Frequently Asked Questions

A prepayment penalty is a fee that can be charged by lenders for paying off all or part of a loan early. These prepayment penalties can range from a fee of 1-5% of the outstanding mortgage balance. Bear in mind, prepayment penalties are more common on investment mortgages and Non-Qualified mortgages(Non-QM). 

A Non-Qualified Mortgage is any mortgage loan that falls outside of the conventional agency guidelines set forth by the CFPB(Consumer Financial Protection Bureau). Non-QM loans and Portfolio loans are often used interchangeably, but refer to the same market. Conventional loan standards are stringent and must be followed to be a salable loan on the secondary market. The Non-QM market allows for alternative financing options, as these loans are bought and serviced by private investors. These loan offerings range from Interest Only, Bank Statement for Self-Employed Borrowers, No Income(DSCR), Unique Property Types, and much more. We are partnered with 10+ of the nation’s top Non-QM lenders and offer a wide variety of options. 

If another lender told you “No”, call us to discuss options that may fit your specific needs in this market!

DSCR stands for Debt Service Coverage Ratio. This type of loan is strictly for investment properties and may also be referred to as a “No Doc/Income loan.” DSCR allows for the borrower to qualify for the loan based on rental income generated by the subject property coupled with their credit score.

No Income, no Employment, no Debt to Income Ratio. This product is popular for investors with up to 28 financed properties and is available for nearly all property types. Condos and commercial properties are allowed.

When the appraisal order is placed, we also request that the appraiser fill out the Standard 1007 Fannie Mae Form. This form allows for the market rent of the property to be assessed on a monthly basis. This monthly rent number derived from the appraisal form is then compared to the total PITIA(Principal, Interest, Taxes, Insurance, Association Dues). Most lenders want to see these numbers be 1:1, but can still oftentimes qualify as low as a 0.7 ratio of rental income to monthly payment.

It is oftentimes difficult for self employed borrowers to show enough income on tax returns to qualify for a mortgage. Even more so, it can be a hassle to track down all of the necessary tax forms needed to apply and qualify. Bank statement loans solve just that!

Most conventional loan guidelines require 1 or 2 years’ prior tax returns to be submitted for income verification. This loan program allows for bank statements to be used in lieu of tax forms, and should more accurately reflect your cash flow and income. This type of loan can be used for primary, second homes, and investment properties. Both personal and business bank statements can be used to qualify.

Rate locks are tied to the specific property address you wish to purchase or refinance. Mortgage rates can change from the day you apply for a loan to the day you close the transaction. If interest rates rise sharply during the application process it can increase the borrower’s mortgage payment unexpectedly. Therefore, a lender can allow the borrower to 'lock-in' the loan’s interest rate guaranteeing that rate for a specified time period, often 30-45-60 days. The longer the lock period, the higher the cost to the borrower in points to secure that rate. Regardless of how far in advance you may wish to lock in at a specific rate, the most important thing to pay mind to is locking through your contract closing date. At Fieldstone Funding, we cannot lock your rate without a fully executed purchase contract. 

Credit scoring is a system creditors use to help determine whether to give you credit. Information about you and your credit experiences, such as your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. This credit "score" accounts for one's ability and likelihood to repay a loan and make the payments when due. Be mindful that lenders will typically pull a lower credit score than you saw on Credit Karma or on credit card monthly notices. This is because lenders use a more conservative version of FICO when determining credit worthiness. We pull from the 3 major bureaus, being Equifax, Experian, and Transunion, most often qualifying our borrowers off of the median score. 

Example: Sarah has a 714 score from Equifax, a 729 score from Experian, and a 701 from Transunion. Sarah will qualify off of the 714 "median" credit score.