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525 Randall Ave. Cheyenne, WY  82009 307-632-0001

We have found that there are several things that most borrowers question time and again. The following should help you understand some of what will be involved in your transaction:

Interest rates vary from program to program, and investor to investor. There are often hidden costs that may make one advertised rate look great but will actually cost you a lot more at the closing table. Some borrowers are happy to go this direction because is means that their annual percentage rate is lower, but some borrowers want to keep their initial investments low so they need to get the lowest closing cost available and may be willing to pay a slightly higher interest rate. Some borrowers have ongoing tax issues that can benefit from paying either a higher interest rate or immediate issues that can benefit from paying points or all of the seller's closing costs. A big part of our job is to understand your personal needs and research the market to get you the best "deal" available.

Points are often misunderstood. Each investor establishes what they want to yield every day based on their cost of money. They offer their market rate and give us information as to what they will charge in the form of "points" in order to yield that same rate if the borrower chooses to but a lower interest rate. Consequently, the borrower has the right to decide whether they want to pay the market rate and pay no points or have a lower interest rate by paying points. One point is 1% of the loan amount, but it is not an even 1-to-1 exchange. In other words, 1 point does not reduce the interest rate 1%. In fact, 1 point often relates to only about a 1/4% reduction in the interest rate. Points are tax deductible since they are essentially pre-paid interest. They are often used to negotiate the sales contract because the seller can often benefit more with a larger tax deduction at closing rather than taking a lower offer. The buyer needs to think about which will be more beneficial to them - a lower purchase price translates to a lower loan, but a lower interest rate (via points) can sometimes translate to lower payments. This, too, is something we can help you evaluate.

Credit Information - There are 3 credit repositories that all issue findings on credit reports. As a result, some information is duplicated, and quite honestly, not all of it is accurate. What we don't want to happen is for you to be disqualified from getting the loan you want because your credit report contains inaccurate information. Therefore we take a lot of time to go over your credit report with you to determine what is and isn't correct. If you have some blemishes on your record you'll be given the chance to write a letter of explanation to combat it's negative influence. If you have supportive documentation, we'll pass that along to the underwriter so they will see the whole picture and not only the bottom line. Working together, we can often demonstrate your change in circumstances that places you in a position to qualify for a mortgage.

Closing Costs - As we said, some investors charge more than their services (processing, underwriting, and closing) then others, but the buyer's total closing costs (without points) average about 2 1/2 - 3% of the total loan amount.

Appraisal - Every loan file is evaluated in two ways. The borrower is only 1/2 of the equation. The other half is the property that will be mortgaged. Even when the borrower is solid gold, if the property does not match the criteria, we can't make the loan. What we ask the appraiser to do is determine if the property is worth what the buyer has agreed to pay, and in the case of government loans )FHA and VA), if the property meets their standards. Remember, all we really want to know is if the loan is adequately secured by the collateral. We work with all the licensed appraisers, however, we deliberately foster close relationships with a few of them which enables us to obtain "rush" orders when necessary.

The bottom line is that there is a lot to know about mortgages and since this is a major financial transaction you don't want to take it lightly or trust an amateur. There is much more to it than simply filing out an application! Our best advise is to find a loan officer you trust so they can take a lot of the trauma out of this transaction for you. Of course, we would love to have your business and look forward to working with you.