Frequently asked questions about Home Mortgages |
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Direct lenders vs. Mortgage Broker / Interest & APR / How is my information used
What is the difference between a mortgage broker and a direct lender?
FEMBi has been a direct lender for over 12 years and is proud to be on top of Lender's choice. When you work with a direct lender, you interact with the same people from the same company throughout the entire process - from application to close - ensuring the attention to detail you deserve. A direct lender approves the loan, and can generally offer lower rates/costs and a quicker process. That's not always the case with a mortgage broker. A mortgage broker is a middleman that brings you to the lender who approves the loan, which can result in a higher cost for you.
What is the difference between interest rate & APR?
Your interest rate is the monthly cost you pay on the unpaid balance of your home loan. An Annual Percentage Rate (APR) includes both your interest rate and any additional cost or prepaid finance charges such as the origination fee, points, private mortgage insurance, underwriting and processing fees. (Your actual fees may not include all of the items above.) While your interest rate is the rate at which you will make your monthly mortgage payments, the APR is a universal measurement that can assist you in comparing the cost of mortgage loans offered by different mortgage lenders.
How is my information used to come up with loan options?
When using our mortgage rates page or our mortgage calculators, we try to customize the loan to what you are looking for - a new home, a lower rate, cash from your home, etc. Our site will return up to 6 loan options that fit your specifications. If you don't see what you're looking for, call us. We'll custom fit a loan just for you. Since we don't know everything about you, it's always best to speak with a Home Loan Expert about your particular situation to make sure you qualify.
Are the pre-qualification and pre-approval services free?
There is no charge for getting pre-qualified or pre-approved. You're not under any obligation to use this site to apply for a loan, even if you use it to review interest rates and terms for a variety of loans, or use it to get pre-approved or pre-qualify for a loan.
FEMBi has been a direct lender for over 12 years and is proud to be on top of Lender's choice. When you work with a direct lender, you interact with the same people from the same company throughout the entire process - from application to close - ensuring the attention to detail you deserve. A direct lender approves the loan, and can generally offer lower rates/costs and a quicker process. That's not always the case with a mortgage broker. A mortgage broker is a middleman that brings you to the lender who approves the loan, which can result in a higher cost for you.
What is the difference between interest rate & APR?
Your interest rate is the monthly cost you pay on the unpaid balance of your home loan. An Annual Percentage Rate (APR) includes both your interest rate and any additional cost or prepaid finance charges such as the origination fee, points, private mortgage insurance, underwriting and processing fees. (Your actual fees may not include all of the items above.) While your interest rate is the rate at which you will make your monthly mortgage payments, the APR is a universal measurement that can assist you in comparing the cost of mortgage loans offered by different mortgage lenders.
How is my information used to come up with loan options?
When using our mortgage rates page or our mortgage calculators, we try to customize the loan to what you are looking for - a new home, a lower rate, cash from your home, etc. Our site will return up to 6 loan options that fit your specifications. If you don't see what you're looking for, call us. We'll custom fit a loan just for you. Since we don't know everything about you, it's always best to speak with a Home Loan Expert about your particular situation to make sure you qualify.
Are the pre-qualification and pre-approval services free?
There is no charge for getting pre-qualified or pre-approved. You're not under any obligation to use this site to apply for a loan, even if you use it to review interest rates and terms for a variety of loans, or use it to get pre-approved or pre-qualify for a loan.
Refinance or 2nd mortgage
Is it a good idea to refinance my home?
You may be tired of making one mortgage payment for your first mortgage, and another payment for your second mortgage. Perhaps it's time to reduce your current interest rate to a lower fixed or adjustable rate, or maybe you have an adjustable rate that you want to convert into a fixed rate mortgage. You may want to cash out some of your equity, or lower your overall mortgage payment. Refinancing may also allow you to get rid of private mortgage insurance (PMI) if you now have 20% equity in your home. To talk about the possibilities, call one of our Mortgage Bankers or apply online for a no-cost, no-obligation quote.
Can I refinance for no cost or low cost?
Absolutely. With the wide variety of loan programs available, you may very well be able to refinance your existing loan at no cost or minimal cost to you. You will see immediate savings, and you won't have to sacrifice your bank account or equity to get a great rate. Many people have taken advantage of our no cost refinance programs. Why shouldn't you be one of them? Ask one of our experienced Mortgage Bankers about our flexible financing options, or apply online to get matched with a loan program that fits your goals.
Is it worth refinancing if I only see a small change in my current rate?
A lower interest rate will save you money if you plan to stay in your home for more than a few years. You can use our mortgage calculator to see how much you will save by refinancing. However, even if you don't pick a lower interest rate, refinancing can still save you money by allowing you to roll in higher interest debt, or giving you the flexibility of and interest-only option.
Can I obtain a cash-out refinance loan for more than my home is worth?
FEMBi does not provide any loan programs at this time that allow you to refinance your home for more than it is worth.
Can I eliminate PMI by refinancing?
If you meet two specific conditions, you may be able to remove mortgage insurance by refinancing your new home. You can qualify if you have made your mortgage payments on time every month for a specific time (usually a year), and you have reached a point of having 20% equity in your home, either through appreciation or paying down your mortgage.
You may be tired of making one mortgage payment for your first mortgage, and another payment for your second mortgage. Perhaps it's time to reduce your current interest rate to a lower fixed or adjustable rate, or maybe you have an adjustable rate that you want to convert into a fixed rate mortgage. You may want to cash out some of your equity, or lower your overall mortgage payment. Refinancing may also allow you to get rid of private mortgage insurance (PMI) if you now have 20% equity in your home. To talk about the possibilities, call one of our Mortgage Bankers or apply online for a no-cost, no-obligation quote.
Can I refinance for no cost or low cost?
Absolutely. With the wide variety of loan programs available, you may very well be able to refinance your existing loan at no cost or minimal cost to you. You will see immediate savings, and you won't have to sacrifice your bank account or equity to get a great rate. Many people have taken advantage of our no cost refinance programs. Why shouldn't you be one of them? Ask one of our experienced Mortgage Bankers about our flexible financing options, or apply online to get matched with a loan program that fits your goals.
Is it worth refinancing if I only see a small change in my current rate?
A lower interest rate will save you money if you plan to stay in your home for more than a few years. You can use our mortgage calculator to see how much you will save by refinancing. However, even if you don't pick a lower interest rate, refinancing can still save you money by allowing you to roll in higher interest debt, or giving you the flexibility of and interest-only option.
Can I obtain a cash-out refinance loan for more than my home is worth?
FEMBi does not provide any loan programs at this time that allow you to refinance your home for more than it is worth.
Can I eliminate PMI by refinancing?
If you meet two specific conditions, you may be able to remove mortgage insurance by refinancing your new home. You can qualify if you have made your mortgage payments on time every month for a specific time (usually a year), and you have reached a point of having 20% equity in your home, either through appreciation or paying down your mortgage.
Reverse Mortgages
Who are reverse mortgages designed for?
Reverse mortgages are designed for homeowners at least 62 years of age with moderate to significant equity in their homes who want to eliminate their mortgage payment and/or receive additional income. There are a few reverse mortgage options to choose from, so we'll help you find the right one for you. Talk to a Reverse Mortgage Expert to get started now!
Can a reverse mortgage be taken out if there is already a mortgage on my home?
Definitely! Any existing mortgages will be paid off at closing. Then you're free to enjoy the financial freedom that comes along with eliminating your mortgage payment.
What type of homes won't qualify for a reverse mortgage?
Vacation homes or other secondary residences, and rental properties of more than four units do not qualify. But if you're looking to get cash out of a property you don't use as your primary residence, get in touch with Quicken Loans for their mortgage options.
Will I have any tax liability for the reverse mortgage proceeds?
Currently the IRS treats monies received from a reverse mortgage to be loan advances and not taxable income. We recommend a tax advisor for specific questions, or call a Reverse Mortgage Expert to tell us about your unique situation.
What about a home in a "living trust"?
A homeowner who has put the home in a living trust can usually take out a reverse mortgage, subject to review of the trust documents.
Does the money from a reverse mortgage affect Social Security, Medicare or pension benefits?
The proceeds from a Reverse Mortgage do not affect these benefits. We recommend that you consult your financial advisor or a Reverse Mortgage Expert to review your specific situation.
Can the interest charged on my loan principal be deducted for tax purposes?
The interest accrues and is deductible when the loan balance and interest is repaid, when the borrower permanently leaves the property. We recommend that you consult a tax advisor or a Reverse Mortgage Expert to review your specific situation.
What are the upfront costs associated with a Reverse Mortgage?
The borrower will pay an origination fee, and actual closing costs, including charges by the title and escrow companies. All of these costs can be financed as part of your new reverse mortgage. Costs vary by state and situation, so get in touch with a Reverse Mortgage Expert today to find out what a reverse mortgage can do for you.
What is due when the loan is repaid?
The borrower will pay back the cash advances they have received plus accumulated interest and any upfront costs that were financed initially will also be added to the loan balance.
Will I ever owe more than my home is worth?
All reverse mortgages are "non-recourse" loans which means that the borrower doesn't owe more than the value of the home, regardless of loan balance. Talk to your Reverse Mortgage Expert or your HUD Counselor about this.
Will the lender take my house?
No, this is a myth! A reverse mortgage is a loan against the property. The title remains in the name of the borrower(s) and the lender is only repaid the loan balance or home value; whichever is less.
If there are no payments, what are my responsibilities as a homeowner with a reverse mortgage?
You are required to pay your property taxes, keep current the property insurance in place, maintain the home and notify the lender if you will be away from the property for an extended period of time.
When does the loan become due and payable?
The loan is due and payable when the last remaining borrower sells the property, permanently leaves the home, or passes away. Until these events take place you live in the home and make no payments to the lender.
Do I or my heirs have to sell the property to repay the loan?
No, repayment can be accomplished by refinancing the existing reverse mortgage to a conventional mortgage loan. We can help you with that too! Visit Quicken Loans for all your traditional mortgage information.
Reverse mortgages are designed for homeowners at least 62 years of age with moderate to significant equity in their homes who want to eliminate their mortgage payment and/or receive additional income. There are a few reverse mortgage options to choose from, so we'll help you find the right one for you. Talk to a Reverse Mortgage Expert to get started now!
Can a reverse mortgage be taken out if there is already a mortgage on my home?
Definitely! Any existing mortgages will be paid off at closing. Then you're free to enjoy the financial freedom that comes along with eliminating your mortgage payment.
What type of homes won't qualify for a reverse mortgage?
Vacation homes or other secondary residences, and rental properties of more than four units do not qualify. But if you're looking to get cash out of a property you don't use as your primary residence, get in touch with Quicken Loans for their mortgage options.
Will I have any tax liability for the reverse mortgage proceeds?
Currently the IRS treats monies received from a reverse mortgage to be loan advances and not taxable income. We recommend a tax advisor for specific questions, or call a Reverse Mortgage Expert to tell us about your unique situation.
What about a home in a "living trust"?
A homeowner who has put the home in a living trust can usually take out a reverse mortgage, subject to review of the trust documents.
Does the money from a reverse mortgage affect Social Security, Medicare or pension benefits?
The proceeds from a Reverse Mortgage do not affect these benefits. We recommend that you consult your financial advisor or a Reverse Mortgage Expert to review your specific situation.
Can the interest charged on my loan principal be deducted for tax purposes?
The interest accrues and is deductible when the loan balance and interest is repaid, when the borrower permanently leaves the property. We recommend that you consult a tax advisor or a Reverse Mortgage Expert to review your specific situation.
What are the upfront costs associated with a Reverse Mortgage?
The borrower will pay an origination fee, and actual closing costs, including charges by the title and escrow companies. All of these costs can be financed as part of your new reverse mortgage. Costs vary by state and situation, so get in touch with a Reverse Mortgage Expert today to find out what a reverse mortgage can do for you.
What is due when the loan is repaid?
The borrower will pay back the cash advances they have received plus accumulated interest and any upfront costs that were financed initially will also be added to the loan balance.
Will I ever owe more than my home is worth?
All reverse mortgages are "non-recourse" loans which means that the borrower doesn't owe more than the value of the home, regardless of loan balance. Talk to your Reverse Mortgage Expert or your HUD Counselor about this.
Will the lender take my house?
No, this is a myth! A reverse mortgage is a loan against the property. The title remains in the name of the borrower(s) and the lender is only repaid the loan balance or home value; whichever is less.
If there are no payments, what are my responsibilities as a homeowner with a reverse mortgage?
You are required to pay your property taxes, keep current the property insurance in place, maintain the home and notify the lender if you will be away from the property for an extended period of time.
When does the loan become due and payable?
The loan is due and payable when the last remaining borrower sells the property, permanently leaves the home, or passes away. Until these events take place you live in the home and make no payments to the lender.
Do I or my heirs have to sell the property to repay the loan?
No, repayment can be accomplished by refinancing the existing reverse mortgage to a conventional mortgage loan. We can help you with that too! Visit Quicken Loans for all your traditional mortgage information.
