FAQs

How is Discount Mortgage Lenders different?

At Discount Mortgage Lenders, Inc., you get your mortgage the way you need it. Unlike many online lenders, we have three offices serving customers in the Midwest. We offer a broad range of mortgages ensures that we provide you with a solution that is specifically tailored to your needs. You can apply online, over the phone, or with three offices in Illinois - you can meet with a loan officer in person. At Discount Mortgage Lenders, we pride ourselves on our service. Check out the rates on the other Web sites, and then come to us for a low cost loan that meets your needs. Whether your credit rating is excellent, good or less than perfect, Discount Mortgage Lenders, Inc has developed a broad range of loan programs to satisfy your borrowing requirements. Not to mention, we can help you save hundreds of dollars on loan payments each month. With Discount Mortgage Lenders you can relax in the knowledge that you are in safe hands with local offices an low rates.

Does Discount Mortgage Lenders charge an application fee or a fee to get my loan approved?

No. Because we are confident in the rates and service we offer, Discount Mortgage Lenders does not hold our customers hostage by requiring an application fee. We don't charge an application fee, appraisal fee, loan lock fee, or credit report fee. Up to the time your loan is ready for you to close the only cost will be those incurred by Discount Mortgage Lenders. Many lenders require a $200 - $500 fee to apply in order to "hook" consumers into the process, hoping to deter them from going elsewhere even if the experience turns sour. At Discount Mortgage Lenders, you're free to search loan programs and apply at your convenience without risk or obligation. We trust that you will recognize the value and savings you'll find by applying with Discount Mortgage Lenders

Are they other costs I should look for when applying for a mortgage?

Prepayment penalties. Its generally a good thing to be able to pay your loan off early whether it be from selling the home or refinancing. But certain lenders charge a penalty for early pay off. Penalties apply to a specific period of time, usually between 1 to 5 years after first getting the loan. Some loan programs that have very low starting rates or have a lower rate for someone with a poor credit situation have prepayment penalties and it can be the only way to get these loans. Unless we think you fall in that class, we avoid prepayment penalties.

What does a lender look at when I apply for a mortgage?

We will consider many factors in evaluating your loan application, but they usually focus on four areas:

• 1. Income and debt. How much money you make and what other bills you have to pay helps the lender determine whether you can afford to make mortgage payments.
• 2. Assets. The lender needs to make sure you have enough money to cover the costs of buying a home.
• 3. Credit. Whether you've met other financial obligations helps the lender predict whether you will repay your mortgage.
• 4. Property. The home you want to buy has to be worth enough to act as collateral for the mortgage.

What if I've had credit problems?

Your credit history is only one factor in qualifying for a loan, and having made some late payments doesn't have to keep you from buying a home or refinancing. Regardless of your credit history, we have a solution that works for you. Find a loan that helps you rebuild your credit, and consolidate debt. You can trust that Discount Mortgage Lenders, Inc will work hard to find the best solution for your unique needs. In fact, Discount Mortgage Lenders Select loan program offers a variety of mortgage options to help people with less-than-perfect credit become homeowners or refinance and leave credit challenges behind. Discount Mortgage Lendersis not limited to working with only one type of borrower, which means that people of all financial and credit profiles receive the same impressive cost-saving benefits we offer. Best of all, there's no cost or obligation to apply for a loan or get a custom loan search

What if my income is difficult to verify?

Whether you're self-employed, retired, salaried, have excellent credit or bad credit, bankruptcy, or late payments, we'll search for the best loan program to fit your specific needs. We have a wide variety of loan programs for stated income, limited income verification and no income verification situations. We offer many conforming, jumbo, cash-out, Alt-A, and sub-prime loans, with flexible payment terms such as 30-year and 15-year fixed, adjustable rate mortgages (ARMs), short-term, and balloon payment options that have adjustments for income verification constraints.

What is the minimum down payment I can make on a home?

There is generally no minimum down payment required for buying a home. We have loans with no money down, 3% down payment options and many other options. With housing prices as high as they are, homeownership would be impossible for many people if not for these low-down-payment options. Discount Mortgage Lenders, Inc. has a number of loan programs that can help you buy a home with little or no cash - find out if one is right for you. We even have loans with no down payment and No Income Verification.

What closing costs will I have to pay?

Closing costs vary based on a number of factors - including the mortgage type, your credit, the loan amount- but they usually include the following: Lender fees. Our fees are extremely low since we do not charge credit report fees, appraisal fees or any type of application fee. Some third party fees will exist. Charges for services not provided by your lender often include the settlement fee, title insurance, and attorney's fees. Prepaid items. Certain mortgage costs must be paid in advance at time of closing. The most common of these are pre-paid interest, hazard insurance, and deposits to taxes for escrow accounts.

Should I choose a fixed-rate or adjustable-rate loan?

Most mortgage loans have either a fixed interest rate or an adjustable interest rate or a hybrid of the two. With a fixed-rate mortgage, the interest rate never changes and your payments remain stable throughout the life of your loan. With an adjustable-rate mortgage (ARM), the interest rate changes at regular intervals - usually once every year - based on a formula that uses a market index. For most ARM options, rate adjustments begin after an initial period - usually between three months and ten years - during which the rate is fixed. A fixed rate is usually best if you plan to stay in your home for the long term and are buying at a time when rates are relatively low. An ARM is usually best if you plan to move before the rate adjustments begin, or if you are buying when rates are relatively high.

What will my mortgage payments include?

For most borrowers, each monthly mortgage payment goes toward the following:

• 1. Principal, which is the total outstanding balance of the loan
• 2. Interest, which is the cost of borrowing money
• 3. Taxes, which are levied on the property by the local government
• 4. Insurance, which protects the owner and the lender from losses caused by fire and natural hazards

Should I refinance my existing loan?

People refinance their existing loans for a number of reasons including obtaining a lower interest rate, to save on monthly payments and to change the term of the loan. People also choose to refinance if they want to switch from an adjustable rate to a fixed rate or to consolidate debt by refinancing for a higher loan amount and using the difference to pay off other debt.
There are generally three reasons to refinance:

• 1. Your existing interest rate is too high
• 2. You want to pay your mortgage off faster
• 3. You want to take cash out of your property

When considering refinancing, you need to look at the interest rate of the existing mortgage, the interest rate of a new mortgage, the cost of refinancing, your current income and credit status, as well as how much equity you've built up in your home

What is a cash-out option?

If you have enough equity in your property, you can refinance with a loan amount greater than your current mortgage and keep the difference! You can use the money for home improvement, debt consolidation, or whatever else you would like.

Do I need to get an appraisal when I refinance?

Yes, but with Discount Mortgage Lenders once we preapprove your loan - at no cost - we provide the appraisal free of charge.

What does LTV mean and how does it affect my loan request?

Loan-to-value (LTV) is the amount of financing you are able to receive based on your credit, home loan amount, and occupancy. The loan-to-value ( LTV ) ratio of your home is calculated by dividing the fair market value of your home by the amount of your home loan request. For examples: A borrower putting a $10,000.00 down payment on a new home is financing 90% of the value of the house or 90% LTV, a borrower who has a house worth $100,000.00 who want to refinance their existing mortgage of $75,000.00 and get cash back of $5,000.00 will be requesting a loan with an LTV of 80%.

Does my property type matter and what does this mean?

Home loans aren't just for new homeowners. We offer financing for a wide variety of property types, from single-family residences to high-rise condominiums.

Why would I choose an ARM over a fixed rate mortgage?

An Adjustable Rate Mortgage can be appealing because it offers you a lower interest rate than a fixed rate loan, which in turn means a lower monthly payment. An ARM may be a good match for you when you only expect to spend a few years in your home, or if you want to purchase a larger home than you could otherwise buy without this option. Please review our loan products summary for more information