Welcome to Spreading Oaks

Mortgage Basics

What will lenders need to know about you?

• Your past financial history, your credit report, and your credit score. 
• Your income and employment history.
• Your monthly expenses on credit cards, auto payments, and other debts.
• Your savings and your estimated net worth.

What will lenders need to know about the property you wish to finance?

• The legal description of the property.  This may be provided by your realtor, or an attorney.
• Knowledge of all claims against the property.  This will require a title search.
• The accuracy and completeness of all public records concerning the property.  This will require title insurance.
• The value of the property.  This will require an appraisal.
•  In addition, the lender may require information about special insurance requirements, termite inspections and  property surveys.

What about Fixed Rate and Adjustable Mortgages?  Which is best for me?

• Fixed Rate Mortgages generally have a fixed monthly payment amount and interest rate over the lifetime of the loan.
• Adjustable Rate Mortgages (ARMs) fluctuate according to indexes, such as the LIBOR index.  This usually results in lower initial payments due to lower interest rates often for a fixed initial period.    
• Adjustable Rate Mortgage rates and payments may rise as interest rates rise, once the fixed initial period ends. 
• We can help you decide which type loan best meets your needs,  considering things such as your tolarance for risk, and long-term plans for owning the home.

What about Points vs Interest Rates?

• Lenders cover their risk and profit through the loan's interest rate and upfront fees called points.  A point is 1% of the loan amount. 
• Paying a point up front which gets you a lower interest rate over the life of the loan may cost you over the short term, but save you money over the long term. 
• You must evaluate the option in terms of how long you plan to own the home.

Will a mortgage broker get me a better rate than I could obtain directly from a lender?

In many cases, yes.  Mortgage brokers may have a variety of programs available from several lenders.

Won't that cost me more up front?

Whoever handles your loan will be paid ultimately by you  for processing the loan, whether he works directly for a lender or is an independent broker.  But other factors could come into play. A loan officer at a bank, for example, may be limited to the types of mortgage programs offered by that institution, while an independent broker may have the option of working with several lenders, each offering programs which differ.