Discover all that you need to know about mortgage loans.
It’s generally a good time to refinance when mortgage rates are 2% lower than the current rate on your loan. It may be a viable option even if the interest rate difference is only 1% or less. Any reduction can trim your monthly mortgage payments. Example: Your payment, excluding taxes and insurance, would be about $770 on a $100,000 loan at 8.5%; if the rate were lowered to 7.5%, your payment would then be $700, now you’re saving $70 per month. Your savings depends on your income, budget, loan amount, and interest rate changes. Your trusted lender can help you calculate your options.
As easy as going to the following link and filling up the applications, and uploading the documents requested, another way is giving us a call, and we will request some documents to start an application for preapproval.
Here’s a list of items we will need to process your application:
We look forward to providing you with prompt and professional service. If you have any questions, please call us at (617) 233-3097. We’re here to help!
A point is a percentage of the loan amount, or 1-point = 1% of the loan, so 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 by paying some of this interest up-front. Lenders may refer to costs in terms of basic points in hundredths of a percent, 100 basis points = 1 point, or 1% of the loan amount.
Your application may have a minor effect on your credit score, lowering it by just a few points. Checking your credit is a necessary step for getting a mortgage. It allows us to show you real mortgage options and
interest rates – and get you approved.
You have a 45-day window in which multiple credit checks from mortgage lenders are recorded only once on your credit report. This is so you can shop around for a mortgage without your credit taking a big hit.
You can get approved with a credit score as low as 580 if you meet our other eligibility criteria.
Remember that the score we use might differ slightly from the one you get from your credit card company or another source. We use a FICO® Score, but educational sources might use a different credit scoring model. We still encourage you to apply even if you think your score is slightly below 580.
Yes, if you plan to stay in the property for a least a few years. Paying discount points to lower the loan’s interest rate is a good way to lower your required monthly loan payment, and possibly increase the loan amount that you can afford to borrow. However, if you plan to stay in the property for only a year or two, your monthly savings may not be enough to recoup the cost of the discount points that you paid up-front.
The annual percentage rate (APR) is an interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other credit costs. The APR allows homebuyers to compare different types of mortgages based on the annual cost for each loan. The APR is designed to measure the “true cost of a loan.” It creates a level playing field for lenders. It prevents lenders from advertising a low rate and hiding fees.
The APR does not affect your monthly payments. Your monthly payments are strictly a function of the interest rate and the length of the loan.
Because APR calculations are effected by the various different fees charged by lenders, a loan with a lower APR is not necessarily a better rate. The best way to compare loans is to ask lenders to provide you with a good-faith estimate of their costs on the same type of program (e.g. 30-year fixed) at the same interest rate. You can then delete the fees that are independent of the loan such as homeowners insurance, title fees, escrow fees, attorney fees, etc. Now add up all the loan fees. The lender that has lower loan fees has a cheaper loan than the lender with higher loan fees.
The following fees are generally included in the APR:
The following fees are normally not included in the APR:
Mortgage rates can change from the day you apply for a loan to the day you close the transaction. If interest rates rise sharply during the application process it can increase the borrower’s mortgage payment unexpectedly. Therefore, a lender can allow the borrower to “lock-in” the loan’s interest rate guaranteeing that rate for a specified time period, often 30-60 days, sometimes for a fee.
Credit scoring models are complex and often vary among creditors and for different types of credit. If one factor changes, your score may change — but improvement generally depends on how that factor relates to other factors considered by the model. Only the creditor can explain what might improve your score under the particular model used to evaluate your credit application.
Nevertheless, scoring models generally evaluate the following types of information in your credit report:
Scoring models may be based on more than just information in your credit report. For example, the model may consider information from your credit application as well: your job or occupation, length of employment, or whether you own a home.
To improve your credit score under most models, concentrate on paying your bills on time, paying down outstanding balances, and not taking on new debt. It’s likely to take some time to improve your score significantly.
On a conventional mortgage, when your down payment is less than 20% of the purchase price of the home mortgage lenders usually require you get Private Mortgage Insurance (PMI) to protect them in case you default on your mortgage. Sometimes you may need to pay up to 1-year’s worth of PMI premiums at closing which can cost several hundred dollars. The best way to avoid this extra expense is to make a 20% down payment, or ask about other loan program options.
The property is officially transferred from the seller to you at “Closing” or “Funding”.
At closing, the ownership of the property is officially transferred from the seller to you. This may involve you, the seller, real estate agents, your attorney, the lender’s attorney, title or escrow firm representatives, clerks, secretaries, and other staff. You can have an attorney represent you if you can’t attend the closing meeting, i.e., if you’re out-of-state. Closing can take anywhere from 1-hour to several depending on contingency clauses in the purchase offer, or any escrow accounts needing to be set up.
Most paperwork in closing or settlement is done by attorneys and real estate professionals. You may or may not be involved in some of the closing activities; it depends on who you are working with.
Prior to closing you should have a final inspection, or “walk-through” to insure requested repairs were performed, and items agreed to remain with the house are there such as drapes, lighting fixtures, etc.
In most states the settlement is completed by a title or escrow firm in which you forward all materials and information plus the appropriate cashier’s checks so the firm can make the necessary disbursement. Your representative will deliver the check to the seller, and then give the keys to you.
Most appraisals cost between $500 and $700, but remember that the cost can exceed that range.
The cost of an appraisal varies based on the type and location of the property. Your appraisal may cost more if you have a multiunit property instead of a single-family home, for example, or if you live in a remote
No. You won’t receive the funds until three to five days after closing. The Truth in Lending Act requires your lender to give you three business days after closing to cancel the refinance. Since the loan isn’t technically closed until after that time passes, you won’t receive your funds until then.
Generally, we recommend you only consider buying a house if you plan to live there for at least five years, but this depends on a lot of factors, like the housing market, rental prices, and how much equity you have in the house.
An approval is a lender deciding that you’re a good candidate for a mortgage based on the financial information you provide. In the approval, you usually get an estimate of your loan amount, interest rate, and monthly payment could be. This process can vary from lender to lender, and some lenders will call this a “preapproval”; or a “prequalification”.
Approval letters generally expire after 90 days, though that can vary based on your type of loan. If you haven’t made an offer within 90 days of getting an approval letter; you should renew your approval before
making an offer on the house.
It’s free to work with a real estate agent if you’re buying a home. But this doesn’t mean your agent doesn’t get paid. The seller will pay the commission for both your agent and their agent. In most cases, the commission is 6%, with 3% going to each agent.
Most real estate agents prefer that you get approved first. An approval gives your agent certainty that they won’t lead you down the wrong path by showing you homes outside your budget. You can save yourself time and heartbreak by learning your budget upfront.
In most cases, your agent won’t require you to sign a contract. If you don’t think your agent is doing everything they can to help you get into a home, you should be honest about your feelings. Talk with the agent directly or inquire whether there’s another agent at the same company you can work with.
Your approval letter will state the amount you’re approved to borrow from the lender. You can offer a greater amount, but you’ll likely need a larger down payment to make the difference. Check with us first to make sure you can get approved for a higher amount should your offer get accepted.
Yes – it’s common for buyers to ask the seller to complete repairs as a contingency for you buying the house. You can also request that they make upgrades, like installing a new carpet, but keep in mind that this could increase your purchase price.
Your first mortgage payment won’t be due for up to two months after closing. If you close on June 9, for example, you’ll pay per diem interest at closing to cover the period between June 9 and June 30. Then, your payment for July will be due on August 1.
Contact your lender right away if you’re going to miss a mortgage payment. Missing multiple payments can hurt your credit score, but it can also lead you to default on a loan – and you could lose your house. If you’re experiencing a hardship, your lender may be able to create a payment plan to help you get back on track.
A down payment is a money you pay upfront when buying a home. How much you’re required to put down is determined by the price of the house and the type of loan you’re getting.
You may consider putting down more than what’s required. A bigger down payment upfront can save you money in the long run. The more you put down, the lower your interest rate and monthly payments will be.
The amount of your down payment and loan type will also determine whether you’re required to get mortgage insurance. If you need mortgage insurance, your monthly payment amounts will be higher.
Try out different numbers on our affordability calculators to see how your down payment and the loan type can affect your monthly income.