Begin by using the Better Business Bureau to check for any record of consumer complaints. In addition, check with the state agencies that regulate lenders,…

If you’re using a real estate agent, get referrals from them first. Most real estate companies get solicited all day long from lenders wanting referrals.…

If you only looked at newspapers, television ads, or websites, it would seem that all lenders are your best lender. No one’s bad. In fact,…

You now find the lender that offers your chosen loan. If your mortgage is more commonplace, such as a conventional Fannie or Freddie loan, then…

An FHA 203(k) is a little different from a renovation loan and doesn’t cost as much as a conventional renovation loan in terms of equity…

You’ll run into some equity problems if you don’t watch out. Your lender can use the ‘‘subject to’’ value of the improvement when your current…

That depends on how much you want to borrow. If you just want to borrow $20,000 for a new deck or to redo the master…

No, but it’s critical to examine the sales contract. There may be a provision that you make a loan application with the builders’ mortgage company,…

Just get approved for a regular mortgage loan and wait for the house to be built. When you buy a new home in a brand-new…

If you don’t have a float-down feature, you can always refinance or modify. No one can predict the future, so you’re not the only one…

You need to compare your choices, but neither will ever be handsdown better each and every time. Yes, with a two-time close you’ll have two…

There are two common options: a one-time close and a two-time close. A one-time close loan means you obtain construction financing and a permanent mortgage…

There is no requirement that you take a permanent mortgage at the end of construction as long as the construction note is retired. But you’ll…

No. If you already own the land, then instead of coming to the closing table at the end of construction with a down payment you’ll…

The lender will take your building plans and give them to a licensed appraiser, who will determine a future market value of the completed home.…

Your builder will need to pass muster, both from an experience as well as a financial perspective. Lenders will review the net worth of your…

Construction costs are divided between ‘‘hard’’ and ‘‘soft’’ costs. Hard costs cover things like hammers and nails, wood, labor, and anything physical needed to build…

Mostly the same way you get approved for any other mortgage. You need good credit and all that goes with it, but the most important…

Starting from scratch allows you to build your own home exactly the way you want. Down to the linen closets. When you buy from a…

Construction loans differ from regular mortgages, but typically, when you get a construction loan you’ll also need to get a mortgage at the end. Construction…

Great questions, but it’s simply a matter of preference. For example, I know a guy who will shave his head before he will ever buy…

Reverse mortgages require counseling that has been prescreened and presented to you in a formal manner. Reverse mortgage loan officers must also go through training…

No, a reverse mortgage will first pay off any current mortgages on the property, and then you’ll be left with your reverse mortgage funds. If…

Lenders can set their own rate programs, but most reverse mortgage loans are ARMs based upon a common index, such as a treasury or LIBOR…

Many of the closing costs for a reverse mortgage are similar to a refinance, and you’ll need title insurance and a survey and escrow charges…

Because a cash-out refinance requires the homeowner to make monthly payments back to the lender, which sort of defeats the purpose. Furthermore, reverse mortgage funds…

That depends upon a few things, but reverse mortgages are primarily calculated based on the age of the borrower (loan-to-value numbers are triggered by life…

Anyone who owns their home, lives in it, and is age 62 or older can qualify. There are no credit or income qualifications for a…

A reverse mortgage is designed to help older Americans who own their homes by paying the homeowner cash in exchange for the equity in their…

Nothing, really, except that you’ll be sending your mortgage payment to another lender. Lenders can make money by collecting monthly interest payments, or they can…

A modifiable mortgage is a mortgage loan that allows its interest rate to be modified, even if it’s at another lender. It sounds similar to…

A recast applies to ARMs and is used when extra payments are made to the principal balance. When you make a regular payment on your…

A note modification is taking the original terms of the note and reducing the interest for the remaining term of the loan, without changing any…

Maybe. You’ll have to qualify all over again, just as when you bought the home, so if you’ve experienced some credit problems, such as collections,…

Because the lender is adding mortgage interest that you’ve yet to pay your current lender. When you refinance your mortgage, your new loan officer will…

If all you’re wanting is to have access to some of the equity in your home, then take the HELOC. They’re inexpensive (sometimes free) and…

Good question. There are some very important considerations here when refinancing a mortgage that has subordinate (second) money behind it. First, given enough equity, many…

You can do a couple of things, actually. And they’re fairly easy. The first is to get an equity second mortgage on your house for…

A cash-out refinance is the exact same process as a refinance, only this time you come away from the closing table with a check in…

You can. For some people, paying the same amount each month, every month, is a little more ‘‘automatic.’’ Payment by payment, more money goes to…

Changing your loan term along with your rate may also be a good reason to refinance your mortgage from a 30-year to a 15-year loan.…

I’ve never been a big fan of paying discount points and origination charges on any loan, purchase or otherwise. If you paid a discount point…

A refinance is a brand-new mortgage, that’s why. You will have new title insurance, a new note, a new lien, a new everything, mostly. Yes,…

No, you can close a refinance anytime you want. I’ve had clients in process for months before they decided to take the plunge and refinance…

That’s a fair question. If you applied the refinance test solely to owning the home longer than it takes to recover the fees, then it…

A rescission period is a unique feature of refinanced mortgages and only applies to your primary residence. It’s a three-day grace period that lets you…

No, and I’ll explain why. The real test is how long it takes to recover your closing costs using your new lower payment, compared to…

There are many reasons, but the primary one is to reduce the interest rate on your current mortgage loan. If your rate is at 8.00…

That depends on your perspective. Subprime loans have been around for years, and while they have always had higher default rates, they had never had…

In my opinion, it’s whether or not your lender or loan officer is a greedy crook. People with damaged credit have had it rough enough…

Now, that’s predatory. Foreclosing on a home is not on the list of top-ten things a bank likes to do. It’s expensive. It’s messy. And…

People have been trying to define exactly what a ‘‘predatory’’ loan is, with varying degrees of success. By general definition, a predatory loan is designed…

Then don’t refinance. That’s the inherent risk on a couple of fronts. First, rates might in fact be higher when you go from a subprime…

That’s always up to you to decide. But subprime lending provides home ownership opportunities to a class of people that normally would be entirely shut…

It’s not uncommon for them to be higher in fees, albeit not by much when compared to conventional loans. But there’s the rub. Since lenders…

A lot. Typically the caps, if there are any, are much higher with subprime hybrid loans; at the same time, they carry higher margins. With…

Prepayment penalties are common on subprime loans, much more so than on conventional ones, where prepayment penalties are rare. These penalties are usually ‘‘soft’’ in…

They’ll be higher than rates with a conventional product, there’s no doubt about that. But how much higher depends on your grade. The lower the…

Nothing’s the matter with them, other than that their interest rates and terms are less favorable than loans for people with good credit. You just…

Not necessarily. As with other loan types, it can depend upon your credit, but there are low-money-down subprime loans and even zero-money-down subprime loans for…