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"My experience with Eric at Patriot Financial was fantastic! I had a very difficult loan to do and they were the only lender that could make it happen. The other lenders wouldn’t even take the time to help me, they just told me it couldn’t be done. Thank you Eric and Patriot Financial!"
A 2007 Patriot Financial Client
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 Patriot Financial FAQs:
We know that mortgages can be confusing and frustrating for a lot of people. We're here to help. Below is a list of our Frequently Asked Questions..
Click one to learn how Patriot Financial can help unravel the knot:
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Well, first of all, you don’t. Typically however, you are far better off paying costs. The only time you wouldn’t want to pay costs is if you’re looking at being in the loan for a very short time. At this point, you would be better off paying a high rate because you won’t pay on it for very long and the money you would gain in not having costs would outweigh the money you lose in paying for a higher rate.
Be very leery of companies who offer no cost or low cost loans. It sounds great on the surface, but inevitably you will pay a much higher rate than you qualify for to cover all those costs. Every loan has a cost that is required to do the loan such as title insurance and underwriting fees for example, if you’re not applying for them doesn’t mean they are not being charged, they are, it just means your lender or broker is paying for them. They recover that cost by charging a higher rate which if you keep the loan typically for longer than 1 year, will cost you more than paying the fee. As always, we will custom tailor your loan to fit your needs, so if a no cost loan is the way to go for you, we can do it. Typically, we find this is not the best way to go for you financially, but sometimes it is and we do set your loan up that way. |
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 What are Points? |
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Points are equivalent to dollar figure of 1% of the loan amount. For example, 1 point on a 200k loan is equal to 2 thousand dollars. Points are used to compensate brokers and lenders and are also used to buy your rate down below the “floor” rate you qualify for. Points usually are tax deductible; however, you would want to consult your accountant on whether or not they are for you. Typically points are perceived as a bad thing, however, paying points is often the best thing a person can do. If you are going to keep your loan for 5 years or more, you may want to consider paying as much in points as you can to buy down the rate as low as you can. Over time, the money you pay up front will save you thousands in interest making paying points, a good idea despite their negative perception. |
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| Do I have to pay anything up front? |
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No, every cost is typically rolled into the loan with the exception of the appraisal, we require that is paid up front. |
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| How do pre-payment penalties work? |
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If your loan has a pre payment penalty you want to read your note closely to ensure how the penalty works. There are two types of penalties, soft and hard penalties. A soft penalty allows you to sell the property at any time and receive no penalty. A hard penalty means that if your pay off your loan for any reason during the penalty period, you will have to pay the contracted amount required by the penalty. Usually the penalty is either a percentage of the loan amount, or a certain amount of month’s interest. Consult your loan officer on both the length of the penalty and the dollar amount of the penalty. The best advice is to know whether or not you could be penalized based on your plans for the property and loan you are getting. If there is a chance you might be penalized, you probably want to find a loan that will not have one. If you know you will be in the loan past the penalty period, it is typically a good idea to have one, since it will lower your rate and you won’t be penalized for an early penalty. Often times they can be tax deductible as well, consult your accountant. |
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| What are 3rd-Party Fees? |
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There is work that is required to be done on every loan, by every lender. Typically those are appraisal fees, title insurance, escrow fees, processing fees, underwriting fees, recording fees, tax service fee, wire fee. There are others, however, these are the ones Patriot Financial charges. They are rolled into the loan and sadly, cannot be avoided. We can pay them for you, but that probably means you will be getting a higher rate than you could have if you rolled them into your loan. This may or may not be a good idea for you, as always, we are willing to discuss anything with you. Lenders who advertise no cost loans, still are charged 3rd party fees; there is no avoiding this for anyone, so you will be paying a higher rate or more “points” to cover these fees. |
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| How do Adjustable Rates work? |
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Most adjustable rates (ARMS) have a fixed period and then adjust after the fixed period is over. Once the fixed period is over the ARM will adjust according to the rate the index it is tied to. In simple English, your rate is usually going to go up about 1% every 6 months for the first couple years it adjusts and then will level off. Most ARMS have a cap it cannot raise above, but that usually is 6% over your fixed period rate. We advise that ARMS are a good thing for the right person, but you also need to know when to get out. If your credit score is below 620, usually you always want to take an ARM because you don’t want to get a fixed rate based on a sub par credit score that you’re probably going to get rid of anyway once your credit improves. ARMS are also a good way to go for anyone planning on selling their property in 5 years or less. ARMS come with 2 year, 3 year, 5 year, 7 year, or even 10 year fixed periods. |
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| Why choose an Adjustable Rate Mortgage? |
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Simply put, they usually offer lower rates during the fixed period. If you’re in need of a short term fix or plan on selling within 5 years or less, an ARM is the way to go. Be careful though, most ARMS come with pre payment penalties, so make sure your ARM has a period that is fixed long enough for year so you don’t get hit with increasing rates once it adjusts but you also want to make sure your no paying a pre payment penalty. In other words, you have to time it right and know exactly what you’re getting, but for most people today, ARMS are a smart way to go. |
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| Why choose a Fixed Loan? |
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You should only take a fixed loan if you plan on being in the property for a long time and do not plan on refinancing in less than 5 years. If this is you, the stability of a fixed loan is the way to go. If your credit score is typically below 620, even if you want to stay in the home forever, fixed rates are not favorable and you might want to consider an ARM to help with your credit and fixed rate down the road once your credit is better. The US average a length of 2 years in each mortgage so consider this when you are deciding fixed or adjustable. It is often a good idea to compare the rates on an ARM vs. fixed and then choose what works best for you. |
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| Will my Loan get sold? |
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Most of the time yes, it will. This is true with almost every lender today. All it means is that your statement will come from somewhere new and that your check will be made out to a new company. The contract you sign on, your loan terms must remain the same. |
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| What is an Annual Percentage Rate (APR)? |
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Annual Percentage Rate (APR) is an expression of the effective interest rate that will be paid on a loan, taking into account one-time fees and standardizing the way the rate is expressed. In other words the APR is the total cost of credit to the consumer, expressed as an annual percentage of the amount of credit granted. APR is intended to make it easier to compare lenders and loan options.
The APR is likely to differ from the "note rate" or "headline rate" advertised by the lender. The concept of APR can be generalized. For example lenders use the same concept to calculate their total earnings on loans and for determining their margin on the loan. Consumers can use the APR concept to compare savings accounts and calculate the earnings on a savings account, taking transaction costs into account.
In the US and the UK, lenders are required to disclose the APR before the loan (or credit application) is finalized. |
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