When looking for a new or refinance mortgage is it common for us to go to our banks as this is where we feel safe. We keep our money there and often have auto and/or credit cards form these same institutions. Truth be told the banks sell of the majority of their home mortgages so they function much like a Mortgage Broker from the borrowers prospective.
When you sit down with any loan officer they we talk with you about your goals or why you are looking for a new mortgage. This is so they can select the proper program they have to offer to meet your needs. This is important, not every Bank or Lender will offer a mortgage program that truly fits your needs but rather best fits the loan officers needs. Just as Chevy is beating up Ford on the aluminum truck beds. The question is, will you be throwing heavy rocks, bricks or other such items into your mortgage? So it is important you know what you are looking for when it comes to a purchase, rate reduction, term reduction or cash out mortgage.
I am going to use the company I work for as an example, and there are many companies that work similar to my company, to address many of the common questions I get on a daily bases. Just a little background on my company, We are both a Direct Lender and a Mortgage Broker originating in seven states. We can fund a on one of our programs or broker a loan through a Wholesale Mortgage Partner if they are offering a better options for the Borrower. We will use a Wholesale Mortgage Partner if it is in the borrower’s best interest, not every Company, Bank, Direct Lender or Mortgage Broker offers this service. Common questions by mortgage type below, I hope this helps.
Purchase Mortgages We offer forward mortgage programs for FHA, VA, USDA, Conventional and HEMC for those over 62 years of age. Fees are where the cost go up on purchase loans so pay close attention and do not get lost in the excitement of the new home. A.P.R. is somewhat misleading so where do you look. The actual cost/money to close and the monthly payment is the answer. Real Estate Agent referrals are often a good option. In House Lenders are sometimes questionable. Always get a second offer as you will often get a better rate with the same credits, up grades or incentives. There are many In House Lender companies that bank on home buyers not doing their diligence.
Cash -Out Mortgages This is an area of the business where companies are all over the map. My Company offers a cash-out mortgage options to 95% of your homes value with no mortgage insurance. This is not a hidden mortgage insurance where the Lender pays it I mean truly no mortgage insurance. Best of all this program has a max loan limit of $1,250,000 for a single family residence. There are restrictions but they are not too bad.
Term Reduction This is a loan type that most Loan Officers do not seem to offer to people. The deal is simple, keep your payment the same and reduce the number of years left to pay. This will often add up to 100’s of thousands of dollars over time. And if you sell early the ratio of cash to principle more times than not will reduce your remaining principle balance faster than your current mortgage so it is a win/win for the home owner.
Payment Savings The term payment savings is used with a home owners want to refinance to reduce their monthly payment. This can offer the home owner monthly payment savings that can be significant. When it not enough of a monthly saving to act this is when the Term Reduction option should be looked at.
There are many other programs available to current home owners and future buyers but these are the most common. When obtaining a new home mortgage for any reason we can all move fast but fast is not always your best option. I am not saying to delay your purchase but rather take 20 minutes to confirm you are getting a fair deal. We have all rushed into things and then later were upset we impulse purchased. These are answers to common questions I get daily so I hope they help. When it comes to a home mortgage there are no silly questions so please ask any questions that you may have.