COMMON REFINANCING QUESTIONS AND ANSWERS

When interest rates fall, a homeowner should definitely call us about refinancing, but he or she should discuss their entire financial situation and goals before making any final decision. Is your goal to lower your monthly payment? Consolidate debts? Get cash out for a new purchase? Increase your interest deduction expense for your taxes? Ask your loan officer to provide a couple of refinance options for you, showing how your loan term length, monthly payment and your total interest expense on the loan will change. After looking at these options, it will be clear whether or not you should spend the money to refinance.

How do I know when I should refinance my current mortgage loan?
It is often said that you should refinance when mortgage rates are 1% lower than the rate you currently have on your loan. Refinancing may be a good option even if the interest rate difference is less than 1%. A modest reduction in the loan rate can still reduce your monthly payment. The amount of savings in any situation will depend on your income, budget, loan amount and the change in interest rate. Your loan officer can help calculate the different options.

What are points?
Points are costs that need to be paid to a lender in order to receive mortgage financing under specified terms. A point is a percentage of the loan amount.

What does it mean to lock the interest rate on a mortgage loan?
Due to the nature of interest rate movements, mortgage rates can change dramatically from the day you apply for a mortgage loan to the day you close the transaction. If interest rates rise sharply during the application process, it could make a borrower's mortgage payment larger than he/she previously thought. To protect against this uncertainty, a lender can allow the borrower to 'lock-in' the loan's interest rate, guaranteeing the borrower the prevailing loan rate for a specified period of time.

I've had credit problems in the past. How does this impact my chances of getting a home loan?
Obtaining a home loan is possible even with very poor credit. If you have had credit problems in the past, we will consider you to lend to.

I've been late a couple of times on my credit card bills. Does this mean I will not qualify for a 2nd mortgage?
Apply, because we have programs for all types of credit.

Do I have to provide my Social Security number?
No, but it is recommended to streamline the process. We need your Social Security number to access your credit history.

What do I do if I don't know the "current market value" for my property?
Please provide us with an estimate of the amount for which you realistically think you could sell your home. Looking at recent sales prices for similar homes in your neighborhood can help you estimate your home's market value.

Do I have to answer all of these questions to proceed?
Yes. You need to answer all of these in order to receive our best loan recommendations.