FAQ:
- What’s involved with getting approved for a mortgage loan?
- What costs are associated with getting a mortgage?
- What’s a reasonable amount of closing costs to pay for a mortgage?
- How do I determine if it makes sense to refinance?
- Should I choose a Fixed or Adjustable Rate mortgage?
- Can I lock in my interest rate?
- I can’t document my income. Will I still qualify for a mortgage?
- What is the minimum down payment required?
- Is comparing Annual Percentage Rates (“APR”) an effective way to choose between two different mortgages?
- What is a Good Faith Estimate of Closing Costs (“GFE”)?
- Why do some Lenders require a security deposit or an application fee?
- Are interest only loans risky?
- What is a No Cost mortgage?
- Can I get a better interest rate if I go directly to my bank?
- Should I get pre-qualified for a loan before I look for a house?
- What if interest rates go lower after I close?
- Why is my loan payoff amount higher than my principal balance
- Are bi-weekly payment plans worth the expense?
- I’ve been making regular mortgage payments for several years, does it make sense to refinance and start the term over again?
- What’s the best way to shop for a mortgage?
- How do Mortgage Brokers get paid?
- How do I turn my house into a checkbook?
- Who developed this site?
1. What’s involved with getting approved for a mortgage loan?
First you’ll need to fill out the loan application. Scout makes it simple by offering the entire application process online. After you take a few moments to fill it out, we’ll evaluate your debt to income ratio, credit history and assets. We’ll bring the loan documents right to your door for signing and then we’ll fund the loan. It’s really quite simple. The entire process typically takes up to 3 weeks, but if you’re in a rush, let us know. We can fund mortgages in as few as 10 days.
2. What costs are associated with getting a mortgage?
There are three different types of costs associated with getting a mortgage. The origination fee represents a fee paid to the broker or bank for services performed. The discount points represent the prepayment of interest. It’s used to buy down your rate. And non-recurring closing costs represent costs paid to the bank, broker and/or third parties to cover the costs of getting your loan approved. However, when you work with Scout Mortgage – you’ll NEVER pay closing costs. Not a dime. Ever.
3. What’s a reasonable amount of closing costs to pay for a mortgage?
It’s always difficult to determine what is reasonable or what makes sense. The easiest way to avoid making a mistake is to get a No Cost mortgage and then shop for the lowest No Cost mortgage rate. Only Scout Mortgage offers both. That’s why we put $500 on the table for anyone who can find a lower no cost closing rate.
4. How do I determine if it makes sense to refinance?
There are many variables that determine whether or not a refinance makes sense. Perhaps you want to lower your interest rate, combine a first or second mortgage, take out equity for investment needs, convert to another type of mortgage and so on. Unfortunately, these variables change over time. The only way to guarantee that refinancing makes sense now and in the future is to get a No Cost Mortgage and then shop for the lowest No Cost mortgage rate. That’s why Scout offers a complimentary mortgage management service. If anytime rates drop, we’ll refinance you for FREE!
5. Should I choose a Fixed or Adjustable Rate mortgage?
The two factors that should be considered are 1) how long do I think I will live in the house and probability of this prediction holding and 2) what’s the difference between a Fixed and Adjustable Rate mortgage. If you’re unsure, please don’t hesitate to call one of our seasoned mortgage professionals at 480.607.7906.
6. Can I lock in my interest rate?
Yes, typically Scout Mortgage offers its clients a 30-day rate lock.
7. I can’t document my income. Will I still qualify for a mortgage?
Yes, but the bank may require a larger down payment, higher credit scores or more cash assets in reserve. Give us a call and one of our seasoned mortgage professionals would be happy to take you through this process. 480.607.7906.
8. What is the minimum down payment required?
There are many loan programs that do not require a down payment. However, generally the best interest rates will be available with a 10% down payment.
9. Is comparing Annual Percentage Rates (“APR”) an effective way to choose between two different mortgages?
No. The APR is based on a fatal assumption that you will hold the mortgage note for its entire term, typically 30 years. If you hold the note for less time than its entire term, then the APR begins to move higher. The shorter the time you hold the note, the higher the APR. The best way to shop for a mortgage is to insist on a No Cost Mortgage and then shop for the lowest No Cost Mortgage rate. Only Scout Mortgage offers both and we'll pay $500 to anyone who proves us wrong.
10. What is a Good Faith Estimate of Closing Costs (“GFE”)?
Anytime you apply for a mortgage, the Broker or Bank is required to provide you with a GFE. The GFE is an estimate of what all the numbers will look like on the HUD-1 Settlement Statement at closing. When it is time to close your loan, you should compare the GFE to the numbers on the HUD-1 Settlement Statement. Do not sign the loan documents if there are major differences in estimates or there are additional charges that were not disclosed up front on the GFE. Send us your GFE from any no cost mortgage. We’ll give you $500 CASH if we can’t give you a lower no cost closing rate.
11. Why do some Lenders require a security deposit or an application fee?
Scout Mortgage is unique in that we never require an upfront security deposit or an application fee. Therefore, the onus is on us to perform and deliver the loan we promised upfront.
12. Are interest only loans risky?
Not necessarily. In the past, an Interest Only payment option was only available on an Adjustable Rate Mortgage (“ARM”). The option to make an Interest Only payment expired when the initial fixed rate period (usually 3 or 5 years) of the ARM was over. When the rate on the ARM began to adjust, the borrower was left with a double whammy: A higher rate and a Principal and Interest Payment. However, now borrowers can obtain a 30 year fixed rate mortgage with the option to make Interest Only payments for 10 or 15 years mitigating much of the risk.
13. What is a No Cost mortgage?
A No Cost mortgage is a loan where the borrower does not pay any Origination Fees, Discount Points or Non Recurring Closing Costs. Additionally, these costs are not added to the borrower’s principal balance. Typically, a Scout Mortgage client will save thousands in upfront fees and get the same interest rate that competitors are charging thousands of dollars for.
14. Can I get a better interest rate if I go directly to my bank?
No. The advantage of working with a mortgage broker is that brokers have relationships with many banks. Mortgage brokers know which banks have the lowest rate and best loan programs and the bank with the lowest rate may not be your bank. Additionally, a mortgage broker will continue to work for you after the loan closes by monitoring interest rates. If interest rates drop, your mortgage broker will contact you to lower your rate. This is what we at Scout call our complimentary mortgage management service. Your banker on the other hand would prefer to keep your loan at the higher rate.
15. Should I get pre-qualified for a loan before I look for a house?
Yes, It’s a good idea to get to know how much house you can afford without getting in over your head. A pre-approval will also strengthen qualifications as a buyer. At Scout Mortgage, we offer complimentary pre-qualifications.
16. What if interest rates go lower after I close?
It’s not a problem. At Scout Mortgage we continually monitor our customer’s loans. Whenever we can lower your rate for FREE we’ll let you know.
17.Why is my loan payoff amount higher than my principal balance?
Mortgage interest is paid in arrears. In other words, you pay the accrued interest at the end of the month. Therefore, when you pay off a mortgage you need enough funds to cover the principal balance plus the interest that has accrued since your last payment.
18. Are bi-weekly payment plans worth the expense?
No. The same results can be obtained for free by dividing your principal and interest payment by 12 and adding this to your monthly payment. This will save you the initial set up fee and the monthly charges typically associated with bi-weekly payment plans. The theory behind the bi-weekly payment plan is to make 26 half payments or 13 full payments during a 12 month period.
19. I’ve been making regular mortgage payments for several years, does it make sense to refinance and start the term over again?
The most important item on your mortgage note is the interest rate. You can control the term or how quickly you pay off your note. Many of our clients refinance to lower their interest rate, but then continue to keep making the original payment calculated at the higher interest rate. By doing so, our clients accelerate the pay off of their mortgage and save thousands of dollars in interest expense.
20. What’s the best way to shop for a mortgage?
The best way to shop for a mortgage is to first insist on a No Closing Cost mortgage. Second, shop for the lowest no cost rate.
21. How do Mortgage Brokers get paid?
Brokers typically get paid from the Bank that they sell your loan to. Brokers may also charge a fee to the consumer for their services. Scout Mortgage never does.
22. How do I turn my house into a checkbook?
Get a home equity loan from Scout Mortgage. In effect you get a checkbook - a home equity line of credit that you can use to purchase everything you want from a vacation, college tuition, to a home improvement project. You are releasing the equity that currently resides in your house so fulfill some want or need. It’s wise to use this checkbook prudently.
23. Who developed this site?
This site was designed and developed by MSCO.
