Q & A with Dottie Herman

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Q1 - How do I go about taking a second mortgage on my primary residence?

A - Before beginning the process it is important to understand whether you have equity in your property. Take time to look at what other properties in your area are selling for, and have an educated idea of what an appraisal will come back at. Finding a lender might unfortunately be  a challenge as not all lenders offer second mortgages, or only offer them to those borrowers who already have their first mortgage with them. Inquire first with the lender that has your first mortgage. If they do not offer them, go first to banks that you might already have another relationship with, like your bank that holds your checking or savings.

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Q2 - How do I know which mortgage is right for me? My wife and I are looking to buy a home and we expect to have more money in the future than we do now as my husband is still in law school. Should we take a 5 or 7 year ARM where the rates are lower now?

A - Loan product choice has many variables that take time to understand. Taking a 5 or 7 is not automatically the right choice just because the rate is lower. Work with an experienced mortgage banker, and they will help you look at the various options.

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Q3 - I am trying to refinance- how long should this process take and what are the fees associated with a refinance? How much will I have to pay out of pocket?

A - If you have gathered all of the necessary documentation that the mortgage banker requests, the process of refinancing should take 4-6 weeks. It can take much longer when the information is not complete from the start. The fees vary greatly due to many factors, including the type of property, location, loan size and rate, and if you are considering paying points. You may not have to come out of pocket for the fees if they can be built into the rate, or can be included in the new loan amount.

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Q4 - My husband and I tried to sell our home for 6 months and we had no luck, so we have decided to stay and renovate. Can you still get a renovation loan? We can't make the changes to our home without some sort of a loan, and we don't know where to begin.

A - FHA 203K renovation loans are available from many lenders. They allow you to take out one loan that will not only provided the financing for the renovations but also refinance your first mortgage, and lock in today's low rates. Speak with an experienced mortgage banker about the program. Home equity loans/lines can also be used if you have sufficient equity in your home.

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