Tips - Q/A
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HELPFUL TIPS
How Your Credit Score is Determined
several inquiries for car/mortgage in a 13 day period
are treated as one inquiry.
Types of Lenders
Retail - Banks are going to charge a premium rate.
Wholesale - We as the correspondent lender shop for the best rate .
Mortgage Brokers
Correspondent Lender
How Your Credit Score is Determined
- 30% based on payment history
- 30% on outstanding debts - do not go over 30% balance on any card.
More cards are better. - 15% on long term debt
- 15% on type of credit Mortgage or Installment
- 10% on number of inquiries
several inquiries for car/mortgage in a 13 day period
are treated as one inquiry.
Types of Lenders
Retail - Banks are going to charge a premium rate.
Wholesale - We as the correspondent lender shop for the best rate .
Mortgage Brokers
- Do not fund loans
Correspondent Lender
- fund there own loans
QUESTIONS & ANSWERS
Q. How much will I need for a down payment?
A. Many lenders have loan programs with 5% down or less including zero
down. Of course you can always put down more if you have it to reduce the
monthly principal and interest payment.
Q. Are there other fees required in addition to down payment?
A. Yes. There are lender fees, pre-paids, title fees, taxes, etc. In may cases the
Lender will allow these fees to be paid by the seller and the contract can be
worded accordingly.
Q. Is a 30-year fixed rate always the best way to go?
A. Your decision should be based on long range plans. If you may be relocating
or are planning to move up in house size and standard in the near future, your
decision should be based on the best and most affordable short range lowest
rate and fees. Adjustable Rate Mortgages (ARM) make up one-third of home
loans. Rates on 15 and 30 year fixed-rate mortgages are very low by historical
standards. ARM rates are even lower, but they could rise when it's time for them
to adjust.
Q. Do I have to pay mortgage insurance if I don't have 20% down?
A. A "piggyback" loan lets you avoid paying for mortgage insurance. Piggyback
financing is now almost 50% of home purchases and consists of two loans. It
eliminates mortgage insurance.
Q. Should I pay off my mortgage as soon as possible?
A. This is a personal choice and the answer is often rooted in how far an
individual is from retirement and/or perceived financial stability. A younger
person or savvy investor may be more concerned with "return on investment"
(ROI) than "security and safety".
Q. Why is it so important to be Pre-Approved?
A. You can only be sure that you are shopping in the right price range if you are
Pre-Approved for a loan first. When you are ready to make an offer, you not only
want to come from a position of strength with the seller, but you want the
language in the Contract to correctly reflect your ability to finance. Incorrect
language may result in your inability to close for lack of funds and/or loss of
deposit.
Q. How much will I need for a down payment?
A. Many lenders have loan programs with 5% down or less including zero
down. Of course you can always put down more if you have it to reduce the
monthly principal and interest payment.
Q. Are there other fees required in addition to down payment?
A. Yes. There are lender fees, pre-paids, title fees, taxes, etc. In may cases the
Lender will allow these fees to be paid by the seller and the contract can be
worded accordingly.
Q. Is a 30-year fixed rate always the best way to go?
A. Your decision should be based on long range plans. If you may be relocating
or are planning to move up in house size and standard in the near future, your
decision should be based on the best and most affordable short range lowest
rate and fees. Adjustable Rate Mortgages (ARM) make up one-third of home
loans. Rates on 15 and 30 year fixed-rate mortgages are very low by historical
standards. ARM rates are even lower, but they could rise when it's time for them
to adjust.
Q. Do I have to pay mortgage insurance if I don't have 20% down?
A. A "piggyback" loan lets you avoid paying for mortgage insurance. Piggyback
financing is now almost 50% of home purchases and consists of two loans. It
eliminates mortgage insurance.
Q. Should I pay off my mortgage as soon as possible?
A. This is a personal choice and the answer is often rooted in how far an
individual is from retirement and/or perceived financial stability. A younger
person or savvy investor may be more concerned with "return on investment"
(ROI) than "security and safety".
Q. Why is it so important to be Pre-Approved?
A. You can only be sure that you are shopping in the right price range if you are
Pre-Approved for a loan first. When you are ready to make an offer, you not only
want to come from a position of strength with the seller, but you want the
language in the Contract to correctly reflect your ability to finance. Incorrect
language may result in your inability to close for lack of funds and/or loss of
deposit.