Frequently Asked Questions
Helpful mortgage information can be tough to come by. Here are the answers to some of the most frequently asked questions we receive at Alderus.
HOW CAN I CONSOLIDATE DEBT WHEN REFINANCING MY MORTGAGE?
Cash-out refinancing can help homeowners who want to consolidate high-interest, non tax-deductible debt. Because your mortgage interest rate is likely to be lower than rates on credit cards or other types of bank loans, consolidating debt may reduce your overall monthly debt payments. In addition, your mortgage interest may be tax-deductible, while your credit card interest is not.
CAN I REFINANCE TO TAKE CASH OUT OF MY HOUSE?
Yes. We offer variety of options that allow you to tap into your home’s equity and take cash out. Consult your Mortgage Advisor, for the best cash-out refinancing option for you.
CAN I BUY A HOME IF I HAVE LESS THAN PERFECT CREDIT?
Yes. Keep in mind that we don’t just look at your credit history, but also at your ability and willingness to pay in the future. We may be able to help you buy a home, even if your credit isn’t perfect.
WHAT IS MORTGAGE INSURANCE (MI OR PMI) AND WHY IS IT REQUIRED?
Private mortgage insurance (PMI) is insurance written by a private company that protects the lender from losses in the event the borrower defaults on the mortgage. Borrowers are required to pay the premium for private mortgage insurance. Private mortgage insurance limits a lender’s exposure to financial loss resulting from loan default. If you make a down payment of less than 20%, even if you have a good credit profile, lenders generally require private mortgage insurance.
HOW MUCH DO I NEED FOR A DOWN PAYMENT?
Your down payment depends on the type of loan you’re looking for and your credit. We have lots of options – as little as 3.5% down for FHA loans, 5% down for conventional loans, 10% down for vacation homes, and 100% loans for veterans choosing to use their VA benefits.
HOW MUCH CASH WILL I NEED TO PURCHASE A HOME?
The amount of cash that is necessary depends on a number of items. Generally speaking,
though, you will need to supply:
• Earnest Money: The deposit that is supplied when you make an offer on the house
• Down Payment: A percentage of the cost of the home that is due at settlement
• Closing Costs: Costs associated with processing paperwork to purchase or refinance a house.
We can sometimes arrange to provide a credit towards those closing costs.
HOW DO I KNOW HOW MUCH HOUSE I CAN AFFORD?
The amount that you can borrow will depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value with a lower down payment. We will help you determine exactly how much you can afford.