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Mortgage FAQ

We are always here to answer all your mortgage-related questions, below is a list of most commonly asked questions that we received on a daily basis. If you do not see your question here, please feel free to contact us directly.

During low rate environment, a refinance transaction will typically take 45-60 days to complete. During normal market conditions, a refinance will take less than 30 days to complete.

A zero closing cost refinance transaction refer to transactions where either the lender or the broker will be paying for the cost associated with conduction the transaction. However, at closing, borrower will still be responsible for any Non-Recurring Closing Cost (NRCC), these cost include cost that will incur whether the transaction is to take place or not, for instance, interim mortgage interest, unpaid property tax, mortgage insurance and fire & hazard insurance.

Debt-to-income ratio is defined as

(Principal payment+Interest Payment+Propety Tax Payment + Insurance)

divide by

Total monthly income before tax

Many programs will require this ratio to be 0.45 or less. In cases where subject is a condo or town house, the HOA association fee will need to be added to the numerator of this equation.

A full appraisal report would be required for any purchase transaction. For refinance transaction, it would be on a case by case basis, in some scenarios, only a drive-by appraisal would be required. Oftentimes, an appraisal report could be waived if the loan amount is relatively small.

In theory, every time when you are applying for credit, it will lower your score by a little bit. However, in reality, we have observed that negative impact of a mortgage application on your credit score is non-material.

This is question frequently asked by borrowers, our honest opinion is that no one can predict which direct the rate market is going to go, and since we offer no closing cost refinance option, it would be advantageous to refinance even if the rate is .125% lower than your current rate. In the cases of ARM, it is even advisable to refinance at an rate on par with your current rate just to extend the fix term period of the mortgage. If the rate does go down further in the future, we can always refinance again. Although this method takes more effort from the part of the home owner, this is the most certain way to save you mortgage interest in the long run.

Depends on the programs and the complexity of the deal, a purchase transaction will required somewhere between 17 days to 30 days to complete.

When submitting a loan application, a borrower will decide whether to lock the rate immediately or lock the rate later on. Once the rate is lock, it will be locked for a specific period of time normally in 30-days, 45-days and 60-days increment. The longer the lock period, the higher the interest rate. Transaction would be required to be completed within the lock period, otherwise, additional fee will be charged on a daily basis for each day that goes over the lock period.

Unfortunately, this is a rather complex question depending on a whole variety of factors. Here at RateKing, we have a whole array of in house lending options and outside source, it is recommended to reach out to us and let us have an opportunity to review your situation on a case by case basis.

Normally, the broker will impose a six months no refinance restriction on every refinance/purchase transaction, that means that, from the current closing date to the next closing date of your refinance, there has to be a six months waiting period.

Generally Speaking,

For W2 Wage earner, we would need the following documentation:

  • 1 month most recent paystub
  • 1 year most recent w2
  • 2 months most recent bank statements with every page
  • Page 1 and 2 of your most recent tax return, (two years of tax return would be required including schedule E will also be required if you own rental property
  • Copy of your driver’s license
  • Copy of your home insurance and property tax bill for ALL properties owned
  • Copy of your Trust Certification if property is held under trust

For Self Employed

  • 2 years of 1099 if applicable
  • 2 years of tax return with all schedules
  • 2 months of most recent bank statement with every page
  • Copy of your driver’s license
  • Copy of your home insurance and property tax bill for ALL properties owned
  • Copy of your Trust Certification if property is held under trust
  • Copy of your current business license or CPA letter to verify business if applicable

A Loan-to-Value ration is defined as,

(Existing First Mortgage Loan Amount)/(Market Value of Property)

The lower this ratio, the less risky the profile is, hence, borrower will have a lower interest rate from the lender. The higher this ratio is, the more risky the profile is, and thus resulting in a higher interest rate.

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