| 1. |
First determine your financial mortgage related goals: i.e. are you looking to improve your monthly cash flow, reduce your mortgage term, or do you need to take out cash utilizing the equity from your home? Obtaining the right mortgage for your particular needs could make sense even when rates are not at their lowest levels. First identify your goal and contact a mortgage professional for suggestions on mortgage programs that would best help you meet your objectives.
| 2. |
I've always heard about the 2% rule when refinancing, is it important? |
This rule is somewhat obsolete due to the variety of closing cost options that exist today. With the proliferation of no cost and zero point mortgages, a potential refinancier can recoup the costs of refinancing very rapidly if not immediately. The 2% rule may be a helpful tool when paying both points and closing costs in order to refinance.
| 3. |
What is the difference between a conforming and a non-conforming (a.k.a. jumbo) mortgage? |
A conforming mortgage is one that does not exceed the maximum mortgage limit of the two primary GSE's (Government Sponsored Enterprises), Fannie Mae and Freddie Mac. The current conforming maximums are: $333,700 for a 1 unit property, $427,150 for a 2 unit property, $516,300 for a 3 unit property and $641,650 for a 4 unit property. These maximums apply to all states except Alaska and Hawaii. Therefore a jumbo mortgage is one that has a mortgage amount exceeding the aforementioned limits. The interest rates on jumbo mortgages are typically between 1/4-5/8% higher than on conforming mortgages.
| 4. |
A super jumbo mortgage is a mortgage request exceeding $650,000. A super jumbo mortgage typically has a rate 1/4% higher than your average jumbo mortgage.
| 5. |
Conforming non-owner occupied rates are typically 3/8% higher than owner occupied interest rates. The equity requirement is usually higher for non-owner occupied mortgages as well, typically 20-30%+.
