Frequently Asked Questions

When should I refinance?

Refinancing your home loan can be advantageous, particularly when mortgage rates dip at least 2% below your current loan's rate. However, even a 1% decrease—or less—might still make refinancing a worthwhile consideration. Any drop in rates can lead to lower monthly mortgage payments. For example, on a $100,000 loan at an 8.5% interest rate, your monthly payment, excluding taxes and insurance, would approximate $770. If the rate dropped to 7.5%, your payment could decrease to $700, saving you $70 each month. The extent of your savings will depend on various factors including your income, budget, loan amount, and the extent of the interest rate reduction. A trusted Mortgage Lender in Queen Creek, AZ, such as Jared Halbert from Brick Mortgage, can help you assess your refinancing options and calculate potential savings as your dedicated Loan Officer and Mortgage Broker.

What are points?

It's generally a good time to refinance when mortgage rates are 2% lower than the current rate on your loan. It may be a viable option even if the interest rate difference is only 1% or less. Any reduction can trim your monthly mortgage payments. Example: Your payment, excluding taxes and insurance, would be about $770 on a $100,000 loan at 8.5%; if the rate were lowered to 7.5%, your payment would then be $700, now you're saving $70 per month. Your savings depends on your income, budget, loan amount, and interest rate changes. Your trusted lender can help you calculate your options.

Should I pay points to lower my interest rate?

Yes, if you plan to stay in the property in Queen Creek, AZ, for at least a few years, purchasing discount points to reduce your loan's interest rate is a wise decision. This approach, often recommended by Mortgage Lenders like Jared Halbert at Brick Mortgage, lowers your required monthly home loan payments and can even increase the loan amount you are able to afford. However, if you intend to stay in the property for only a year or two, the monthly savings might not be sufficient to recoup the upfront cost of the discount points. Consulting with a skilled Mortgage Broker or Loan Officer can help you evaluate whether this financial strategy aligns with your long-term housing plans.

What is an APR?

The Annual Percentage Rate (APR) is an essential metric reflecting the total cost of a mortgage as a yearly rate, and it's likely to be higher than the stated note rate or the advertised rate on the mortgage due to the inclusion of points and other credit costs. This rate helps homebuyers in Queen Creek, AZ, compare different types of mortgages based on the annual cost for each loan. As a key tool designed by Mortgage Lenders like Jared Halbert at Brick Mortgage to measure the "true cost of a loan," the APR creates a fair competitive landscape for lenders, ensuring that they cannot merely advertise low rates while concealing fees.

Despite its importance in evaluating the cost of a loan, the APR does not influence your monthly payments, which are determined solely by the interest rate and the length of the home loan. To accurately compare loans, Jared Halbert, a seasoned Loan Officer, advises obtaining good-faith estimates from various Mortgage Brokers for the same type of loan program, like a 30-year fixed, at consistent interest rates. After removing fees not directly related to the loan, such as homeowners insurance and title fees, summing the remaining loan-specific fees can reveal which lender offers the most cost-effective options.

Included in the APR calculation are several fees: points (both discount and origination), prepaid interest (interest from the loan closing to month-end), loan processing, underwriting, document preparation, private mortgage insurance, and escrow fees. Conversely, fees like title or abstract, borrower attorney, home inspection, recording fees, transfer taxes, credit report, and appraisal fees are typically not included in the APR, emphasizing the need to consider these costs separately when evaluating the financial impact of a mortgage transaction in Queen Creek, AZ.

What does it mean to lock the interest rate?

Mortgage rates are subject to change from the day you apply for your home loan to the day you close the transaction in Queen Creek, AZ. If interest rates rise sharply during the application process, it can unexpectedly increase the borrower’s mortgage payment. To mitigate this risk, Mortgage Lenders like Jared Halbert at Brick Mortgage can offer the borrower the option to "lock-in" the loan's interest rate. This lock-in guarantees the interest rate for a specified period, typically 30-60 days, and sometimes this service is provided for a fee. Utilizing a rate lock is a strategic move recommended by experienced Mortgage Brokers and Loan Officers to ensure that your mortgage payment remains predictable despite fluctuating market conditions.

What documents do I need to prepare for my loan application?

Below is a list of documents required when you apply for a mortgage in Queen Creek, AZ. Given that each situation is unique, you may need to provide additional documentation. Promptly providing any requested information can significantly expedite the application process.

Your Property

• Copy of the signed sales contract, including all riders.
• Verification of the deposit you placed on the home.
• Names, addresses, and telephone numbers of all realtors, builders, insurance agents, and attorneys involved.
• Copy of the Listing Sheet and legal description if available. For condominiums, include the condominium declaration, by-laws, and most recent budget.

Your Income

• Copies of your pay-stubs for the most recent 30-day period and year-to-date.
• Copies of your W-2 forms for the past two years.
• Names and addresses of all employers for the last two years.
• Letter explaining any gaps in employment in the past 2 years.
• Work visa or green card (copy front & back).
• If self-employed or if you receive commission, bonus, interest/dividends, or rental income, provide full tax returns for the last two years PLUS year-to-date Profit and Loss statement. Include complete tax returns with all schedules and statements. If an extension was filed, provide a copy of the extension.
• K-1's for all partnerships and S-Corporations for the last two years.
• Completed and signed Federal Partnership (1065) and/or Corporate Income Tax Returns (1120) for the last two years if your ownership position is 25% or greater.

If you will use Alimony or Child Support to qualify:

• Provide the divorce decree/court order stating the amount, as well as proof of receipt of funds for the last year.

If you receive Social Security income, Disability, or VA benefits:

• Provide the award letter from the agency or organization.

Source of Funds and Down Payment

• Sale of your existing home - provide a copy of the signed sales contract on your current residence and a statement or listing agreement if unsold (at closing, provide a settlement/Closing Statement).
• Savings, checking, or money market funds - provide copies of bank statements for the last three months.
• Stocks and bonds - provide copies of your statement from your broker or copies of certificates.
• Gifts - If part of your cash to close, provide a Gift Affidavit and proof of receipt of funds.

Debt or Obligations

• Prepare a list of all names, addresses, account numbers, balances, and monthly payments for all current debts with copies of the last three monthly statements.
• Include all names, addresses, account numbers, balances, and monthly payments for mortgage holders and/or landlords for the last two years.
• If you are paying alimony or child support, include the marital settlement/court order stating the terms of the obligation.

Application Process

• Check to cover Application Fee(s).

This list was compiled with the expertise of Jared Halbert, a dedicated Mortgage Lender and Loan Officer at Brick Mortgage, who assists clients in navigating the complexities of securing home loans in Queen Creek, AZ. Remember, providing these documents promptly when requested by your Mortgage Broker can streamline your application process.

How is my credit judged by lenders?

Credit scoring is a critical system utilized by creditors, including mortgage lenders in Queen Creek, AZ, to determine whether to extend credit. This system involves collecting information from your credit application and credit report, such as your bill-paying history, the types and numbers of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts. Using statistical programs, creditors, like those at Brick Mortgage overseen by Jared Halbert, a skilled Loan Officer and Mortgage Lender, compare this information against the credit performance of consumers with similar profiles.

In credit scoring, points are awarded for each factor that helps predict who is most likely to repay a debt. The total number of points—a credit score—indicates how creditworthy you are, or how likely it is that you will repay a loan and make the payments on time.

FICO scores, developed by Fair Isaac Company, Inc., are the most widely used type of credit scores. Your score will range between 350 (indicating high risk) and 850 (indicating low risk).

Ensuring the accuracy of your credit report is crucial, as it plays a significant role in many credit scoring systems. To obtain copies of your credit report, contact the three major credit reporting agencies:

• Equifax: (800) 685-1111
• Experian (formerly TRW): (888) EXPERIAN (397-3742)
• TransUnion: (800) 916-8800

These agencies may charge up to $9.00 for your credit report. However, you are entitled to receive one free credit report every 12 months from each of the nationwide consumer credit reporting companies—Equifax, Experian, and TransUnion. This free report, available at https://www.annualcreditreport.com, may not include your credit score but is invaluable for verifying the accuracy of your financial records, especially important when working with Mortgage Brokers and Lenders in Queen Creek, AZ.

What can I do to improve my credit score?

Credit scoring models are sophisticated and can differ significantly among creditors, including those in Queen Creek, AZ, and for various types of credit. If any factor in your profile changes, your score may also change, but the extent of improvement typically depends on how that factor interacts with others considered by the model. Only your creditor, such as a Mortgage Lender or Loan Officer at Brick Mortgage like Jared Halbert, can detail what might enhance your score under the specific model used to evaluate your credit application.

Scoring models commonly assess the following elements in your credit report:

1. Payment History: This is often a critical component. Your score is likely to be negatively impacted if you have a history of late payments, accounts turned over to collections, or bankruptcy filings, as long as these are reflected on your credit report.
2. Outstanding Debt: Many models look at your debt relative to your credit limits. If your balances are near your credit limits, this is likely to hurt your score.
3. Credit History Length: Generally, models evaluate the length of your credit history. A short credit history might impact your score negatively, but this can be mitigated by factors like timely payments and maintaining low balances.
4. Recent Credit Applications: Many scoring models consider recent credit applications by checking "inquiries" on your credit report. Applying for several new accounts in a short period could lower your score. However, inquiries for account monitoring or for "prescreened" credit offers do not affect your score.
5. Types and Number of Credit Accounts: Having established credit accounts is typically beneficial, but owning too many credit card accounts can be detrimental. Moreover, some models scrutinize the types of credit accounts you hold; for instance, loans from finance companies might negatively impact your score under certain models.

Besides information from your credit report, scoring models may also consider details from your credit application, such as your occupation, length of employment, or homeownership status.

To enhance your credit score effectively, focus on making timely bill payments, reducing outstanding balances, and avoiding new debt. Improving your score significantly is a gradual process but essential for securing favorable terms from Mortgage Brokers and Lenders in Queen Creek, AZ.

What is an appraisal?

An Appraisal is a critical assessment used to estimate a property's fair market value, especially significant in Queen Creek, AZ. This document is generally required by lenders, such as Brick Mortgage overseen by Jared Halbert, a knowledgeable Mortgage Lender and Loan Officer, before loan approval. The purpose of the appraisal is to ensure that the mortgage loan amount does not exceed the property's value, aligning with various loan programs' stipulations.

The appraisal process is conducted by an "Appraiser," who is typically a state-licensed professional trained to provide expert opinions on property values based on factors such as location, amenities, and physical conditions. This evaluation is essential not only for the lender's security but also for the buyer to avoid overpaying for a property. In Queen Creek, AZ, where the real estate market can vary significantly by area, the appraisal serves as a vital tool to determine the appropriate price for a home loan, ensuring that all parties involved in the transaction have a clear and accurate understanding of the property's value.

What is PMI (Private Mortgage Insurance)?

On a conventional mortgage in Queen Creek, AZ, if your down payment is less than 20% of the home's purchase price, mortgage lenders like Jared Halbert at Brick Mortgage will typically require you to obtain Private Mortgage Insurance (PMI). This insurance protects the lender in the event that you default on your mortgage. Occasionally, you might need to pay up to one year's worth of PMI premiums at closing, which can amount to several hundred dollars.

The most straightforward method to avoid this additional expense is to make a 20% down payment. Alternatively, you can consult with your Mortgage Lender or Loan Officer about other loan program options that might not require PMI. Exploring these alternatives can help minimize upfront costs and potentially enhance your purchasing power in the competitive Queen Creek real estate market.

What is 80-10-10 financing?

Surprisingly, even individuals with substantial incomes in Queen Creek, AZ, often find it challenging to save enough for a 20% cash down payment on their dream homes. When using conventional financing, such buyers are typically required to purchase Private Mortgage Insurance (PMI), which ironically increases the overall cost of homeownership and can make qualifying for the mortgage even more difficult. For those in the "cash-challenged" class, however, there is a viable solution to avoid PMI: the 80-10-10 financing method. This strategy involves a traditional 80% first mortgage provided by an institutional lender like a bank, a 10% second mortgage, and a 10% cash down payment.

For those who can only afford a smaller down payment, 80-15-5 financing is also an option. It follows the same principle: you take an 80% first mortgage, a 15% second mortgage, and make a 5% down payment. However, due to the increased risk to the lender from the smaller down payment, it's typical to face higher loan fees and mortgage interest rates with 80-15-5 financing compared to 80-10-10.

Both of these financing arrangements are valuable tools in Queen Creek’s real estate market, where Jared Halbert and his team at Brick Mortgage can guide buyers through the complexities of mortgage options, helping them to navigate the path to homeownership without the burden of PMI.

What happens at closing ?

The grand finale of your home-buying saga in Queen Creek, AZ—affectionately known as "Closing" or "Funding"—is when the property officially transfers from the seller's hands into yours. Imagine it as the ultimate handover party, but instead of streamers and confetti, you're passing around a lot of serious paperwork.

At closing, it might feel like you've invited everyone but the local marching band. The guest list often includes you, the seller, both real estate agents, your attorney (if you're too busy sipping margaritas in another state), the lender’s attorney, and a whole ensemble of title or escrow firm representatives, clerks, and secretaries. It’s less of a party and more of a ceremonial passing of the baton, which can last anywhere from a brisk one-hour sprint to a multi-hour marathon, depending on how many contingency clauses and escrow accounts are dancing through the paperwork.

Most of the heavy lifting during closing is done by attorneys and real estate professionals—so you might be on the sidelines cheering rather than running the relay. And don’t forget the pre-closing warm-up: the final inspection or "walk-through" to ensure that all agreed-upon repairs are completed and the drapes and lighting fixtures haven’t mysteriously walked out the door.

In most states, including the bustling real estate scene of Queen Creek, the settlement is orchestrated by a title or escrow firm. You just send over all necessary materials, information, and the requisite cashier's checks. Then, like magic, the firm disburses funds, your representative hands over a hefty check to the seller, and voilà, the keys are yours—no magic wand required!

So gear up, future homeowners of Queen Creek, and remember, while Jared Halbert and his team at Brick Mortgage can't promise it'll be as fun as a carnival, they'll certainly help make it as smooth and successful as possible!

How long have you been a mortgage broker in Arizona?  And are you familiar with the Queen Creek real estate market?

How Much Down Payment is Required?

The quest to secure the keys to your castle in Queen Creek, AZ, starts with what sometimes feels like a Herculean task: the down payment. Depending on a blend of factors—including the type of mortgage, your fiscal fitness, lender whims, and the generosity of regional or national loan programs—the required down payment can vary more than the Arizona weather.

Conventional Loans: Ah, the classic! These loans aren’t backed by any government entity and usually ask for a 20% down payment. But fear not, first-time homebuyers—some lenders, perhaps inspired by tales of chivalry, might let you slip in with just 3% to 5% down. Just remember, if you're scrimping on the upfront cash, you might be wrestling with private mortgage insurance (PMI) until your home equity looks a bit more muscular, reaching that 20% threshold.

FHA Loans: The knights in shining armor from the Federal Housing Administration make it easier for those of us without a treasure chest of gold. If your credit score is a robust 580 or higher, you're looking at about 3.5% down. Got a credit score playing hide and seek in the 500-579 range? Brace yourself for a 10% down payment.

VA Loans: Calling all veterans and active-duty warriors! Thanks to the U.S. Department of Veterans Affairs, you might just land a stronghold without any down payment. That’s right, zero, zilch, nada!

USDA Loans: Ideal for the aspiring lords and ladies seeking dominion over a more pastoral scene, these loans, backed by the U.S. Department of Agriculture, often require no down payment. Imagine, owning a piece of the Queen Creek countryside without emptying your coffers!

Jumbo Loans: If you’re eyeing a castle beyond the usual fiefdoms (read: pricier homes that exceed conforming loan limits), be prepared to fork over a heftier down payment. We're talking about 10% to a staggering 30% or more, based on your financial prowess and the lender’s mood.

Navigating this maze of mortgage options might seem daunting, but fear not! Jared Halbert and his team at Brick Mortgage are your trusted guides in Queen Creek, turning the quest for your dream home from a daunting saga into a victorious campaign.