Frequently Asked Questions

When you begin the loan process, you have hundreds of questions.  Your Mortgage Company can answer each and every question you may have.

What is a pre-qualification?
Pre-qualification is an estimate of how much of a mortgage you can afford. It is just an estimate, not a commitment, and it is based upon the information you provide rather than formal documents such as credit reports, property appraisals, and income verification.

What is a pre-approval?
Pre-approval is a firm commitment made by a mortgage company. Your credit report has been verified, but other details, such as a property appraisal are yet to be completed.

Why should I bother with a pre-approval?
It can be easier to negotiate a real estate when the seller knows you are pre-approved for the sales price. There’s also the aspect of your own peace of mind, knowing you have been pre-approved for a loan amount before you fall in love with a house!

What are points?
Points reduce the interest rate you would otherwise pay. One point is equivalent to 1% of the total loan amount. For example, 2 points on a loan amount of $100,000 would be $2,000. Paying points may be attractive to someone who plans to stay in a house for at least three years or more.

What is APR?
Annual Percentage Rate is the rate of interest you pay after you factor all finance charges and interest over the life of the loan.

What is mortgage insurance?
Private Mortgage Insurance protects the lender against loan default, and is usually required when a borrower has less than 20% for the down payment.

How do you compare APRs of different mortgages?
Calculating the APR can vary. Usually it is best to evaluate the same interest rate for the same loan type and term, and then compare points and total closing costs. Our mortgage experts offer you invaluable advice based on years of experience in the industry.

What is the difference between fixed rate and adjustable rate mortgages?
Fixed rates remains constant throughout the entire term of the mortgage. Adjustable rates start off at one rate but then are subject to adjustment at fixed periods. Your monthly payments will be recalculated based on the prevailing market conditions at the time - and yes, your payments can go up or down.

Which is better, an adjustable rate mortgage or fixed rate mortgage?
In most cases, a fixed rate mortgage is better when rates are low. Adjustable rates may be more attractive if you don’t plan to stay in the house for several years. One caution to consider about adjustable rate mortgages is negative amortization, where the total amount you owe on your mortgage actually increases during the mortgage period.

What are the advantages of purchasing a home vs. renting?
* Increased standard of living.
* Tax deductions for interest and property taxes
* Building home equity
* Appreciation of your property

What are good reasons to refinance my home?
* Converting an adjustable rate mortgage to fixed rate mortgage to stabilize your payments
* Converting a higher-rate mortgage to a lower-rate mortgage when rates are low
* Tax considerations for the amount refinanced
* Tapping into additional cash to improve your home and increase its value

Which mortgage program is best for me?
Now that's highly personal!  There is no one answer.  We can help you evaluate countless loan offers sponsored by large numbers of lenders, then you decide what's right for you.  We will then assist you through the loan process, step-by-step, right through closing.

We have answers for all your questions!  We would be delighted to advise you about questions concerning your personal financial situation so you can buy the home of your dreams.  Contact Your Mortgage Company today or apply online -- we'll respond quickly and professionally to help you protect your best interests right through closing!