Loan Servicing Resources

Your monthly payment is based on the loan amount, interest rate, and the amortization schedule. We’ll also collect escrow, which is used to cover payments for taxes, homeowners insurance, and other bills associated with your account. We calculate your escrow amount based on the expected bill amounts for the upcoming year. Because of this, the escrow amount can change every year, which will affect your mortgage payment.

If your loan has been transferred, MSF and the new servicer mails a Notice of Assignment to you, which includes information on where to make your payment. For further questions, please call 866-558-8850 or email us at msfcares@mortgagesolutions.net.

ARM – Adjustable-Rate Mortgage: With an ARM, your interest rate may change over time, based on the terms of your mortgage. You might make interest-only payments for a set amount of time when your loan begins, and switch to a fully amortized loan for the rest of the term.

Interest–Only Loan – Fixed Rate: With an Interest-Only Fixed-Rate loan, your payments will be interest-only for a set period of time and then switch to a full amortized payment for the remainder of the loan’s term. These loans are serviced as ARM loans beginning with ARM Plan “FX” for Fixed Rate.

Amortized Loan – Fixed Rate: With an Amortized Fixed-Rate loan, you’ll make regular payments that go toward your principal and interest (P&I). You’ll receive a detailed payment schedule with your closing documents.

Daily Simple Interest (DSI) Loan: With a DSI loan, interest is calculated based on the number of days between your payments. The longer the gap between payments, the higher the interest amount. If the interest amount is higher than your scheduled monthly payment, that could mean no money would be applied toward paying down your principal.

In a nutshell, mortgage insurance protects the lender in case you default on your loan. It’s typically required on loans where the down payment is less than 20 percent of the property’s original value, which is defined as the lesser of the sales price or the appraised value at closing. Mortgage Insurance might also be needed depending on the type of loan or property. There are three main types of Mortgage Insurance:

• Private Mortgage Insurance (PMI):
  PMI is required for conventional loans when the buyer puts down less than 20%. With PMI, a buyer who can’t afford a large down payment can still get an affordable loan. You are responsible for paying the Mortgage Insurance premiums.The Homeowners Protection Act of 1998 set rules about cancelling your PMI based on the original value of your home. It also includes requirements for disclosures, notifications, and how unearned premiums will be returned. These rules apply to single-family, primary residence mortgages which closed on or after July 29, 1999, that are not covered under the Federal Housing Administration (FHA) or Veterans Administration (VA). Some investor guidelines may provide additional options to cancel PMI based on your home’s current value.
• Mortgage Insurance Premium (MIP):
  MIP only applies to FHA loans, and is designed to protect the lender if you can’t repay your loan. FHA loans typically require an upfront MIP amount, which is paid at closing, and an annual MIP, which is collected and disbursed through your escrow account. HUD recalculates the annual MIP amount every year. However, FHA loans with MIP are not covered under the Homeowners Protection Act of 1998.
• Rural Housing Service (RHS):
  RHS loans are made through the USDA and can have an upfront premium as well as an annual premium. For RHS loans that closed prior to October 1, 2011, the upfront premium covers the entire life of the loan, with no annual premium required. For RHS loans that closed on or after October 1, 2011, an annual MIP is collected monthly and sent to the USDA. These annual premiums are required for the life of the loan and cannot be canceled. RHS loans are also not covered by the Homeowners Protection Act of 1998.

MIP is specific to FHA loans and is designed to protect the lender if you’re unable to repay your mortgage. There are two types of MIP:

• Upfront MIP: This is paid as part of your closing costs and is added to your loan balance. Upfront MIP is paid off through your monthly payments over the life of the loan. Loans with Upfront MIP can also require Monthly MIP.
• Monthly MIP: With Monthly MIP, you pay twelve installments per year into your escrow account. The rate is recalculated every year and depends on your loan’s term and Loan-to-Value ratio (LTV). Loans with Monthly MIP can also require Upfront MIP.

The Homeowners Protection Act of 1998 establishes provisions designed to help homeowners cancel or terminate their Private Mortgage Insurance (PMI). It also includes requirements for disclosures, notifications, and how unearned premiums will be returned. These rules apply to single-family, primary residence mortgages which closed on or after July 29, 1999, that are not covered under the Federal Housing Administration (FHA) or Veterans Administration (VA).

This Act requires that your PMI be automatically removed when you have reached the date when the principal balance of your mortgage is scheduled to reach 78% of your home’s original value, provided your payments are current at that time. Please keep in mind that additional payments towards principal won’t change the automatic removal date. However, you may be able to request cancellation if you meet the requirements for borrower-requested removal.

Hazard Insurance is a type of homeowners insurance that can help pay for repairs or rebuilding if your home is damaged by covered events such as fire, wind, hail, or other natural disasters.

A loan-to-value ratio (LTV) is an easy way to understand how much of your home’s value is covered by your mortgage. We calculate the LTV as a percentage by comparing your loan’s current principal balance to the original value of your home.

The original value is whichever is lower between the purchase price you agreed to in the contract or the appraised value at closing. To determine your LTV, simply divide your current principal balance by the home’s original value (expressed as a percentage).

Example:
Purchase price: $100,000
Original appraised value: $150,000
Current loan balance: $90,000
90,000 / 100,000 = 90% LTV

IRS Form 1098, also known as a Mortgage Interest Statement, shows how much interest, including points (when applicable), that we’re reporting to the IRS. If you itemize your deductions, mortgage interest is generally deductible for first and second homes. For more information, please contact a tax professional or the IRS.