Q. What is points?
A. Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. It's the fee paid to get lower rate. When you request a no point mortgage rate you're requesting the current market rate which is 0 points or 0%.

Q. Should I pay rate lock fee?
A. No. You shouldn't pay any rate lock fees especially to brokers. If you're paying up to 0.50% rate lock fee I hope that was the best rate on the market. Note: When the loan officer quotes you a rate and you like it, you should request the rate to be locked and request proof of rate lock. Some loan officers will tell you they locked the rate in hopes that the rates will get better and they will make more money when closing time comes.

Q. What is YSP?
A. YSP stands for Yield Spread Premium. It's what the broker makes from the lender when they sell you a rate. Brokers are required to disclose YSP on the Good Faith Estimate sheet. If your broker is getting more than 1% YSP then you're not getting the lowest rate.

Q. Should I pay application fee?
A. No. That is junk fee.

Q. What are average closing costs?
A. Average closing costs should be around $2,500 without broker fees, origination fees, discount fees.

Q. My loan is $200,000 and On the Good Faith Estimate I'm paying 2% origination fee and there is 1.5% YSP. Is this a good deal?
A. No! This broker is making 3.5% ($7,000) in fees from which he'll get at least 40% ($2,800). This is not a good deal. You shouldn't pay more than 1.5% ($3,000) on any deal. Find another lender or negotiate.

Q.What is Loan Discount Fee?
A. That's the fee you pay to buydown the rate. Let's say a the loan officer quoted you a 30 year 6.250% fixed mortgage rate no points. If you wanted 5.875% Fixed rate you would have to pay 1% of loan amount.

Q. What is loan origination fee?
A. This is the fee you're paying to lender or broker for doing the loan. If you asked for a 0 point loan there should be no originate fee.

Q. If I requested a no point mortgage loan, will I still be charged loan origination, discount fee, or mortgage broker fee.
A. No! If you asked for a no point loan there should be no fees under those three.

Q. Should I get a No Closing Cost mortgage?
A. No if you don't want a higher rates. Instead of a 6.25% rate you would be getting 7.00%.

Q. What is PMI?
A. Private Mortgage Insurance. This is required by lender when the borrower doesn't have 20% down payment. There are many programs on the market that can elimiate PMI like 80/20 combo or 80/10 combo... which includes a 1st mortgage and a 2nd mortgage (Equity loan) for total 100% CLTV (Combined Loan to value). Read about PMI

Q. I'm first-time home buyer and I don't have 20% down payment...can I still buy a property?
A. Yes you can. There are programs that will allow you up to 100% financing, but I suggest you have at least 6 months of mortgage payments in your savings account. Unexpected things can happen and it's good to be prepared. Few late mortgage payments can really mess up your credit history.

Q. I'm self employed and I can't document my income, can I qualify for a loan?
A. yes. There are many program out there for self employed borrowers. These programs are called stated income/verified assets or stated income/stated assets. You state your income and assets in the application but it's not verified by the bank. Stated Doc loans have slightly higher rates.

Q. I'm unemployed and I have a mortgage to pay but I'm running out of cash. I know I will get a job soon and I don't want to lose my house. What do I do?
A. If you know you'll be out of work temporary you can refinance your mortgage or get an equity loan. You can go with Stated Doc or No Doc loan program. These programs are for self employed who can't verify income or assets.

Q. I've had a subprime mortgage for 2 years now and my rate is 9.82%. Is there anything I can do to lower it?
A. First you should check out your credit history and scores. If your middle score is 580+ you can qualify for market rates and get rid of the subprime mortgage. You should request some mortgage quotes and see what other lenders/brokers can offer you.

Q. Should I get the Option ARM mortgage or any adjustable rate mortgages?
A. If you're an investor and planning to sell or refinance within 12 months then Option ARM or adjustable rates would make sense in the short run. If you're looking to buy a home to stay in for couple years you should NOT get any Option ARM rates that start with 1.25%+. Those loan programs only benefit the brokers selling it because they make a lot of money. For the borrower it could be a nightmare! If going to stay at the property for 3 to 10 years they have fixed ARM rates such as 3/1 ARM 5/1 ARM 7/1 ARM 10/1 ARM which means they are fixed for 3 to 10 years and then they start adjusting.

Ask Ally: If you have any questions at all or you are in deep sh*t and need help e-mail AskAllyQuestion@gmail.com