Common Questions:
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HOW DO YOU SAVE ME MONEY?
Banks have found that it is cheaper for them to buy loans than it is to find clients and hire professionals to close their business. For this reason, most large banks offer mortgage loans on a wholesale level. This means that a good Mortgage Company has access to hundreds of programs from several different banks. This allows the consumer the ability to shop several banks at one time with only one application and credit report, thus increasing the chance of finding better rates and programs in tune with a broader financial plan. |
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WHY AND HOW DO INTEREST RATES CHANGE?
Many people are surprised to learn that rates change on a daily and sometimes hourly basis. Interest rates fluctuate in response to changes in the financial markets. The bond market is generally a good indicator of the general trend of interest rates.
WHAT HAPPENS ONCE I AM PRE-APPROVED?
You are ready to buy a home! Remember that it is very important to inform us of any changes in the financial information that was provided at the time of approval, as it may make a change in the amount or type of loan that you can qualify for.
WHEN SHOULD I CONSIDER REFINANCING?
The old rule of thumb was at least 2%, but this is no longer the case. Many different individual factors need to be analyzed to determine if refinancing is right for you, such as the length of time you intend to stay in your home, or the type of loan you currently hold. We are always happy to provide a recommendation to you for your particular circumstances.
WHAT IS AN ORIGINATION FEE?
Typically, it is 1% of your loan amount, and works exactly like a discount point. You can avoid all or part of this fee by paying a higher interest rate. In Utah, rates are typically quoted assuming this 1% origination fee.
HOW DO I SHOP RATES?
Interest rates vary on the loan size and the consumer’s financial strength and goals. It is common to find misleading rates published in the Internet and newspaper. While you can often find an interest rate quote that is a bit lower, more often than not the lender has hidden fees or qualifications that are unattainable. A proper rate and program quote will be customized around a financial goal. As an example, if a homeowner intends to move in less than five years, they would be better off paying .125% more interest than $2000 more in fees.
WHAT IS TITLE INSURANCE?
It is a policy provided by the title company guaranteeing the accuracy of the title work done on your home at the time of purchase. As a buyer, you are required to purchase a lenders policy of title insurance as part of your standard closing costs, which only protects the mortgage company. You may also choose to purchase an owners policy, which would protect you against any loss in the event of any legal issues relating to the title of your home.
WHAT IS MORTGAGE INSURANCE?
This is generally required in one form or another when the down payment is less than 20%, and protects the lender in the event of loan default. The lower the down payment, the higher the risk for the lender, and thus the higher the monthly premium. Depending on your particulars, there are ways in which mortgage insurance can sometimes be avoided at purchase, or dropped altogether at some point in the future.
WHY DID MY REALTOR REFER ME TO YOU?
A high quality Realtor knows that the key to a successful transaction means TEAMWORK with a professional mortgage banker. Any experienced Realtor could tell you horror stories about times when a client made a poor choice of mortgage company, and ended up with big surprises at the closing table, or worse, no closing taking place at all! A good Realtor will form relationships with trusted individuals who have proven themselves time and time again, so that they know you will be given the excellent service that you deserve. It is important to know that your Realtor is NOT given any compensation or 'kickbacks' for referring you to a mortgage banker. As mortgage professionals, we desire more referrals, both from you and your Realtor, so consider the extra motivation this provides for us to take great care with your satisfaction!
WHY SHOULD I USE A REALTOR?
First and foremost, because you need an experienced professional working on your behalf. The Realtor's commission is not paid by the buyer, but by the seller of the home being purchased, and it is in each party's best interest to have professional representation. As a seller, profits are generally maximized by having an experienced Realtor market and sell your home, rather than deal with the headaches of trying to do it all on your own. See our page on 'selecting a Realtor' for more information.
Many people are surprised to learn that rates change on a daily and sometimes hourly basis. Interest rates fluctuate in response to changes in the financial markets. The bond market is generally a good indicator of the general trend of interest rates.
WHAT HAPPENS ONCE I AM PRE-APPROVED?
You are ready to buy a home! Remember that it is very important to inform us of any changes in the financial information that was provided at the time of approval, as it may make a change in the amount or type of loan that you can qualify for.
WHEN SHOULD I CONSIDER REFINANCING?
The old rule of thumb was at least 2%, but this is no longer the case. Many different individual factors need to be analyzed to determine if refinancing is right for you, such as the length of time you intend to stay in your home, or the type of loan you currently hold. We are always happy to provide a recommendation to you for your particular circumstances.
WHAT IS AN ORIGINATION FEE?
Typically, it is 1% of your loan amount, and works exactly like a discount point. You can avoid all or part of this fee by paying a higher interest rate. In Utah, rates are typically quoted assuming this 1% origination fee.
HOW DO I SHOP RATES?
Interest rates vary on the loan size and the consumer’s financial strength and goals. It is common to find misleading rates published in the Internet and newspaper. While you can often find an interest rate quote that is a bit lower, more often than not the lender has hidden fees or qualifications that are unattainable. A proper rate and program quote will be customized around a financial goal. As an example, if a homeowner intends to move in less than five years, they would be better off paying .125% more interest than $2000 more in fees.
WHAT IS TITLE INSURANCE?
It is a policy provided by the title company guaranteeing the accuracy of the title work done on your home at the time of purchase. As a buyer, you are required to purchase a lenders policy of title insurance as part of your standard closing costs, which only protects the mortgage company. You may also choose to purchase an owners policy, which would protect you against any loss in the event of any legal issues relating to the title of your home.
WHAT IS MORTGAGE INSURANCE?
This is generally required in one form or another when the down payment is less than 20%, and protects the lender in the event of loan default. The lower the down payment, the higher the risk for the lender, and thus the higher the monthly premium. Depending on your particulars, there are ways in which mortgage insurance can sometimes be avoided at purchase, or dropped altogether at some point in the future.
WHY DID MY REALTOR REFER ME TO YOU?
A high quality Realtor knows that the key to a successful transaction means TEAMWORK with a professional mortgage banker. Any experienced Realtor could tell you horror stories about times when a client made a poor choice of mortgage company, and ended up with big surprises at the closing table, or worse, no closing taking place at all! A good Realtor will form relationships with trusted individuals who have proven themselves time and time again, so that they know you will be given the excellent service that you deserve. It is important to know that your Realtor is NOT given any compensation or 'kickbacks' for referring you to a mortgage banker. As mortgage professionals, we desire more referrals, both from you and your Realtor, so consider the extra motivation this provides for us to take great care with your satisfaction!
WHY SHOULD I USE A REALTOR?
First and foremost, because you need an experienced professional working on your behalf. The Realtor's commission is not paid by the buyer, but by the seller of the home being purchased, and it is in each party's best interest to have professional representation. As a seller, profits are generally maximized by having an experienced Realtor market and sell your home, rather than deal with the headaches of trying to do it all on your own. See our page on 'selecting a Realtor' for more information.
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