Mortgage questions? We’ve got answers. Check out the FAQs below for answers to our clients’ most common mortgage questions.
Don’t see the answer to your particular question? Contact us and we’ll be happy to answer any questions that you may have, and work with you to exceed your expectations when securing a loan.
Purchasing a Home
How much home can I afford?
How do I qualify for a loan?
Because Seattle Mortgage Planners can shop over 50 different banks and lenders, we typically have a far larger product set from which to choose compared to a bank or credit union. We recommend the easy route: call us (no obligation) and speak with an expert who will clearly talk with you about which programs, rates, and payment plans will suit your needs. Seattle Mortgage Planners also allows you to apply and get pre-approved right here online – it’s fast and easy and Seattle Mortgage Planners charges no up-front application fee.
How do I know what my loan rate will be?
What are rates, terms, and APR?
In this example, the mortgage term is 30 years. As the borrower, you will pay back the loan in installments over the course of 30 years.
The interest rate in this example is 7.25%. This means you must pay interest on the money you’ve borrowed at a rate of 7.25% per year. That is, in addition to paying back the loan, you will pay your lender an additional 7.25% of the current loan balance every year. This interest is basically the fee your lender charges you in return for lending you the money.
The Annual Percentage Rate (APR) is a measure of the cost of credit, expressed as a yearly rate. Because APR includes points and other costs such as origination fees, it’s usually higher than the advertised rate. The APR allows you to compare different mortgages based on actual annual costs.
What are points and how many do I have to pay?
Sometimes it makes sense to pay the extra points and ‘buy’ the rate lower, sometimes it does not. This decision is yours to make, but we will review it with you in-depth and explain your options, the break-even, etc. to determine what final rate and point combination works for your particular circumstances.
You can choose a ‘no-point’ option, or can pay points to get a lower rate. If you choose to pay points and have a lower rate, they are paid when the loan closes, not at the time of application. Contact us for a consultation
What is included in closing costs?
Costs do not include fees charged by 3rd party providers including (but not limited to) appraisers, title companies, escrow, courier, etc. If there are material changes to the loan program or the rate due to Borrower/Client request and this request results in a change in costs, a revised Good Faith Estimate will be provided to the client and used for the purposes of this offer. Borrower/Client must meet all guidelines for loan approval and be able to satisfy required conditions for funding.
Do I get a tax advantage from having a mortgage?
Can I make extra principal payments so I can pay off the loan more quickly?
It’s important to note however, this is a choice and is not required. You should consult a financial planner to determine if paying extra principle each month is the highest and most adequate use of your money.
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Securing a Jumbo Loan
Do I need a jumbo loan?
What is a jumbo conforming loan?
Do I need to have 80% down?
Refinancing a Home
How do I refinance my existing home loan?
30-Year Fixed-Rate Refinance
Choose this when:
- You want low monthly payments that do not change
- You want a loan that’s generally easier to qualify for
- You’re planning to remain in your house less than 10 years
- You want the maximum tax advantage (please consult your tax adviser)
15-Year Fixed-Rate Refinance
Choose this if:
- You want a shorter loan life and lower rates
- Low monthly payments are not a priority
- You’re planning to stay in your house for more than 10 years – especially if you’re planning to completely pay off your loan
Cash Out Option
If the equity in your property qualifies, you can refinance with a loan amount greater than your current mortgage – and keep the difference! Use it for home improvement, debt consolidation, or whatever you want.
How can I estimate the value of my property?
While this is by no-means an accurate final estimate, it does offer a starting point. An appraiser may value the property significantly higher or lower depending on condition, recent comps, upgrades, etc. Since a mortgage is a loan secured by a piece of real property, a crucial factor is in the correct value of the property in question.
Property value can be determined in a number of ways:
- The market value of the property – that is, what a buyer will pay for it and what other comparable properties (comps) in the neighborhood have recently sold for.
- The appraised value of the property – that is, what a trained and licensed professional deems the property to be worth based on an inspection, comps, and a thorough analysis of the property and its neighborhood.
Additionally, the appraiser estimates the replacement value of the property – that is, the cost to build a house of similar size and construction on a vacant lot. The appraiser reduces this cost by an age factor to take into account deterioration and depreciation.
