Mortgage Guide
CONVENTIONAL FINANCING
- Structured lending options to avoid P.M.I. with less than 20% down.
- Home Equity lines of credit available to eliminate P.M.I. and/or avoid jumbo loan interest rates
- Competitive P.M.I. buy out options
- 7% down No mortgage insurance Options
- 3% seller concession towards closing (from seller)
- Extended Rate lock options
- Mortgage application to Closing as quick as 10 days
- Fully underwritten pre-approvals allowing you to be competitive against CASH offers.
- FREE Credit Enhancement Options
- Free repeat customers Refinance options within 6 months from closing (based on rate reduction)
- Free rate reduction refinance for repeat clients should rates rate come down after 6 months
FHA LENDING
- 3.5% down payments
- Low fixed rates
- Expanded underwriting guidelines
- Funds gifted by family can be used towards down payment and closing cost.
- Seller credits up to 6% of loan amount
- Rent payment history can be used towards credit qualifying guidelines.
- FHA Mortgage recommended for First time home buyers.
- FREE Credit Enhancement Options
- Fully underwritten pre-approvals allowing you to be competitive against CASH offers.
- Free rate reduction refinance for repeat clients should rates rate come down after 6 months.
VA LENDING
- Veteran home loans, VA mortgage assistance program, No closing cost VA loans
- NO Down Payment Required
- NO P.M.I.
- NO Origination Fee: Average Savings ($1795)
- Up to 6% Buyers Credit (from seller towards closing cost)
- Minimum Credit score 620
- FREE Credit Enhancement Options
- Funding fee exemptions for qualified VA borrowers
- Energy efficiency cost benefits options
- Assumable VA Loan options
- Low Fixed 30 and 15 year fixed loan options
- FREE Bi weekly VA programs
- Free rate reduction refinance for repeat clients should rates rate come down after 6 months.
Wholesale Vs. Retail Mortgages
Wholesale mortgage lenders have a direct relationship with the wholesale investor, so they have access to better/lower interest rates. They’ll be limited to types of products as they only deal in conventional, FHA, & VA lending. That said, they’re a great resource for borrowers that want the absolute best terms.
Retail Mortgage Lenders will have more loan options for the client to choose from but they come with slightly higher, retail rates.
Lucky for you, we have access to both and our AskLocal Mortgage Table will be more than happy to walk you through which route suits your situation best.
Importance of Shopping Interest Rates
Interest rates vary WAY more than you’d suspect from bank to bank. Accepting an agent’s mortgage referral simply isn’t enough. Most agents are only interested in on-time closings, not the terms of your loan.
You need to do your due diligence, which takes time and extreme patience when dealing with the typical loan officers out there. Knowing time is at a premium for most people these days and patience is all but exhausted with a normal day anymore, AskLocal has made the normally hard, really easy with our mortgage partner. Their direct-to-consumer model will beat the competition each and every time while still giving you white glove service and knowledge.
We have one simple goal. To be your trusted resource for everything real estate here going forward.
What are the Fees and Closing Costs?
Fees and costs matter just as much as the interest rate being offered. Mortgage is not created equal. With rates increasing and applications down, realtors and lenders alike can easily take advantage of vulnerable consumers out there as those sharks are hungrier now more than ever. We’ve created this marketplace to eliminate that bad behavior and protect our clients from the dark side of this business.
There are 3 key differentiators when comparing quotes:
- What is the fixed interest rate?
- How much is the origination fee (National average is $1,395)?
- Are there discount points for the rate being offered?
Don’t be fooled by the fact it’s labeled ‘Discount Points’.
The hard fact is there is typically nothing ‘Discount’ involved. Discount points were designed to give buyers an option to pay more cash at closing which, in turn, would lower the note rate. Unfortunately, most lenders have used this as a loophole to line their pockets instead of lowering your rate.
Rest assured our mortgage partner doesn’t operate in this manner and will be happy to show you the costs associated with buying down your rate. Just don’t hold your breath. There is no free lunch in the banking world!
Fixed or Adjustable Rate?
Normally, AskLocal likes to eliminate variables, not bring them in. And this is why our lending partner only puts forth fixed rate options. Unless YOU request options otherwise.
An ARM can be a viable, advantageous solution for some but in most instances, fixed rates are the way to go. Regardless of your preference here, our mortgage partners take the time to walk you through the pros and cons associated with all options available to you. All we care about is making certain you are comfortable, confident, and fully aware of what the obligation truly represents going forward.
*AskLocal doesn’t recommend adjustable rates unless:
- You’re VERY confident you’ll be in the home short term.
- You have the disposable income and/or assets necessary to pay it off once the loan reaches its maturity date/becomes adjustable.
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?
A bridge loan is a wonderful tool that allows existing homeowners the ability to access their equity to buy their next home prior to being forced to sell their current.
Contrary to public knowledge, bridge loans are extremely advantageous for the right borrower(s) that need the flexibility to offer on a new home without the contingency of selling theirs first. This allows our clients to move at their own pace, have updates/upgrades performed prior to moving in (great for those who don’t enjoy living in a construction zone).
Any existing mortgage(s) are paid in full and the bridge loan take first lien position on the property. The bridge loan payment will likely be much less than the mortgage that was paid off as it’s typically structured on an interest only payment structure. Giving you more flexibility while not being financially overwhelmed, holding two properties at once for a short period of time.
AskLocal has partnered with the best lenders available in this space and offer no and low cost bridge options. If you own a home and have equity, we highly recommend taking a look at this option. It will strengthen you as a buyer in the eyes of a seller knowing you don’t HAVE to sell that property before closing on theirs.
With the free ‘Recast’ policy, your end game could be as if you sold day 1 and bought day 2 but had all the flexibility of buying day 1 and selling day 2.