Frequently Asked Questions

What is a mortgage broker and why should I use the services of one?

A mortgage broker is a “middleman” between you the borrower, and the lender who actually provides the funds for the loan. A broker may use many different wholesale lenders, and therefore has access to numerous different types of loan programs and rates for the borrower. A broker gets daily wholesale rates from multiple lenders and can then pass these rates on to the borrower. Contrast this to a bank and other big lenders who charge retail rates to cover overhead and make extra profit.

How does a no-cost loan work?

When was the last time that you received something for nothing? Well, a no-cost loan is not free either. The concept behind a no-cost loan is similar but opposite to paying points. In this case, the lender is essentially paying you points to be used for your closing costs in exchange for a higher interest rate.   No-cost loans can be convenient and are very popular because you don’t have to pay closing costs for the loan.  A no-cost loan is also a great idea if you don’t plan on keeping the loan for a long time.   But you should understand  the trade-off.


Apple Street Mortgage will explain this to you and provide you with the information necessary for you to make a sound financial decision.


When does it make sense to refinance?

The old “rule of thumb” is when rates drop by 2%.  Hogwash!  There are many variables that must be factored in to make a sound decision on your refi.  A no-cost loan may make sense if you can lower your rate by 1/8%!  Or you may wish to refi at the same rate just to spread your payments back out over 30 years and/or take some cash out of the equity that you’ve gained from your home’s price appreciation.


Again, Apple Street Mortgage Corp. will help you with these important and often difficult  decisions.


Should I pay points?

Paying points, also known as discount points or prepaid interest, is a way to reduce your interest rate.  For an extra cost, you get a better interest rate because the lender is willing to charge a lower rate in exchange for an upfront fee.  In general, the longer you plan to keep your loan, the more points you might want to pay because the upfront fee will eventually pay for itself in the form of the monthly savings you’ll get from a lower interest rate.


This is not always a straightforward decision.  But, as part of our service, Apple Street Mortgage Corp. will run the numbers to help you decide what makes the most sense for you, saving you perhaps thousands of dollars.



How are rates determined?

Loans are typically packaged in groups and sold to the secondary market, eventually ending up on Wall Street which is subject to subtle changes in economic and political conditions. As such, rates fluctuate daily (sometimes two or three times daily) similar to the stock market.  There is no way to know where rates will go from one day to the next.   Beware of anyone who tells you differently.  However, you can generally get a good relative indication of what mortgage rates are doing currently by watching the 10-year Treasury.  When the Treasury goes up,  the return (interest rate) goes down, and mortgage rates follow (usually).  Look for the 10-year rate and its recent history in the business pages of the newspaper or on a financial TV channel.


At Apple Street Mortgage, we monitor economic conditions closely.  We can’t predict the future but we will arm you with the latest information to help you make an informed decision.



What about the mortgage rates I see in the paper and online?

Advertised rates in the paper are often out-of-date.   Rates change daily.  The ads you see may be weeks old.  A lender  does not have to honor these rates and published rates are often very “optimistic”.  Average rates posted in various places online and in the paper may not be helpful either.  Many of these rates are the averages of  advertised rates or have discount points involved which cloud the data.


Call Apple Street Mortgage Corp. to get a current low wholesale rate.



What are Apple Street Mortgage’s interest rates?

This is an important question. We don't post rates online for a very simple reason: Interest rates fluctuate, sometimes two or three times daily, and positioning of lenders in the marketplace also changes. Everyday we shop interest rates and discount points with many wholesale lenders online.  This ensures that we are able to offer you the best overall price on a large variety of products with numerous lenders - the best lender and rate for your situation may change while you're having lunch.  Apple Street Mortgage’s lending network makes comparison shopping easy. Not only can you skip checking rates with multiple banks and mortgage companies, but we help you select from among hundreds of mortgage products, the one that is right for you.

Perhaps even more importantly, an interest rate by itself without an indication of fixed closing costs is absolutely meaningless - and this assumes that we have all the input to determine what your rate will be.  Pay more costs, rate goes down.  Pay less costs, rate goes up.  We read the papers and websurf all the time.  It is a rare site indeed that makes clear what your costs will be - and we're experts!  

At Apple Street Mortgage, we'll ask the right questions and analyze your situation.  Only then will we quote an interest rate and your closing costs.  And we'll explain it to you until you understand it.  Then we'll guarantee it and attend your closing to back it up.


ARM (Adjustable Rate Mortgage) or Fixed Rate?

An ARM is a mortgage whose rate is fixed for a period of time (traditionally this used to be one year) but then may fluctuate periodically.   The initial rate is often desirable relative to a regular permanent fixed rate but you run the risk of paying a higher rate (possibly much higher) in years to come.   A relatively new and very popular type of ARM is the hybrid ARM.  A 3/1 hybrid ARM for instance is fixed for three years and then is subject to change on an annual basis after the third year.   But there are all kinds of variations on the theme.  These products may be very desirable if you don’t plan on keeping your loan for a long time, if the lower initial payment helps you qualify,  or if you expect to come into more money, perhaps from a big raise, and can handle the higher payment or even prepay the principal on your loan, or you just want to maximize cash-flow for the near term.  New and varied loan products are constantly arriving on the market. Click here to get more details on how ARMs work.  Click here for interest-only ARMS.


Let Apple Street Mortgage Corp. walk you through some of these products and guide you in selecting the best one for you.



What time of the month should I close?

This is one of the big misconceptions in the industry – especially with refinances.  Popular thinking has usually been to close at the end of the month.  This is because, at closing, you pay interest to the new lender (prepaid interest) from the time of funding to the end of the month.  This means that you’ll pay less prepaid interest on the new loan by closing on the 25th than you will by closing on the (preceding) 5th.   If having sufficient cash-to-close is an issue, it may be prudent to close near the end of the month.


But the reason that you’re refinancing is generally to get a better rate isn’t it?  Don’t you want to trade in that old high rate for your new lower rate as soon as possible?  The 5th makes much more sense than the 25th.  Any reduction in prepaid interest that you pay to the new lender near the end of the month will be counterbalanced by all the interest that you have to pay to the old lender.  Also, by closing on the 5th, your first full payment will still be 55 days away instead of the 35 days if you closed on the 25th.  There's no magic here - you'll pay one way or the other - it's just a question of when.   The logic for a new purchase loan isn't substantially different.  Again, it may help your cash-to-close situation to close near the end of the month.

Confused?  Call and we'll walk you through it until it makes as much sense to you as it does to us.


What should I watch out for when working with a lender?

There are many lenders out there who are upfront and honest.  But, like in any business, finding them is not always easy.  Here are a few things to be watchful of.  Be wary of the bait and switch.  This is when a lender woos you with a desirable but unavailable rate, and then changes the rate after you’ve filled out a lot of paperwork and invested your time and money.   Or an unscrupulous lender may tell you that she’s locked a rate for you but, secretly, he has allowed the rate to float.  If the rate drops, you’ll still get the higher rate.  If the rate goes up, the lender may report  “some kind of mess up at the lock desk”, and you will be without your low rate!  We’ve heard these stories over and over!


Call Apple Street Mortgage Corp. to get the straight,  honest scoop on your home loan.  We look forward to “Removing the Mystery from Your Mortgage”!