Mortgage Master, Inc.
855 Waterman Ave
East Providence, RI 02914
401-438-5176
EFax 401-223-4903
Contact Us

RI Lender No. 20041831LL, Broker No. 94000577LB. 
 Mortgage Master, Inc. is an Equal Housing Opportunity Lender.

FAQ's - En Espanol, View in Spanish

General Information - Home Loans

Q. What should I consider when deciding whether to rent or buy a home?
A. This is a decision based on both financial and lifestyle choices. From a lifestyle standpoint, you should consider whether or not you want to commit to living in a home for several years. To determine if it makes financial sense to buy, you should compare the cost of renting to the after-tax cost of owning. Use the Should I Rent or Buy? calculator for a quick estimate, then estimate possible rent increases and price appreciation of a home. These factors may affect your final decision.

Q. How can I determine how much I can afford to pay for a house?
A. No one wants to find the home of their dreams, only to discover that they can't afford the mortgage payments. You can use the How Much Can I Afford? calculator to get a quick estimate of how much you can spend for a house. Using your estimated down payment and monthly mortgage payment. To learn how much you can borrow, based on your income, debts, and projected down payment, use the How Much Will My Mortgage Payment Be? calculator.

Q. How much are Mortgage Master’s fees for obtaining a home loan?
A. Well, it depends upon many factors, including which state you live in, what county you live in, and even what loan program you have selected. However, a good rule of thumb is that the national average for closing costs is about 3 - 6% of the home's sale price (not including down payment).

Loan Program Questions

Q. What is the difference between a fixed rate and adjustable rate mortgage?
A. Fixed rate mortgages feature an unchanging interest rate, which is determined when you are approved for a mortgage and remains the same for the term of the loan. With adjustable-rate mortgages (ARMs) the interest rate may vary over the course of the loan. Typically, the interest rate is lower the first year, then increases at predetermined intervals. This means your payments increase as well.

Q. Why do interest rates fluctuate?
A. Basically, interest rates are tied to inflation and the reaction of the financial markets. An increase in inflation causes interest rates to rise because lenders pool loans into securities and then sell them in the secondary market, competing with the entire pool of worldwide investment opportunities. Inflation causes the value of fixed-rate securities to go down, so mortgage rates go up. For more information about interest rate trends please call.

Q. What are points?
A. A point is 1% of the loan amount. For example, for 2 points on a $300,000 house, you will pay 2% of $300,000, or $6,000. The number of points charged for a mortgage depends on the circumstances. Sometimes it is advantageous to pay higher points and get a lower interest rate, as you'll end up paying less over the life of your loan. You will pay for the points at the time of closing and may be able to deduct the point amount as interest on your income tax return.  The interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes.  You should consult a tax adviser for further information regarding the deductibility of interest and charges.

Q. What is PMI?
A. PMI is Private Mortgage Insurance. It is required when a borrower makes less than a 20% down payment on a house. This partially protects the lender from loss if the borrower fails to make the mortgage payments. Depending on your loan program, but generally when you've paid off 20% of your loan, you may ask for the PMI requirement to be removed. This will decrease your total monthly loan payment.
When your LTV (loan-to-value) ratio is 80% or below, you may ask for the PMI requirement to be removed. PMI deletion requirements vary according to loan program and state requirements. Current First Horizon loan customers may determine if you are eligible to remove PMI Insurance by accessing our Interactive Telephone Response System by calling 1-800-364-7662, and after selecting your language preference, select option #2 for PMI information.

Credit Questions

Q. Can you approve my loan application before I shop for a house?
A. Yes. After we review your credit history and the additional information you provide, we may be able to provide you with a conditional approval. This is called a pre-qualification. This conditional approval is subject to a satisfactory title review and appraisal of the property that will secure your loan, and no substantial changes prior to closing in the information you provide. Generally, this will help you shop for a home in your price range, and proves to sellers you are likely to have the funds necessary to purchase their home.

Q. How will my credit score affect my loan application?
A. Your credit score plays a significant role when you apply for a loan. People with higher credit scores are eligible for more loan options and better interest rates. If you've had credit difficulties in the past, you may still qualify for some mortgage programs, but these usually cost more, depending on the severity of your credit problems.

Q. How can I improve my credit score?
A. Your credit score is based on the credit data available to the credit reporting agency on the day the score is requested by a lender. You can develop or improve your credit score by following these tips: Pay your bills consistently and on time. Check your credit report and work to correct any errors. Keep your spending and debt under control. Maintain only a reasonable amount of unused credit. For example, keep the number of credit cards you use to a minimum. Avoid too many credit inquiries. Contact creditors immediately if you cannot make a payment on time. This may keep them from reporting your delinquency to a credit agency.

Q. What if I have little or no credit?
A. There are still ways to show a credit history. You can prove your good payment history on rent and utilities by obtaining references or credit letters from your landlord and utility companies. Provide a year's worth of checks to validate consistent payments. This information will become part of your loan application.

Q. I can barely meet my monthly bills. How can I consider buying a home?
A. Don't be discouraged. There are steps you can take to improve your financial situation. The best thing to do is seek professional counseling to help you with your credit situation. National Foundation for Credit Counseling (NFCC) is a nationwide non-profit organization that provides credit counseling free or for a reasonable fee. They can help you develop a solid plan for regaining control of your finances.

Q. How can I ensure that the information on my credit report is correct?
A. Your credit report reflects the information reported to the credit bureaus by each of your creditors. The information changes each time something is added or deleted from your credit file. For instance, paying off an account, opening several new credit accounts, or making a late payment on one of your accounts will appear on your credit record.
The best way to make sure that the information in your credit file is correct is to periodically request copies of your credit report. If you think an entry is in error, notify the appropriate credit bureau and ask that the error be corrected.

En Espanol, View in Spanish