Dos and don’ts when applying for a mortgage

Written by Ryan Morgan on . Posted in Mortgage 101

Dos and don'ts when applying for a mortgage

Do:

  1. Notify us of any income changes! Please notify your loan officer if there are any income changes, for better or worse, as it affects the underwriting process and the necessary documentation that is required.
  2. Keep documentation for any large or irregular deposits!  Underwriters will need to verify any funds in all accounts being used for the transaction. You should keep copies of any checks deposited, bank statements to verify a transfer and you should have letters ready to explain any large deposits.
  3. Pay bills on time! As your closing date approaches, credit supplements or credit updates may be required. One late payment can potentially decrease your score up to 100 points.

Don’t:

  1. Apply for new credit of any kind! Every time your credit is pulled, your lender is notified and the underwriters may be required to investigate. Additional debt or a credit score change can alter not only the amount that you qualified for, but eligible loan programs and rates.
  2. Over charge your credit card! Lenders are required to check your credit immediately before settlement. An increase in credit balances can negatively impact the final steps of the loan settlement. It is wise to keep your balances below 50% of your maximum limit.
  3. Change your employment! Should you decide to quit or change your job, it would impact your income and could potentially jeopardize your approval. If it is something that is incumbent, please notify your loan officer immediately!

Refinancing your existing mortgage versus home equity products

Written by Ryan Morgan on . Posted in Refinancing

 

Good Better Best Keys Represent Ratings And Improvement

This dilemma is very common among homeowners. Most people do not like the idea of going back to a 30 year term when they refinance, which is a valid concern. Each option you will have access to will have it’s own strengths and weaknesses, and it’s important to get sound advice from your loan officer on which may be most appropriate for your goals and needs. The biggest strength to refinancing your existing mortgage, is securing a fixed rate mortgage. You will likely sacrifice in the short term to do this, but it provides protection as you continue to build equity and pay down your mortgage. Most home equity loan programs are based off of prime interest rate, which fluctuates. While this may be a much cheaper solution for the short term, it could potentially lead to an increase in rate and payment in the future.

For someone who is looking for short term debt, a home equity line may be the appropriate tool to achieve that. For someone with a longer horizon, it may make more sense to go with a more conservative approach to your mortgage refinance.

The bottom line is if you are looking to refinance, make sure you examine all options with your loan officer so you can ensure you make the right financial decision to protect your home.
Check out Bankrate’s article on other tips to consider!

When should you consider refinancing?

Written by Ryan Morgan on . Posted in Refinancing

 

Refinance Calculator How Much Can You Save Mortgage Payment

Every home owner has a unique set of circumstances and needs, the answer to this question may be different for every home owner. There are a variety of reason for refinancing, ranging from lowering your interest rate, shortening your loan term, taking cash out for home improvements and consolidating existing debt, just to name a few.

One of the most important things to consider when you are examining your options, is what the cost of the loan is. On refinances, you are able to roll your closing costs into your loan so there is no “out of pocket” cost. However, be wary! While it may be rolled into your loan, it is still a cost. You may not realize this cost until you go to sell your home, so make sure you look carefully at any fees that you will be responsible for on your refinance. A good rule of thumb to examine is your break even point. You calculate that by taking the cost of the transaction, and dividing it by your monthly savings. For example, if your refinance is going to cost you $3,000 and it saves you $100 per month, you will break even for this move in 30 months.  This is important because you may be in your forever home, or you may be in your starter home and this is extremely important when you examine your refinance options. There are also programs available where you can pay reduced, or even no closing costs for your refinance.

There are many different options available for refinance products, please consult with your loan officer in order to receive sound advice on which programs may be best for you! Check out the Wall Street Journal’s take on refinancing too.

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