Home Mortgage Loans/Refinance

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Driven crazy by too many debts and expenses?
A debt consolidation or interest rate reduction refinance could be the answer. Talk to us today to lock in an all-time low rate!
Thinking about waiting for better rates...
...but worried you might lose out? Call one of our experts today and discuss your options. But first - arm yourself by reading our experts suggestions in the links above!
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and built up some equity in your house? Think it's time to enjoy the fruit of your efforts? Discuss cash-out refinance options with our experts.
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DO NOT MAKE THESE COMMON MORTGAGE MISTAKES

Check our Refinance section for advice on how to be prepared even BEFORE you speak with a Mortgage Expert.

Your current lender may not have the best rates and programs.

Believing it’s easier to work with your current lender is a common misconception. In most cases, they’ll require the same documentation as other lenders and mortgage brokers. This is because most loans are sold on the secondary market and have to be approved independently. Even if you’ve been good at making payments to your existing lender, they’ll still have to process the verifications all over again.

Determine the total transaction costs (exclude escrows for taxes & insurance from this) and how much you’ll save each month by lowering your monthly mortgage payment. Divide the transaction costs by the monthly savings to determine the number of months you’ll have to stay in the property to recoup your refinancing costs.

For example, if the costs of refinancing total $2000, and you save $50 per month, you break-even in 2000/50 = 40 months. In this case, you should only refinance if you plan to stay in the home for at least 40 months.

Note: The above example is suited to comparing two similar loans when the intent is to lower your monthly payment and recoup transaction costs relatively quickly. Other refinancing transactions require different kinds of analyses. Other types of refinancing transactions include exchanging a fixed rate for an ARM, or a 30 year mortgage for a 15 year mortgage. Discuss these in detail with one of our Mortgage Experts.

Within 3 working days after receipt of your completed loan application, your mortgage company is required to provide you with a written good-faith estimate of closing costs. However, you should ask for a written fee worksheet even before you decide which lender to apply to.

Have the appraisal company conduct a desk-review appraisal (typically at no charge) and provide you with a range of possible values. Your mortgage company can ask an appraiser to do this for you.] Do not waste your money on a complete appraisal if you believe the home is unreasonably priced in this initial review.

Mortgage companies do not use the county tax assessor’s value to help determine if they’ll originate your loan. They, like real estate agents, usually use the sales comparison approach (formerly known as the market data comparison approach).

Do not sign documents in a hurry. As soon as possible, review the documents you’ll be signing at close of escrow–including a copy of all loan documents. This way, you can review them and get your questions answered in a timely manner. Do not expect to read all the documents during the closing. There is rarely enough time to do that.

When your mortgage company asks you for additional paperwork–get cracking! They’re trying to get you approved! If you don’t quickly respond to your broker’s requests, you could end up paying higher rates should your rate lock expire.

When a mortgage company tells you they’ve locked your rate, get a written statement detailing the interest rate, the length of the rate lock, and other particulars about the program.

Many mortgage companies look at the combined loan amounts (i.e., the sum of the first and second loans) when you are refinancing only your first loan. If you plan on refinancing your first loan, check with your mortgage company to see if having a second loan will cause your refinance to be turned down.

Check our Buying a Home section for how to be prepared even BEFORE you speak with a Mortgage Expert.

Pre-approval and pre-qualification are two different things. During the pre-qualification process, a loan officer asks you a few questions, then hands you a “pre-qual” letter. The pre-approval process is much more thorough. During the pre-approval process, the mortgage company does virtually all the work associated with obtaining full-approval. Since there is no property yet identified to purchase, however, an appraisal and title search aren’t conducted.

When you’re pre-approved, you have much more negotiating clout with the seller. The seller knows you can close the transaction because a lender has carefully reviewed your income, assets, credit and other relevant information. In some cases (multiple offers, for example), being pre-approved can make the difference between buying and not buying a home. Also, you can save thousands of dollars as a result of being in a better negotiating situation -advice you can take to the bank.

Most good Realtors will not show you homes until you are pre-approved. They don’t want to waste your, their, or the seller’s time.

We can help you become pre-approved at little cost. They’ll usually need to check your credit and verify your income and assets.

If an agent tries to make you sign a written document that is contrary to their verbal commitments, don’t do it! For example, if the agent says the washer will come with the home, but the contract says it will not–the written contract will override the verbal contract. In fact, written contracts almost always override verbal contracts. When buying or selling real estate, abide by this maxim: Get it in writing!

While rate is important, you have to consider the overall cost of your loan. Pay close attention to the APR, loan fees, discount and origination points. Some lenders include discount and origination points in their quoted points. Other lenders may only quote discount points, when in fact there is an additional origination point (or fraction of a point).

This difference in the way points are sometime quoted is important to you. One lender will quote all points, while another lender may disclose an extra point, or fraction thereof, at a later time–an unwelcome surprise.

Within 3 working days after receipt of your completed loan application, your mortgage company is required to provide you with a written good-faith estimate of closing costs. You may want to consider requesting a GFE from a few lenders before submitting your application. With a few GFEs to compare, you can get a feel for which lenders are more thorough, and you can educate yourself regarding the costs associated with your transaction. The GFE with the highest costs may not indicate that a particular lender is more expensive than another–in fact, they may simply be more diligent in itemizing all fees.

The cost of the mortgage, however, shouldn’t be your only criteria. You should feel comfortable that the loan officer you are dealing with is committed to your best interests and will deliver what they promise.

Your Realtor is not a financial expert. He or she may not know which loan is best for you. Your Realtor gets a commission only when your transaction closes. As a result, the Realtor may refer you to a lender who will close your loan, but who may not have the best rates or fees. Also, many Realtors refer you to one of their friends in the loan business – who also may not have the best rates or fees. We recommend asking for a loan with someone of your choice before you sign a real estate sales contract. There are countless stories of consumers who ended up paying higher rates, or got a loan that wasn’t right for them, because they blindly followed their Realtor’s advice.

Although most Realtors are professional and concerned about your best interests, you should do your own homework.

When a mortgage company tells you they have locked your rate, get a written statement detailing the interest rate, the length of the rate lock, and other particulars about the program.

Buyers and sellers have opposing interests. Sellers want to receive the highest price, buyers want to pay the lowest price. In most situations, dual agents cannot be fair to both buyer and seller. Since the seller usually pays the commission, the dual agent may negotiate harder for the seller than for the buyer. If you are a buyer, it is usually better to have your own agent represent you.

The only time you should consider using a dual agent, is when you can get a price break. This usually resuls from the dual agent lowering their commission

This inspection is different from an appraisal.

Unless you’re buying a new home with warranties on most equipment, it is highly recommended that you get property, roof and termite inspections. These reports will give you a better picture of what you’re buying. Inspection reports are great negotiating tools when it comes to asking the seller to make repairs. If a professional home inspector states that certain repairs need to be made, the seller is more likely to agree to making them. If the seller agrees to make repairs, have your inspector verify the completed work prior to close of escrow. Do not assume that everything will be done as promised.

Start shopping for insurance as soon as you have an accepted offer. Many buyers wait until the last minute to get insurance and find they have no time left to shop around

Do not sign documents in a hurry. As soon as possible, review the documents you’ll be signing at close of escrow–including a copy of all loan documents. This way, you can review them and get your questions answered in a timely manner. Do not expect to read all the documents during the closing. There is rarely enough time to do that.

You expect to move out of your current residence on Friday and into your new residence over the weekend. Also on Friday, your lease terminates and the movers are scheduled to appear. Friday morning arrives: bags packed, boxes stacked, children under arm and the dog on a leash; you’re sitting on your front door stoop awaiting the arrival of the movers. Your phone rings. Your loan closing is delayed until the following Tuesday. The new tenants turn into your driveway with a weighted-down U-Haul and the movers pull up across the street.

You ask yourself, “Where’s the nearest Motel 6 and storage facility? How much will the movers charge for an extra trip? Can we afford it?”

How can you avoid such a disaster? Schedule your lease cancellation and ask the new occupants to show up seven days after you anticipate closing your own purchase transaction. Consider the extra expense an insurance policy. You’re buying peace of mind–and protecting yourself from expensive delays.

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