3. How do we provide the most competitive rates possible?

We are a small firm who prides itself on the amount of volume that it brings in on a consistent basis due to referrals from previous overly satisfied customers. In order to keep satisfied customers we give them what they want, the best product at the best price! Our main goal is to be your personal Mortgage Broker for life.

5. Should I pay points in exchange for a lower interest rate?

6. Is comparing APRs the best way to decide which Mortgage Company has the most competitive rates and fees?

7. How do I know if its best to lock in my interest rate or to let it float?

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A 15-year fixed rate mortgage gives you the ability to own your home free and clear in 15 years. And, while the monthly payments are somewhat higher than a 30-year fixed rate mortgage, the interest rate on a 15-year mortgage is usually lower, and more important; you’ll pay less than half the total interest cost of the traditional 30-year mortgage.

However, if you cant afford the higher monthly payment of a 15-year mortgage don’t feel alone. Many borrowers find the higher payment out of reach and choose a 30-year mortgage. It still makes sense to use a 30-year mortgage for most people.

Who considers a 15-year mortgage?

The 15-year fixed rate mortgage is most popular among younger homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. They own more of their home faster with this kind of mortgage, and can then begin to consider the cost of higher education for their children without having a mortgage payment to make as well. Other homebuyers, who are more established in their careers, have higher incomes and whose desire is to own their homes' before they retire, may also prefer this mortgage.

Advantages and Disadvantages of a 15-year mortgage

1. The 15-year fixed rate mortgage offers two big advantages for most borrowers:
   • You own your home in half the time it would take with a traditional 30-year mortgage
   • You save more than half the amount of interest of a 30-year mortgage. Mortgage companies usually offer this mortgage at a slightly lower interest rate than with 30-year loans, typically up to 0.50% lower. It is the lower interest rate added to the shorter loan life that creates real savings for a 15-year fixed rate borrower
2. The possible disadvantages associated with a 15-year fixed rate mortgage are:
   • The monthly payments for this type of loan are roughly 10% to 15% higher per month than the payment for a 30-year mortgage.
   • Because you’ll pay less total interest on the 15-year fixed rate mortgage, you wont have the maximum mortgage interest tax deduction possible.

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The interest rate market is subject to movements without advance notice. Locking in a rate protects you from the time that your lock is confirmed to the day that your lock period expires.

A lock is an agreement by the borrower and the Mortgage Company and specifies the number of days for which a loans interest rate and points are guaranteed. Should interest rates rise during that period, we are obligated to honor the committed rate. Should interest rates fall during that period, the borrower must honor the lock.

A home loan often involves many fees, such as the appraisal fee, title charges, closing fees and state or local taxes. These fees vary from state to state and also from Mortgage Company to Mortgage Company. Any Mortgage Company or broker should be able to give you an estimate of their fees, but it is more difficult to tell which Mortgage Companies have done their homework and are providing a complete accurate estimate. We take quotes very seriously here at Phelan Mortgage Associates.

Fees that we consider third party fees include the appraisal fee, the credit report fee, the settlement or closing fee, the survey fee, tax service fees, title insurance fees, flood certification fees, and courier/mailing fees.

Third party fees are fees that well collect and pass on to the person who actually performed the service. For example, a credit bureau is paid the credit report fee and a title company or an attorney is paid the title insurance fees.

Fees that we consider to be taxes and other unavoidable items include: State/Local Taxes and Recording Fees. These fees will most likely have to be paid regardless of the Mortgage Company you choose. If some Mortgage Companies don’t quote you fees that include taxes and other unavoidable fees, don’t assume that you wont have to pay it. It probably means that the Mortgage Company who doesn’t tell you about the fee hasn’t done the research necessary to provide accurate closing costs.

Fees such as points, document preparation fees, and local processing fees are retained by the Mortgage Company and are used to provide you with the most competitive rates possible.

This is the category of fees that you should compare very closely form Mortgage Company to Mortgage Company before making a decision.

You may be asked to prepay some items at closing that will actually be due in the future. These fees are sometimes referred to as prepaid items.

One of the more common required advances is called "per diem interest" or "interest due at closing." All of our mortgages have payment due dates of the 1^{st of the month. If your loan is closed on any day other than the first of the month, you’ll pay interest, from the date of closing through the end of the month, at closing. For example, if the loan is closed on June 15, well collect interest from June 15 through June 30 at closing. This also means that you wont make your first mortgage payment until August 1. This type of charge should not vary from Mortgage Company to Mortgage Company, and does not need to be considered when comparing Mortgage Companies. All Mortgage Companies will charge you interest beginning on the day the loan funds are disbursed. It is simply a matter of when it will be collected.}

If an escrow or impound account will be established, you will make an initial deposit into the escrow account at closing so that sufficient funds are available to pay the bills when they become due.

If your loan requires mortgage insurance, up to two months or the mortgage insurance will be collected at closing. Whether or not you must purchase mortgage insurance depends on the size of the down payment you make.

If your loan is a purchase, you’ll also need to pay for your first years homeowners insurance premium prior to closing. We consider this to be a required advance.

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If you’ve ever purchased a home before, you may already be familiar with the benefit and terms of title insurance. But if this is your first home loan or you are refinancing, you may be wondering why you need another insurance policy.

The answer is simple: The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and especially your Mortgage Company, want to make sure the property is indeed yours: That no individual or government entity has any right, lien, claim, or encumbrance on your property.

The function of a title insurance company is to make sure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly, and that your interests as a homebuyer are fully protected.

Title insurance companies provide services to buyers, sellers, real estate developers, builders, mortgage companies, and others who have an interest in real estate transfer. Title companies typically issue two types of title policies:

1. Owners Policy: This policy covers you, the homebuyer
   
2. Mortgage Company’s Policy: This policy covers the lending institution over the life of the loan

Both types of policies are issued at the time of closing for a one-time premium, if the loan is a purchase. If you are refinancing your home, you probably already have a homeowners policy that was issued when you purchased the property, so well only require that Mortgage Company’s policy be issued.

Before issuing a policy, the title company performs an in-depth search of the public records to determine if anyone other that you have an interest in the property. The search may be performed by title company personnel using either public records or, more likely, the information contained in the company’s own title plant.

After a thorough examination of the records, any title problems are usually found and can be cleared up prior to your purchase of the property. Once a title policy is issued, if any claim covered under your policy is ever filed against your property, the title company will pay the legal fees involved in the defense of your rights. They are also responsible to cover losses arising from a valid claim. This protection remains in effect as long as you and your heirs own the property.

The fact that title companies try to eliminate risks before they develop makes title insurance significantly different from other types of insurance. Most forms of insurance assume risks by providing financial protection through a pooling of risks for losses arising from an unforeseen future event, say a fire, accident or theft. On the other hand, the purpose of title insurance is to eliminate risks and prevent losses caused by defects in title that my have happened in the past.

The risk elimination has benefits to both the homebuyers and the title company. It minimizes the chances that adverse claims might be raised, thereby reducing the number of claims that have to be defended or satisfied. This keeps costs down for the title company and the premiums low for the homebuyer.

Buying a home is a big step emotionally and financially. With title insurance you are assured that any valid claim against your property will be borne by the title company, and that the odds of a claim being filed are slim indeed.

First of all, lets make sure that we mean the same thing when we discuss "mortgage insurance." Mortgage insurance should not be confused with mortgage life insurance, which is designed to pay off a mortgage in the event of a borrowers death. Mortgage insurance makes it possible for you to buy a home with less than a 20% down payment by protecting the Mortgage Company against the additional risk associated with low down payment lending. Low down payment mortgages are becoming more and more popular, and by purchasing mortgage insurance, Mortgage Companies are comfortable with down payments as low as 3-5% of the homes value. It also provides you with the ability to buy a more expensive home than might be possible if a 20% down payment were required.

The mortgage insurance premium is based on loan to value ratio, type of loan, and amount of coverage required by the Mortgage Company. Usually, the premium is included in your monthly payment and one to two months of the premium is collected as a required advance at closing.

It may be possible to cancel private mortgage insurance at some point, such as when your loan balance is reduced to a certain amount below 75-80% of the property value. Recent Federal Legislation requires automatic termination of mortgage insurance for many borrowers when their loan balance has been amortized down to 78% of the original property value. If you have any questions about when your mortgage insurance could be cancelled, please contact your Loan Specialist.

The maximum percentage of your homes value depends on the purpose of your loan, how you use the property and the loan type you choose, so the best way to determine what loan amount we can offer is by contacting one of our Loan Specialists today!

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