Purchase Frequently Asked Questions

 

How do I qualify for a loan? 

Lenders use specific criteria to determine if you qualify for a loan and the amount you qualify for. Factors include credit scores (we’ll pull a free credit report for you), income, liquid assets (if any), and if you have a down payment. Because Seattle Mortgage Planners can shop over 50 different banks and lenders, we typically have a far larger product set from which to choose compared to a bank or credit union. We recommend the easy route: call us (no obligation) and speak with an expert who will clearly talk with you about which programs, rates, and payment plans will best suit your needs. Seattle Mortgage Planners also allows you to apply and get pre-approved right here online – it’s fast, easy, and free (Seattle Mortgage Planners charges no application fee).

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How do I know what my loan rate will be? 

Rates vary primarily based on the type and purpose of the loan, your credit history and income, loan amount, value of the property, and the number of points you are willing to pay. Once the rate is chosen and ‘locked’, we’ll guarantee the rate up to and including your expected close date.

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What are points and how many do I have to pay? 

One point is equal to 1% of your loan amount. It is important to remember that discount points are linked to the interest rate for the loan and therefore are a choice, not required. Generally speaking, the lower the interest rate, the higher the points paid. Sometimes it makes sense to pay the extra points and ‘buy’ the rate lower, sometimes it does not. This decision is yours to make, but we will review it with you in-depth and explain your options, the break-even, etc. to determine what final rate and point combination works best for your particular circumstances. You can choose a ‘no-point’ option, or can pay points to get a lower rate. Finally, if you choose to pay points and have a lower rate, they are paid when the loan closes, not at the time of application.

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Do I get a tax advantage from having a mortgage? 

You should consult a tax attorney or accountant for specific details, but interest on a mortgage is usually tax deductible. Interest on credit cards or automobile loans is not normally tax deductible.

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What are rates, terms, and APR? 

All mortgages have an interest rate, a term, and an Annual Percentage Rate (APR). For example, a mortgage might be defined as a 30-Year Fixed Rate Loan at 7.25%, with an APR of 7.45%.
In this example, the mortgage term is 30 years. As the borrower, you will pay back the loan in installments over the course of 30 years.
The interest rate in this example is 7.25%. This means you must pay interest on the money you’ve borrowed at a rate of 7.25% per year. That is, in addition to paying back the loan, you will pay your lender an additional 7.25% of the current loan balance every year. This interest is basically the fee your lender charges you in return for lending you the money.
The Annual Percentage Rate (APR) is a measure of the cost of credit, expressed as a yearly rate. Because APR includes points and other costs such as origination fees, it’s usually higher than the advertised rate. The APR allows you to compare different mortgages based on actual annual costs.

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