Working with Lenders and Brokers
Frequently Asked Questions
Straight answers to the questions we hear most.
Your Debt-to-Income (DTI) ratio is a percentage calculated by dividing your total monthly debt payments (including your potential new mortgage, car loans, student loans, and credit card minimums) by your gross monthly income. It is a critical factor for lenders because it indicates your ability to manage monthly payments and repay the loan.
A standard mortgage pre-approval letter is typically valid for 60 to 90 days. This is because your financial situation and credit can change. You can usually get an extension if needed, provided you reconfirm your financial details.
A mortgage rate is the interest you pay on the money you borrow to purchase a home. It’s expressed as a percentage and determines a significant portion of your monthly mortgage payment. Essentially, it’s the cost of borrowing money from a lender.
Customer service is a key differentiator. Credit unions consistently rank higher in customer satisfaction surveys. They are member-focused and often provide a more personalized, community-oriented experience. Banks, especially large ones, can feel more impersonal and bureaucratic, though they may offer more robust 24/7 digital support.
The process involves applying for a new mortgage that is greater than your current mortgage balance. At closing, the old loan is paid off, and you receive the excess funds. For example, if your home is worth $400,000 and you owe $200,000, you might refinance into a new $300,000 loan. After paying off the $200,000 old loan, you would receive approximately $100,000 in cash (minus closing costs and fees).
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