Serving Michigan Home Buyers

for Decades - Oakland, Macomb, and Wayne Counties

owner

Daniel Litvin, PresidentNMLS #134188

Home Loan FAQs

There are no silly questions when it comes to home mortgages.

When should I refinance?

The best way to judge whether or not you should refinance is to figure out how many months it will take you to recoup the costs associated with refinancing.

For example, if a refinance would save you $100 per month and the costs were $1,500 to do it, then your breakeven point would only be 15 months. As long as you planned on living in the home for longer than 15 months, it makes sense for you to refinance.

The significance of such savings in any scenario will depend on your income, budget, loan amount and the change in interest rate. One of Advantage Lending Corp’s mortgage experts can help calculate the different scenarios.

What are points?

Points are costs that can be paid to a lender in order to receive an interest rate below market conditions.

A point is 1% of the loan amount. One point on a $100,000 loan would be $1,000.

Discount points are fees that are used to lower the interest rate on a mortgage loan (you are discounting the interest rate by paying some of this interest up-front).

Lenders may express other loan-related fees in terms of points. Some lenders may express their costs in terms of basis points (hundredths of a percent). 100 basis points = 1 point (or 1 percent of the loan amount).

Should I pay points to lower my interest rate?

If you plan on staying in the property for at least a few years, paying discount points to lower the loan’s interest rate can be a good way to lower your required monthly loan payment (and possibly increase the loan amount that you can afford to borrow).

If you only plan to stay in the property for a year or two, your monthly savings may not be enough to recoup the cost of the discount points that you paid up-front.

Ask your lender how long it would take for your monthly savings to recoup the costs of the discount points.

What is an APR?

The annual percentage rate (APR) is an interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other credit costs. The APR allows homebuyers to compare different types of mortgages based on the annual cost for each loan. The APR is designed to measure the “true cost of a loan.” It creates a level playing field for lenders. It prevents lenders from advertising a low rate and hiding fees.

The APR does not affect your monthly payments. Your monthly payments are strictly a function of the interest rate and the length of the loan.

Because different lenders calculate APRs differently, a loan with a lower APR is not necessarily a better rate. The best way to compare loans is to ask lenders to provide you with a good-faith estimate of their costs on the same type of program (e.g. 30-year fixed) at the same interest rate. You can then delete the fees that are independent of the loan such as homeowners insurance, title fees, escrow fees, attorney fees, etc. Now add up all the loan fees. The lender that has lower loan fees has a cheaper loan than the lender with higher loan fees.

The following fees are generally included in the APR:

  • Points – both discount points and origination points.
  • Pre-paid interest. The interest paid from the date the loan closes to the end of the month.
  • Loan-processing fee.
  • Underwriting fee.
  • Document-preparation fee.
  • Private mortgage-insurance.

The following fees are sometimes included in the APR:

  • Loan-application fee.
  • Credit life insurance (insurance that pays off the mortgage in the event of a borrowers death).

The following fees are normally not included in the APR:

  • Title or abstract fee
  • Escrow fee
  • Attorney fee
  • Notary fee
  • Document preparation (charged by the closing agent)
  • Home-inspection fees
  • Recording fee
  • Transfer taxes
  • Credit report
  • Appraisal fee

What does it mean to lock the interest rate?

Due to the nature of interest rate movements, mortgage rates can change dramatically from the day you apply for a mortgage loan to the day you close the transaction.

If interest rates rise sharply during the application process, it could make a borrower’s mortgage payment larger than he/she previously thought.

To protect against this uncertainty, a lender can allow the borrower to ‘lock-in’ the loan’s interest rate, guaranteeing the borrower the prevailing loan rate for a specified period of time (often 30-60 days). A lender may or may not charge a fee for this service.

How is my credit judged by others?

Credit scoring is a system creditors use to help determine whether to give you credit.

Information about you and your credit experiences, such as your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report.

Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles.

A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points — a credit score — helps predict how creditworthy you are, that is, how likely it is that you will repay a loan and make the payments when due.

Because your credit report is an important part of many credit scoring systems, it is very important to make sure it’s accurate before you submit a credit application.

To get copies of your report, contact the three major credit reporting agencies:

Equifax: (800) 685-1111
Experian (formerly TRW): (888) EXPERIAN (397-3742)
Trans Union: (800) 916-8800

These agencies may charge you up to $9.00 for your credit report.

What is an appraisal?

Appraisal is a document that gives an estimate of a property’s fair market value. An appraisal is generally required by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property.

The appraisal is performed by an “appraiser” who is typically a state-licensed individual trained to render expert opinions concerning property values.

In an appraisal, consideration is given to the property, its location, amenities as well as its physical conditions.

What is PMI (Private Mortgage Insurance)?

If you make a down payment of less than 20% of the purchase price of the home, mortgage lenders generally require that you take out Private Mortgage Insurance (PMI) that protects the lender incase you default on your mortgage.

You may need to pay up to a year’s worth of premium for this coverage at closing, which can amount to as much as several hundred dollars.

One obvious way to avoid this extra cost is to make a 20% down payment.

What happens at closing?

What can I do to improve my credit score?

What Our Clients Say

Advantage Lending Corp
5.0
Based on 130 reviews
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Stephen J Francis
Stephen J Francis
20:05 02 Jun 20
Refinanced with Advantage Lending (Dan). Outstanding service and great communication - - Dan answered all my questions... promptly and thoroughly. The process was smooth from my first contact through my closing - - just what you want. Highly recommended.read more
Eric Maniaci
Eric Maniaci
18:17 11 May 20
I’ve worked with Dan in the past as a fellow loan officer and recently became a client via a refinance transaction.... When I used to work with Dan I always knew him to be very detail oriented, maintain great communication with his clients throughout their transaction and work diligently to get the job done accurately and on time. Fast forward several years later and nothing’s changed. Choosing to work with any other lender or broker will be a mistake. If you want the best combination of service & value then do yourself a favor and just let Dan handle all of your mortgage needs. He’ll make the process easy, give you a very competitive rate and you’ll have the added piece of mind of knowing that your loan is being handled not just by an expert, but also by the owner of the company. What more could you ask for?!read more
JMB 123
JMB 123
02:04 08 May 20
Did a refinance through Dan. Great communication as well and quick to close. He took the time to explain all the... different options for us based on our plan for our home. Will definitely use his services again. Highly recommend!!read more
eric simms
eric simms
12:10 05 May 20
What can we say, Advantage Lending Corp is the best! Always professional, attentive, first class and friendly. Dan... and his team always quickly answer questions and communicate often which is appreciated. Our refinance was a smooth transaction even during the Covid-19 pandemic. Outstanding! Thanks again Advantage Lending team!read more
Michael Clark
Michael Clark
08:52 14 Apr 20
The recent changes in mortgage rates prompted me to contact Dan at Advantage Lending Corp as I originally financed my... new through him. I was very glad I did! He and his staff did an outstanding job of putting a package together that lowered my monthly payment and also produced a refund from the previous mortgage! He and his staff are simply the best! I highly recommend him for all your home financing needs! Thank you Dan!read more
Michael Dvorák
Michael Dvorák
04:17 28 Feb 20
Incredibly knowledgeable and a pleasure to work with. Made obtaining the correct mortgage for my situation stress... free. I would highly recommend if you want to feel comfortable making major financial decisions.Refinance update: When the rates dropped, Dan was able to lay out a simple plan to save me money. I felt safe the entire process because I was plainly given all the information needed to make decisions. If you want to feel safe asking any questions and get honest feedback then I cannot recommend better.Thanks again for another stress free experience.read more
barabolla1 .
barabolla1 .
18:50 26 Feb 20
This is my second time working with Dan and his team, and I couldn’t be happier! They are Friendly, professional and... quick to answer any questions you may have. They really put you at ease and step you through the mortgage process and make sure you understand what is happening every step of the way! I will continue to do my business through them and always recommend them to everyone I talk too!read more
chris kivlen
chris kivlen
23:02 28 Jan 20
We were extremely thrilled with our refinance experience that Dan provided. He went above and beyond to explain each... step of the process to both my significant other and I separately. There were a couple times we had a question and he responded immediately with an answer that was very easy to digest in an area where I had little existing knowledge of finance terms, etc. We were completing our refinance around the holidays and Dan called us from the office on Christmas Eve with the final numbers offering to answer any additional questions. He truly goes out of his way for each and every client regardless of the day. About a month after the refinance process was complete, we reviewed the checks we received and the numbers weren’t adding up. We called Dan to ask some follow-up questions and within minutes of taking a quick review of our file, he identified the exact amount on an additional check we would receiving and told us who to expect it from. We are so grateful to have found a broker so detail-oriented, hardworking, and compassionate about what he does. We recommend him to all family and friends that are in need of a broker and let them know that Dan will make what may appear to be a difficult/confusing process at first glance, very easy to understand. Thanks Dan!read more
Anthony Steffens
Anthony Steffens
15:10 21 Jan 20
We have worked with Dan and his team several times! He is super knowledgable and will take the personal time to... explain the entire process. He has and will find the best rates for sure! I have several friends and family members that have used him as well...with the same feedback. If you want someone you can relax and TRUST...go with Advantage Lending Corp! Dan and his team are there to protect you, and to make purchasing a home/mortgage an easy process. Thanks again Dan, we love the new home!!!read more
Lisa Fritts
Lisa Fritts
14:25 10 Jan 20
Dan is extremely knowledgeable!!! We are self-employed and income can be hard for the inexperienced loan officer to... figure out. Dan had no problem calculating the income. He was very professional and kept us informed on each step of the mortgage process. His processor, Melody, was extremely helpful and insightful as well. I highly recommend Dan as your mortgage guy.read more
Brian Vettraino
Brian Vettraino
11:18 27 Dec 19
I have used Advantage Lending Corp twice now and always give them out as a referral to others seeking a mortgage. Dan... and Melony are great to deal with and have a vast amount of knowledge. They go above and beyond to make sure you're at ease in making life changing decisions. Their communication thru the entire process makes you feel as if you're the most important client they have and you're treated as a friend, not just a customer always.read more
Shawn Greenleaf
Shawn Greenleaf
17:50 10 Dec 19
Dan and his team are top notch! They are the most honest and truthful team I have ever worked with. I have had many... mortgages through them and referred them to others and had the best prices and percentages around. In fact nobody came close. Thank you for all your hard work and always being a phone call away.read more
MarkO MOTO
MarkO MOTO
16:37 10 Dec 19
Dan and Melony were the most helpful and responsive mortgage brokers that my wife and I have ever worked within this is... our seventh mortgage. They were able to have our mortgage ready to close within 20 days. No other brokers could get this done. Hard working and thorough by far the best in the business.read more
Amy Bruce
Amy Bruce
14:16 19 Nov 19
If you are looking to buy a home for the first time, second time, refinance, or buy a second home, you need to contact... Dan! We have been working with him for many years now. We highly recommend him to everyone that is looking for a "mortgage guy". Several family members have also worked with him and were highly satisfied based on our recommendation. He is flexible and is able to work with your busy schedule. Dan takes care of every detail so that the process is easy and smooth. He is kind and knowledgeable. When we had an issue arise with our most recent transaction, Dan worked hard and solved the problem right away. Thank you, Dan!read more
Emily Hendrix
Emily Hendrix
11:36 30 Oct 19
Dan was awesome! This was my first home buyers experience, and I would definitely recommend Dan to anyone looking to... buy a home! He was always willing to explain any questions I had, and would call just to check up and see how the process was going. Dan was very informative and took the time to make sure I knew what steps to take as a first time home buyer. Dan was available if I had questions on the weekend and got my mortgage approved within a week. I appreciate all the time and work he put in to help be buy my first home!read more
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