Mortgage Info

We recommend that you work with a qualified mortgage broker who can assist you in finding the right mortgage for you. Ask friends and associates who have refinanced or purchased recently if they have a broker they can recommend. You’ll want to find a broker who is energetic, flexible and knowledgeable about finance and loans and someone who has your best interests in mind.

Streeterville Properties Group has established relationships with the best mortgage brokers and lenders in Chicago. We feel confident that we are referring our clients to the best professionals who will expertly handle the financing of their dreams. Each of these preferred mortgage brokers has worked in the Streeterville neighborhood for many years and knows the area very well. They will understand all the details of lending on a condo building and will quote you interest rates that reflect the property type. They are the best in the business and will make sure that your transaction is smooth and without issue. We have provided below a list of our preferred lenders and other useful information regarding mortgages. Please contact one of our experts or e-mail us if you have any questions such as current rates and/or you would like to get started on your pre-approval!

Do you have the time or experience to “do it yourself?” Thanks to the Internet, information is readily available online. Once you have educated yourself sufficiently about real estate loans, all it takes is the time and energy to sift through online resources to find the information you need.

Rates can change quickly. That great rate you find today might not be there tomorrow. Once you find the rate you are looking for, submit a loan application and lock in that rate.

Some sources for interest rates on the Internet include:

• Bank Rate Monitor
• E-Loan

When comparing loans, make sure that you’re comparing loans of the same type. For example, you find that “Loan 1” for a 30-year loan has a much lower interest rate than “Loan 2” (also for 30 years). Upon further inspection, you find that “Loan A” is technically an adjustable rate mortgage. Its payment is based on a 30-year amortization, but becomes due through either payment or refinancing at the end of 5 or 7 years. These are frequently referred to as a 5-year or 7-year fixed-rate mortgage. While both said “30-year”, they are not the same type of loan.

Ask the lender for a statement detailing all fees associated with the loan. Factors such as “points” (loan fee), interest rate and “garbage fees” (extra fees which some lenders charge) can vary greatly from one lender to another.

Gary Komar, 1st Advantage Mortgage, A Draper and Kramer Company
Cell: 312-286-8896
Fax: 312-795-2374
Office: 630-268-5623
Email: gary.komar@1amllc.com
Website: www.1amllc.com/komar

Fred Carli, Draper and Kramer Mortgage Corp.
Cell: 773-316-7444
Fax: 312-795-2779
Office: 312-795-2354
Email: CarliF@draperandkramer.com

Adam Kraft, The Federal Savings Bank
Phone: 312-738-6025
Fax: 312-624-6743
Cell: 773-909-5805
Email: akraft@thefederalsavingsbank.com

Ben Barber, The Federal Savings Bank
Phone: 312-738-6253
Fax: 312-624-6746
Email: bbarber@thefederalsavingsbank.com

Lizette Masters, First American Bank
Phone/Fax: 312.881.8603
Email: LMasters@firstambank.com

Steve Hill, Wells Fargo
Phone: 847.899.3373
Email: Steven.L.Hill@wellsfargo.com

Daniel Kreuger, BMO Harris Bank
Phone: 312-515-1873
Fax: 312-245-5299
Email: Daniel.Kreuger@harrisbank.com

*NOTE: The list of mortgage terms below is neither exhaustive nor technical, and is intended to give the user of this glossary a very basic understanding of some of the commonly used terms associated with mortgages.

Adjustable Rate Mortgage (ARM) – A mortgage that allows the lender to adjust the mortgage’s interest rate based on changes to a pre-selected index. When rates change, the mortgage’s monthly payments will increase or decrease, but are usually subject to a cap.

Amortization– Gradual debt reduction. Normally, the reduction is made according to a predetermined schedule for installment payments.

Annual Percentage Rate – A term used in the Truth in Lending Act to represent the full cost of a loan including interest and loan fees.

Appraisal – An estimate of a property’s fair market value based upon an analysis by a disinterested, qualified, licensed person.

Appraiser – The appraiser decides the market value of a home based on its condition and the selling prices of comparable homes recently sold in the area. His or her job is to compute a fair estimate of market value that might help the lender decide a reasonable loan amount, for one example.

Appreciation – An increase in value of an asset; the opposite of depreciation.

Balloon Mortgage – Where principal and interest on a loan are amortized for a longer period than the term of the loan. For example, a 30-year amortization and a 5-year term. At the end of the 5-year term, the outstanding principal on the loan is due. The principal sum due at maturity is known as the “balloon.”

Balloon Payment – The final, lump sum payment paid at the maturity date of a balloon mortgage.

Closing – The conclusion of a transaction. In real estate, the closing can include the delivery of a deed, payment of the purchase price and expenses associated with the transaction, the signing of any documents such as notes and mortgages, and the disbursement of funds necessary to the sale or loan transaction.

Closing Agent/Attorney – A closing agent or attorney assures that all documentation related to the sale of a house has been completed prop┐erly, including the title search and title insurance. The closing agent explains all closing documents to the buyer and the seller, obtains their signatures where necessary and records the documents.

Closing Costs – All of the costs to the buyer and seller individually that are associated with the purchase, sale, or financing of real property. They include, but are not limited to, prorating of agreed items such as taxes and rents, the cost of title insurance policies, and the cost of credit reports, recording fees and escrow fees. Synonym: settlement costs.

Closing Statement – A financial disclosure form that summarizes and outlines all funds received and expected at the closing, including but not limited to the escrow deposits for taxes, hazard insurance, and mortgage insurance.

Collateral – Property pledged as security for a debt, such as the real estate as security for a loan.

Commission – (real estate brokerage) A real estate broker’s fee for negotiating a real estate trans┐action, often expressed as a percentage of the sales price.

Commitment – An agreement, often in writing, between a lender and a borrower to loan money at a future date subject to compliance with stated conditions.

Contingency – A condition that must be met before a contract is fulfilled. For example, the sale of a house might be contingent upon the seller paying for certain repairs.

Contract To Purchase – A document that can be legally binding in which the purchaser agrees to buy certain real estate (or personal property) and the seller agrees to sell under stated terms and conditions.

Conventional Loan – A loan for the purchase of real estate not insured or guaranteed by any governmental agency.

Counteroffer – An offer made in response to an offer (instead of acceptance) and having the effect of rejecting the original offer. For example: A offers to buy B’s house for X dollars. B does not accept the offer, but responds by offering to sell to A at a higher price. B’s offer to A is a counteroffer.

Credit Rating – A rating assigned to a person to help establish ability to pay obligations based upon one’s past history of timely payment.

Credit Report – A report to a prospective lender on the credit standing of a prospective borrower, used to help determine credit-worthiness.

Debt To Income Ratio – Long term debt expenses as a percentage of monthly income. Lenders use this ratio to qualify borrowers for loans, typically setting a maximum debt to income ratio of 36 percent.

Deed – A written instrument when duly executed and delivered conveys title to or an interest in real estate.

Deposit – (1) Can be called “earnest money” and is generally an amount of money given by buyer to seller to indicate an intention to purchase or lease. (2) A natural accumulation of resources (oil, gold, etc.) that may be commercially recovered and marketed.

Down Payment – The part of the purchase price paid by a buyer from his/her own funds to make up the difference between the purchase price and the loan amount.

Earnest Money – A sum of money given by a buyer to a seller of real estate to show his intent to buy the property and to help demonstrate his ability to do so.

Equity – The homeowner’s ownership interest in real property. Simply put, it is the difference bet┐ween fair market value and the current amount the owner owes on any loan on the property.

Escrow Account – An account set up by a lender into which the borrower makes periodic payments, usually monthly, for taxes, hazard in┐surance, assessments, and any mortgage insurance premiums. The funds are held in trust by the lender who pays the sums as they become due.

Fair Market Value – The price at which property is transferred between a willing buyer and a willing seller who have reasonable knowledge of all pertinent facts and neither being under any extraordinary compul┐sion to buy or sell.

Financing Costs – The cost of interest and other charges involved in borrowing money to build or purchase real estate.

First Mortgage – A security interest in real estate that creates a primary lien in favor of the lender against real property.

Fixed-Rate Loan – A loan with the same rate of interest for the life of the loan.

Foreclosure – A legal procedure through which a borrower in default is deprived of his/her interest in mortgaged property. There is foreclosure by sale and strict foreclosure. In foreclosure by sale, the mortgaged property is sold to satisfy the loan and title to the property passes to the lender or to a third party that purchases the property at foreclosure sale. Strict foreclosure is a judicial process through the courts.

Gross Monthly Income – The amount of consistent and stable income that an individual receives each month, averaged over a period of time. This amount includes overtime pay, bonuses, commissions and income from dividends or interest, provided that the individual can show a consistent history of receiving such income and does not take out taxes and withholdings.

Guaranty – A promise by one party to pay a debt or to perform an obligation contracted by another if the original party fails to pay or perform pursuant to a contract.

Hazard Insurance – An insurance contract where the insurer contract pays for loss on a home from certain hazards, such as fire, in exchange for the purchaser’s regular payment of premiums (or the cost of insurance).

Housing Expense Ratio – A homeowner’s monthly expenses as a percentage of his or her monthly income.

Interest – An amount paid for the use of money- that is, the cost of securing a loan.

Interest Rate – A fee charged by a lender for the borrowing of money for a specified time, usually expressed as an annual percentage.

Interest Rate Cap – The maximum interest rate charge allowed on an adjustable-rate loan for any one adjustment period during the life of the loan.

Loan – Borrowed money (principal) typically repaid with interest.

Loan To Value Ratio – The relationship between the amount of a home loan and the total value of the property. For example, if you receive a loan of $33,250 on a home that costs $35,000 the loan to value ratio is 95 percent (33,250 divided by 35,000).

Market Value – The highest price that a willing buyer would pay and the lowest price a willing seller would accept, in an arm’s-length transaction.

Mortgage – A security interest in real property given by a borrower in exchange for a loan from the lender to enable the borrower to purchase real estate, for example. The lender will hold a security interest (mortgage) in the property and the borrower will make regular payments, including interest, to reduce the loan amount until paid in full.

Mortgage Banker – One who originates mortgages exclusively for resale on the secondary mortgage market.

Mortgage Broker – One who charges a service fee for bringing together a borrower and lender for the purpose of a loan origination.

Mortgagee – A lender to whom a security interest in property is conveyed in exchange for the loan.

Mortgage Life Insurance – A type of term life insurance. The amount of coverage decreases as the mortgage balance declines. In the event that the borrower dies while the policy is in force, the debt is automatically paid by insurance proceeds.

Mortgagor – One who borrows money, giving as security a mortgage or deed of trust on real property.

Origination Fee – A one-time fee (points) charged by a lender for making a real estate loan. The fee (usually a percentage of the amount loaned) may include the costs of loan document preparation, a credit check and an appraisal.

PITI – Principal, Interest, Taxes, and Insurance are the components of a mortgage payment, on a mortgaged loan.

Point – A dollar amount paid to a lender for making a loan. A point is one percent of the loan amount. Also called discount points.

Prepayment Clause – The clause in a mortgage or note allowing a borrower to pay off the loan prior to the date of maturity.

Prepayment Penalty – An amount that may be charged to the borrower by the lender for the early repayment of a debt. The prepayment penalty compensates the lender for the interest on the loan it would now not be earning.

Principal – The original balance of money loaned, excluding interest. Also, the remaining balance of a loan excluding interest.

Private Mortgage Insurance (PMI) – Insurance generally required by a lender when the borrower’s down payment is less than 20 percent of the purchase price, enabling a lender to make a conventional loan of a higher percentage of the property value. The cost of private mortgage insurance is usually included in the borrower’s monthly mortgage payment.

Property Tax – A tax levied on real property, the amount of which is dependent upon the property’s value.

RESPA – Real Estate Settlement Procedures Act. RESPA is a federal law that requires lenders to provide home mortgage borrowers with infor┐mation about known or estimated settlement costs, and that regulates those who provide settlement services to home sellers and purchasers.

Servicer – After a mortgage loan closes, the loan servicer collects the payments, manages escrow accounts, pays taxes and in┐surance bills as they become due, and manages delinquent payments. Lenders often “release” servicing to another business, which means that a homebuyer will not necessarily send house payments to the original lender.

Settlement – The closing of a loan or sale transaction.

Settlement Statement – A statement, generally provided at closing, giving a complete breakdown of costs involved in a real estate sale. Also known as the HUD-1.

Simple Interest – Interest computed only on the principal balance.

Title – Ownership in property – In the case of real estate, the documentary evidence of ownership is the deed. Title may be acquired through purchase, inheritance, gift or through foreclosure of a mortgage security interest, to name a few examples.

Title Insurance – Insurance which provides for the payment of a spe┐cific amount of funds for loss caused by defects in the title to real estate.

Title Search – A review of all recorded information to real property to disclose the past and current facts.

Truth-In-Lending – A federal law that requires the full, written disclosure of the terms and conditions of a mortgage and the annual percentage rate to a homebuyer. Also known as Regulation Z.

Variable Interest Rate – An interest rate that fluctuates as the prevailing rate moves up or down. In mortgages there are usually caps to the frequency and amount of fluctuation.