If you live in San Mateo County and own or want to buy a home, there is a good chance that you will need a jumbo mortgage rate quote when shopping for a loan. There are many variables that go into a jumbo mortgage rate quote. knowing what these variables are can help you ask the right questions to get the most attractive jumbo mortgage rate for your needs.
Here are seven questions to ask to get the best jumbo mortgage rate quote in San Mateo County:
1. Does it make a difference in the rate if I am purchasing or refinancing? Some lenders differentiate their jumbo mortgage rates based on the type of transaction. For example, some lenders prefer purchase transactions and will discount the rate for this type.
2. Are the rates differentiated based on the loan-to-value (LTV) percentage? Lenders love it when borrowers have equity! They will often discount their jumbo mortgage rates based on the equity percentage. As a borrower, you may want to choose to borrow less to take advantage of the lower rate! These discounts are usually based on 5% increments in the loan-to-value percentage. For example, a lender may offer a lower jumbo mortgage rate for a 65% LTV than a 70% LTV.
3. Are your jumbo mortgage rates based on the credit score? Lenders also love high credit scores! They often reward borrowers with high credit scores with a lower jumbo mortgage rate. It is also important to ask which credit score is used to determine the rate. Some lenders will use the lowest middle score of all the borrowers (most credit reports have three credit scores). Other lenders will use the middle score of the primary wage earner (the borrower who makes the most money).
4. Does the amount of money I would like to borrow have an impact on the rate? The answer to this question widely varies from lender. Some lenders will offer better jumbo mortgage rates for lower loan amounts. Others will offer better rates for higher loan amounts. It's important to ask where the cut-offs are, meaning at what loan amount does the rate change? Finding out this information will help you structure how much of a loan to apply for?
5. Do you offer a discount for an impound account? An impound account is an account with the lender, funded by the borrower, that pays the property taxes and homeowners insurance when they become due. Some lenders will offer a lower jumbo mortgage rate to borrowers that agree to an impound account.
6. Do you offer a discount to the rate if I accept a pre-payment penalty? A pre-payment penalty is a percentage of the loan amount that must be paid to the lender if the loan is paid off before the pre-payment penalty period expires. Some lenders will offer a discount to their jumbo mortgage rate if the borrower accepts a pre-payment penalty. It is very important to note that all pre-payment penalties are not alike. They can differ in the length of the pre-payment penalty period. The dollar amount of the penalty can differ. The penalty can differ based on how the loan is paid off. For example, the pre-payment penalty may be waived if the house is sold, but enforced if the loan is refinanced. Make sure to understand all the varaibles of a pre-payment penalty!
7. Does the rate differ based on where the property is located? For example, does the rate change based on being in San Mateo County? This is a very important question to ask!
Having the knowledge to ask these questions will help you get the most attractive jumbo mortgage rate from a jumbo mortgage lender!
Do you need help making an effective financial decision? Call or text me at (650) 222-0386, or e-mail me.
Opes Advisors is licensed by the CA Department of Business Oversight 4150089, CA Bureau of Real Estate 01458652, Oregon ML -4902, Washington CL-1178435 and NMLS 235584. Equal Opportunity Lender. Opes Advisors is a registered investment advisor with the Securities and Exchange Commission (SEC). ©2014 Opes Advisors, Inc. All rights reserved.