Does my credit score impact my rate?
A higher credit score can help make you eligible for lower interest rates. Mortgage lenders look at scores from all 3 credit reporting agencies – Experian, Equifax, and TransUnion, and most will use the middle score for determining the interest rate. While the credit score is just one piece of determining your interest rate, it can greatly affect the amount of money you pay over the life of the loan. Be sure to check your credit report and clean up any mistakes before applying for a loan.
What are your closing costs?
There are several costs associated with refinancing a mortgage –appraisal, flood certifications, wire transfer fees, credit reporting fees, and title fees just to name a few. It is important to get a Good Faith Estimate from your Mortgage Lender and understand each cost and how they compare with other banks. Closing costs differ for each bank. When a bank advertises “No Closing Costs”, ask questions about who is covering those costs and the effect on the rate.
When might an Adjustable Rate Mortgage make sense?
An Adjustable Rate Mortgage can be a benefit to you if you only plan on staying in your home for a few years. You will be locked in, typically at a lower rate than a 15 or 30 year mortgage, for three, five or seven years. You will want to consult with your mortgage lender to determine the best loan type for your situation.
What is PMI and do I have to pay it?
PMI stands for Private Mortgage Insurance. This is an addition to your monthly principal, interest, and escrow payment. If you have less than 20% equity in your home. PMI is a mortgage insurance policy that protects your lender in case you default on the payments. Once you have the 20% equity in your home, there are procedures to eliminate the payment.
What documentation do I need to provide?
You will want to be prepared to bring with you the following documents when applying for a loan or refinance:
Last 2 years of Completed Tax Returns
Last 2 years of W-2’s, 1099’s, etc
Last 2 months of complete bank statements
Most Recent YTD Paystub
Homeowner’s Insurance Binder/Agent Information
Mortgage Statements/Tax Bills/Insurance Documentation for all properties
I would welcome an opportunity to work with you on your mortgage needs and can be reached directly at [email protected] or 920-406-2481.