Why would someone choose an ARM versus a Fixed-Rate on his or her loan?
How many times can someone refinance?
What is the difference between a second home and an investment property?
What is a pre-payment penalty?
What is Mortgage Insurance and how can I get rid of it?
How much do your services cost?
Why should I use a broker instead of going directly to the bank?



Why would someone choose an ARM versus a Fixed-Rate on his or her loan?
Fixed rate loans are the safest and the most secure loans. The interest rate on your loan is fixed for the life of the mortgage so your monthly payments never change. Loans fixed for 15, 20 and 30 years are available at RED I Mortgage. Your mortgage payment is protected if rates go up and you can always refinance if rates go down. Up to 100% financing available on fixed rates. Adjustable-rate mortgages (ARMs) offer an initial interest rate lower than the current fixed 30-year rate. ARMs offer fixed rates for a defined period (from 1mos to 15 years). The most popular Fixed/Arm loan programs are the 2/28 and the 3/27, which offers you two or three years fixed interest rates, then the interest rate becomes adjustable for the remainder of the 30 years left on the loan. We encourage our customers to use these ARMs for many reasons. Investors that hold properties for short periods of time use ARMs. Call us to determine if you should consider an ARM for your next loan.

How many times can someone refinance? The answer is that you can refinance many times and as frequent as you wish but every time you refinance your home, you are eating away at your equity by paying repeated closing costs. We discourage that behavior at RED I Mortgage. We like to see that our customers are utilizing their equity to fall into a better financial situation. We don’t condone refinancing to take a vacation but we do recommend refinancing if you wish to pay off high interest credit cards that were used during a vacation. Either way, the decision is yours and our professional advice is all we can give.

What is the difference between a second home and an investment property? In greater Miami, second homes are only considered to be part time residences in Miami Beach and the Keys and they must truly be used as a second home and not rented. The main advantage of getting a second home designation is that the rates are the same as if you were applying for a Primary Residence. Investment Properties carry higher rates. Let RED I Mortgage’s experience with all three of these designations help you get the best loan possible.

What is a pre-payment penalty? A pre-payment penalty is imposed usually on non-conventional loans. All conventional loans, Fannie Mae Loans, do no have pre-payment penalties. The theory behind this clause is that lenders want to assure that a borrower will keep their loan for a certain time so they can maximize their profit yields. So in order to guarantee their profits, they impose a pre-payment penalty clause from 1 year to 5 years. If you either sell or refinance within the pre-payment period, you will usually have to pay a six-month interest penalty. We recommend our borrowers to wait to either sell or refinance their home after the penalty period is over but we understand that sometimes the ideal is not realistic. We will assess the penalty from your bank and pay it within the refinance.

What is Mortgage Insurance and how can I get rid of it? Mortgage Insurance or Private Mortgage Insurance (PMI) is a clause added to conventional loan programs that finance more than 80% of the market value of a home either by purchase or refinance. RED I Mortgage avoids this costly monthly charge by using combination loans (80/20) or using Sub-Prime Lenders. Ask us how a sub-prime loan with a higher interest rate can give you a lower monthly payment than a conventional loan.

How much do your services cost? Our company fees are $755.00 with no charges for courier or credit. Besides having one of the cheapest fees locally, we DO NOT collect a single dime from any customers unless we close their deal. Most Mortgage Broker Businesses collect monies up front. We don’t. This is one way we let our customers know we are dedicated to getting your loan done correctly and on time. We value our work so getting the file closed is just as important to us as it is to you.

Why should I use a broker instead of going directly to the bank? This is one of the most asked questions and with due reason. What many borrowers don’t realize is that the bulk of lenders that offer the most lenient loan programs do not have a retail division. Mortgage brokers can only access these loan programs with their contractual business relationships. RED I Mortgage acquires loan programs from a wholesale market allowing us to compete and many times better the rates and closing costs of conventional banks. In other words, the bank down the street can only offer you a few loan programs that are usually backed by securities giant, Fannie Mae. The prerequisites for these loans are usually very strict and don’t allow for low credit scores, no-income verification, collections or charge offs. We offer a wide variety of loan programs from lenders across the nation. Ask us for a GFE (Good Faith Estimate) to compare to your local bank’s charges and rates to see how we rank.