Mortgage Guide
CONVENTIONAL FINANCING
- No P.M.I. Options: Access structured lending options to avoid private mortgage insurance (P.M.I.) with less than 20% down.
- Home Equity Lines of Credit: Available to eliminate P.M.I. or avoid jumbo loan interest rates.
- Competitive P.M.I. Buyout: Options to make your financing more affordable.
- Flexible Down Payment: 7% down with no mortgage insurance available.
- Seller Concessions: Up to 3% towards closing costs.
- Extended Rate Lock: Lock in your rate for peace of mind.
- Quick Closing: Mortgage application to closing in as little as 10 days.
- Fully Underwritten Pre-Approvals: Stand out against cash offers.
- Free Credit Enhancement Options: Improve your credit standing.
- Repeat Client Benefits: Free refinancing within 6 months if rates decrease.
FHA LENDING
- Low Down Payments: Start with just 3.5% down.
- Fixed Rates: Enjoy stable, low fixed interest rates.
- Expanded Underwriting: More flexible qualification guidelines.
- Gift Funds Allowed: Family gifts can be used for down payment and closing costs.
- Seller Credits: Up to 6% of the loan amount towards closing costs.
- Rent Payment History: Can be considered for credit qualification.
- Ideal for First-Time Buyers: FHA mortgages are a great choice for new homeowners.
- Free Credit Enhancement Options: Improve your credit standing.
- Fully Underwritten Pre-Approvals: Enhance your competitiveness against cash offers.
VA LENDING
- Veteran Home Loans: Access VA mortgage assistance with no closing costs.
- No Down Payment Required: Enjoy 100% financing options.
- No P.M.I.: Save on additional insurance costs.
- No Origination Fees: Average savings of $1,795.
- Seller Credits: Up to 6% towards closing costs.
- Minimum Credit Score: Only 620 required.
- Free Credit Enhancement Options: Improve your credit standing.
- Funding Fee Exemptions: Available for qualified borrowers.
- Energy Efficiency Options: Benefit from cost-saving programs.
- Assumable VA Loans: Great flexibility for future buyers.
- Fixed Rate Options: Choose from low fixed 30 or 15-year loans.
- Free Biweekly Payment Programs: Pay off your loan faster.
Wholesale Vs. Retail Mortgages
- Wholesale Lenders: Access better rates through direct relationships with investors. Limited to conventional, FHA, and VA lending.
- Retail Lenders: Offer a wider range of products but may have slightly higher rates.
At Ask Local, we connect you with both options and help you choose the best fit for your needs.
Importance of Shopping Interest Rates
Interest rates can vary significantly between lenders. Relying solely on a referral can lead to suboptimal terms. It’s essential to do your research, and our direct-to-consumer model simplifies the process while ensuring you receive top-notch service.
Understanding Fees and Closing Costs
Fees matter as much as interest rates. Be cautious, as some lenders may take advantage of consumers. When comparing quotes, consider:
- Fixed Interest Rate: What is the offered rate?
- Origination Fee: National average is $1,395.
- Discount Points: Understand their true cost and benefits.
Our mortgage partners provide transparent options and explain any associated costs.
Fixed or Adjustable Rate?
We prefer fixed-rate options for stability, but our partners can discuss adjustable-rate mortgages (ARMs) if they suit your needs. We’re here to ensure you feel confident and informed about your choices.
Pro's and Con's of P.M.I. (Private Mortgage Insurance)
P.M.I. is an insurance policy, paid by you, that insures the lender in the event you were to default on the loan. This insurance now opens up opportunities that allows buyers to put as little as 5% down on a conventional loan (3% for first time home-buyers).
Borrowers can now keep that additional cash on hand to save for renovations, eliminate higher interest rate, existing debts, or simply save for rainy days.Just know that P.M.I. isn’t a poison.
On the contrary, we have seen WAY to many people persist with 20% down, letting go of all their liquid cash, to only find themselves racking up high interest rate credit card debt for all those trips to Home Depot and Bed, Bath, & Beyond (Consistent, nice little Saturday’s in your immediate future after you buy).
There are 3 way to pay the P.M.I. when going down this line:
- Borrower paid -this adds to the monthly payment as a line item paid monthly as part of your total mortgage payment. This is eliminated once the principal balance of your loan reaches 78% of the original purchase price.
- Lender paid- you incur a slightly higher rate, with no additional monthly line-item cost. This is known as lender paid. The higher rate is for life of loan, P.M.I. Is not.
- Single premium (lender or buyer) this is where you pay an upfront buy-out as a single line-item cost added to all others when you close. This premium comes with a discounted rate and can make a lot of sense if you know you’ll be in the home for at least 5 years.
- The Answer to which one is best comes through your consultation with your AskLocal mortgage pro.
AskLocal’s preferred mortgage partners have every option available in this space. They’ll take the time to explain each and make sure you’re making the very best financial decision going forward.
What is a Bridge Loan and who/how it benefits?
Bridge loans allow you to leverage your current home’s equity to purchase a new one before selling. This option provides flexibility and financial relief during transitions. Our preferred lenders offer no and low-cost bridge loan options to strengthen your position as a buyer. At Ask Local, we are dedicated to being your trusted resource for all your real estate and financing needs. Let us help you navigate this journey with ease and confidence!
