Question 1

How does a cash-out loan work?

Accepted Answer

A cash-out loan is when you take equity out of your home in cash. Let's say your home is currently worth 400k and your current loan is 200k. Potentially, pending a loan qualification, you could take out up to 80% of the value of the home. In this case, 120k. Your new loan would be for 320k and the payment would be higher but you would also have 120k in additional funds to spend or invest.

Question 2

Should I get a fixed rate or adjustable rate loan?

Accepted Answer

Most people are safer with a fixed rate loan because the loan payment does not change except for when taxes, insurance or HOA fees adjust. An adjustable rate is beneficial for those who are going to be in the home for a short period of time and want a lower, more risky rate.

Question 3

What is a sub-prime mortgage?

Accepted Answer

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Question 4

Should I get an FHA loan or a conventional loan?

Accepted Answer

There are many reasons to consider between the two loan products. In general, FHA loans are for borrowers with less money down and they are more flexible and have better pricing for lower credit scores. Conventional is often a better option for those with more money down and a better credit score. However, other factors may influence the correct decision so be sure to ask your Loan Officer which loan works best for you!

Question 5

When should I refinance?

Accepted Answer

We take the cost of refinancing quite seriously. We don't want to waste your money. As a general rule, you want to reduce your interest rate by at least .5%. Also, the amount of time to recover loan costs added to your loan should be  approx. 5 years or less.