There are a lot of questions when it comes to buying or refinancing a home. Get answers here.
How long have you been in business?
Right Start Mortgage was founded in 1989, and we’ve been providing home loans to loyal clients for the past 30 years. We’re a family-owned and operated company that believes in offering our customers a unique mortgage experience from beginning to end. Head here to meet our team.
Can I buy a home without a real estate agent?
No law states you can’t purchase property without a real estate agent, and there are some benefits to doing so. For example, you can work directly with the seller of a “For Sale by Owner” property and perhaps get a reduced price on a property. However, if you go it on your own, you’ll need to do your own research and be your own representative when making an offer.
The advantages of hiring a real estate agent are they’ll be able to give you access to a much wider choice of properties. Plus, you’ll have an experienced negotiator working for you, and they’ll help navigate you through all of the details that come into play during closing.
What questions should I ask if I’m interested in a house?
Buying a house is a big investment, and you’ll want to make sure you have all the information you need to make a decision. Here are three main questions to ask if you’ve found a home you like:
How long has the home been on the market?
If it’s been listed for a while, the seller might be eager to sell, which gives you a bargaining chip. If it’s just recently been listed, putting in a low offer won’t be as enticing to the seller.
Why is the property up for sale?
Not all realtors will share this information, but that can be valuable information for a buyer if they do.
When was the home last renovated?
Knowing when an owner last renovated will give you an idea of when you could expect to have to renovate the home yourself.
Additionally, you'll want to get a feel for the neighborhood. Take a walk around the area to see what it's like where you might be living. Take note of any noises you hear (such as freeway traffic or trains) that might be bothersome. Check a local crime map. Talk to neighbors if you have the opportunity. And take a drive through the neighborhood at different times and days to see how the atmosphere changes.
What do I need to consider if I’m looking at foreclosed homes?
If you’re thinking of purchasing a foreclosed home, one of the most important steps you can take is to have it inspected so you can estimate repair costs and negotiate a concession with the seller.
Also, you’ll want to ensure your earnest money deposit is refundable. With a foreclosed home, sometimes the purchase may not go through, and you’ll want to be able to recoup your earnest money if that happens.
What is an APR?
An annual percentage rate (APR) reflects the cost of a mortgage as a yearly rate. It’s expressed as a percentage, but unlike an interest rate, it includes charges such as mortgage insurance, closing costs, points, and origination fees. This allows borrowers to compare loans on a level playing field.
What does it mean to lock the interest rate?
Interest rates can change throughout the loan process. Therefore, locking an interest rate can help prevent mortgage payments from rising unexpectedly if the rates go up sharply. Typically, a lender will allow a borrower to lock in a loan interest rate for a specified period (typically 30 to 60 days) and sometimes for a fee.
What are points?
Discount points are fees you pay to a lender to get a lower interest rate. It can help lower your monthly mortgage payment and possibly increase the loan amount you can afford to borrow. However, if you only plan to stay in the home for a short period, you might not be able to recoup the cost.
How is my credit judged by lenders?
When you apply for a loan, the lender will review your credit report to assess your ability to repay your loan. They’ll look at:
- Your bill-paying history
- The number and type of accounts you have
- The age of your accounts
- Whether you’ve had late payments
- Whether you have any bills in collections
- What your outstanding debts are
Many lenders will look at your FICO score, which scores your credit between 350 (high risk) and 850 (low risk). The better your credit, the better terms and interest rates you'll have access to.
What can I do to improve a bad credit score?
There are many steps you can take to improve your credit score. Here are some of the main ways you can make an impact:
- Dispute credit report errors (get a free credit report at AnnualCreditReport.com)
- Pay your bills on time
- Pay down your revolving credit
- Ask for higher credit limits to reduce your overall credit utilization (you’re aiming for 30% or less)
- Avoid applying for new credit
- Resolve collections
What is PMI?
Private mortgage insurance (often referred to as PMI) is insurance that protects lenders in the event you default on your loan. If you have a down payment of less than 20% on a conventional loan, a lender will require that you have private mortgage insurance. The cost will vary. You can either pay a 1-year premium at closing or have the PMI added to your monthly mortgage payment.
What happens at closing?
Closing is the most exciting part of the home buying journey because it’s when you will take ownership of the property. Before you’re handed the keys, though, there’s a lot that needs to happen:
- The sales contract is agreed on by all parties and executed
- All past inspections are ordered
- You are given HOA information if you purchased a condo
- Arrangements are made for repairs outlined in the contract
- A holding deposit is sent to the title company
- You do a final walkthrough of the property
- Your loan application information is verified one last time
- You receive instructions on obtaining homeowner’s insurance
- Your lender finalizes your loan and sends documents to the title company
- The title company orders tax information and begins a title search
- Any pre-closing issues are resolved
- The title company prepares all required documents
- A closing date, time, and location are selected
- You sign all closing documents
- You get the keys to your new home!
When should I refinance?
The typical rule of thumb is that when interest rates drop by 1% or more, it’s a good time to consider refinancing your home loan. You can save money in the long-term, build equity in your home more quickly, and reduce your monthly payment.
Falling interest rates are also a good time to convert from a fixed-rate loan to an adjustable-rate mortgage (ARM) if you want to take advantage of the dip.
On the flip side, if you’ve found that you don’t like the fluctuations that come with an adjustable-rate mortgage, then refinancing to a fixed-rate loan can give you stability.
Can I refinance if I have bad credit?
A strong credit score is key to getting a great interest rate, but there are loan programs for those with less than perfect credit. Your lender can help identify the best loan opportunities for you.
Are there out-of-pocket costs?
Yes. You’ll need to account for closing costs to cover the fees for title insurance, appraisal, taxes, and transfer fees, among others. This typically runs between 3% and 6% of the loan’s principal. There are some loan programs with no closing costs, but it’s important to note that typically the fees will be recouped by giving you a higher interest rate.
Who can I contact if I have questions about my first payment?
If you have questions about your first payment on your new loan or have not yet received a payment coupon, please call us at (800) 520-5626 or send us an email.
What if I need help with an existing Right Start Mortgage loan?
If you are looking for payoff information, payment or tax, or hazard account information, log in to the Servicing Portal to access your account. If you need other assistance with your account or would like to speak to someone directly, call (800) 520-5626.