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First off, what is a refinance?  A refinance (refi) is where you take out a new loan, with new terms, and use that money to pay off your old loan.  You are “re-financing” your home. You would refinance for the following two reasons: To save money. This is a rate and term refinance, and the…

To protect against losses on low-down-payment loans, lenders require mortgage insurance for any loan-to-value higher than 80%.  This is applicable for all conforming conventional Fannie/Freddie loans.  In case of default, a mortgage insurer would pay a claim to the holder of the mortgage.  Because of the cost of foreclosure, a mortgage insurance claim helps reduce the…

On a conventional one unit Primary or Secondary residence (loans originated after 1999): The Homeowners Protection Act of 1998 requires mortgage insurance to be canceled automatically when your loan balance is scheduled (based on the original amortization schedule) to reach a value of 78% of the purchase price. Canceling mortgage insurance outside of that is…

1. Pre-qualification: A pre-qualification is the first step and answers the following questions: What is the best loan type for me? How much money will I need to put down? What kind of payments should I expect at the sales prices I am interested in? How much cash total will I need to buy? And…

An adjustable rate mortgage, or ARM, typically has a start-rate that is set for a period of 3, 5, 7, or 10 years.  After that initial period most ARMs adjust annually.  How they adjust will depend upon the terms agreed to in your note, or shown on your adjustable rate disclosure. Here is the most…