Below are some of the most frequently asked questions about the mortgage industry. If you need help, give USA Mortgage Network Inc. a call at 413-737-1100
. We'd love to help you get the answers you need.
Q - When does it make sense to refinance?
A - 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 - 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.
Q - What is a full documented loan?
A - Both income and assets are disclosed and verified, and income is used in determining the applicant's ability to repay the mortgage. Formal verification requires the borrower's employer to verify employment and the borrower's bank to verify deposits. Alternative documentation, designed to save time, accepts copies of the borrower's original bank statements, W-2s and paycheck stubs.
Q - What is the required down payment for each program?
A - Each program has different requirements, please call us for details.
Q - What is a good faith estimate?
A - It is the list of settlement charges that the lender is obliged to provide the borrower within three business days of receiving the loan application.
Q - What is 'Earnest Money'?
A - Earnest Money is a deposit made to a seller showing the buyer's good faith in a transaction. Often used in real estate transactions, earnest money allows the buyer additional time when seeking to finance. Earnest money is typically held jointly by the seller and buyer in a trust or escrow account.
Q - What is a pre-qualification?
A - This is the process of determining whether a customer has enough cash and sufficient income to meet the qualification requirements set by the lender on a requested loan. A pre-qualification is subject to verification of the information provided by the applicant. A pre-qualification is short of approval because it does not take account of the credit history of the borrower.