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Frequently Asked Questions
WHY DID MY REALTOR REFER ME TO YOU?
A high quality realtor knows that the key to a successful
transaction means TEAMWORK with a professional mortgage banker.
Any experienced realtor could tell you horror stories about
times when a client made a poor choice of mortgage company, and
ended up with big surprises at the closing table, or worse, no
closing taking place at all! A good realtor will form
relationships with trusted individuals who have proven
themselves time and time again, so that they know you will be
given the excellent service that you deserve. It is important to
know that your realtor is NOT given any compensation or
"kickbacks" for referring you to a mortgage banker. As mortgage
professionals, we desire more referrals, both from you and your
realtor, so consider the extra motivation this provides for us
to take great care with your satisfaction!
WHY SHOULD I USE A REALTOR?
First and foremost, because you need an experienced professional
working on your behalf. The realtor's commission is not paid by
the buyer, but by the seller of the home being purchased, and it
is in each party's best interest to have professional
representation. As a seller, profits are generally maximized by
having an experienced realtor market and sell your home, rather
than deal with the headaches of trying to do it all on your own.
See our page on "selecting a realtor" for more information.
WHY
AND HOW DO INTEREST RATES CHANGE?
Many people are surprised to learn that rates change on a daily
and sometimes hourly basis. Interest rates fluctuate in response
to changes in the financial markets. The bond market is
generally a good indicator of the general trend of interest
rates.
WHAT
HAPPENS ONCE I AM PRE-APPROVED?
You are ready to buy a home! Remember that it is very important
to inform us of any changes in the financial information that
was provided at the time of approval, as it may make a change in
the amount or type of loan that you can qualify for.
WHEN
SHOULD I CONSIDER REFINANCING?
The old rule of thumb was at least 2%, but this is no longer the
case. Many different individual factors need to be analyzed to
determine if refinancing is right for you, such as the length of
time you intend to stay in your home, or the type of loan you
currently hold. We are always happy to provide a recommendation
to you for your particular circumstances.
WHAT
IS AN ORIGINATION FEE?
Typically, it is 1% of your loan amount, and works exactly like
a discount point. You can avoid all or part of this fee by
paying a higher interest rate. In South Dakota, rates are
typically quoted assuming this 1% origination fee.
WHAT
IS TITLE INSURANCE?
It is a policy provided by the title company guaranteeing the
accuracy of the title work done on your home at the time of
purchase. As a buyer, you are required to purchase a lenders
policy of title insurance as part of your standard closing
costs, which only protects the mortgage company. You may also
choose to purchase an owners policy, which would protect you
against any loss in the event of any legal issues relating to
the title of your home.
WHAT
IS MORTGAGE INSURANCE?
This is generally required in one form or another when the down
payment is less than 20%, and protects the lender in the event
of loan default. The lower the down payment, the higher the risk
for the lender, and thus the higher the monthly premium.
Depending on your particulars, there are ways in which mortgage
insurance can sometimes be avoided at purchase, or dropped
altogether at some point in the future
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