| Frequently Asked Mortgage Questions Why Refinance? #1 Answer – SAVE MONEY!!! With interest rates at near historic lows, many borrowers are taking advantage of the low interest rates available to reduce their monthly payments, get “cash-out”, consolidate debt, or simply get better terms. Are you ready to refinance? The answer depends on your situation. The following are some reasons someone may want to consider refinancing: Consolidate Debt We have found that most of our clients refinance to consolidate debt. Generally, this helps borrowers save money by paying off high interest rate credit card or other debt, which significantly lowers a borrower’s outgoing cash. Plus, the interest on your mortgage loan may be tax-deductible, while credit card interest is not*. The lifetime savings can be enormous when you take all of the facts into consideration. *Consult your tax advisor for more information. Lower Your Interest Rate Whether consolidating debt or simply refinancing to a lower rate, there is often a lot of money you could be keeping in your pocket. For instance, if you take your current loan and lower the interest rate by 1-2% you could save literally thousands of dollars. Depending on your loan size, with today’s low cost loans, sometimes you do not even need to lower your rate this much. Call Citywide for a free loan analysis. Change Terms Whether you would like to shorten your term, save money over the life of the loan, or lengthen your term to save money per month, Citywide Mortgage can help. Sometimes, borrowers can even shorten their term and still save money each month on their mortgage payment! Shortening your term even by a few years can literally help you save thousands of dollars. With many specialized programs, you may be able to lower your monthly payments so you can focus on putting your money where you really need it. “Cash-Out” Equity Need home improvements, to buy a car or do you finally want to take that much deserved vacation? Regardless of the situation, Citywide can help borrowers take equity out of their homes for any number of reasons. Other types of consumer loans often have high rates and short terms. The equity in your home is yours; put it to work for you. Despite your reason for refinancing, Citywide Mortgage is here to help. Our loan professionals will give you a proposal and let you know if refinancing may be right for your situation. Back to Top Which mortgage is best for me? There isn’t a single or simple answer to this question. Contrary to popular belief, there is no such thing as a “do-all” mortgage. One characteristic of real estate is that no two properties are exactly alike. Likewise, no two borrowers are exactly alike. Since everyone’s situation differs, it is hard to judge someone else’s experience with your own. The best loan for you may not be the best for another. Some things to consider when selecting a loan program are: Your Goals: Your goal may be to save money each month, consolidate debt, pay off your loan earlier or simply lower your mortgage payment. Since often you will be able to accomplish one of these goals to a larger extent than the others, it is helpful to decide what your goals are. Then, you need to determine what your most important goal is before shopping for a mortgage loan. Your Current Financial Snapshot: Are you facing hardships that could be corrected by refinancing? Do you expect to move in the next few years? Do you plan on starting a family soon? Does your income vary from time to time drastically? These are all questions to ask yourself when looking for a loan. If you are purchasing a home or refinancing you may want to consider these things. There are many different programs developed for many of these situations. Make sure to speak with your loan professional about the situation you are in.
The best mortgage for you can only be determined through an in-depth analysis of your situation. Don’t be afraid to divulge any information that you feel may hinder your ability to get approved. As mortgage professionals it is our job to find the best loan program that suites our borrower’s needs whatever they may be.
Back to Top What determines whether I will be approved for a loan? There are several factors that go into a lender’s decision as to whether or not to approve a loan. As simple as it may seem to get approved, many years have gone into developing a semi-uniform underwriting system so each borrower has an equal chance of obtaining a loan. The following are some of the factors that are taken into consideration for approval: Credit Worthiness When a creditor provides financing they will almost undoubtedly look at your credit history. When a creditor provides financing, they will almost undoubtedly look at your credit history. Credit scores (FICO) vary from as low as 450 to as high as 850. You score will depend on many factors, such as: slow payments or delinquent accounts, collections, judgments, amount of credit on revolving accounts compared to high credit limit and amount owed on balances. Although score plays a huge roll in credit worthiness, it is not the only thing creditors look at. The credit history (i.e. time since accounts have been established or willingness to repay since derogatory reporting) may sometimes come into play. Regardless of your credit score, there are programs out there for most situations. It is important to have an educated mortgage professional view your credit to determine what you may be able to qualify for, particularly if you are preparing to purchase a new home. Ability to Repay The ability to repay is determined by your income. Debt-to-income ratios are used to determine the borrower’s capacity to repay a loan. Since some borrowers are waged, some are self-employed, some have irregular pay schedules or they may just be entering the job market, they may need a loan that will be tailor made to fit their situation. Having a lender that has a variety of different programs to fill these needs is important. At Citywide Mortgage we have a loan program to fit nearly every borrower’s needs. Collateral Your property is your collateral. Loan-to-Value (LTV) is one of the most important factors in determining the ability to qualify for a loan. LTV is the total loan amount divided by the total value of your home and LTV is measured as a percentage. Some banks will only go up to 80% LTV on a refinance. Mortgage brokers or their partners have the ability to offer 97% LTV for borrowers on purchases. This makes it possible for some borrowers to get into a home with no money down. Back to Top How long does it take to close a loan? In most instances, it takes less than 30-days to close a mortgage loan. Though in some special circumstances, it may take a little longer. Due to Citywide’s use of the latest technology for automated loan approval, it often takes much less than 30 days. Plus, with in-house lending, underwriting and closing departments, your loan closing is expedited much quicker than what some brokers and mortgage companies offer. In some cases, a closing can take place less than a week from the date the loan application is taken. Now that’s speed! Back to Top Should I use a bank or a broker to finance my property? Banks generally “portfolio” their loans. This means that they will keep all servicing and collections in that bank. Banks generally offer good service but are very limited in what they can offer as far as programs are concerned. Rates are most often higher since this interest income is a huge profit for banks. Mortgage brokers originate, collect documents, “shop” for borrowers, and arrange closings. After that, the loan is transferred at closing to a mortgage lender. Brokers offer great service and a variety of programs and a knowledgeable staff. However, if a broker doesn’t have it’s own lending department, the process may take a little longer due to the dependence of another company to fund loans.
Mortgage lenders generally do not lend money directly to the public. They generally offer extremely competitive rates and terms, as well as speedy service to brokers. After the loan is placed with a mortgage lender, the loan may be sold on the secondary market, such as Fannie Mae, Freddie Mac, or the original lender may keep it. Now, what would the perfect marriage be? How about a brokerage that is also a mortgage lender? You can have this with Citywide. This creates the perfect situation to offer a variety of programs, along with the ability to quickly fund loans. Back to Top | 
