Frequently Asked Questions

The SIMPLE & EASY Loan Approval and Funding process:

NO COST or OBLIGATION to obtain a PRE-QUALIFICATION letter so you can start making offers!

Just fill out the loan application on our website and click "submit"! We will call you to let you know if you qualify, and if you want to move ahead with the loan process.
We will ask you to come to our office to sign official loan application forms and receive your LOAN PREQUALIFICATION LETTER. Please bring to your appointment the following:
- a copy of a bank statement showing the source of your down payment funds Iif available)
- If you are buying the home as an owner occupant, we will also ask for income documentation, such as paystubs, last two years W-2's, last two years Federal tax returns, OR last 12 months of bank statements (where we will add your last 12 months of deposits and divide by 12 to determine average monthly income). (Not required for investment property buyers).
- valid ID (driver's license, or consulate card, or passport are all acceptable).
- a copy of your purchase contract (if you are under contract).
Start making offers using your Loan Pre-Qualification Letter.
Once you have an accepted offer, and want to move ahead with a BRADLOAN, have your Realtor send me a copy of your accepted contract, and make an appointment with me to revise and finalize your desired loan terms specific to the price and address of the
home you are buying. You will also need to bring with you two cashiers checks or money orders: $350 payable to Mark Huffman (for the appraisal), the other payable to eMortgage Inc. for $535 to be applied toward your loan fees. (All other fees and costs are to be paid in escrow to the title Company at closing of your purchase.
You will be contacted that your loan docs are ready for signature at the title Company, you make an appointment with them to sign, and once signed, we fund your loan! Prior to signing, the Title Company should be able to tell you the amount of money you need to bring to Title when you go in to sign to cover your down payment and closing costs.
The Title Company records the home in your name and you own a new home!
Regardless of the Title company your home "closed" at, you will receive a Payment Coupon Book from Grand Canyon Title Agency account servicing usually within 15 to 30 days of your "closing".

Easy Borrower Qualifications:

For Owner-Occupants, if you have less than 50% of your gross income (before taxes) going toward your proposed BRADLOAN payment, existing car payments, student loan or credit card payments, and have required funds for down payment, loan fees and closing costs, regardless of credit issues, you will most likely qualify for a Brad Loan.! It's pretty simple.

NO PROBLEM if you have:

low credit scores
no credit
bad credit
a foreclosure
a short-sale
bankruptcy
credit issues from the past
non-citizen
ITIN number

The fact that you have saved up 20% to 30% cash for a down payment tells me you have overcome the problems of the past!

For Investors, loans are given on a "Low Doc" basis where we approve a loan based primarily on the amount of down payment, investor's cash reserves, review of the credit report, preliminary title report, the appraisal and copy of lease(s) if applicable.

Do you require any up front fees to start the loan process?

Once you have a property under contract, and you have decided to move forward to purchase the property with a BRAD LOAN, we require a $535 non-refundable application fee payable to eMortgage Inc. (cashier's check, cash or money order) and a separate cashier's check, cash or money order made payable to the Mark Huffman, the appraiser (typically $350 for most single family homes under $200,000). If you choose not to close your loan for any reason, you will forfeit the $535 application fee. Your appraisal fee becomes non-refundable at such time as appraiser commences the appraisal process. Should BRAD choose not to close on your loan, your application fee will be fully refunded to you.

Your Home Will Be Titled in Your Name!

YES, your home will be titled and recorded with the County Recorder in the Public Records in your name. You will own the home with Title recorded in your name from day one, along with the recorded Mortgage (Deed of Trust) to secure your property as collateral for the loan we gave you.

What are Origination Fees?

A mortgage broker charges an origination fee commonly referred to as points, it is considered a "commission" or a "fee" for arranging your loan.

While we do not give tax advice, "points" aka "Origination Fees" are usually fully tax deductible as prepaid interest on a purchase. They are usually deductible on a refinance as well, but usually spread out over the term of the loan. Monthly mortgage interest paid is also usually deductible on your taxes as well. Please consult your Tax Advisor on these matters.

How Much $ is a "Point"?

A "point" equals one percent of a loan amount. For example, one point on a $50,000 loan is 1% of $50,000 which equals $500.00. Points are charged on the loan amount, not on the purchase price. If you were buying a $70,000 home taking out a $50,000 loan, and there was an 8 point origination fee, you would take 8% of 50,000 which equals $4,000 .

What are Administrative fees; Underwriting, Processing, Document Preparation, Lender Inspection?

The administrative fees which total approximately $1720 include the following:

Underwriting ($495) one of our due diligence functions; reviewing and assessing information about you and the property to determine if the loan is viable. In underwriting we review the purchase contract and any applicable addendums, appraisal, credit report, the flood certification report, the application, back up documentation, all to determine if the loan is an acceptable risk.
Document Preparation ($395) is the preparation of your loan documents for closing.
Lender Inspection ($295) is part of our due diligence when the lender makes a site visit to the subject property and neighborhood to determine if it is the kind of property we are comfortable with as collateral for the loan.
Loan Application ($535) is gathering all your information and data, discussing your different loan options, evaluating your circumstances, evaluating collateral, and discussing and determining which BRAD LOAN is right for you. It is also to pay for us to obtain a preliminary title report, work with the title company, work through title issues with the escrow officer, work with realtors, insurance agents, appraisers, gathering up borrower's documentation, etc, and coordination of all the previous mentioned functions and people to help bring your loan to fruition.

What are the closing costs in addition to loan fees?

You will also have third party costs and expenses which include the following:

Title Fees which include title insurance, a lender's title policy, eDoc Fees, Courier Fees, Wiring Fees, Document Recording Fees, etc. These fees can vary between $700-$1200 depending on the loan amount and type.
Loan Servicing Set Up Fees charged by the account servicing agent (typically around $325)
One year's prepaid home owners insurance (for homes being bought for $40,000 to $120,000 , insurance seems to run in the $400 to $1000 per year range)
Appraisal fees paid to an appraiser (usually $350 to $450)
Tax service fee ($85) paid to a title company to keep account servicing up to date on the subject property's real estate taxes and their status.
Pre-paid prorated interest (depends on the day of the month you close your deal)
Initial deposit to the impound account as a cushion toward future real estate taxes and insurance.
Wiring fees ($30 to $60) charged by the lenders bank to wire your loan funds to Title.
Credit Report ($18 to $28) fees charged by the credit reporting agency. If we have a current credit report for you on file and you do regular business with us, we will only charge for 1 credit report every 3 months.
Flood Certification ($18) to determine if your property is in a flood zone and therefore requiring flood insurance, as well as charges from
Courier services ( typically $30 -$60) shipping documents between lender, title company, and in some cases, the borrower.

The estimated total of these fees can vary between $3,000 and $3,800 and they are required for almost every loan. The above are an estimated range of fees for loans under $100k. Your actual fees may vary.

LOAN SERVICING AGENT: Who keeps track of my payments, maintains my impound account to pay my insurance and taxes when due? Why do lenders usually require impound accounts?

We set up your loan servicing with a third party "Loan Servicing Agent". Regardless of the Title Company your loan is closed at, we use Grand Canyon Title Agency Account Servicing to service THE BRAD LOAN. You are assigned an account number, and are sent a payment coupon book. You mail your payments directly to the Loan Servicing Agent, they process your payment, retain the amount to be held in your impound account to pay the real estate taxes and insurance when due, and forward the interest (and principal if applicable) payment on to the lender. They see to it that the extra money you send in each month for taxes and insurance (the impound account) is paid out timely to insure both you, and the lender, your insurance and taxes are paid when due and kept current. Unpaid taxes and insurance creates additional exposure and risk for the lender, so lenders usually require the set up of an impound account to be sure insurance is keep current, helping protect their collateral against uninsured fire or other such hazards as well as insuring funds are set aside to pay real estate taxes to prevent an occurrence of unpaid taxes which become a lien on the collateralized property.

The Loan Servicing Agent keeps track of your payments and how much you owe. They also send you a year end statement reporting to you how much you have paid in interest, taxes and insurance to use for your income tax deductions.

In the event you want to pay off your loan, whether due to sale or refinance, or any other reason, you, or the Title Company you are working with for your sale or refinance transaction, would contact the Loan Servicing Agent for the "payoff" statement, and the payoff of the loan would be made to the Loan Servicing Agent who would in turn release the lien from your property and forward the payoff funds to the Lender.

Monthly payments, balloon payments, and payoffs are all made and accounted for through Grand Canyon Title Agency Account Servicing, a 3rd party loan servicing agent. All monthly payments to include an estimated $30.00 Arizona hard money lenders loan servicing fee and impounds of 1/12 taxes and insurance. Borrowers will receive annual statements for tax purposes detailing interest, taxes and insurance paid as well as impound account adjustments.

What if I sell or payoff my loan and there is unspent money in my impound account? Under ordinary circumstances, any unspent funds in your impound account not previously used to pay your insurance and taxes will be refunded to you by the Loan Servicing Agent. This is your money. (In events of foreclosure, Deed in Lieu of Foreclosure, or other default, there may be circumstances where impound balances may be applied toward money owed to the lender).

Interest Only Loans vs. Fully Amortized Loans

If you make payments with both interest and additional funds to apply toward the principal, this is called an AMORTIZED payment, or AMORTIZATION. Car loans are almost always amortized loans. If a portion of your payment is principal, and you make the same monthly payment, your payments are first applied to the interest and the rest to principal. Since you only pay interest on the amount of your balance, as you pay down your loan balance with your monthly principal payments (in addition to the interest), less of your monthly payment goes to pay the interest (because every month you owe less) and more of your payment applies to your principal, paying your loan down faster and faster each month. Just like a car loan. After a period of time, you owe nothing; your loan is paid off and your home is "free and clear".

An interest only loan means you only have to pay the interest due each month, BUT you have the option of adding extra funds to your interest payment to be applied to principal which lowers your principal balance, therefore lowering your monthly interest charges. An amortized payment requires you to pay principal as well as your interest each month. In either event, you are only charged interest on the amount of your principal balance. Any extra money paid over and above your monthly interest charge is applied to pay down your principal balance, resulting in lower interest charges the following month.

Will you run a credit report?

Yes, however our loan decisions are not based on your credit score. Running your credit report helps us to know our borrower better, and verify your other financial obligations We will not run your credit report until you authorize us to do so.

If I Choose the Loan Program with the Balloon Payment, what happens when my loan comes all due and payable?

Balloon payment means the entire unpaid principal balance plus any unpaid interest and or late fees are all due and payable at one time on a specified date. If your exit strategy in paying off your loan is not by SELLING your PROPERTY, we suggest you contact us AT LEAST six months prior to your ALL DUE date to discuss your options of refinancing to a conventional loan (if you and your property qualify) or paying a fee for an extension (if offered at that time by the Lender), or seeking financing elsewhere.

Will my loan amount be based on purchase price or appraised value?

On a purchase, regardless of the appraisal or perceived below market purchase price, your loan to value (LTV) will be determined by the purchase price, or purchase price plus renovation costs. On properties that you have owned over one year, or have been substantially improved since purchase, we will consider a loan based on the appraised value and\or on acquisition cost plus improvement costs.

Do you have loan programs that will help finance renovation costs if I am buying a property in need of substantial renovations?

We have an excellent loan program to roll your renovation costs into your BRAD LOAN. Please refer to the Loan Programs page to learn more about my RENOVATIONS INCLUDED loan program.

Can I hold the property in the name of an LLC or Corporation?

Typically we have borrower close loan and title to the property in their personal name, but allow property to be immediately Deeded over to their LLC after closing in their personal name. Exceptions to this may be considered on a case by case basis when necessary.

Will my Brad Loan appear on my credit report?

No, however the loan servicing agent can provide you with a printout of payment history to use in applying for future refinance. (a foreclosure proceeding, however would appear on your credit report as it is in the public records).

100% Loan to Value Loans

Available with cross-collateral, where borrower allows lender to be secured by equity in additional, usually, free and clear properties.

What is "Cross Collateralization"?

It is when more than one property is used as collateral for the loan. For example, you want to buy a $100,000 property with no cash down. You own another property that is worth $80,000 that is free and clear. You have $80,000 worth of equity. We could loan you 100% of your purchase price (no money down) because we would use both properties as collateral. You are pledging the equity in your additional collateral as additional security for your loan in lieu of putting up a cash down payment.

If I have "cross collateralized" will I have to pay off the entire loan if I want to sell or re-finance one of the two properties?

No, you would only have to pay off a portion of your loan to release the property you wanted to sell or refinance from the lien. This is sometimes a pre-determined amount at the time your loan is originated, and is called a "release price".

Why do they call it "hard money", "private money" or "equity loans"?

Loan approval is weighted mostly on the value and borrowers "equity" of the "hard asset" used as collateral with a lesser concern given to the borrower's credit rating. These loans are also referred to as "private money loans", as the source of the funds do not come from conventional bank loans but instead come from private sources such as investor's personal funds, pension plans and other non-traditional sources. These funding sources have more flexibility in their lending practices as they do not have to fulfill the more stringent FDIC and governmental mandated lending requirements of the traditional bank.

CALL IF YOUR QUESTIONS ARE STILL NOT ANSWERED OR IF YOU WANT TO LEARN MORE! 480.948.0880 or email your question(s) to brad@bradloans.com

or email your question(s) to brad@bradloans.com