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FAQ |
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- How do you determine
what I qualify for?
- How long does the
loan process take?
- What information
do you need from me to complete and submit my application?
- How much will my
loan cost?
- What is the no cost
loan?
- What is Title Insurance?
- What is Mortgage
Insurance?
- Are your offices
local?
- Do you do business
out of state?
- What is the difference
between using a bank and a mortgage broker?
- How and why do
interest rates change?
- How often do interest
rates change?
- How can I improve
my rate?
- When should I
consider refinancing?
- What are the benefits
& short falls of a short term loan?
- How do you determine what I qualify
for?
There are many different factors that determine the loan
size you qualify for. Your credit score is the single biggest
factor. Other factors include your annual salary, length
of employment, and current debt ratios. We would be happy
to review your situation and help you determine how much
you qualify for.
- How long does the loan process
take?
The loan process averages about 20 business days. There
are a number of factors that can vary the length of this
process including our outside vendors times (lender, appraiser,
inspectors, etc). We communicate with both our clients and
REALTOR®’s on a weekly basis at minimum. This
way we keep you up to date on the process and can resolve
any issues that may arise as quickly as possible.
- What information do you need
from me to complete and submit my application?
- Signed Application
- 1 month pay stubs
- 2 months most recent bank statements
- Most recent quarterly investment statement
- Driver’s License
- 2 years W2’s
- Tax Returns
- Lease Agreement / Schedule E (rental income / history)
- CPA letter or Business License (self-employed)
- How much will my loan cost?
The typical loan cost averages between 1-2% of the loan
amount. Variables such as credit score, seller concessions,
loan product, and rate buy-downs will affect the cost of
the loan.
- What is the no cost loan?
The No-Cost Loan allows you to obtain a loan without paying
any points, origination fees, or closing costs by incurring
a slightly higher interest rate at the time of closing.
The rate is typically only 1/4 to 1/2 of a percent higher
than with a traditional loan. There is no time needed to
recoup the costs associated with that of a tradition loan,
allowing you to refinance to a lower rate or sell your home
at any time. With a traditional loan, it typically takes
5-7 years to recoup the costs and fees you pay.
- What is Title Insurance?
It is a policy provided by the title company guaranteeing
the accuracy of the title work done on your home at the
time of purchase. It makes sure that no one else has the
legal right to claim ownership to your property. As a buyer,
you are required to purchase a lenders policy of title insurance
as part of your standard closing costs, which only protects
the mortgage company. You may also choose to purchase an
owners policy, which would protect you against any loss
in the event of any legal issues relating to the title of
your home.
- What is Mortgage Insurance?
This is generally required in one form or another when the
down payment is less than 20%, and protects the lender in
the event of loan default. The lower the down payment, the
higher the risk for the lender, and thus the higher the
monthly premium. Depending on your particulars, there are
ways in which mortgage insurance can sometimes be avoided
at purchase, or dropped altogether at some point in the
future.
- Are your offices local?
Yes, our offices are located in the Denver Metro Area; however,
we do serve the entire state of Colorado.
- Do you do business out
of state?
We have the ability to write business out-of-state; however
the loan programs we can offer may be limited depending
on the state. If you need a loan for a property in a state
other than Colorado, please contact us. If we are unable
to get you the program the best fits your needs, we have
a national network of reputable brokers that we can refer
you to.
- What is the difference
between using a bank and a mortgage broker?
A bank is a direct lender – they lend you their own
money. A mortgage broker is someone who can shop the many
different lending institutions, including those not available
to the public, and get you the best loan product for your
situation.
- How and why do interest
rates change?
Many people are surprised to learn that rates change on
a daily and sometimes hourly basis. Interest rates fluctuate
in response to changes in the financial markets. The bond
market is generally a good indicator of the general trend
of interest rates. For more information, see our section
on Understanding
Your Credit.
- How often do interest
rates change?
Interest rates can change daily, even hourly. This means
that if you are comparing lender rates and fees –
this is a moving target on an hourly basis. For example,
if you have two lenders that you just can’t decide
between and want a quote from each – you must get
this quote at the exact same time on the exact same day
with the exact same terms or it will not be an accurate
comparison. You also must know the length of the lock you
are looking for, since longer rate locks typically have
slightly higher rates.
- How can I improve my
rate?
The ability to improve your rate depends on the reason it
needs improvement.
Low Credit Score - If your rate
is higher due to lower credit score, there are a number
of ways to improve your credit rating, even in a short period
of time – see the Your
Credit Section in our Mortgage Resource Center.
Market Conditions - If the rate
you have is due to market conditions at the time you close
your loan, you can either refinance and buy-down your rate
or you can wait to refinance when interest rates fall. Typically
we do not recommend buying down your rate, as the time needed
to recoup these costs is usually longer than the time you
will be in your home, or the time period where rates will
fall to a level where you can take advantage of lower interest
rates through a no-cost loan refinance. In a falling rate
environment, our clients can refinance several times several
times in a year.
2nd Loan - If you have a 1st and
2nd loan on your home, your effective interest rate may
be higher, as the rate on a second loan is typically higher
than the first. If you have increased the equity in your
home you may be able to refinance and combine your 1st and
2nd into one loan.
- When should I consider
refinancing?
The old rule of thumb was at least 2%, but this is no longer
the case. Many different individual factors need to be analyzed
to determine if refinancing is right for you, such as the
length of time you intend to stay in your home, or the type
of loan you currently hold. We are always happy to provide
a recommendation to you for your particular circumstances.
- What are the benefits
& short falls of a short term loan?
There are a number of benefits to a shorter term loan including
lower interest start rates, the ability to purchase a more
expensive home because the payments are lower, and the flexibility
it provides clients looking for a loan where they can choose
their monthly payment or optimize cash flow.
The draw back to an ARM is that once your introductory rate
is up (anywhere from 1 month to 10 years), your monthly
payment could begin to increase if interest rates are climbing.
Depending on the index this could happen annually or even
as frequently as every month. These adjustments are usually
capped on an annual basis and your mortgage advisor can
tell you what your maximum cap rate for the life of the
loan will be.
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