How often do interest rates change?

Interest rates change daily, and sometimes several times daily, based on the bond market. Rates are also dependent on many variables, such as the type of loan you’re seeking, your credit profile and the mortgage amount for example.

Should I lock in an interest rate now?

You have the option to lock in an interest rate or float at any time. The only exception is when you are pre-qualified, since you must have a property address to lock in with. Since no one person can accurately predict what rates will do, the decision to lock or float must be yours.

What is a point?

A point is prepaid interest which may be charged by the lender for the purpose of providing a lower interest rate. If points are paid, they are normally payable at the time of closing, and can be found on your settlement statement. Each point charged is equal to 1% of the principal loan amount. For example, one point on a $150,000 mortgage is $1,500. The more points you pay the lower your interest rate will be, thus lowering your monthly payment.

Can I finance all of my closing costs?

Most of the products we offer will allow you to finance closing costs into your new mortgage loan as long as there is enough equity in your home. However, including the costs in your mortgage will increase your balance. Alternatively, you may pay a higher interest rate in order to cover your closing costs.

How long will it take to process and close my loan?

It varies from loan to loan, but in general it takes approximately 30 days to process your loan and get you to closing. We strive to do it as quick as possible, without sacrificing the necessary steps to get you the best program with the best rate. Throughout the process, your mortgage consultant will keep you informed on your loan status.

What is an escrow account?

An escrow account is an account established by your lender to pay property taxes and homeowners insurance when they become due, on your behalf. You pay into the account monthly with your mortgage payment.

Can I pay my own taxes and insurance?

On Conventional loans you may pay your own taxes and insurance if the loan meets the lenders guidelines. However, there is an additional fee. For FHA loans the government requires the lender to escrow for taxes and insurance.

What is title work?

Title is required to ensure there are no obstacles (liens or lawsuits) to obtaining clear title to the property.

Where do I go for closing?

We want to make it as easy and convenient for you to do business with us. As such, the closing can take place anywhere you choose… your home or work, our office or the title company.

What exactly happens at closing?

At closing the loan application and all relevant documents are signed. The closer will explain to you the exact terms of the loan and you’ll receive copies of all the loan forms. Once that step is completed, the title company will distribute the payments to all parties that will receive funds from the transaction. The selling party will receive their funds and in the case of a refinance you will receive a check (after 3 business days) for any difference between the actual payouts and the loan amount.

What are credit scores?

In order to determine the credit worthiness of a potential borrower many lenders rely on FICO (Fair Isaac Company) scores, which appear on your credit report. The FICO score is based on a mathematical model and is calculated by the credit reporting agencies based on the amount of current and historical credit, payment history, late payments, etc. Lenders frequently use an average of the FICO scores to determine credit worthiness.

How long can unfavorable information remain on my credit report?

Credit reports usually disclose most derogatory credit comments for seven years. Exceptions are bankruptcies, which can appear for 10 years, and some lawsuits, which can remain on a credit report until the statute of limitations runs out.

Why should I refinance with you instead of my bank or credit union?

Historically interest rates are lower going through a mortgage broker than going directly through your own financial institutions as we have the ability to find the best offered rates from a variety of lenders. In addition, since we deal with several lenders we have the ability to offer an incredible amount of mortgage options for our customers.

What is the best way to compare rates from lender to lender?

When shopping for rates, we suggest that you get a Good Faith Estimate to compare rates and fees (i.e. apples to apples). This ensures that there are no hidden costs or fees and allows for a fair comparison between lenders. You may also want to compare the APR, or annual percentage rate, on the Truth in Lending Statement. This indicates the total cost of doing the loan. The lower the APR, the less cost associated with the loan.

How much is normally required for a down payment on a home purchase?

There’s no set down payment requirement. Many programs are available with low or no down payment required. Call to find out more!

Should I get pre-approved?

Most sellers will require a pre-approval with an offer to purchase because it lets them know that you are able to obtain financing for the purchase of their home. Preferred Plus Mortgage offers pre-approvals free of charge and can pre-approve you over the phone!

What information is needed at the time of application?

We need your residence and employment history for the past two years, as well as a summary of your income and any assets you have. From application we will determine what you'll need to supply us with. Required documentation varies for each application, depending on the program and loan structure.

What is a credit report?

A credit report contains information on how you pay your bills, where you live and work, and any information that is on public record, such as bankruptcy, judgments, tax liens and lawsuits. Your permission is required before a lender can order a copy of your credit report. In order to obtain the report, they will request your name, address and social security number. Please keep in mind that your credit scores may drop if you allow too many people run your credit.