We are proud to offer our borrowers the option to take advantage of a Federal Housing Administration (FHA) loan. FHA loans can be a game-changing option for prospective homeowners by providing very flexible guidelines. Benefits which help in qualifying include allowing higher debt ratios, lower credit scores, gifted down payment, plus adding co-borrowers. Furthermore, FHA is not just for first-time buyers. Conventional Loans - Conventional loans typically favor buyers with higher credit scores, but this type of loan also provides excellent options for not so perfect credit. Contrary to belief, conventional loans offer down payments as low as 3%. Today’s conventional loans provide flexibility to buyers including options to pay your own taxes and insurance, favorable treatment of student loan debt, mortgage insurance strategies, and more. In addition to financing, a primary residence, conventional loans provide financing for second homes as well as rental properties. Fixed Rate Loans - Looking for your mortgage payment to be the same every month? You’re not alone! Most borrowers prefer the security of a fixed rate and payment. Most of our loan products include a fixed rate which helps borrowers with stability within a budget. Keep in mind, that although the principal and interest are fixed, escrows for taxes and insurance can fluctuate over time. Renovations Loans - We strive to take the guess work out of renovation loans. Our products can turn any home into your dream home. From small cosmetic updating to major projects such as adding square footage or foundation repair, we have a product to help. Below you will find some answers to questions we are frequently asked but if you don’t find the answer to your question below please do not hesitate to contact us! Jumbo Loans - Buying a home in higher priced areas often requires borrowing more than the conventional loan limits. That is where a jumbo loan can help, and options include up to multi-million dollar loan amounts to finance primary, secondary, or investment properties. Additionally, VA loans offer high balance or jumbo financing up to $1,000,000, and when compared to conventional financing it is tough to beat.

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Loan Programs continued... Find The Right Loan For Your Unique Needs.

Reverse Mortgage (HECM) – Reverse mortgages are a Federally insured mortgage loan offered through FHA and are only available to seniors 62 years and older. It is available for a purchase or refinance of a primary residence and offers seniors the ability to use equity in the home to provide potential extra cash flow, funds for various purposes, as well as the ability to live affordable during retirement years. There are no required monthly payments on a HECM loan although the borrowers must continue to pay all property taxes, insurance(s), and association dues if applicable. Talk to one of our reverse loan officers to see if this could be an option for you. USDA Loans - Don’t think of USDA as a loan option that is only for farms or very low income. USDA Guaranteed home loans provide a no money down, fixed-rate financing option and it isn’t just for first-time homebuyers. Properties must be located within a USDA eligible area, and there is a household income limit which is quite liberal. It is tough to beat the affordability and flexibility that a USDA loan offers for a primary residence purchase. Down Payment Assistance – Lack of down payment is one of the most common obstacles to homeownership. Therefore, we strive to provide excellent no to low down payment financing options, but sometimes the buyer doesn’t have the down payment or closing costs required. That is where down payment assistance could help. OVM Financial offers these programs through state agencies to help bridge the gap for prospective home buyers. Adjustable Rate Mortgage (ARM) – This type of loan includes an initial fixed period which is followed by periodic, potential adjustments in rate throughout the term. There are options for how long the initial fixed period lasts prior to the adjustable portion of the term. Then the periodic adjustments to the rate are based on a margin set at rate lock which is added to a predetermined market index. The advantage of an adjustable rate mortgage is that the rate and payment are potentially lower in the first few years compared to a fixed rate term. Although, there is the potential for the rate and payments to increase above a fixed term loan after the potential adjustments start. When comparing a fixed to an ARM, it is best to assume the maximum increases are going to happen on the adjustable rates. There are special terms to discuss with your loan officer if considering an ARM which includes margin, index, caps, discounts, negative amortization, recasting, and more. Most importantly, you need to know what might happen to your monthly loan payment in relation to your future ability to afford higher payments. At first, this makes the ARM easier on your pocketbook than a fixed-rate mortgage for the same loan amount. Moreover, your ARM could be less expensive over a long period than a fixed-rate mortgage—for example, if interest rates remain steady or move lower. Against these advantages, you have to weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. It’s a trade-off—you get a lower initial rate with an ARM in exchange for assuming more risk over the long run.

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Do’s & Don’ts

During Your Loan Process When applying for a mortgage, your credit, income, and assets are verified after submitting your application. It’s important to keep a few things in mind during this process in order to ensure a smooth closing.

PLEASE MAKE SURE YOU DO Keep all accounts current, even if an account is to be paid off at closing

OVM FINANCIAL

Keep copies of all paycheck stubs and any statements of bills being paid off Call your Loan Officer to discuss any major changes in your financial routine Call your Loan Officer before receiving gift funds to be used for closing costs Review copies for clarity & all pages included Provide all documentation up-front for faster approval Finalize insurance up-front

PLEASE MAKE SURE YOU DON’T Change employment without talking to your Loan Officer first Apply for new credit or loans without speaking to your Loan Officer Change bank accounts or transfer money within your existing bank accounts Make cash or other general deposits in your bank account without consulting your Loan Officer Pay for earnest money or other deposits in cash Pay-off or close collections/debts without consultation Co-sign on new accounts

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What’s Next?

The Mortgage Process We have built a solid reputation of being able to close mortgage loans in an efficient and timely manner through our unique process which makes your closing experience with us, a great one – from application to move In!

START Apply online for pre-qualification

You set up homeowners insurance

OVM provides loan disclosures

Underwriter approves the loan

You provide all required documentation

OVM submits documents for underwriting

OVM orders a home appraisal

x

Final documents are prepared for signing

You sign documents and pay remaining costs, if applicable

HOME AT LAST Loan is recorded and keys are exchanged

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Documents Needed

OVM FINANCIAL

Documentation is crucial when applying for a loan. You will need to provide documents that prove income, savings and credit information. If you already own a property, or you’re selling a property - you will need to provide related documentation for that, as well. Income Documents:  Pay stubs – most recent 30 days  Federal tax returns – 2 most recent years (all schedules)  W2’s & 1099’s – 2 most recent years for all sources like retirement, jobs, SSI  If self-employed – 2 most recent business returns (all schedules)  Retirement, SSI, Disability award letter – most recent Asset Documents:  Bank accounts - 2 most recent monthly statements  Retirement accounts (401k, TSP, IRA) – most recent quarterly or 2 monthly statements  Must be actual statements including all pages of each statement  Gift funds – Contact us before transferring gift or other funds! Credit Related:  Landlord contact information covering last 12 months  If rent-free, signed letter stating you live rent free from person allowing it  Most recent mortgage statement for any mortgages  Bankruptcy – Copy of discharge & if recent, complete paperwork to show creditors included  Foreclosure, bankruptcy, short sale – Signed, detailed explanation letter

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Documents Needed continued... Miscellaneous:  Color copy of current driver’s license  Permanent resident alien – Copy of green card (front and back)  Homeowners insurance agent contact information - let us know if you need a referral  Divorce decree, separation agreement, child support order if applicable  MCC Tax Credit (up to $2000 per year): Need 3 years of tax returns  USDA or MCC Tax Credit: Income documents from ALL 18 & over household members  Closing by POA? Talk to us ASAP to complete required steps for approval VA Related:  DD214 if discharged from military  Nearest living relative for each borrower – name, address, phone, & relation to you  Transfer order – if applicable  Current military – statement of service letter from current command (ask for format)

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OVM FINANCIAL

Home Buyer Dictionary ADJUSTABLE-RATE MORTGAGE (ARM): a mortgage in which the interest rate is adjusted periodically based on a pre-selected index. Also sometimes known as a variable-rate mortgage.

COMMITMENT: agreement, often in writing, between a lender and a borrower to loan money at a future date subject to the completion of paper work or compliance with stated conditions.

AMORTIZATION: loan payment by equal installments of principal and interest, calculated to pay off the debt at the end of a fixed period.

CONSTRUCTION LOAN: short term interim loan to pay for the construction of buildings or homes. Usually written to provide periodic disbursements to the builder as progress is made.

ANNUAL PERCENTAGE RATE (APR): the interest rate reflecting the cost of a mortgage as a yearly rate. It allows home buyers to compare different types of mortgages based on the annual cost for each loan.

CONTRACT SALE OR DEED: contract between buyer and seller of real estate to convey title after certain conditions have been met.

APPRAISAL: a document giving an estimate of a property's fair market value; generally required by a lender before loan approval. ASSESSMENT: a local tax levied against a property for a specific purpose, such as a sewer or street lights. BALLOON (PAYMENT) MORTGAGE: usually a short-term fixed-rate loan which involves small payments for a certain period of time; after that time period elapses, the balance is due or is refinanced by the borrower. BORROWER (MORTGAGOR): a person approved to receive a loan who is then obliged to repay it and any additional fees according to the loan terms. CAP: a consumer safeguard on an adjustable-rate mortgage that limits how much a monthly payment or interest rate can increase or decrease. CAP: a consumer safeguard on an adjustablerate mortgage that limits how much a monthly payment or interest rate can increase or decrease. CERTIFICATE OF ELIGIBILITY: document given to qualified veterans entitling to Veteran's Administration guaranteed loans. Obtained by sending DD-214 (Separation Paper) to the local VA office with VA form 1880 (request for Certificate of Eligibility). CERTIFICATE OF REASONABLE VALUE (CRV): appraisal issued by the Veterans Administration showing a property's current market value. CLOSING: the meeting between the buyer, seller, and lender or their agents where the property and funds legally change hands.

CONVENTIONAL LOAN: a private sector loan, one that is not guaranteed or insured by the U.S. government. CREDIT REPORT: documents an individual's credit history, listing all past and present debts and the timeliness of their repayment. DEBT-TO-INCOME RATIO: the ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debt 1s divided by their gross monthly income. DEED OF TRUST: in many states, a document used instead of a mortgage to secure the payment of a note. DEFAULT: failure to make the monthly payments on a mortgage. DELINQUENCY: failure to make payments on time. This can lead to foreclosure. DOWN PAYMENT: the portion of a home's purchase price paid in cash and not part of the mortgage loan. EARNEST MONEY: money given by a buyer to a seller as part of the purchase price to bind a transaction or assure payment. EQUAL CREDIT OPPORTUNITY ACT (ECOA): a federal law requiring lenders to make credit equally available without discrimination by race, color, religion, national origin, age, sex, marital status, or income from public assistance programs. EQUITY: an owner's financial interest in a property; calculated by subtracting the amount still owed on the mortgage from the fair market value of the property. ESCROW: an account held by the lender into which the home buyer pays money for tax or insurance payments. 10

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FHA: the Federal Housing Administration provides mortgage insurance to lenders to cover most losses when a borrower defaults; this encourages lenders to make loans to borrowers who might not qualify for conventional mortgages. FHA LOAN: loan insured by the FHA open to all qualified home purchasers. While there are limits, they are generous enough to handle moderately priced homes almost anywhere in the country.

PREPAYMENT: permits the borrower to make payments in advance of their due date, thus saving money on interest. PREPAYMENT PENALTY: charges for the early repayment of debt. PRINCIPAL: the borrowed amount, less interest or additional fees.

FHA MORTGAGE INSURANCE: a policy paid at closing to insure the loan with FHA.

PRIVATE MORTGAGE INSURANCE (F1-AI): insurance paid by the borrower. This may be required by the lender when the down payment is less than 20%.

FIXED-RATE MORTGAGE: mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed.

REALTOR: a real estate agent or broker affiliated with the National Association Of Realtors and its local and state associations.

FORECLOSURE: a legal process in which mortgaged property is sold to pay the loan of the defaulting borrower.

RECORDING FEES: money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records.

HAZARD INSURANCE: form of insurance in which the insurance company protects the insured from specified losses, such as fire or windstorm. LIEN: a legal claim against property that must be resolved before the property is sold.

REFINANCING: paying off one loan by obtaining another; refinancing is generally done to secure better loan terms (like a lower interest rate).

LOAN-TO-VALUE (LTV) RATIO: a percentage calculated by dividing the amount borrowed by the sales price or appraised value of the home to be purchased.

RESPA: Real Estate Settlement Procedures Act allows consumers to review information on known or estimated settlement cost once after application and once prior to or at a closing. The law requires lenders to furnish the information after application only.

LOCK-IN: guarantees a specific interest rate if the loan is closed within a specific time.

SECOND MORTGAGE: a mortgage made subsequent to another mortgage and subordinate to the first mortgage.

MARKET VALUE: the highest price that a buyer would pay and the lowest price a seller would accept on a property.

SURVEY: a measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, its dimensions, and the location and dimensions of any buildings.

MORTGAGE INSURANCE: a policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; usually required with a down payment of less than 20%. MORTGAGE MODIFICATION: an option that allows a borrower to refinance and/or extend the term of the mortgage loan and thus reduce the monthly payments. ORIGINATION FEE: fee charged by a lender to prepare loan documents, make credit checks, inspect and sometimes appraise a property; usually a percentage of the loan’s amount. POINTS: prepaid interest charged at closing by the lender. Each point equals l percent of the loan (e.g., 2 points on a $ l 00,000 mortgage would be $2,000).

TITLE: a document that gives evidence of an individual's ownership of property. TITLE INSURANCE: a policy, usually issued by a title insurance company, which insures a home buyer against errors in the title search. The cost of the policy is usually a function of the value of the property, and is often borne by the purchaser and/or seller. TRUTH-IN-LENDING: a federal law requiring disclosure of the annual percentage rate charged to home buyers shortly after they apply for the loan. VA LOAN: a long-term, low- or no-down payment loan to veterans guaranteed by the Department of Veterans Affairs. 11

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OVM FINANCIAL

Notes

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Notes

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Begin Your Homebuying Journey Contact a licensed, local professional to get started today!

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OVM Financial, Inc. NMLS#86788 www.nmlsconsumeraccess.org

OVM Financial, Inc is an Equal Housing Lender. NMLS #86788 nmlsconsumeraccess.org. We lend to the following states: VA #MC-3038, NC #140706-104, SC #MLS- 86788, GA #46432, TN #1298677, TX, MD #22748, FL #MLD1483, and CO-Licensed By Division of Real Estate www.ovmfinancial.com Š 2018 OVM. All Rights Reserved.

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Profile for OVM Financial

Road map to financing (new)  

Road map to financing (new)