Frequently Asked Questions

Finding your way through the mortgage process starts with getting answers to your questions. At Spinnaker Financial, we want you to rely on our expertise for the information you need to make informed decisions about your finances. We’ve listed the most commonly asked questions on the right. Some answers will depend on your situation. Call (805) 238-3516 today for more info.

How to get started?

The best way to start any mortgage process is with the help of a lender that’s 100% on your side—and that’s Spinnaker Financial. Simply call (805) 238-3516 or fill out our quick, no-obligation and confidential GET A QUOTE FORM now. Your mortgage professional will start working right away to find you your ideal mortgage and will be with you every step of the way. This streamlined, personalized approach means the entire experience will be as simple and stress-free as possible.

What does it mean to refinance a mortgage?

Refinancing is simply the process of replacing your existing mortgage with a new one with a lower rate and/or better terms. It can help you realize your dreams and it doesn’t get any easier than with Spinnaker Financial. Call (805) 238-3516 today for more info.

What types of loans does Spinnaker Financial have? 

At Spinnaker Financial, we have the loan that’s right for you and the expertise to select exactly which kind of loan that may be. From Conventional Mortgages—both Fixed and Variable-rate—to easier-to-qualify-for loans like FHA insured, VA or HARP 2, we offer a broad range of options, and will not rest until we find the ideal loan for you. Call (805) 238-3516 today for more info.

How is my credit score calculated?

Your credit score is calculated mathematically. It uses information in your credit report and compares it to information on millions of other people. The resulting number is a highly accurate prediction of how likely you are to pay your bills. People with the highest credit scores get the lowest interest rates. Your credit score considers both positive and negative information in your credit report. Late payments will definitely lower your credit score, but establishing or re-establishing a good track record of making payments on time will raise your score over a period of time. Call (805) 238-3516 today for more info.

How are loan and mortgage rates calculated?

Rates are complicated and can be tricky to understand. We can help you compare your rate quotes. We’re happy to take you through estimates, allowing to understand what every item means to you and your bottom line. Comparing mortgage rates can be confusing because there are so many factors such as taxes, property taxes and home owners insurance that contribute to calculating your mortgage payment and closing costs. No one is expected to know it all from the beginning, but we’ll make sure it all makes perfect sense to you in the end. Call (805) 238-3516 today for more info.

What does “lock in” your rate mean?

Think interest rates are on the way up? Then “locking in“ your interest rate before you close may be a great idea. This means your lender “freezes” your interest rate, this can range between 15-90 days before the loan closes. Call (805) 238-3516 today for more info.

What is PMI, and do I need it?

Private mortgage insurance (PMI) is an insurance policy that protects your lender in case you default on your mortgage. You may be required to purchase it, especially if you plan to make a down payment of less than 20% of your home’s purchase price, which means you have a loan-to-value ratio (LTV) greater than 80%. PMI is purchased through a third-party insurance company, and paid via your monthly mortgage payments. How much it costs depends on several factors, but once your LTV is below 80%, you can refinance your mortgage to get rid of the PMI. Call (805) 238-3516 today for more info.

What is the loan-to-value ratio? Why do I need to know that?

Loan-to-value (LTV) tells you how much equity you have in your home relative to how much you owe on it and what the house is worth. LTV is important to know when refinancing because it can affect your interest rate and whether or not you’ll need Private Mortgage Insurance. Call (805) 238-3516 today for more info.

Aren’t the interest rate and the annual percent rate (APR) the same thing?

No, but they are very close. The interest rate is how much it costs to borrow the money from your lender. The APR is the total cost of your mortgage and accounts for additional fees like closing costs, origination charges, lender points, and private mortgage insurance (PMI). Call (805) 238-3516 today for more info.

What is the typical refinance process?

Refinancing can be a simple process, normally it’s much easier than buying a home. There are certain steps to take, they are as follows: 1. Lookup the value of your home and check your credit scores.2. Get all needed documents and apply for the refinance. 3. Once your loan is approved, the underwriting process starts and time to be carefully reviewed. 4. Sign your papers and close your loan. Call (805) 238-3516 today for more info.

When is the right time to refinance?

You want a lower monthly free or mortgage payment. You want or need cash fast. You want to take your debt and consolidate. To shorten your payback length of time. You want to switch from a variable-rate to a fixed-rate mortgage to stabilize your monthly payment. Call (805) 238-3516 today for more info.

What does it mean to be pre-qualified?

The first step in the mortgage process is to get pre-qualified. Spinnaker Financial can pre-qualify you over the phone or online. We’ll review your information and talk to you regarding your goals. After that you will receive a pre-qualified amount. This figure will give you an extremely close idea of what you can expect to get the loan for. Call (805) 238-3516 today for more info.

What does it mean to be pre-approved?

This process is a bit more involved than being pre-qualified. With Spinnaker, this process will be as easy and painless as possible so you can start finding your new home. We’ll calculate the specific mortgage amount for which you are approved. This will also give a clearer idea of what the interest rate will be on the loan. In some cases, you might be able to lock-in a specific rate. Along with the pre-approval, you will be given the rate at which your loan will be for, in writing. This will allow you to look for a home within the pre-approval price range or lower. Call (805) 238-3516 today for more info.

What is an underwriter looking for in a purchase loan application?

Mortgage underwriters are looking for several things. 1. Can the buyer pay back the mortgage? 2. What the value of the property would end up being if the person cannot pay back the loan. Understanding this can give you an advantage when you start the underwriting process. Call (805) 238-3516 today for more info.

What is a conventional loan?

Conventional mortgages are typically underwritten according to the guidelines set by Fannie Mae and Freddie Mac. These come in two different types: fixed-rate and variable-rate mortgages. Call (805) 238-3516 today for more info.

What is an FHA insured loan?

FHA insured loans are mortgages that are insured by the Department of Housing and Urban Development. The government is essentially guaranteeing it will pay the mortgage if you can’t. FHA insured loans require smaller down payment on a house than most other financial institutions. Typically, qualifying for an FHA insured loan is often easier than qualifying for a conventional mortgage. This  makes it attractive for homebuyers and homeowners alike. Call (805) 238-3516 today for more info.

How does my credit score impact the rate I get on my mortgage loan?

A good credit score will help you qualify for a home loan and also assist you in getting the lowest interest rate possible. In fact, your credit score is the most important piece of the puzzle when it comes to your mortgage rate. The higher your score, the lower the interest rate. Call (805) 238-3516 today for more info.

How can I improve my credit score?

Improving your score is not impossible. There are things you can do right now to begin improve your credit score, including:

1. Getting copies of your credit reports and review them to see if there is any incorrect information

2. Set up payment reminders that will help you pay your bills on time

3. Try to pay off as much debt as you can, reduce your financial risk

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