Mortgage Questions & Answers: This Lender Makes Home Loans Easy To Understand
The subject of the mortgage can be very complicated and confusing. That’s why Jeremy Ogea, Branch Executive Vice President and Mortgage Loan Officer, breaks it down and simplifies it.
Here are some of the most asked questions we get about home loans with answers from Jeremy.
Q: What are closing costs and what do they include?
A: âThink of closing costs like a pie cut into pieces,â Jeremy says. Each exhibit may contain third party fees, lender fees, and escrows. Here’s a look at what they can include:
- Third Party Fees: Usually consist of title company fees, ratings, inquiries and credit reports.
- Lender fees: the costs incurred by a bank to initiate the loan.
- Commitments: prepaid fees collected at closing. Home insurance, mortgage insurance, property taxes, and HOA fees are all examples of escrow.
Q: How much do I need for a down payment?
A: First-time homebuyers and experienced buyers usually want to know how much to set aside for a down payment.
âA down payment can vary depending on the type of mortgage you’re looking for,â says Jeremy. âThere are many down payment options available to a wide variety of borrowers. In general, a smaller down payment can make your purchase more affordable, especially for first-time home buyers. A larger down payment can lower your monthly payment, potentially avoiding mortgage insurance. ”
Jeremy continues, “No matter what type of purchase loan you are considering, it is always a good practice to save and put some funds aside for a down payment.”
Q: Can I use my family’s funds as a down payment?
A: “Usually yes!” said Jeremy. âWhen it comes to buying a home, borrowers can sometimes not have enough funds for a down payment. Fortunately, there are options for borrowers that may depend on the help of a family member of the donor.
Q: How is my interest rate determined?
A: Mortgage rates are determined by many factors and can fluctuate daily.
Jeremy says, âEach individual’s mortgage rate depends on a number of aspects including loan type, credit rating, loan-to-value ratio, debt-to-income ratio, and other factors. Some borrowers prefer the lowest possible rate, which is available with a surrender rate option. ”
With so many rate options available, it’s always best to talk to your lender about your specific needs, whether you’re making a purchase or refinancing.
Q: What is the first step in a purchase prequalification?
A: Prequalification can help you find your next dream home.
Jeremy says, âOne of the first steps in the prequalification process is to talk to your loan officer about your options and what you are looking for. Once the application is received, your loan officer will review it and make sure all the conditions are met to issue a prequalification. ”
Jeremy continues, âThis is an exciting opportunity to buy a home. Rest assured, whether you’re a first-time buyer or a seasoned buyer, we’re here to make the process simple, smooth and rewarding. ”
Q: Should I refinance my home?
A: Many homeowners seek to refinance their loans for several reasons.
âOne of the main reasons borrowers look to refinance their homes is to reduce their interest rate, which can result in a lower monthly payment,â says Jeremy. âIt’s always a good time to get a rate and term quote from a loan officer if you are considering lowering your current payment or loan rate. ”
Another common reason to refinance is to dip into your home equity. Withdrawal refinancing typically allows you to borrow up to 80% of your home’s value for a number of reasons. Depending on your situation, this can be a good option for things like debt consolidation, personal expenses or new home improvements. ”
Do you have more questions about home loans? Get answers by contacting a mortgage lender at Southside Bank.