Frequently Asked Questions

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General

Why use a Mortgage Broker instead of a lender for your mortgage loan?

Mortgage Brokers are a cheaper way for lenders to get their product to market. A lender does not have to worry about payroll taxes, overhead, supplies, etc. when a Mortgage Broker closes a loan with that lender. Therefore, the interest rates that a Mortgage Broker is able to offer are generally lower than you would find by going directly to the lender.

Also, by utilizing the services of a Mortgage Broker you will have someone on your side during the entire mortgage process. We like to see ourselves as advocates, working on your behalf, to bring you to a successful closing. Since we are a mortgage broker, and not a bank or banker, you have the ability to apply once with us and utilize our extensive network of regional and national lenders, as well as our expertise, in finding the best fit for your mortgage needs.

What is the APR?

The Annual Percentage Rate (A.P.R.) is the cost of your credit expressed as an annual rate. Because you may be paying loan discount "points" and other "prepaid" finance charges at closing, the A.P.R. disclosed is often higher than the interest rate on your loan.

How is my credit report used?

Your credit report is used to evaluate your mortgage request by showing how you have handled your credit obligations in the past. The following companies can provide you with a copy of your credit report, often free of charge:

Equifax
Website: www.equifax.com
Phone: 1-800-685-1111

Experian
Website: www.experian.com
Phone: 1-888-397-3742

TransUnion
Website: www.transunion.com
Phone: 1-800-888-4213

What documents will I need to apply for a mortgage?

Traditional loans usually require documents that verify your employment, income and assets, and may include:

  • Pay stubs for the last full month
  • W-2 forms for the past two years
  • Federal Tax Returns for the past two years
  • Bank statements for the past two or months
  • Copy of your drivers license
  • Signed purchase contract (for a purchase transaction)

Purchase a Home

Can I buy a home if I have less-than-perfect credit?

Yes. Keep in mind that lenders don't just look at your past history, but also at your ability and willingness to pay in the future. We may be able to help you buy a home, even if your credit isn't perfect.

When should you pay discount points?

When you pay a discount point, you are essentially paying part of your interest to the lender up front. This will lower your interest rate - as well as your monthly payment - over the life of the loan. One discount point is typically equal to 1% of the loan amount. For example, one point on a $100,000 loan would require payment of $1,000 at closing. Generally speaking, the longer you plan to remain in a property or hold your mortgage, the more advantageous it is to pay points. There is no requirement to pay discount points; whether or not you decide to pay points is completely up to you.

How much do I need for a down payment?

Each mortgage program requires a different minimum down payment. Below are the general guidelines for minimum down payment:

FHA - 3.5%
USDA - ZERO
VA - ZERO
Conforming/Conventional - 3-5%

Which mortgage and homeowners costs are tax-deductible?

Three types of mortgage and homeowners costs may be tax-deductible: Discount points, interest paid on a home loan or home equity loan and property taxes. After the year of sale, your mortgage interest and annual property taxes are the only deductible costs. For a refinanced loan, points must be deducted over time. Consult your tax advisor for advice about your situation.

Refinance your Mortgage

What are the benefits of refinancing?

You may want to consider refinancing if you are interested in paying off high-interest-rate debt, shortening the length of your repayment term for your mortgage, or lowering your monthly mortgage payment.

When does it make sense to refinance?

Generally speaking, one or more of the following conditions needs to be present before you should consider refinancing your mortgage:

  • Mortgage interest rates are falling.
  • Your home has significantly appreciated in market value.
  • You've been making payments on your original 30-year mortgage for less than ten years.
Can I refinance to take cash out of my house?

Yes. Lenders offer a variety of options that allow you to tap into your home's equity and take cash out. Contact us for the best cash-out refinancing option for you.

How can I consolidate debt when refinancing my mortgage?

Cash-out refinancing can help homeowners who want to consolidate high-interest, nondeductible debt. Because your mortgage interest rate is likely to be lower than rates on credit cards or other types of bank loans, consolidating debt may reduce your overall monthly debt payments. In addition, your mortgage interest may be tax-deductible, while your credit card interest is not. The amount you save on loan consolidation may vary by loan. Since a home loan may have a longer term than some of the bills you may be consolidating, you may not realize savings over the entire term of your new loan. In addition, your loan may require you to incur premiums for hazard and, if applicable, flood insurance and mortgage insurance which would affect your monthly payment reduction. Federally Guaranteed Student Loans should not be consolidated because you will lose important federal benefits.

Do I need to have my house appraised in order to refinance?

Yes, in most cases. However, depending on the circumstances, an appraisal may not be required.

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