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Here are a few common questions, and the answers from Matchton Financial Group:
Q. What is refinance all about and how can it help me?
REFINANCE
If you obtained your home loan when interest rates were higher than they are now, you can borrow the money for your home again at a lower interest rate. This is known as refinancing. Refinancing replaces your existing loan with another lower interest rate loan for the same amount. This can save you tons of money when market interest rates drop 1 or more percentage points lower than your present rate. Refinancing can be used to reduce your interest rate, change the term of your loan, or to consolidate your debts.
Refinance to Consolidate Debts:
With equity in your home, refinancing is the smartest way to consolidate your debts. Some loans use your home as collateral. Refinancing, on the other hand does not. You can just throw your debts into the amount owed when you refinance. One monthly payment; one low interest rate. Refinancing is the best route to take because the interest rates are lower than any of your other consolidating options. If you have lot's of equity and good to excellent credit, then this is your best option.
Change your Adjustable to a Fixed rate:
Rates are at their lowest right now. Changing your adjustable rate to a fixed rate is a smart idea. Refinancing is the best way to do this.
- Back To QuestionsView Glossary
Q. What is the difference between a "no-cost, no fee" loan and a "standard closing cost" loan? A. For a no cost loan you will pay a higher interest rate than the going market rate, but will have reduced, (if any) closing costs and fees. Those costs are recovered by the lender in the higher interest rate.
With a no fee loan you will also pay a higher interest rate, though not as high as a no cost loan.
Standard closing costs consists of items such as title, credit reports, appraisal, underwriting fee, brokers fee, and lenders costs. The lowest market rate is available when loan costs are paid as part of the loan and not paid back as part of the interest rate. The point is that you pay the loan costs and fees either way. After two or three years, you makeup the broker fee and for the rest of the 27 years of the loan, your saving on the interest rate, thus resulting in saving thousands on the interest charges.
Q. How do we get things started? A. When you are ready to refinance or purchase a home contact Matchton Financial Group, either through an email, pre-approval application or call 561-737-5580. Matchton Financial Group will help you get pre-approved for a purchase and guide you through the process. For a refinance, Matchton Financial Group will assess your situation with 22 different banks and recommend the best loan program for you. Once that is determined they will guide you through the approval process.
Q. How long will this loan take to close? A. The loan can take anywhere from 14 to 21 days depending on the complexity of the loan program. Having accurate information, as required by the lenders and underwriters will avoid unnecessary delays.
Q. Do I need an appraisal? - Back To QuestionsView Glossary A. Generally, on regular loans, yes. On home equity loans, no.
Q. Can I use an old appraisal? A. Usually, if the appraisal is within the last 6 months, but must be put in Matchton's name.
Q. What costs do I have to pay up front? A. The only up front cost is for an appraisal.
Q. Can I use a credit report that I have already obtained? - Back To QuestionsView Glossary A. A new credit report must be obtained.
Q. What does "lock a rate" mean and when can I use it? A. When a rate is locked, it means you are guaranteed a specific rate for a period of time. You can lock a rate through Matchton Financial Group at any time in the process. Generally they go for 15 to 45 days.
Q. Will it cost me any money to lock the rate? - Back To QuestionsView Glossary A. Matchton Financial Group does not charge for locking rates. We value our integrity with our lenders and make every attempt to honor the locks.
Q. What steps need to be taken to secure a loan? A. The first step in securing a loan is to complete a loan application. To do so, you'll need the following information.
Pay stubs for the past month
W-2 forms for the past 2 years
2 Recent bank statements
Proof of any other income
Sales contract (if applicable)
During the application process, the lender will order a report on your credit history and a professional appraisal of the property you want to purchase or refinance. The application process typically takes between 2-3 weeks. - Back To QuestionsView Glossary
Q. Are there any costs or up front fees associated with the loan origination process? A. Yes. The appraisal fee of approximately $275 will be the only out of pocket expense on a refinance loan and is refundable, if for any reason we cannot close the loan.
Q. What is a good faith estimate and how does it help me? A. It's an estimate that lists all fees, all closing costs, and any escrow costs you will encounter when purchasing or refinancing a home. The lender must supply it within three days of your application so that you can make accurate judgments when shopping for a loan.
Adjustable Rate Mortgage (ARM)
Also known as a variable rate mortgage. The interest rate on these mortgages changes periodically
Annual Percentage Rate - APR
A mortgage's yearly interest rate. The APR represents the actual annual cost of credit over the life of the loan, including interest, service charges, points, loan fees, and other items.
Balloon Mortgage
A mortgage with monthly payments, followed by a lump sum due at the end of the loan.
Cap
A limit placed on adjustable-rate mortgages to protect the borrower from large interest-rate increases. A limit on the amount an interest rate or a monthly payment can increase during the adjustment period and over the life of the loan. Usually used in reference to an adjustable-rate loan.
Conventional Loan
A fixed-rate, fixed term mortgage loan not obtained under a government-insured program.
Fixed-rate Mortgage
A mortgage whose interest rate does not change during the life of the loan.
Index
A statistic that indicates current economic or financial conditions. Adjustable-rate mortgages are based on the movement of a specific independent index.
Margin
The number of percentage points added to the index on an adjustable rate mortgage.
Mortgage Broker
A broker who, for a fee, can place loans with many different lenders.
Mortgage Insurance
Lenders often require private mortgage insurance (PMI) when a home buyer obtains a loan that exceeds 80 percent of a property's value. This is for conforming/Fannie Mae loans only.
Negative Amortization
An increase in a mortgage's outstanding balance, caused when the monthly payments do not cover the monthly interest due.
Origination Fee
A fee charged by lenders for the work involved in preparing and servicing a mortgage application. Matchton Financial Group never charges an origination fee.
Points
Fees paid by the borrower to the lenders to buy down interest rates.
Principal
The amount of a mortgage, not including interest. The face value of a note or mortgage.
