The decision between a 15-year and a 30-year mortgage is one of the most significant financial choices a homebuyer can make, setting the trajectory fo...
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The choice between a 15-year and a 30-year mortgage is one of the most significant financial decisions a homebuyer or refinancer will make. This decis...
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The journey to homeownership is often symbolized by the quest for the perfect mortgage rate, but the financial responsibility extends far beyond that ...
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In the ever-evolving landscape of real estate financing, an often-overlooked option presents a unique opportunity for both buyers and sellers: the ass...
Read MoreClear communication is key. Find out if you’ll be working with one loan officer or a team, their preferred method of communication (email, phone, portal), and their typical response time for questions.
Loan stacking is when you take out multiple home equity loans or lines of credit from different lenders at the same time. This is extremely risky because it can over-leverage your property to an unsustainable level, dramatically increasing your monthly payments and the likelihood of default and foreclosure. Most legitimate lenders will check for this and refuse to proceed if other recent loans are found.
The process is generally simple:
1. Check Eligibility: Contact your lender to confirm they offer recasts and that your loan type qualifies (e.g., conventional loans often do; FHA/VA may not).
2. Make a Lump-Sum Payment: You must make a significant principal payment, which often has a minimum requirement (e.g., $5,000 or more).
3. Submit a Request & Pay Fee: Formally request the recast from your loan servicer and pay the associated processing fee.
4. Lender Re-amortizes: Your lender applies the payment and creates a new amortization schedule based on the lower principal.
5. Confirmation: You will receive confirmation of your new, lower monthly payment and the date it takes effect.
These terms are often used interchangeably in the mortgage context. Technically, “forbearance” is the general agreement to pause payments, while “deferment” often refers to the specific solution where the missed payments are moved to the end of the loan. In this case, you resume your normal payments, and the forborne amount becomes a non-interest-bearing balloon payment due when you sell the home, refinance, or pay off the loan.
Conforming Loan: A mortgage that meets the loan limits and guidelines set by Fannie Mae and Freddie Mac. These loans often have competitive, standardized rates.
Jumbo Loan: A mortgage that exceeds the conforming loan limits. Because they are larger and considered riskier for lenders, jumbo loans typically have higher interest rates and stricter credit requirements.
