MOP Comparison
UC MOP Loan or Commercial Loan - Which is Better for You?
| UC MOP Loan | Commercial Loan | |
|---|---|---|
| Underwriting | ||
| Max. debt ratio | 48% | 40% |
| Supporting documents | Originals, ATM statements, emails, etc. OK | Original written statements from financial institution only |
| IRS 4506-T Form (to request tax returns) | Not required; UC verifies income upfront | Required for "easy qualifier" or "quick qualifier" loans |
| FICO Credit Score & Loan Rate | Same rate applies regardless of score | Rate increases noticeably if score <760 |
| Rates and Fees | ||
| Rate | Low, based on UC STIP index | High, introduce "teaser" rates, then normalized |
| Type of rate | Variable | Fixed, variable, or hybrid |
| Margin | 0.25% | >= 1% |
| Term | 10 - 30 years | 10 - 30 years |
| Annual Rate Cap | 1% | Possibly 2% or higher |
| Conforming vs. Jumbo | One rate for both | Jumbo is approx. 0.25% - 0.50% higher rate than conforming |
| Loan to Value (LTV)=loan sales price ratio | Same low rate | Tiered (i.e. larger downpayment, lower rate; smaller downpayment, higher rate) |
| Penalty | No | Maybe |
| Points/Fees | No | Possibly Yes. Fees are "document fees", "processing fees", "lender fees" |
|
Closing costs and rate |
Same rate whether closing costs are financed or not | Rate bumped on "zero cost" loans |
| Private Mortgage Insurance (PMI) | None | Yes, if down payment <20% |
| Service | Personal, anytime | Varies by organization |