Frequently Asked Questions

Why did my realtor refer me to you?
A high quality realtor knows that the key to a successful transaction means teaming with a professional mortgage banker. Any experienced realtor can tell you horror stories about times when a client made a poor decision in choosing a mortgage company, and ended up with big surprises at the closing table, or worse, no closing taking place at all! A good realtor will form relationships with trusted individuals who have proven themselves time and time again, so that they know you will be given the excellent service that you deserve. It is important to know that your realtor is NOT given any compensation or "kickbacks" for referring you to a mortgage banker. As mortgage professionals, we desire more referrals - both from you and your realtor. This motivation provides you with our best service for your best interest!

Why should I use a realtor?
It is important for you to have an experienced professional working on your behalf. The realtor's commission is not paid by the buyer, but by the seller of the home being purchased. As a seller, profits are generally maximized by having an experienced realtor market and sell your home, rather than deal with the headaches of trying to do it all on your own. As a buyer, it is in your best interest to have an agent on your team to provide you with professional representation; after all, it's free advice.

Why and how do interest rates change?
Many people are surprised to learn that rates change on a daily basis, sometimes hourly. Interest rates fluctuate in response to changes in the financial markets. The bond market is generally a good indicator of the general trend of interest rates.

When should I consider refinancing?
The old rule of thumb was at least 2%, but this is no longer the case. Many different individual factors need to be analyzed to determine if refinancing is right for you; such as, the length of time you intend to stay in your home or the type of loan you currently hold. We are always willing to provide a recommendation that best suits your particular needs.

How do I "lock-in" my interest rate?
A loan officer can "lock-in" the interest rate quoted either during your initial loan consultation or over the phone. We will provide you a written Interest Rate Agreement and an updated Good Faith Estimate, which details the interest rate and terms of the loan you have requested, as well as the period of time the rate is locked. This time frame may vary between 10 - 60 days depending upon your projected closing date. Generally, the closer you "lock-in" your rate to your estimated closing date the better your interest rate pricing will be. A good time line to work by to maximize your savings is to lock 20 days out from your closing. However, every situation is unique.

What is an origination fee?
Typically, it is 1% of your loan amount, and works exactly like a discount point. You can avoid all or part of this fee by paying a higher interest rate. In Texas, rates are typically quoted assuming this 1% origination fee.

What is Private Mortgage Insurance (PMI)?
This is generally required in one form or another when the down payment is less than 20%, and protects the lender in the event of loan default. The lower the down payment, the higher the risk for the lender, and thus the higher the monthly premium.

What is Title Insurance?
It is a policy provided by the title company guaranteeing the accuracy of the title work done on your home at the time of purchase. As a buyer, you are required to purchase a lenders policy of title insurance as part of your standard closing costs. You may also choose to purchase an owners policy, which would protect you against any loss in the event of any legal issues relating to the title of your home.

Why is the Annual Percentage Rate (APR) different from the interest rate?
The APR is the cost of your credit expressed as an annual interest rate. Points and other prepaid finance charges are factored into the APR to show the true yield on the loan, which is why the APR is often higher than your note rate. The APR can be compared to the APR on other loan programs to give you a consistent means of comparing rates and programs. While the APR has some merit, when comparing fixed rate mortgages, it confuses even experts when attempting to evaluate different ARM loans. Remember, it's the note rate, not the APR, which is used to determine you payment.

What does it mean to be a mortgage broker?
Unlike banks, mortgage brokers specialize only in mortgage lending. Mortgage brokers have the ability to use many different companies' products, thereby providing you with a wide variety of options and choices for your financing. This allows us to shop the competition for the best pricing and pass the savings on to you.

Does it cost more to work with a broker?
Normally, the cost is less. Here's why: We originate, close and fund mortgage loans and deliver them to the nations' largest mortgage services for less than the cost they would pay to originate the loan themselves. As a result, this decrease in cost directly benefits you.

What if I don't have any established credit?
If you are unsure about your credit, your Loan Officer can work with you to document alternate credit information. If you have been renting, we can obtain a rental rating from your landlord as a way of verifying your payment history. Or, we can contact your utility companies, phone service, cable companies or car insurance carrier to obtain a rating on your payment history. Not all loan programs will accept alternative documentation on your credit. However, there are both government and conventional programs that will accept this type of payment history to establish credit qualifications.

What if I had credit problems in the past or filed bankruptcy?
Your credit payment history lets the Lender know your intentions to repay the loan. Therefore a good credit history is important, but a perfect credit history is not. If you have any outstanding credit obligations that need to be dealt with, we can work with you to re-establish your credit history. Every credit situation is different, which is why more Lenders are offering creative loan programs for individuals with a less than perfect credit history. First time homebuyers can also attend seminars that will explain the home purchasing process and requirements with you. Chances are, no matter what your current situation, there is a loan program to fit your needs.

What does the Title and Escrow Company do?
The escrow company is the neutral third party. One of their most important roles is to distribute the money that changes hands during the sale. They also ensure everyone involved in the transaction is treated properly and that all legalities are met accordingly. When the loan is funded, the escrow company distributes the loan proceeds and your down payment to the seller in order to pay off their (seller) existing loan. The Title Company also makes certain that you get a property free of liens or encroachments from the seller or adjoining landowners.

I closed my loan in March and my first payment is due May 1, but I have not received a statement from the lender. What should I do?
In the loan documents that you signed at closing you should have received a copy of your First Payment Letter that contains all the information you need to make your first payment, i.e. payment amount, loan number, address, etc. When the lender receives your first payment, this will trigger their computer to send you the next statement. Every time you make a payment in the future, the lender will send you another statement. If you did not receive your First Payment Letter at closing or have questions on how to proceed forward, call us, we would be happy to assist you.