Many customers I talk to have already heard of points and want to know if I’m quoting any points with my rates. Points typically have a negative connotation and rightfully so – they are probably the most commonly abused vehicle for predatory lending. Points are commonly referred to by lenders as “discount points” and sometimes “origination fee” which is confusing because the application fee is also referred to as origination fee sometimes but they are completely different.

This is one of the most important topics to discuss with new buyers. I am always surprised when I talk to clients who have spoken to other mortgage lenders and have no knowledge that they will need money at closing outside of the down payment money. It is very important that a buyer understand the total costs upfront right from the beginning.

So you found a brand new or newly renovated condo and you are excited to be the first person to ever scratch the brand new hardwood floors. Congrats! Aside from trying not to get any fingerprints on the newly painted surfaces there are a few items you will want to know about regarding new conversions/construction condos.

Refinance is a common term you might hear and there are a few reasons why people refinance.

Refinance just means you are going to get a whole new loan and payoff your current loan replacing it with the new one. You might refinance for any of these reasons:

Adding a 2nd mortgage to your current mortgage can be a great option for many reasons. It gives you the ability to tap the equity in your home without touching the first mortgage – which might be a very low rate. Normally when doing a cash-out refinance you have to overwrite the first mortgage and potentially lose a lower rate. With 2nd mortgages however, you are able to avoid doing this and still tap into the equity of the home. There are two 2nd mortgages available and each has pros and cons.

Many buyers are lucky enough to receive money from family or friends when they are buying a home. This is referred to as “gifts” and it’s very common and typically easy to document. It is important to let the loan officer know upfront if you will be receiving money because documenting assets must be done a certain way and there are certain requirements. In most cases we will need a copy of the check from the donor and your bank statement showing that check clearing along with a “gift letter” which is a bank form we will send to you for the gift donor to fill out and sign.

A common question I get when somebody is looking at the final figures is – Why do I pay so much for taxes and or insurance upfront? Aren’t I double-paying? People always ask me if they are double-paying for these items because essentially they are. The reason is because of when the taxes and insurance are due. City taxes are due quarterly in Massachusetts (4x per year) and home insurance is always paid for a full year in advance.

Yes. There are a few reasons a mortgage payment can increase (or decrease).

Mortgage Product

If you chose to do an ARM (Adjustable rate mortgage) the rate is only fixed for the set term such as 5, 7 or 10 years and after that period the rate will adjust based on the index and margin. The margin is a set number when you lock in the rate and the index is tied to some trackable financial benchmark such as the 1 year LIBOR rate. On a regular fixed rate loan – like a 30 year fixed - the mortgage payment itself should not ever change.

Deciding who you want to work with for your loan is an extremely important part of the process. The loan process in general can be complex and confusing. People have different and unique financial situations with some needing more hand holding than others. Starting with the initial application, to the uploading of supporting documents, things that you may do or say during the application process could make all the difference in whether or not you get approved or just make the approval process much harder than it has to be.