Top 4 Questions You Should Be Asking About Your Mortgage Loan

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You’re buying a home. That’s great! But there are a lot of steps involved between “This is IT, honey!” to picking up the keys from escrow. If you’re a first-time homebuyer – or even if you’ve been through the whole process many times before – because of changes in the laws governing the mortgage loan industry, there are some very critical questions you should still be asking your mortgage lender – every lender, every time. The answers can mean the savings of literally thousands of dollars for you. (Hear that? It’s the sound of the new furniture you can spend that money on instead!)

Question #1: “Do I have to use the lender who issued my pre-qualification letter?” The short answer is: Nope. You have all the power in your hands to shop around for the best mortgage loan for you – just as you would do to find the best deal on a car or a big-screen television. And that is power that can save you hundreds or thousands of dollars. When you’re in the service business (as Realtors are), you develop working relationships with different lenders, title and escrow companies, as well as with many other home service businesses. Your Realtor’s first order of business is to confirm your ability to complete a purchase for the home you select – and that is most easily done by obtaining a pre-qualification letter from a lender. Going to the people they know is the easiest way to do that. However, the pre-qual is not a promise of a loan – it’s just an observation that based on what you told them, you may be able to qualify for a mortgage of that amount. Definitely take your Realtor’s suggestion, but be sure to do some shopping on your own. You’re probably going to be surprised at what you discover.

Question #2: “What is the loan origination fee?” Since loan origination fees can be a substantial cost for obtaining your new home mortgage, this question should definitely be next on your list. Since the recent economic crisis, some of the things you might think you ‘know’ about mortgage loans no longer apply. One of those old myths is that obtaining a loan from a mortgage broker will cost you more in origination fees and costs. That’s no longer the case. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2014 has turned the tables on what you may have experienced previously. Now, those federal regulations cap the fees on mortgage brokers; now by law, they are considerably less than those fees that banks or mortgage bankers can charge. At Premier Mortgage, for example, we offer loans with no origination fee at all – 0%. (And no – we don’t make up for that with ‘junk fees’ either – just keep reading.)

Question #3: “What other fees or charges are there for my loan?” Often, it is the out-of-pocket costs that must be paid at close of escrow that can make or break your ability to even purchase the home you choose. Some of these charges are required and simply can’t be avoided – such as property taxes, insurance, and homeowners association fees. But fees beyond that should be considered closely. When you see items on your Good Faith Estimate such as Document Fees, Mortgage Processing Fees, Underwriting Fees, etc. – that’s the time to get out your pen and start crossing things off the list, because those are what fall under the category of the ‘junk fees’ referenced above – and many lenders (we’re one of them) don’t charge buyers those fees at all.

Question #4: “What’s my APR?” Annual Percentage Rate. That’s a huge question. Based on your mortgage loan interest rate, the APR is the total yearly cost of your mortgage, taking into account the fees on your loan such as interest, origination fee, insurance, points, and others charges included in your loan that were not paid at closing (such as taxes, etc.) Depending on what items you were charged for your loan, it can raise your stated “interest rate” considerably in real dollars. (Just remember, the higher the loan fees, the higher the APR.) So be sure to ask both questions – what is your interest rate, and what is your APR. Avoiding the fees mentioned in questions 2 and 3, above, can make a huge difference in what you pay overall during the life of your mortgage loan.

You wouldn’t let your neighbor take over your finances and decide how to spend your money, right? In fact, you probably wouldn’t even let your own parents do that. The decisions you make in selecting the right mortgage loan can have a tremendous impact on your future financial planning and affect your family for years to come. So our best advice is: Be wise. Ask questions. And know your rights.

For additional information or to schedule an appointment for mortgage prequalification or refinancing, call Premier Mortgage Lending at 702-485-6600 or visit premiermortgagelending.com.

Premier Mortgage Lending, NMLS #393282, is located at 701 N. Green Valley Pkwy., Suite 125, Henderson, 89074. The full-service lender is a member of the Las Vegas and Boulder City Chamber of Commerce, Better Business Bureau and Southern Nevada Home Builders Association, as well as an affiliate member of the Greater Las Vegas Association of Realtors.

New No Fee Mortgage Can Save Homebuyers Thousands In Closing Costs

Rick PiettePurchasing a home will probably be one of the biggest and most expensive decisions in one’s life. You want to buy at the lowest cost, and the seller wants to sell at the highest price. Discovering the best mortgage deal can help home buyers to save thousands of dollars at closing time.

“Buying a home can be nerve-wracking because of all the paperwork and the money that’s involved. Finding the right home that meets your needs for a good price can be tricky, and sifting through all of your mortgage options in search of the best deal can be downright confusing,” said Rick Piette of Premier Mortgage Lending.

The first step in the home buying process, after selecting a Realtor, is getting a “pre-qualification letter” from a mortgage lender.

“Normally your Realtor will guide you to this first mortgage source. With ‘pre-qual letter’ in hand, you’ll now be able to go home shopping,” Piette said.

“But most people get so caught up in the home buying process – and don’t realize that they still need to shop for the best mortgage deal – a step that can save you thousands. You are led to believe that the loan officer who issued your pre-qual letter has to close your loan … but that is just not true.”

Piette encourages home shoppers and those thinking of refinancing to meet with a full-service mortgage broker like Premier Mortgage Lending, in addition to mortgage bankers, to become educated of all of their financing options.

“A real advantage to working with a mortgage broker is that you can obtain a home loan with no lender fees. Also a broker can connect you to multiple lending institutions with a multitude of loan products that have varying interest rates and costs. To find the best mortgage deal for your specific circumstances, take your time to compare multiple programs and their different interest rates, APRs, monthly payments for different loan amounts, and out-of-pocket-closing-cost scenarios. If you do not understand something, just ask,” Piette said, adding that his company connects borrowers to multiple lending programs including the popular no-fee traditional loans as well as second chance financing for those who have experienced a short sale or foreclosure.

“With all of this information in hand, you can make an educated, financially sound decision,” he said. “For obvious reasons, our no fee mortgage is a popular choice because its out-of-pocket costs are significantly less and we don’t charge ‘junk fees’ like others do.”

The price difference and “junk fees” can be found in the “origination charges” – one of three types of charges found in your good faith estimate. “Origination charges” can vary between lenders, unlike the “prepaid charges” (taxes, insurance and homeowners association fees) and the “title and escrow” charges which will end up to be the same regardless of the lender chosen.

“Most lenders charge one percent of your loan amount for the origination fee. If you look at your mortgage paperwork, you may notice that it’s more than the typical one percent because some lenders tack on ‘junk fees’ that are sometimes listed as mortgage processing or underwriting fees,” Piette said. “You don’t have to pay an origination fee or those ‘junk fees.’ You can save money by shopping around for a lender that doesn’t charge them like Premier Mortgage Lending.”

Piette explained that brokers’ origination fees are now considerably less than banks or mortgage bankers because 2014 federal regulations capped what mortgage brokers can charge consumers as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“These new rules are great for the consumer because it can save you money on one of the biggest purchases that you’ll ever make in your life. Where you get your mortgage loan does not really matter. What matters is finding the home that’s right for your family and not paying any more than you have to for your home or your loan,” Piette said.

The first step in finding the best loan deal is completing the complimentary mortgage prequalification process and analyzing the paperwork that is provided.

For additional information or to schedule an appointment for mortgage prequalification or refinancing, call Premier Mortgage Lending at 702-485-6600 or visit premiermortgagelending.com.

Premier Mortgage Lending, NMLS #393282, is located at 701 N. Green Valley Pkwy., Suite 125, Henderson, 89074. The full-service lender is a member of the Las Vegas and Boulder City Chamber of Commerce, Better Business Bureau and Southern Nevada Home Builders Association, as well as an affiliate member of the Greater Las Vegas Association of Realtors.

The Benefits of Refinancing Your Home Loan

When you decide to refinance your mortgage, you replace your current loan with a new mortgage bearing terms. You can save thousands of dollars and gain the peace of mind with fixed monthly payments. But, before deciding to refinance, determine what your goals are and what you want to accomplish. 

Mortgage refinancing reduces your monthly payments. For example, it could extend the term of the loan form 15 years to 30 years, and would reduce a monthly payment from $1,792.00 to $1,329.00, for a home with a cost of $200,000 with a 7% interest rate.
 
If you have positive equity, you can tap into your property’s equity by taking another mortgage for more than you owe. With the cash-out refinance option, the market value of your home must be higher than the balance on your current mortgage.
 
The low interest rates are one of the best reasons to refinance as well as the improved loan period. It is important to shop around. Luckily, when you make the decision to refinance, you have the luxury of fully investigating your options.
 
It is important to look carefully at the refinancing fees and make sure your savings will pay back those costs in a reasonable time frame. The financial risk can cause the bank to foreclose on your house and keep the proceeds from a sale. If you default and the sale of your house does not cover your loan amount, the bank can seize other assets. When it comes to refinancing your home loan, Premier Mortgage Lending can lend a hand.

How Much Home Can I Afford?

One of the most important questions home buyers ask today is “How much home can I possibly afford” or “How big should my mortgage be?” There are no solid answers to these questions, but there are factors to consider when determining home affordability.

When buying a home, mortgage lenders don’t just look at your income, assets and the down payment you have. They look at all of your liabilities, obligations, including auto loans, credit card debt, child support and potential property taxes and insurance, and your overall credit rating.

There are primary factors that will determine your monthly mortgage payments, the size of the loan, which refers to the amount of money borrow, and ‘term’ of the loan, which determines the length of time within which it must be paid back in full. For this reason, a 30-year mortgage plan is most common among homeowners.

Before considering a home purchase, it is important to determine a comprehensive budget by listing all sources of income and your spouses including alimony, child support and investment income and your income from your job. Add up your monthly expenses leaving room for clothing, entertainment, and other item you purchase on a monthly basis.

Once you’ve established a budget, determine the amount left to go toward housing expenses and take into account insurance expenses, the cost of utilities towards a new home, and HOA fees.

The home buying process can be quite lengthy and complex and when you decide to apply for a mortgage loan, your credit history and credit score will be the most important factors when determining what you want, in addition to any other requirements your lender may require you to meet to obtain a mortgage loan.

Save yourself from frustration and disappointment down the road by doing your research and making the necessary calculations you need now. Look at homes within your price and combine it with the knowledge that you can obtain financing at the home’s price point. Premier Mortgage Lending can lend a personal and experienced touch to all your mortgage requirements.