Why should I use a Mortgage Broker instead of my local Bank or a Mortgage Bank?

A broker deals with a very wide variety of lenders. We can secure the best rate and costs on the type of program you are looking for. In almost every case we can get you a lower rate than if you went to that bank directly. We receive discounted/wholesale rates in exchange for doing the majority of the labor in connection with a loan.

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What is the difference between being Pre-Approved or Pre-Qualified?

A Pre-Approval implies that you have given a broker or lender documentation for your income and assets and your loan has been either approved through a computerized underwriting system or from the bank directly. In the case of a Pre-Qualification a broker or lender has just run your credit and is saying they don’t anticipate you will have a problem securing a commitment for a particular loan. A Pre-Approval gives an extra level of protection.

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What documents will I need?

Unless you derive income from something other than a job or a business you own you will need some or all of the basic documents listed below. Please speak to a qualified loan officer regarding other types of income or what items might be needed for a no-income verification mortgage. Everyone’s situation is different; please call us to review exactly what documents you may need.

Two most recent pay stubs for all borrowers
Most recent Two years W-2’s
Self-Employed individuals will need two years personal tax returns and sometimes
     business returns.
The most recent statement (all pages) from any checking, savings, investment or
     retirement accounts.

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What if I can’t or don’t want to verify my income or assets?

Today, more than ever, there are a tremendous variety of “no-income documentation” loans. There are no-income with full asset disclosure, stated income/stated asset, no ratio, no doc and a whole host of programs in between. If you feel you need or want one of these types of loans it is very important to sit down with a trained loan professional to determine what type of loan will suit your needs best while still providing an excellent rate and costs.

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Do I have to pay an upfront application fee?

Not at Choice Mortgage Corporation. We do not believe in charging you an upfront fee like most banks and brokers out there. We believe that if we are getting you a competitive rate and the service you expect you will have no reason to go anywhere else. Most other places charge this fee in order to keep you with them when you discover how poor there service is or that the deal was not quite what was promised. A legitimate mortgage company does not need this fee upfront; we have faith and confidence in what we can do. We do charge an “application fee” payable at closing. This fee pays for items such as credit reports, overnights and costs involved in the processing of your loan. This is the only fee we charge directly.

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What are points and do I have to pay points or an origination fee?

Points are a percent of the loan amount. 1 point is 1% of the loan amount you are borrowing. If you paid 1 point for a $100,000 loan it would cost $1,000.00. They are a fee that is charged by a mortgage company or lender to “discount” the rate or give you a lower rate in exchange for more money upfront. Beware, points can be called many different things such as Origination Fees, Broker Fees, Commitment or Lock-in Fees. Don’t be fooled. If it is a fee based on a percentage of the loan amount and it is being charged by the bank or broker it is points in some form or another. In almost all cases you do not have to pay points. As a general rule points rarely make good financial sense if they can be avoided. Over 80% of the loans we do have absolutely no points. Generally, unless you need a more difficult or special type of loan, you should not have to pay points.

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How do you get paid?

In most cases we are paid by the lender. If you are paying points then our fee may be made up in part or whole by the points. Remember because we receive wholesale rates we almost always secure you a rate as good as or better than you would receive directly from that same bank.

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Do I have to pay PMI?

No. There are a wide variety of options available to avoid PMI when you are borrowing more than 80% of the value of a home. There are loans that include the PMI in the rate or your loan can be broken up into a first and second mortgage. Both options offer greater tax deductibility and higher levels of financing without having to waste money on Private Mortgage Insurance. If you are borrowing more than 80% be sure to discuss these options with your loan officer.

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How long does it take to complete the process?

3 weeks is the average from application until scheduling of a closing. Sometimes the process can take a bit longer. As a broker we have every incentive to get your loan done quickly. Most of the delays in completing a loan are due to a slow response by borrowers when documents are requested. The faster you get it to us the faster your loan will be completed.

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How do I know if it makes sense to refinance?

That depends on what you are trying to do. If you are looking to lower your rate and save money every month than the cost of the refinance should “pay back” in approximately 2 years or less. Remember to factor in the monthly cost of any credit cards and loans you will be paying off when comparing what you pay now and what you will be paying. If you are looking to take a shorter mortgage the savings is in the interest and payments you save over the long haul.

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What is the difference between a Home Equity Line of Credit (HELOC) and a fixed rate equity loan?

Both are generally used as a second mortgage. A fixed rate home equity loan is just like any fixed rate loan. You borrow a certain amount and pay it back over a predetermined length of time with the payment and rate being fixed. A Home Equity Line of Credit or HELOC, is like a giant credit card secured by your home. You have a credit limit that you can borrow up to and pay back on a regular basis. The lender charges you the interest only on your outstanding balance at any given time. It is up to you to pay back principal. All equity lines are adjustable and are based on Prime Rate plus a margin. Either type of loan can be very useful for a wide variety of purposes. Speak to a loan officer regarding which loan fits your particular situation best.

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