Q & A with Dottie Herman

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Q1 - I have heard that you can refinance at no cost, is that true?

A - There are always costs associated with any mortgage, including mortgage refinancing.  The lender may waive their costs (ie:  application, processing and underwriting fees), but there are always title charges and legal fees, to name a few. Speak with your loan officer to find out the particulars for your situation.

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Q2 - I am unsure if I should get a 15 year fixed or a 30 year fixed. What information do I need to use to make an informed decision? Is one better than the other?

A - While a 15-YR loan has a lower interest rate and term than a 30-YR loan, it requires a larger monthly payment, which makes it more difficult to qualify for.  If you can qualify for the 15-YR loan, and can comfortably handle the monthly payments, then this would be the better loan for you.  You would save a lot of money in interest over the life of the 15-YR loan versus the 30-YR loan.  If it's lower monthly payments and a better tax write-off that you're looking for, then take the 30-YR loan.

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Q3 - I am a salaried, W-2 employee.  What income documents do I need to show to an Underwriter?

A - Usually, your last 2 years of W-2's for all jobs worked, your last 4 weeks of paystubs, and your last 2 years Federal 1040 Tax Returns with all schedules, so the UW can calculate if you had any "Unreimbursed Employee Business Expenses" over the last 2 years.

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Q4 - As a buyer would I want the seller to finance the property or should I go through a bank? Are there dangers to me as the buyer?

A - With seller-financing, a buyer can usually get a below market interest rate, and would not have to pay any bank closing costs.  The down side is that the buyer would not have a mortgage payment rating history on his/her credit report going forward.

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If you have a real estate question for Dottie, please send it to; Reporters@WorldPropertyChannel.com

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