When does it make sense to refinance?
It's generally a good idea to refinance when you are lowering your interest rate for no closing fees. It may be a viable option to refinance if you can reduce your payment regardless of costs if you are finding yourself accruing credit card debt on a monthly basis, as well as looking into at a cash-out home loan where consolidating higher interest debts results in your overall reduction in monthly payments.
A point is a percentage of the loan amount or 1-point = 1% of the loan. One point on a $100,000 loan is $1,000. Points are costs that need to be paid to a lender to get mortgage financing under specified terms. Discount points are fees used to lower the interest rate on a mortgage loan. Origination points are fees charged to cover the lender’s fees or profit. Lenders may refer to costs in terms of basis points in hundredths of a percent. 100 basis points = 1 point, or 1% of the loan amount.
What is cash to close or funds to close?
Cash to close is the amount of money required to complete the transaction of closing a refinance. This term doesn't refer to actual cash. Also, it is not recommended to pay with cash in this situation as it often won't be accepted.
Can I roll my closing costs into my loan?
Yes, this option lets you bring no money to closing. There will be no added costs as you provide your loan to value to allow for the financed costs.
Do you offer alternative income-based purchase loans?
Yes, but rates and fees are generally higher for these types of loans. For program details please speak with a loan consultant.
Will an Appraisal or Refinance increase my property taxes?
Refinancing your home (including the appraisal) does not impact the amount of property taxes paid for your property. Your property taxes will only change when the county assessor assess any changes. This is not triggered by a refinance. Assessment value changes occur slower than housing market prices, and are typically only adjusted once per year. In addition, many states/counties have laws regarding how much property taxes can be increased, within a specific amount of time.
Can I keep my current impound account or roll it over in my new loan?
No, if you wish to continue having an impound account we will establish a new impound account for your loan. The balance of your current impound account will be refunded to you, by your current lender, within 30 days of receiving the payoff.
Can I pull equity out of my home (cash-out refinance)?
Your home equity is the difference between the appraised value of your home and how much you still owe on your mortgage. A good rule of thumb for a primary residence is to borrow up to 80% percent of the value.
I recently filed or completed forbearance. Can I still refinance?
Yes, but there are stipulations for qualifying, so please speak with a loan consultant.
Can I skip my mortgage payment when I refinance?
When you refinance you can skip one or two mortgage payments.
Do all loans need an appraisal?
No, the requirement of an appraisal is determined by an automated underwriting system. The more equity you have in your home, the less likely it is that you need an appraisal. If you are getting a cash-out refinance, the probability of needing an appraisal increases.
How do I know how much money needs to go into my new impound account?
The number of months of reserves is determined by when the loan will close and when your property taxes and homeowners insurance are due.
What does ‘interest paid in arrears’ mean?
Simply put, the payment you make on the first of each month pays the interest for the month that just ended and the principal for the month ahead. The mortgage payment you made in December pays for the interest in November, but the principal for December.
Why do you request more documentation throughout the loan instead of upfront?
Sometimes underwriting may request additional documentation or information as they review the loan for approval. While we do our best to determine what those documents are upfront, things can come to light later in the process. Other times, we may need updated income documentation, bank statements, or mortgage statements as they expire.
We can lock your loan the same day we have our initial conversation. Locking your rate is possible as long as all necessary documentation is received by cutoff time and you qualify for the loan. Rates change like the stock market, so the sooner we receive all the necessary documents, the sooner we can lock. We also offer locks for up to 90 days.
What are impounds (also called escrow accounts)?
Impounds, also referred to as an escrow account, can be part of your monthly payment. They are used to pay your property taxes and homeowner insurance. Some borrowers prefer to do this instead of making lump-sum payments themselves. We can set up the account through your purchase or refinance on your behalf.
What is the difference between an interest rate and the APR?
The interest rate is the yearly cost you will pay to borrow the money, and it’s expressed as a percentage rate. The interest rate does not reflect fees or any other charges you may have to pay for the loan.
An annual percentage rate (APR) is a broader measure of the cost of borrowing money than the interest rate. The APR reflects the interest rate, any points, mortgage broker fees, prepaid interest, and other charges that you pay to get the loan. For that reason, your APR is usually higher than your interest rate.