We answer your questions about the mortage process...
FIXED RATE MORTGAGES
These programs are typically either on a 15 year or 30 year amortization or repayment schedule. These programs provide the most security in the sense that the required monthly principal and interest payments will not change for the life of the loan. This is because the interest rate is fixed for the entire life of the loan, thus it is called a 15 or 30 year fixed program.
ADJUSTABLE RATE MORTGAGE
All of Trademark Mortgage’s ARM programs are based on a 30 year amortization or repayment schedule. These loans are referred to as adjustable rate mortgages (ARM’s), because the interest rate will change or adjust on a predetermined schedule. ARM’s have an initial fixed period that the interest rate will not change or adjust. After this initial period the interest rate will change or adjust based on a market index plus a margin. The market index for ARMS may be an average one year treasury bill index as published in the Wall Street Journal or in our Hourly Market Update Section. The margin is predetermined and is typically between 2.75% and 3%. So, if the one year treasury bill index is 5.5% and your margin is 2.75% on the date of your first adjustment, your new rate would be 8.25%. There are limits to how much your interest rate can adjust in any given adjustment and over the life of your loan. A periodic rate cap, would limit the amount of any single adjustment which is 2% in rate on Trademark Mortgage loan programs. A lifetime rate cap limits the cumulative amount of any adjustments over the life of the loan, 6% in rate on Trademark Mortgage loan programs.
What is a mortgage broker? What are the pros and cons of using a mortgage broker?
A mortgage broker is a company that markets other lenders products, similar to an independent insurance or travel agent. Mortgage brokers are offered mortgage products and services at wholesale prices and market these products and services to consumers. The advantages of this is that a broker can offer the lowest rates because they can utilize the lender offering the best prices that particular day. Also, a broker has the option to operate on lower margins than other banks or lenders. Another advantage is that a broker has access to many different programs than any one lender will provide. A loan that one lender can not do, may be able to be done by a broker because they may have a lender that offers programs your situation. Trademark Mortgage is a full service mortgage broker. The only way this impacts you is that your loan will be owned and serviced by the lender (not Trademark Mortgage) who makes the loan. Trademark Mortgage does all of the processing and customer service of your loan all the way through closing. It is our name and reputation on the line every day and we want to provide a single source for you to work with. That way we can have control of the service you receive and we can assure your satisfaction. Many other internet mortgage providers just pass your name off to another lender in exchange for some broker fees or marketing fees. The cons of using a mortgage broker is that often their level of service is influenced by their interactions and service levels provided by the lenders. That is why we chose to partner with only a few of the top national lenders to work on providing seamless customer service to you the customer.
How does an interest rate lock work?
At Trademark Mortgage an interest rate lock guarantees your interest rate for 30 days from the date your application is received. A lock does not obligate you to a loan, as technically you are not obligated to any loan until it closes. It just eliminates the risk of interest rates increasing. If interest rates fall, we can not re-lock with the lender at the lower rate, so if you are comfortable with an interest rate you can be assured that the interest rate will be available when you close.
The purpose of a lock is to provide an opportunity for you to arrange to complete your mortgage and real estate transaction before the lock expires. This allows you to budget, plan your affordability, and purchase a home without having to worry about it changing before you actually close on your loan. Otherwise, interest rates may increase and by the time you close on your home, you may not be able to afford or qualify for the loan on your home. Interest rate locks provide needed security. Since lenders are absorbing interest rate risk they charge for taking on this risk. For instance, typically a 60 day lock interest rate is slightly higher than a 30 day lock interest rate. Therefore, when you shop for mortgages, a 7% interest rate with a 60 day lock is a better deal than a 7% interest rate with a 30 day lock.
Am I guaranteed the rate I apply for?
Yes, once you submit and we receive your application a lock for that interest rate is established. If you submit your application electronically or via fax, you will be locked in at the rates published on the site at the time you submit your application. If you mail your application, your rate will be locked at the rate that is published on this site at the time we receive your application. You will receive a confirmation via email and in your loan approval package. Your interest rate will be guaranteed as long as you are approved and submit your information prior to any deadlines to complete your loan. We typically require that you submit the requested information within 10 days from the time you receive your approval package. If this is not possible to submit your information within this time frame, just make arrangements with us by email or by phone.
