Frequently Asked Mortgage Questions

Usually people refinance to save money, either by obtaining a lower interest rate or by reducing the term of the loan. Refinancing is also a way to convert an adjustable loan to a fixed loan or to consolidate debts. The decision to refinance can be difficult, since there are several reasons to refinance. However, if you are looking to save money, try this calculation: Calculate the total cost of the refinance. Calculate the monthly savings.  Divide the total cost of the refinance (#1) by the monthly savings (#2). This is the "break even" time. If you own the house longer than this, you will save money by refinancing. Since refinancing is a complex topic, consult a mortgage professional.

A rate lock is a contractual agreement between the lender and buyer. There are four components to a rate lock: loan program, interest rate, points, and the length of the lock.

A fixed-rate mortgage is a home loan option with a particular interest cost for the entirety of the loan. Even if you have a fixed-rate mortgage the monthly payment amount may fluctuate during the life of the loan. A fixed-rate loan offers a fixed term (for example, 15 or 30 years) as well as a fixed interest rate, so the monthly amount for the payment of principal and interest will not change during the term of the mortgage. However, your monthly mortgage payment may also include taxes and insurance. While your principal and interest amounts will not change, the amount needed for taxes and insurance may.

PMI or Private Mortgage Insurance is provided by a private company to protect the mortgage lender against losses that might be incurred if a loan defaults.  It can make a big difference on how much money is required for a down payment.  PMI is required when the loan amount is more than 80% of the home's value.

Without PMI, lenders would require a borrower to put down 20%.  We understand that even if you have enough money for a large down payment, you may prefer to use it for other purposes.  And if you don't have a 20% down payment, it can take a long time to save it.  While you're saving, the price of your dream home is likely to rise - perhaps faster than you can save.

PMI has become much more affordable in recent years, and is a great tool for securing a loan without a 20% down payment.

No!  Getting started before you find a home is the best thing you could do!

If you get started before you have a property to purchase, we can issue a pre-approval subject to you finding the perfect home, which you can use to assure real estate agents and sellers that you are a qualified buyer.

Getting pre-approved early will help us review your financial situation in detail, and put you into the best loan product possible.

A loan eligible for purchase by the two major Federal agencies that buy mortgages, Fannie Mae and Freddie Mac.

A mortgage larger than the maximum eligible for conforming purchase by the two Federal agencies, Fannie Mae and Freddie Mac.

It is an upfront cash payment required by the lender as part of the charge for the loan, expressed as a percent of the loan amount; e.g., "2 points" means a charge equal to 2% of the loan balance.

Yes!  

Conventional Loan - As little as 3% down payment.

FHA Loan - As little as 3.5% down payment.

VA/USDA Loan - As little as 0% down.

Mass Housing Loan - As little as 0% down for First-Time Home Buyers.