Things to Know Before Locking in Your Mortgage Loan Interest Rate

You, like many others, may have read about locking your mortgage loan's interest rate because there are certain companies that play the bait and switch routine where you find out the interest rate promised upfront has now been increased once the mortgage loan process is underway. 

So, it might seem that the obvious move here is to lock your interest rate, right?  Before you assume what may seem to be the obvious answer, let’s consider some of the pros and cons of doing so.

The Pros and Cons of Locking your Loan Rate

Let’s start with some good news. When you lock your interest rate on a mortgage loan, it guarantees you that rate for a fixed amount of time, which is usually no more than 90 days. However, for a small fee, you can usually extend the lock-in if there is some issue that has prolonged the mortgage process.

The locked rate guarantees you the offered rate that you chose to have locked and, in most cases, the cheapest rate will be one of the early offered rates.

This seems like a good way to go because, often, the interest rate might only increase as your loan documents pass through more hands in the company.

There are also some cons to consider. For instance, what happens when you lock your mortgage loan interest rate only to find out that the rates actually slipped even lower? 

While a tiny percentage drop isn’t a terrible loss, there are times where interest rates have taken quite a dip. These larger changes can make a significant change in your overall payment and savings over time, so this is when you need to think carefully about your next steps.

Don’t Panic! Have a Plan

Your first reaction should not be to panic. It’s understandable because so many people already feel so nervous about the mortgage loan and home buying processes. However, you can chose to opt out of the mortgage loan process with that lender if it will mean a considerable change.

Yet, today’s lenders are often on top of following interest rate fluctuations and can guide you before you lock in a rate. A smart lender who wants your business is often willing to renegotiate the loan to keep your mortgage loan in the pipeline, especially those companies that you’re your best interests at heart.

The bottom line is simple: locking your loan rate is recommended by many as a smart decision to make during your mortgage loan process, especially if you have a faithful and highly ethical mortgage lending partner who is guiding the process every step of the way.

Posted by Indigo Mortgage at 11:27 AM No comments:

Mortgage Loan Shopping that Doesn’t Break the Budget

When choosing a new mortgage company, whether it's your first time or your fifth, there are a few things you should know before stepping into that company office and taking the chance that you’ll get the mortgage loan that is right for you. There are certain things you as a consumer should and shouldn't do under any given circumstances.

Some of these things are pretty obvious and even the greenest mortgage shopper could have guessed it's in their best interest not to do those things. However, other things though are not quite as obvious and are mistakes typically made every day by the consumer.

Don't panic though! There are ways to pinpoint that mortgage loan company that cares just as much about the loan as you do and treats every transaction like it’s their only one.

Do’s and Don’ts of Mortgage Loans

Do get a few quotes. Typically, when shopping for a mortgage loan, you are going to want to get a few quotes under your belt.

Don’t share quotes. While it might help to let your mortgage rep know that you are going to take this strategy, under no circumstances should you show him any quotes from other companies that you may have already gathered. They will simply show you how they will beat it or will talk to you into a higher quote, noting that their mortgage loan is better.

Do focus on service provisions. Quality of service should always mean something as in the long run the better they treat you, the better the entire experience will be from start to finish. That’s why you want to do your research and find out from others about their own experiences with each of the mortgage loan companies you are considering.

Do read everything. Next involves a little more on your part: always read the fine print. Read over everything on a contract twice, three times, or as many times as it takes for EVERYTHING to sink in.

Some companies will hide fees and you could end up signing on for more than you bargained for. That’s why you must be very careful and always assertive and on the lookout for bait and switch tactics.

Do select a company with values and integrity. With so many bad experiences in recent years with greedy lenders, there has been resurgence in companies that focus on values and integrity. Some even go as far as to proudly display that they are an organization whose philosophy is faith-based and is directed by a higher power that they have to answer to when it comes to every decision and action they make.

You want to work with a company that puts your best interests first, and these companies understand the importance of treating others as they would like to be treated.

Posted by Indigo Mortgage at 12:16 PM 1 comment:

 

Understanding the Fine Print of Underwriting

When taking out a loan and borrowing money from a mortgage loan company, there are many things to consider and often many obstacles to overcome. It isn't as simple as just signing a piece of paper and promising that you will pay back the lender in the documented time frame or in the documented installment payments.

As the recent years have illustrated, mortgage lenders are concerned about borrowers who will default on their mortgage loans while even some lenders themselves have focused on their best interest rather than that of their customers. When taking out a mortgage loan, it is very important that you know who you are dealing with, so it is best that you do your research, learn about the mortgage company, what others have experienced, and what type of mortgage programs are best for you to ensure they recommend those to you.

The Underwriting Process

The underwriting process is where a lender assesses the risk of issuing a borrower funds and then decides if it is worth the risk to issue the money to the borrower. Typically, a document is presented to the borrower, showing in detail all of the risks being taken and the consequences for not paying the money back. By signing the document, you are agreeing to the risks and terms and have officially become the owner of a mortgage loan – and a house or commercial property, of course!

Changes to the Underwriting Process

Many people already don't like the procedures and complications that are associated with underwriting. And, chances are, if you have not taken out a loan in recent years, you don't know yet but things are changing. While you may not agree with the changes, these are the facts.

What's new? What's been altered or added? While mortgage lenders already wanted to see your bank statements now, they are now looking into a lot more. For instance, they want an explanation for every amount of unexplained funds in your bank account.

They need to know where that 20 spot came from – Did Grandma gift it on your birthday? Or, is it a loan? The point to this is they need to know if you are borrowing money from another source. This is because they want to make sure you are in the position to pay back what you are promising.

Credit inquiries must be explained as well as any new lines of credit taken out. The primary reasons for these extra checks are to ensure that you are not hiding properties or trying to flip them. Lastly, there is now an IRS document that needs to be completed known as the 4506-T.

Simply put, it allows the lender to contact the IRS and get a copy of your tax returns and verify your income. Being that the document also falls under the Patriot Act, if you happen to be self-employed, then you still must use the document.

We’re Here to Help

We do hope that we have shed some light on some of the changes in the process of underwriting. If you have more questions, remember that no one cares more about your loan as we do -- Albuquerque's best choice lender!

Posted by Indigo Mortgage at 11:04 AM No comments:

 

You Served for Us…Here’s a VA Loan’s Special Thank You

It takes a very special type of person -- a brave and humble person -- to take up arms and fight to defend their nation. Man or woman, these brave individuals exist around us -- some in silence and others more vocal about their past and present.

We certainly admire all the veterans that have come home to New Mexico and now live and work in our local communities. These people deserve our thanks and so much more for their sacrifice.

What is often unfortunate is that they are overlooked once they resume their normal lives back at home. And, they are ones that most need help. It may be difficult enough to integrate back into society, but it can be even harder when they need to find a job or they would like to buy a home to make them feel more settled.

Extending a Helping Hand

So, when a company offers things like a VA loan or even a military discount, it really does mean something to us and, without a doubt, to them as well. They deserve to know that they are still appreciated for their unimaginable sacrifices.

That’s why we, at Indigo Mortgage, are offering a VA loan to those who qualify for this particular loan. If you are serving on active duty or have been honorably discharged from the military and happen to be in the market for a new house, why not head on over to the Veteran Affairs site and check it out.

We know that primarily a mortgage company that offers this benefit would need proof of your service in the military and that very site does disclose what qualifies for proof of service. Another step in the process would be to fill out an application form for the process.

You can do that here with our application form. This is a great way to get started. If you have questions along the way, you should know that we are happy to walk you through it.

We Support you…and, We Want You to be Our Customer!

Indigo Mortgage has been serving Albuquerque's residents since its inception in 2003, and we realize how much our armed forces have served us. You have been our guardian angels at our bedside while we sleep at night, protecting the freedoms we hold so dear in this great country!

While we realize that our service men and women could never be fully repaid for their sacrifice, we want to give back. By offering our VA Loan program, we can give back at least something as thanks for your sacrifice. From our entire team, we say thank you for your service. Now, it’s time to serve you!

Posted by Indigo Mortgage at 2:30 PM 2 comments: