411 Rates

What is a Deed-in-Lieu of Foreclosure?

2013-03-19T16:49:00.000-07:00

As of March 1st, Fannie Mae and Freddie Mac will allow homeowners to apply for a deed-in-lieu of foreclosure even if they have been making their mortgage payments on-time. Until recently, the GSEs only allowed their borrowers to engage in a deed-in-lieu of foreclosure if they were more than 90 days delinquent.

What is a Deed-in-Lieu of Foreclosure?

It is a deed instrument in which the borrower conveys all interest in a real property to the lender in order to satisfy a loan that is in default. This is done in hopes of avoiding foreclosure proceedings. The deed-in-lieu of foreclosure has advantages for both the borrower and the lender. The borrower is immediately released from most or all of their personal indebtedness that is associated with the defaulted loan. Also, the borrower's credit is not hurt as much as it would be if they went through foreclosure.

Advantages for the lender include a reduction in the amount of time and money that is associated with a repossession. There is also a lower risk of the borrower exacting revenge by vandalizing the property before they are evicted.

It is considered a deed-in-lieu of foreclosure when the debt is secured by the real estate being transferred Both the borrower and the lender are expected to enter the transaction voluntarily and in good faith. However, if the borrower's outstanding debts are greater than the current fair value of the property, the lender may not proceed.

To summarize briefly, a deed-in-lieu of foreclosure basically means that the homeowner cannot afford their mortgage and are voluntarily giving their home back to the bank in exchange for wiping their debt clean. It does have a negative impact on credit scores, but sometimes it is the only option for some people. It is quite possibly the fastest way that one can escape foreclosure.

To qualify, homeowners must be able to prove their hardships, such as the loss of a job, serious illness, or the death of a co-borrower. They must have a debt-to-income ratio of 55 percent or higher, and the property must be in good condition. This mortgage release option is best for those facing a hardship and will not be able to make their payments in the future. It is not expected than a large number of homeowners will suddenly apply for a deed-in-lieu of foreclosure though, especially since home prices are going up. It is up to each homeowner to decide if it is better for them to continue paying their mortgage for a few more years while home prices further improve, or take a hit to their credit now and move on.

If you find yourself unable to make your mortgage payments, be sure to carefully consider all of your options before making a decision. If you are unsure of what to do, we are willing to help assess your situation and answer your questions. Call us at 888-883-5252 for help.

What is Ginnie Mae?

2013-02-18T11:33:00.000-08:00

The Government National Mortgage Association (GNMA), or Ginnie Mae as it is nicknamed, is responsible for allowing mortgage lenders to obtain a better price for their loans in the capital markets. Recently, Ginnie Mae announced that it has guaranteed more than $41 billion in mortgage-backed securities (MBS) as of December 2012. These are a dependable source of liquidity for loan originators who work with government-backed mortgages.

Ginnie Mae finances housing mortgage insurance programs that are run by the FHA, the VA, and other programs, by raising capital from investors in the global credit market. This ensures liquidity for affordable rental and homeownership for everyone across the nation.

Unlike Fannie Mae and Freddie mac, who are "government-sponsored enterprises" or GSEs, Ginnie Mae is a wholly owned government corporation. Ginnie Mae is the guarantor of MBS issued by government-approved securities issuers who participate in Ginnie Mae's program.

It has always been Ginnie Mae's mission to expand affordable housing throughout the US. Ginnie Mae is an essential part of the housing finance market and its economy recovery.

The Future of Refinancing

2013-02-12T10:00:00.000-08:00

How would you like to be among the millions of responsible homeowners who can refinance their mortgages at a lower rate in order to save thousands of dollars each year? It's within your reach!

Especially now that U.S. Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA) have introduced this legislation in the 112th Congress. It is called "The Responsible Homeowner Refinancing Act of 2013" and it plans to remove the barriers that are currently preventing borrowers from obtaining the lowest rate possible.

This bill would streamline refinancing as we know it for all of Fannie Mae and Freddie Mac's borrowers whether they are underwater or not. Up-front fees would be reduced, appraisal costs for borrowers would be eliminated, and the HARP program would be extended by one year to allow eligible borrowers to take advantage of it.

This would be done at no cost to taxpayers. It is intended to stimulate the economy by lowering borrowers' monthly mortgage payments. This would hopefully reduce the number of foreclosures around the nation while boosting the housing market.

That’s why the Menendez-Boxer bill has such broad support from industry and consumer groups. With the recent record-low rates for a 30-year mortgage averaging around 3.53%, you could be one of the nearly 12 million homeowners guaranteed by Fannie Mae and Freddie Mac who could refinance! There are many who are not currently able to refinance because of policies and high fees, but if the Menendez-Boxer bill goes into effect, all that red tape would be gone! In fact, through HARP, the average homeowner saves $2,500 per year as it currently is. The bill plans on increasing that amount by expanding refinancing opportunities for all those who are eligible.

If you are ready to take advantage of the current low rates, find out if you are qualified for a loan now! Call Quest Loans at 888-883-5252 to find out when it is the right time for you to refinance! We will answer all your questions!

Builders Confidence Improves in August

2012-08-18T08:00:00.000-07:00

If you are interested in building a new home for your family, it is becoming an increasingly better time to do so. Builder confidence has improved again in August for the 4th month in a row! On the National Association of Home Builders/ Wells Fargo Housing Market Index (HMI), their confidence rose two points to 37. It had risen 6 points in July and is at the highest level now since February 2007.

Current sales conditions and the prospect of sales for the next six months are looking good and this aids in improving builders confidence in the market. Of course there can always be more improvement, but considering the state of recession of the past few years, the outlook is very bright. It proves that the housing market is finally getting that economic boost that it has desperately needed.

Should you decide to build a home, Quest Loans would love to help you get the home loan process started. Visit us at QuestLoans.com or call 888-883-5252 for more information!

Refinancers Opt for Fixed-Rate Mortgages

2012-08-16T16:23:00.001-07:00

Are you a current homeowner who is interested in refinancing? If you are, surely you have many questions regarding how to go about doing so and which loan one is right for you. While everyone's situations are different, we can tell you that in the second quarter of 2012 more than 95% of refinancing borrowers chose a fixed-rate mortgage. And of those people, 30% chose to reduce their loan term. This information comes from Freddie Mac's Quarterly Product Transition Report.

Borrowers who refinanced with HARP tended to take out a long-term, fixed-rate mortgage. These fixed mortgage rates are averaging at 3.79% interest for a 30-year loan, and 3.04% interest for a 15-year loan. If you are indeed interested in taking advantage of these low fixed-rates, you could get an even lower rate by also shortening your term. This will reduce your loan balance faster and help you build home equity sooner.

Give Quest Loans a call if you need help getting the refinancing process started! 1-888-883-5252. We would love to help!

Current Mortgage Rate Averages

2012-06-22T11:54:00.000-07:00

The 30-year fixed mortgage rate averaged at 3.66%, down from 3.71% last week. A year ago, it was at 4.50%
The 15-year fixed mortgage rate averaged at 2.95%, down from 2.98% last week. A year ago, it was at 3.69%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.77%, down from 2.80 last week. A year ago, it was at 3.25%
The one-year Treasury-indexed ARM averaged 2.74%, down from 2.78 percent last week. A year ago, it was 2.99%.

Ready to Purchase Your Home?

2012-03-22T15:18:00.001-07:00

At Quest Loans we are committed to obtaining the best loan programs and pricing for everyone from first time home buyers to experienced investors. Let us do the all legwork when it comes to researching the various loan programs available in today’s market. If you are looking to refinance or purchase a new property, let Quest Loans provide you with the Best Rates, Best Service, Period.

Contact us at 1-888-883-5252 to get started on your loan! Or you can email us at information@questloans.com if you have any questions!

Looking to Refinance? Find the Best Loan for You!

2012-02-15T16:30:00.000-08:00

When buying your first home, you will no doubt have plenty of questions. If you are not familiar with all of the terms, this can be somewhat tricky. You may wonder, "what kind of mortgage should I go with?" If you already own a home, you might be asking yourself if refinancing is right for you, and if so, what kind of loan should you go with and how long of a term?

We are not here to tell you what to do, but we can give you some statistics to help you make a decision.

In the fourth quarter of 2011, 95% of all refinanced loans were "fixed-rate mortgages" (FRM). An increasing number of current homeowners who are refinancing also opted to shorten their loan terms. 43% of borrowers who paided off a 30-year FRM chose to go with a 15- or 20-year loan.

The average fixed mortgage rates for that time period were 4% for a 30-year loan, and 3.3% for a 15-year. Since interest rates have been at historic lows recently, now is a good time to apply for a loan, or to refinance your current one. We have been seeing strong refinance activity into fixed-rate loans, and no doubt will continue to. If you have been considering refinancing your home, motivated by these low fixed-rates, you could actually obtain an even lower rate if you were to shorten your term as well. The interest rate on a 15-year FRM was on average about 0.7 percentage points lower than the 30-year FRM during the fourth quarter of 2011.

However, if you are only planning on staying in your home for a few more years, the hybrid adjustible-rate mortgage (ARM) may give you even greater interest rate savings. The initial interest rate on a 5/1 hybrid ARM was 1.1 percentage points lower than the 30-year fixed rate loan. 58% of borrowers who had a hybrid ARM switched over to a FRM instead but the remaining 42% did indeed refinance again with the hybrid ARM.

As you can see, there are many options. We encourage you to continue researching the different kinds of rates to find the best one for you. If we were to just consider the stats, though, the most dominant choice for refinancers continues to be the fixed rate loans. If you have any questions, feel free to contact us at 1-888-883-5252 and we will help you make the correct decision.

Is it possible to "buy" a better rate?

2012-02-12T10:43:00.000-08:00

Do you plan on keeping your loan for a while? Then it may make sense to "buy" a lower interest rate by paying one or more "points."

Even if you're unsure of how long you plan to keep your mortgage before you move or refinance, paying points now for a lower rate may make sense. For example, do you have a high-paying job now but you think you might change careers in the next few years? We can help you sort it out. It's part of our goal to find you the right loan for your means and future.

A point -- which equals one percent (1%) of the total loan amount -- is an up-front fee that lowers your annual interest rate and total interest due over the life of your loan. So, a one point loan will have a lower interest rate than a no point loan. Basically, when you pay points you trade off paying money later in favor of paying money now. You can pay fractions of points, meaning there are a lot of points packages that can make a loan's terms more favorable if that's what's right for you.

There are a variety of rate and point combinations available. When you look at different loan programs, don't look just at the rate -- compare the whole package. Federal law requires lenders to publish their loans' Annual Percentage Rate, or A.P.R. The A.P.R. is a tool used to compare different terms, offered rates, and points.

What are the current rates?

2012-02-07T18:45:00.000-08:00

According to Freddie Mac's Primary Mortgage Market Survey, mortgage rates have dropped even more! They are now at NEW all-time record lows. This includes all rates except for the 1-year ARM which didn't reach a new low.

30-year fixed-rate mortgages (FRM) are averaging at 3.87 percent. This time last year it was at 4.81 percent.
The 15-year FRM averaged 3.14 percent which is down from 4.08 percent last year.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.80 this week and was at 3.69 last year.

Take advantage of these great rates today! Give Quest Loans a call at 1-888-888-2322 for more information so you can be that much closer to owning your own home! You can also email us at information@questloans.com!

How Does Escrow Work?

2012-01-26T10:25:00.000-08:00

Escrow
To finalize the sale of the home a neutral, third party (the escrow holder, a.k.a. escrow agent) is engaged to assure the transaction will close properly and on time. The escrow holder ensures that all terms and conditions of the seller's and buyer's agreement are met prior to the sale being finalized, including receiving funds and documents, completing required forms, and obtaining the release documents for any loans or liens that have been paid off with the transaction, assuring you clear title to your property before the purchase price is fully paid.

The documentation the escrow holder may be collecting includes:

Loan documents
Tax statements
Fire and other insurance policies
Title insurance policies
Terms of sale and any seller-assisted financing
Requests for payment for various services to be paid out of escrow funds

Upon completion of all instructions of the escrow, closing can take place. All outstanding payments and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then transferred to the seller and appropriate title insurance is issued as outlined in the escrow instructions.

At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. As your real estate agent, I'll inform you of the acceptable form.

The Escrow Holder Will:

Prepare escrow instructions
Request title search
Comply with lender's requirements as specified in the escrow agreement
Receive funds from the buyer
Prorate insurance, tax, interest and other payments according to instructions
Record deeds and other documents as instructed
Request title insurance policy
Close escrow when all instructions of seller and buyer have been met
Disburse funds and finalize instructions

The Escrow Holder Won't:

Give advice - the escrow holder must maintain neutral, third-party status
Offer opinions about tax implications

Mortgage Escrow Account

A Mortgage Escrow Account is established to pay on-going expenses while there is a loan on the house. These expenses include property taxes, home insurance, mortgage insurance, and other escrow items. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

Fannie Mae vs Freddie Mac: What is the difference?

2012-01-23T15:00:00.000-08:00

You may hear the names Fannie Mae and Freddie Mac often. But what are they exactly?

They are both Government Sponsored Enterprises (GSE) in the home mortgage business. They are very similar. they both buy mortgages on the secondary market, pool them, and then sell them as mortgage-backed securities to investors in the open market. The way they handle government guarantees, subsidies and direct government funding are the same.

Their main difference is that Fannie Mae primarily buys mortgages issued by banks while Freddie Mac buys mortgages issued by thrifts.

Fannie Mae was a federal program that was created in 1938 as part of the New Deal, and Freddie Mac was chartered by Congress as a private corporation in 1970. Fannie was monopolizing the mortgage market as a government agency until it became a private corporation in 1968. Freddie Mac was brought into the market to compete with Fannie Mae's monopoly so that lenders and bankers would have two options instead of just one. Today, Fannie Mae is a privately-owned corporation while Freddie Mae is a stockholder-owned corporation.

Fannie Mae allows guarantee on multiple properties owned by a single person up to 10 units, while Freddie Mac allows guarantee on no more than 4 units. They do have a slight difference in rules regarding down payments as well. Fannie Mae asks as little as 3% from home loan borrowers and Freddie Mac requires at least a 5% down payment, which means that it does not allow loans of more than 95% loan-to-value.

They both have a common goal in mind: to provide affordability to homeowners. They aim to provide a stability to the mortgage market so that it can continue to function. While Fannie and Freddie compete with each other in the same market, they really are very similar and have the same basic foundation and goals to help you, as a homeowner, get the most affordable loan that you can. Ask your loan officer what is best for you.

Are you pre-qualified or pre-approved for a loan?

2012-01-17T12:46:00.000-08:00

Before you begin to shop for a new home, you should set up a time to meet with me so we can figure out how much you can afford. This will put you in a better position as a buyer. That’s when it is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be crucial when you decide to make an offer on a house.

To get pre-qualified for a loan, I will collect information about your debt, income, and assets. We’ll look at your credit profile and assess goals for a down payment and get an idea of different loan programs that would work for you. I will issue you a pre-qualification letter indicating the amount you are pre-qualified to borrow.

It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow, not a commitment to lend. Getting pre-approved for a loan gives you competitive advantage when the time comes to bid on a home because you have been approved for a loan for a specified amount.

To get pre-approved, you will complete a mortgage application and provide me with various information verifying your employment, assets and financial status such as W-2 forms, bank records and credit card statements. We’ll review your mortgage options and submit your application to the lender that best meets your needs. Once the application process is complete you will receive a pre-approval letter indicating the amount your lender is willing to lend you for your home.

A pre-approval letter is not binding on the lender; it is subject to an appraisal of the home you wish to purchase and certain other conditions. If your financial situation changes (e.g. you lose your job), interest rates rise or a specified expiration date passes, your lender must review your situation and recalculate your mortgage amount accordingly.

Veteran Affairs (VA) Loans

2012-01-15T19:10:00.000-08:00

VA guaranteed loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase of a home. The guaranty means the lender is protected against loss if you fail to repay the loan. In most cases, no down payment is required on a VA guaranteed loan and the borrower usually receives a lower interest rate than is ordinarily available with other loans.

Other benefits of a VA loan include:
Negotiable interest rate.
Closing costs comparable – and sometimes lower - than other financing types.
No private mortgage insurance requirement.
Right to prepay loan without penalties
Mortgage can be taken over (or “assumed”) by the buyer when a home is sold.
Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their loan.

Although mortgage insurance is not required, the VA charges a funding fee to issue a guarantee to a lender against borrower default on a mortgage. The fee may be paid in cash by the buyer or seller, or it may be financed in the loan amount.

A VA loan can be used to buy a home, build a home and even improve a home with energy-saving features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/ caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA.

Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program. A Certificate of Eligibility from the VA must be presented to the lender to qualify for the loan.

Closing Costs: What is included?

2012-01-14T15:05:00.000-08:00

Loan-Related Closing Costs

Loan Origination Fee
This covers the administrative expenses in setting-up and processing the loan. The loan origination fee may be a percentage of the mortgage amount.

Points (optional)
An option for the home buyer is to pay points to lower the interest rate at which the loan will be repaid. Each point equals 1 percent of the mortgage amount. For example: on a $150,000 loan, 1 point would equal $1,500.

Appraisal Fee
The fee for having the house appraised may be incorporated into the closing costs or payment may be required by the lender at the time the loan application is submitted.

Credit Report
The lender uses a credit report to determine the creditworthiness of the loan applicant. This fee is often paid when the loan application is submitted.

Interest Payment
Typically the buyer is required to pay interest on the mortgage loan to cover the time between the closing date and when the first mortgage payment period begins. For example: If closing is on May 15. Your first monthly payment begins to accrue interest on June 1 with your first mortgage payment due July 1. At closing an interest payment covering the accrual period between May 15 and May 31 may be required.

Escrow Account
At closing a payment may be required to fund the escrow account if the lender is paying home insurance, property taxes and/or other expenses out of the escrow account.

Insurance Closing Costs

Homeowner's Insurance
This insurance covers replacement costs for damages caused by fire, wind or other disaster that might affect the value of the property. Typically, the insurance also includes personal liability and theft coverage.

Flood or Quake Insurance
Additional hazard insurance coverage that is required for homes located in a designated hazard zone as established by the Federal Emergency Management Agency (FEMA). An appraiser, inspector, or your realtor can let you know if a property resides in a hazard zone.

Private Mortgage Insurance (PMI)
Insurance required for conventional mortgage loans when the borrower's down payment on the house is less than 20 percent of the loan value.

Title Insurance
This policy protects both the buyer and lender by insuring a clear chain of title. (In other words, it insures that that the person who sells the house has the legal right to do so.)

Understanding the Terms: "APR" and "Interest Rate"

2012-01-11T15:15:00.000-08:00

You'll see an interest rate and an Annual Percentage Rate (A.P.R.) for each mortgage loan you see advertised. The easy answer to "why" is that federal law requires the lender to tell you both.

The A.P.R. is a tool for comparing different loans, which will include different interest rates but also different points and other terms. The A.P.R. is designed to represent the "true cost of a loan" to the borrower, expressed in the form of a yearly rate. This way, lenders can't "hide" fees and upfront costs behind low advertised rates.

While it's designed to make it easier to compare loans, it's sometimes confusing because the A.P.R. includes some, but not all, of the various fees and insurance premiums that accompany a mortgage. And since the federal law that requires lenders to disclose the A.P.R. does not clearly define what goes into the calculation, A.P.R.s can vary from lender to lender and loan to loan.

The A.P.R. on a loan tied to a market index, like a 5/1 ARM (adjustable mortgage rate), assumes the market index will never change. But ARMs were invented because the market index changes and makes fixed rate loans cheaper or more expensive to make -- that's why they're variable rate in the first placed!

So, A.P.R.s are at best inexact. The lesson is that A.P.R. can be a guide, but you need a mortgage professional to help you find the truly best loan for you.

Note when you're browsing for loan terms that the A.P.R. will not tell you about balloon payments or prepayment penalties, or how long your rate is locked. Also, you'll see that A.P.R.s on 15-year loans will carry a higher relative rate due to the fact that points are amortized over a shorter period of time

Definitions of Common Mortgage Terms

2012-01-09T20:00:00.000-08:00

One issue commonly arises when first time home buyers begin their mortgage application process: understanding the definitions of various mortgage terms. If you are not familiar with the process or the industry, there is plenty of jargon that could slow down this process for you. We want you to fully understand these terms and how they apply to you and your future new home.

Definitions

Annual income
Your annual income before taxes. For married couples this is your total combined annual income before taxes.

Purchase price
The price of the home you wish to purchase. This is the actual price you'll pay, not including any closing costs.

Total monthly payment
Total monthly payment that you can qualify for. This is the total of principal, interest, taxes and insurance paid each month. Often called PITI.

Cash on hand
Cash you have for the down payment and all closing costs.

Interest rate
The current annual interest rate you can receive on your mortgage.

Term in years
The number of years over which you will repay this loan. The most common mortgage terms are 15 years and 30 years.

Property tax rate
Your property tax rate. 1% for a $100,000 home equals $1,000 per year in property taxes.

Home insurance rate
Your homeowner's insurance rate. 0.5% for a $100,000 home equals $500 per year for homeowner's insurance.

Monthly car payment(s)
Total monthly payment for your car loan(s).

Credit card payments
Total monthly minimum payments for your credit cards.

Other loan payments
Any other installment loan payments, such as student loans or unsecured loans.

Total closing costs
Total upfront costs to close your loan. This is the total of your loan origination fee, points paid and other closing costs.

Loan origination rate
The percentage the lending institution charges for its origination fee. 1% for a $100,000 home equals $1,000.

Number of points paid
The total number of points paid to reduce the interest rate of your mortgage. Each point costs 1% of your mortgage balance.

Other closing costs
Estimate of all other closing costs for this loan. This should include filing fees, appraiser fees and any other miscellaneous fees paid.

Monthly PMI payment
Monthly cost of Principal Mortgage Insurance (PMI). For loans secured with less than 20% down, PMI is estimated at 0.5% of your loan balance each year. Monthly PMI is calculated by multiplying your starting loan balance by this percent and dividing by 12. When the equity in your home exceeds the percentage required for PMI, your PMI payment drops to zero. Please note that this is only an estimate of your actual PMI. The amount you may be required to pay may be higher or lower than our estimate.

Monthly PI payment
Monthly principal and interest payment.

Total for down payment
Total funds remaining, after closing costs, for down payment.

Limit down payment
Limit your down payment to percentage required to eliminate the need for PMI payments. Even if you have more cash on hand than required for closing costs checking this box will limit your down payment to the minimum amount required to forego PMI.

Show schedule by month
Display the payment schedule by month when you press the "View Report" button.

Show schedule by year
Display the payment schedule by year when you press the "View Report" button.

Total annual income debt percentage
Not shown. This is the percentage of your annual income your financial institution allows you to use for debt installment payments. This includes car payments, credit card payments, other loan payments and your "Principal, Interest, Tax and Insurance" payment for your home. The default rate is 36%.

PITI annual income percentage
Not shown. This is the percentage of your annual income your financial institution allows you to use for your "Principal, Interest, Tax and Insurance" payment for your home. The default rate is 28%.

Qualify amount
Shown as "Total monthly payment." This is the total amount you qualify for per month. This amount is the total of "Principal, Interest, Tax and Insurance" for your home.

Reminders for Home-buyers

2012-01-06T14:42:00.000-08:00

It is important to understand your personal financial situation before getting a mortgage. The amount of money a banker is willing to lend you might not be how much you can afford to borrow.

Make sure to learn the loan jargon before you start mortgage-shopping. It will make everything that much easier!

When choosing the best type of fixed-rate or adjustable-rate, decide how long you want to keep the loan and how much financial risk you can accept.

A good way to get the loan you want is to craft a positive and truthful mortgage application, just as you would prepare your resume to get the job you want.

If you already own a home, refinancing could save you money! Stay up to date with the current interest rates!

If you would like more information on getting your own mortgage application started, contact Felix Katz of Quest Loans at 805-456-1201. He would be happy to answer any questions you may have.

Understanding the Terms: "Lock" and "Float"

2012-01-04T11:22:00.000-08:00

If I were considering financing or refinancing a home today, I would do the following: Lock if my closing was taking place within 7 days or Float if my closing was taking place between 8 and 60 days from now.

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers. Brought to you by the professionals at Quest Loans.

What does this mean?

Basically, a deposit is paid by a borrower to lock in an interest rate for a specific period of time while a mortgage application is being processed. If interest rates decline during this period, the float down option allows the borrower to obtain a lower rate.

For example, suppose a borrower locks in a rate of 5%. Before the borrower's mortgage application is complete, however, interest rates drop to 3.5%. If this borrower has a mortgage rate lock float down, they may lock in the lower mortgage rate before the mortgage is approved.

Welcome!

2012-01-02T14:38:00.000-08:00

Welcome to 411 Rates, the place to get all the info you need about mortgages in a way you can understand it. We know that applying for a mortgage can be a daunting task. There is so much to know and the jargon can really make it confusing. Don't worry, you have come to the right place!

We would like to help you break down the entire loan process so that you aren't left scratching your head while you sign your name. It is important to know what you are agreeing to and how it will effect your life.

Please bookmark us and continue checking back for our frequent simple but informational posts regarding mortgages.