Some important mortgage terms are defined in the glossary.
When do I need a mortgage broker?
According the Wall Street Journal 60% of all home loans are originated by mortgage brokers. Reason? More competitive and flexible terms and responsive timing
What is a mortgage broker and how can they help me?
A mortgage broker 'shops' regional, national and even international investors to find the best loan that fulfills your needs.
Why should I work with a mortgage broker when I can go directly to the bank myself?
A mortgage broker has access to all the sources available to you but in addition can access literally hundreds of lenders and programs that are not available to the general public. Brokers prepare your file for the investor and in return the lenders receive your mortgage at a 'wholesale' rate, thus making them very competitive with any retail terms with the exception that the broker has the ability to shop other lenders to receive the best terms in the marketplace.
What should I look for when selecting a mortgage broker?
Experience, responsiveness, and a proven track record. Chances are that if you are reading this you have been referred by a satisfied client of Gina's.
I don't know which mortgage is right for me, where can I get advice?
Gina does not just quote a rate like a bank, she goes over your needs, and goals and will discuss the pros and cons of the different options that are available to you. A key part of Gina's service is providing you with guidance and and understanding of the mortgage process.
How much home can I afford and can I work out how much you will lend me?
This is based on two things. First how much the lender will let you borrow, and secondly how much you feel comfortable spending each month. This can be a fairly straightforward conversation, or turn into a detailed and fairly in-depth process if one considers the myriad programs available. After discussing your financial goals Gina will work with you to figure out how much a lender will loan you.
How long does the mortgage process take?
The process usually takes less than 30 days, but can be as short as one week. If the property is unique or the end investor is not responsive it may take several months. Either way Gina can readily assess the timeframe to ensure you obtain the financing you need, when you need it.
How much does it cost to close a mortgage?
There are certain fixed costs and certain variable costs that need to be considered when looking at closing costs. Things such as appraisal, credit report charges, recording fees etc, are not affected by the dollar amount of the loan. Other costs such as Title, Escrow, Discount or Origination fees, however, are affected by the dollar amount of the loan. Closing costs are to be looked at in conjunction with relative interest rates available since a higher interest rate can be used to offset closing costs.
When should I apply?
If you are purchasing a home, you should have a bonified approval in hand to be put in the best negotiating postion. Typically these approvals are good for 120 days before they need to be updated.
How do I start the process?
It starts with a phone call or email to Gina. Typically an application is done face to face to facilitate a dialog to match you with the best program that is available to you.
What information will be required when I apply?
Typically this information with be income documentation in the form of year-to-date pay stubs, past two years W-2 statements, most recent asset statements and Purchase and Sale agreement if one is signed.
Short or long term Mortgage -- What loan is right for me?
It depends on your objectives. Gina will help guide you through the decision making process. Only when you see the pros and cons of different programs and compare them to your needs can we determine the best program for you.
FREQUENTLY ASKED QUESTIONS ABOUT ADJUSTIBLE RATE MORTGAGES (ARMs)
Some newspaper ads for home loans show surprisingly low rates. Are these loans for real, or is there a catch?
Some of the ads you see are for adjustable rate mortgages (ARMs). These loans may have low rates for a short timeómaybe only for the first month. After that, the rates can be adjusted on a regular basis. This means that the interest rate and the amount of the monthly payment can go up or down.
Will I know in advance how much my payment may go up?
With an adjustable-rate mortgage, your future monthly payment is uncertain. Some types of ARMs put a ceiling on your payment increase or rate increase from one period to the next. Virtually all must put a ceiling on interest-rate increases over the life of the loan.
Is an ARM the right type of loan for me?
That depends on your financial situation and the terms of the ARM. ARMs carry risks in periods of rising interest rates, but can be cheaper over a longer term if interest rates decline. You will be able to answer the question better once you understand more about ARMs.
Today, many loans have interest rates (and monthly payments) that can change from time to time. To compare one ARM with another or with a fixed-rate mortgage, you need to know about indexes, margins, discounts, caps, negative amortization, and convertibility. You need to consider the maximum amount your monthly payment could increase. Most important, you need to compare what might happen to your mortgage costs with your future ability to pay.