Faqs

There are a few things you should know about the fees involved in taking out a mortgage. The first is that most of the fees on your estimate come from third parties that your lender doesn’t actually control. For example, appraisal, title company, attorney, inspection, survey, escrow deposits, prepaid insurance, home warranty, and county courthouse fees are all controlled by other businesses or organizations.

This is just naming a few. Borrowers come to us frustrated after their experience with another lender because instead of accurately calculating figures and estimating costs, that lender was merely guessing low numbers in order to win their business. We feel like this is an unethical way of doing things which only leads to borrower frustration later down the road.

With other lenders, be prepared to see a long list of fees at the top of the fee worksheet or loan estimate. These can quickly add up and have a large impact on your overall cash-to-close amount. Scissortail Financial keeps it simple by only having one underwriting fee. We also never charge upfront costs like credit report fees or application fees.

We want to be given the chance to prove our worthiness of your trust and do that by not making you pay these costs in advance. Furthermore, we refuse to give veiled estimates and would much rather provide specific numbers so you can make an informed decision about a home loan. To get the best mortgage deal possible, it is essential to confirm all fees from third-parties early on in the process – this way, there are no surprises down the line and you will have a more accurate idea of how much money is needed to close the deal.

When interest rates increase, it can have a direct effect on your borrowing power. Higher interest rates mean higher monthly payments for any loan you take out, which could reduce the amount you are able to borrow and make it more costly in the long run. 

A larger loan balance usually means higher total interest costs during the life of the loan due to compounding interest over time. This is especially true if you don’t plan to pay off your debt quickly. It also might mean that lenders may approve smaller loans instead of ones with larger balances because they want to be sure that borrowers will still be able to afford their monthly payments even if rates continue to rise. 

In addition, increasing rates may lead banks and other lenders to become more conservative in their lending practices, requiring larger down payments or higher credit scores for many borrowers. This could make it harder for some people to qualify for a loan even if they have good credit. 

We can help you understand how any rate changes might directly affect your credit and borrowing power by understanding the terms of a loan. We can also help you explore other options that may be available to you, such as refinancing or other financing products so that you can make the best decision for yourself.

Buying: When it comes to deciding whether to buy or rent, there are several factors to consider. Homeownership allows you to build equity over time since a portion of your monthly payment goes towards paying down the principal. You may also be able to benefit from tax deductions for mortgage interest and property taxes, making home ownership potentially more affordable than renting in the long term. Plus, when you own a home, you have the freedom to remodel or make other changes as desired without needing permission from a landlord.

Renting: On the other hand, renting can often be less expensive upfront than buying because most rental properties do not require a large down payment. Additionally, renters are usually responsible only for paying their monthly rent and utilities, while homeowners must pay ongoing costs such as property taxes, homeowners insurance, and maintenance. Renting also allows you to stay flexible since leases are typically shorter than mortgages and can be renewed or ended more easily. Finally, if the housing market turns down or interest rates go up, renting provides protection from potential losses on a home purchase. 

Once you have a clear goal in mind, you’ll want to evaluate your financial situation. There are four keys things to look at: your credit score, your monthly mortgage payment, the value of your home and your debt-to-income ratio (DTI).

All lenders are not created equal. Many local banks and large regional lenders have what are called overlays. These are additional guidelines on top of the program’s standard guidelines that they apply to try and improve the quality of files that they choose to approve. Lenders that want to service your file after closing are the most common type of lender to have overlays.

At Red Letters Lending, we want all of our borrowers to have the best possible chance at success. We understand that denied loans can lead to late payments or even defaults and foreclosures, so we only underwrite to programs with strict guidelines. This way, every borrower has an equal opportunity to buy their next home without hassle.

Getting pre-approved for a home loan as soon as possible is the best way to go for sellers. The mortgage industry can be a volatile place, with underwriting guidelines, program eligibility, and calculation criteria changing all the time. If it’s been even a short while since you bought your last home, your ability to qualify for the loan program you want might have changed. And that’s why peace of mind is so important to sellers who are looking to buy another property.

At Red Letters Lending, we aim to provide you with the tailored information you need to make sound decisions about buying and selling homes.