Frequently Asked Questions
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What is the difference between a mortgage broker and a direct lender? Example ( Cobalt Financial Corporation vs Major Lender)
Answer: Cobalt Financial Corporation has more than 250 resources to get your money from. We can shop for the best rate. We are getting the money at wholesale vs retail. In addition, I cater to the client from the beginning of the transaction to the end. At a large lending institution, once the loan is originated the sales agents' job is often done and your file is shipped off to a centralized processing center.
What is a GFE?
Answer: This is a Good Faith Estimate. Every loan officer is required to give you an itemized list of costs. I would ask for one prior to even completing the loan application so you can compare costs.
What is DU?
Answer: This is a term used for pre approvals today. It is Direct Underwriting. This is an electronic system that allows a company to link into Fannie Mae's website, submit your information and get an actual loan approval in minutes.
Will my taxes change when I refinance?
Answer: Not in California. If you live in a different state, they may. Call me, I will call the county assessor for you.
How often should I review my Home Owners Insurance Policy?
Answer: Every Year.
Does it lower my fico score to shop for real estate loans?
Answer: I recommend having one or two companies pull credit. Ask the company to tell you all 3 of your fico scores to shop for rates.
What is the best way to pick my loan officer?
Answer: Go with who you feel most comfortable with. Interview at least 3 people. This is a 30-45 day intimate relationship; you want to know you can count and trust the person representing you. You get what you pay for!
Is it better to pay points for my loan or no points?
Answer: This depends on how long you plan to stay in the loan. I will personally analyze this information for you. Basically, you pay a higher interest rate over the long term or you pay up front. I can break it down on paper for your specific loan.
What is the minimum I should expect to put down if I want to buy a house?
Answer: 3% of the sales price. However, some of this can be a gift.
Can my loan be sold?
Your loan can be sold at any time. There is a secondary mortgage market in which lenders frequently buy and sell pools of mortgages. This secondary mortgage market results in lower rates for consumers. A lender buying your loan assumes all terms and conditions of the original loan. As a result, the only thing that changes when a loan is sold is to whom you mail your payment. In the event your loan is sold you will be notified. You'll be informed about your new lender, and where you should send your payments.
What happens if my lender goes out of business?
If your lender goes out of business, you are still obligated to make payments! Typically, loans owned by a lender going out of business are sold to another lender. The lender purchasing your loan is obligated to honor the terms and conditions of the original loan. Therefore, if your lender goes out of business, it makes little difference with regards to your loan payments. In some cases, there may be a gap between the date of your lender's going out of business and the date that a new lender purchases your loan. In such a situation, continue making payments to your old lender until you are asked to make payments to your new lender.