Clients Refinance to save money on mortgage interest.

Either by obtaining a lower interest rate or by reducing the number of years on the loan.

Refinancing is also a way to convert an adjustable loan to a fixed loan.

Refinancing is also done to consolidate debt owed at a higher interest rate, into a much lower interest rate on a Mortgage. Resulting in a decrease in monthly payments.

The decision to refinance can be complex, since there are several reasons to refinance.

However, if you are looking to lower your monthly payment each month, try this quick calculation:
Calculate the total cost of the refinance. Just the closing costs. Don't include escrow for taxes & insurance.
Calculate the monthly savings.
Divide the total cost by the monthly savings. This is the "break even" point. If you own the house longer than this, you will save money by refinancing. The shorter the break even point is, the more sense it makes to Refinance.

*Please Note: By refinancing your existing loan, your total finance charges may be higher over the life of the loan.

Pre-Approval is more complete than Pre-Qualification.

Pre-Qual = the loan officer asks you a few questions and provides you with a generalized YES or NO based upon your responses. A quickie as the kids say.

Pre-Approval = includes all the steps of a full approval, except for the appraisal, title search & complete Underwrite.

A formal Pre-Approval is what most folks want/need to go look at houses for sale and submit offers to purchase. It provides reassurance to the seller that you are well qualified and your mortgage will go smooth if they accept your offer to purchase.

For a Pre-Approval, you will need to following documents...

-2 Years of complete tax returns/W2/1099 statements

-most recent month's worth of paystubs

-copy of your drivers licnese & social security card.

-2 months official bank statements from the account your down payment money will come from.

Brokers counsel you on the loans available, take your application & processes the loan (which involves putting together the complete application of information about your transaction including the credit report, appraisal, verification of your employment, title and assets.)

When the application is complete, the Lender "underwrites" the loan, which means deciding whether or not you are an acceptable risk.

Once the Lender approves your loan, the Broker helps schedule your closing.

Your broker is your point of contact through the entire mortgage process.

Your broker is your guy.

A period of time that your Interest Rates is locked. You need to close within that timeframe. Rate locks are usually 30, 45 or 60 days. You only LOCK in your interest rate when you are ready to proceed with the Mortgage. The clock starts ticking from that point forward. The shorter the lock term, the lower the interest rate.

A loan which "conforms" to the guidelines of the two major Federal agencies that manage mortgages nationwide, Fannie Mae and Freddie Mac.

Generally speaking a Conventional Mortgage requires a 680+ credit score and a debt to income ratio below 50%.

A mortgage larger than the Conventional Mortgage limits set by Federal agencies Fannie Mae and Freddie Mac.

In 2022, for the most the country, any mortgage above $647, 200 is considered Jumbo.

If you can mortgage BELOW the Jumbo limit, the mortgage will be cheaper.

Jumbo mortgages carry higher interest rates than Conventional Mortgages & require a minimum 10% down payment.

No. Quite the opposite.

Historically, Brokers get you a better deal.

Because their overhead is lower. They don't have massive advertising expenses, salaries & corporate campuses. They are small by design. Passing that savings along to the consumer.

Brokers provide more of a fiduciary advisor roll. Counseling the client on mortgage options & strategy.

Because Brokers deal with multiple lenders, they shop for the best terms available on any given day. They can find the lenders who specialize in various market niches that many other lenders avoid, such as loans for the Self Employed, poor credit ratings, rental properties, vacation homes & loans with minimal or no down payment.

An upfront cash payment used to acquire an interest rate below market price. Resulting in less interest paid over the life of the loan.

1 point = 1% of your loan amount.

If you plan on staying in the home for a long time (7+ years), then points are an option to discuss with your Broker.