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Frequently Asked Questions
Q: Is there any cost
to apply / inquire about my mortgage loan or loan refinance?
A: Absolutely not,
our fees are derived in conjunction with the closing and funding
of your mortgage loan. There are no fees collected until your loan
is closed. The one exception to this would be if you cancelled the
loan process after the appraisal had been completed on your home.
In this case, we would need to collect only the appraisal fee.
Q: Why should I use
a mortgage broker for my loan instead of talking to the loan officer
at my local bank?
A: A mortgage broker
offers several advantages to you as a prospective client. First,
a broker offers more flexibility in that we work with several banks
instead of being tied to just one. This means a wider selection
of loan programs and more financing options are available to you.
Secondly, our brokers are not saddled with the myriad of expenses
associated with the larger commercial banks, such as advertising,
large office buildings, payroll, insurance, and benefits for an
extensive office staff.
Our brokers are independent contractors, which not only provides
significant cost savings, but also allows for a more personal and
efficient relationship with the client as our staff is very small.
Q: I am anxious to
get started looking for my new home. How long will it take to get
a pre-approval from the bank?
A: Generally, pre-approvals
can be obtained within 24 to 48 hours after we receive and submit
your completed loan application. Some specialized loan programs
are an exception to this, such a 0 and 3% down, jumbo, and stated
income / asset loans. These loan products can take somewhere between
7 to 10 days for approval.
Q: I just refinanced
three months ago and now the rates have dropped again! Is there
a limit as to how many times I can refinance my loan?
A: No, but careful
consideration must be made as to the cost benefit of doing so. This
can involve many complex factors unique to your individual situation.
Our mortgage brokers will be happy to provide you with a personal
and confidential refinance loan analysis to help you reach the decision
that's right for you.
Q: I am refinancing
again, and had just done so only eight months ago. Is the appraisal
I received then still good for the current refinancing?
A: Most likely not.
In most cases, appraisals more than six months old are no longer
considered suitable. Appraisals six months old or less may qualify
for a re-certification of value at a reduced cost from the standard
appraisal fee. Final determination for appraisal suitability is
made by the lender.
Q: What factors determine
my qualification for the lowest interest rate available?
A: There are many
factors at play here, really too numerous to encompass them all.
Naturally, a solid credit score (700 plus) and a noteworthy credit
payment history are a good start. A history of continuous employment
and residency is also important. A low ratio of liabilities when
compared to assets and income is also beneficial. The type of loan
program you are qualifying under can affect the interest rate as
well. Cash out refinances and 0% down loan programs are just a few
of the loans that will inherently have higher interest rates due
to their nature. Self-employed persons who are not showing an income
on their tax return due to numerous deductions taken would result
in use of a stated income / stated asset loan program at a higher
rate as well. your mortgage consultant will help you find the loan
program that is most beneficial for your individual circumstances.
Q: I heard the Federal
Bank may be cutting interest rates again. Will this mean a drop
in mortgage interest rates as well?
A: Not necessarily.
Mortgage rates are not tied directly to the federal funds rate.
The mortgage rates most closely emulate the 10 year treasury bend,
but even so, may not mirror its movements entirely. There are many
market influences that can affect mortgage rates on any given day.
The federal funds rate, weekly or monthly economic reports (unemployment,
housing starts, consumer confidence to name a few), bond market,
and movement of the broader stock markets as a whole can all have
an impact on mortgage rates.
Summarily, anticipating the direction of mortgage rates is akin
to predicting the movement of the stock market. This is something
economists and market analysts have been trying to do (without success)
for many years.
Q: How is the value
of my home determined?
A: The appraised
value of your home is taken from direct comparable sales in your
surrounding neighborhood. A comparable is a home that is as similar
to your in design as possible (rambler to rambler, two-story to
two-story, etc.). Accepted adjustments are made for significant
non-cosmetic differences. It is not uncommon for the appraised value
of your home to be quite a different figure than the one you might
see used for property tax purposes or one that would represent the
market value of your home as determined by a realtor.
Some of the reasons for this variation are appreciation, location,
and size of your home. A rule change instigated by fannie Mae in
2002 stated that appreciation over time can no longer be used for
home appraisal computations. This was due to an increasing incidence
of mortgage loan defaults due to homeowners borrowing too steeply
against their home's appreciated value. In terms of location, the
value of your home may not be easily determined due to a lack of
home sales in your particular neighborhood. This may be because
the neighborhood is new, or because your neighborhood is one in
which people tend to stay. The size factor involves a home that
greatly outshines its neighbors due to size, amenities, and expense.
It can be difficult to find comparables for these home because they
represent a smaller percentage of homes on the market and are marketable
to a smaller slice of prospective home buyers. Therefore, fewer
of these home sell over a given time frame and fewer of these homes
are represented within a given neighborhood.
Q: What documentation
is required for my mortgage loan?
A: Generally, the
following documents are required to be submitted along with your
application:
- Federal tax return signed and dated for most recent year available.
- W-2 forms for most recent year available.
- Two most recent pay stubs.
- Most recent month's bank statement (must be from bank, not internet
print out).
Originals are not needed. We can make copies and return originals
to you if required.
Special loan programs and individual circumstances may require
additional documentation, as determined by the underwriter. Your
broker will inform you when additional documentation is in order.
Q: I am a permanent
resident alien, can I qualify for a loan?
A: Yes, you are afforded
the same rights as a US Citizen for application purposes.
Q: I am self employed.
Can I qualify for a home mortgage loan?
A: yes, however,
a two year work history as a self-employed individual is required.
Income must be reported and shown on your federal tax return to
qualify for all conventional conforming loan products. If, due to
tax write-offs, you do not show enough income to qualify for your
requested loan amount, alternate programs (such as stated income
/ state asset) are readily available. Ask your broker for details.
Q: How is my credit
score determined ?
A: There are three
major credit reporting agencies that collect information about you.
Most lenders will look at information from all three of the agencies
when considering your mortgage application. These companies are
Experian, Equifax, and TransUnion.
There is no simple answer for determining your credit score,as
it is affected by many factors. How much you have borrowed, if you've
been late making payments, how quickly you've repaid loan balances,
how many revolving lines of credit you have open, how many credit
inquiries have been made in your name are just a few of the considerations.
Try one of the following links to find out more about credit scores
and how you can obtain a copy of your credit report.
Have additional questions or concerns? Click
here to contact us.
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