Frequently Asked Questions

Why should I use a broker?
A broker has a diverse portfolio of lenders which means that your options multiply by the number of lenders in their portfolio.  A broker normally has knowledge of a variety of lenders rates and their niche.  You definitely stand to benefit from this.  For example some lenders have good rates on fixed products, others arms, or jumbo, etc.  Using a broker will save you time and money.

What are the benefits of owning a home?
There are many personal benefits of being a homeowner, which include but are not limited to privacy, space, and being able to remodel your home.  Other benefits can include the tax benefits and increase in equity. 

What is equity?
Equity is the difference between the market value and what you owe on the property.  Equity is important to lenders and they may judge you on your equity position.  Equity is important to a homeowner; when you sell your home, you cash in on your equity from the proceeds of the sale.  If you do a cash out refinance, you can cash in on your equity and will make payments with interest to the bank that lends the money based on your equity.  When you sell your home, any liens, taxes  and loans secured by your home will get paid before you will receive the remaining equity.

Do I qualify to buy a home?
Every borrower is a unique case and we could assess your situation depending on your income and credit, the price range you can afford and the monthly payment you can expect. 

Would it be beneficial to lower my interest through a refinance?
It is always beneficial to lower your interest rate on your mortgage to free up extra cash for tuition, a new auto or other expenses.  Usually, lowering your interest by at least 1% can make a difference of several hundred dollars.

What is the process in a refinance or purchase?
The process with a refinance or purchase are similar in some aspects.  We will need to assess your credit situation then gather documentation that will support your application, get you preapproved with a bank, have an appraisal done, then submit your file for underwriting and final approval to the bank.  Upon final approval your loan is funded through an escrow company, which insures that all requirements from all parties of the transaction is met. 

What documentation will you need from me?
Two most recent pay stubs, last two years W2s, two forms of id for each borrower, current mortgage statements, homeowner’s insurance declaration page, name and number to verify your employment, bank statement showing reserves, and signed disclosures.

How many times will you check my credit?
Normally we need to check your credit once and can forward that same credit report to our lenders if needed to get you pre-approved.

If I refinance, will my taxes go up?
Your taxes will go up if your home is assessed through the county assessors office at a higher value than the last transfer of title.  Your home may be assessed if there is a transfer of ownership or a sale.  This is not normally done in a refinance.

What are closing costs?
Normally closing costs are included in the loan, these costs include third party fees such as title, escrow, processing, or any other fee that is necessary to complete your refinance or purchase.

How much do I need to pay out of my pocket?
The only out of pocket expense is normally the appraisal.  The price of the appraisal can range depending on the value of your home and the area in which you live.  When doing a purchase, you may need to pay a down payment and sometimes a deposit in good faith to open escrow.

How will my bad credit affect the loan?
In some situations when doing a refinance, the lender will require that you pay your bad debt through the refinance.  If you have lates on your mortgage it may cause you to have a higher interest rate and smaller loan amount.

How can I establish credit?
Open a credit card and pay it at the end of each month.  Your payment history over the last twelve months weights most heavily on your score.  Making consistent payments over a period of time can help you establish your credit. 

What is PMI and how can I avoid it?
Private mortgage insurance is an insurance lenders require when financing more than 80% of the value of your home to protect the lender against default.  One way to avoid PMI is to get a second mortgage for anything over 80% of your equity.  There are other ways around this, like paying the insurance in one lump sum included with the refinance or accepting a higher interest rate.