How To Shop Around For A Mortgage, Part Two

Stone Bridge Mortgage_Mortgage Broker vs Bank Lender

 

Gresham first-time home buyers may feel daunted with all that the information that comes along with buying a home. However, Gresham home buyers shouldn’t feel overwhelmed. By carefully educating themselves, they can ensure that they get the best experience when shopping for a home. Stonebridge Mortgage Group is eager to help our Gresham clients understand the ins and outs of mortgage.

Keep in mind that shopping around for your mortgage is important. Just like you wouldn’t settle on the first house you saw, you shouldn’t settle on the first mortgage you discuss with one lender. Shop around and do your research to find a mortgage that truly works for you.

To aid in shopping for your mortgage, here are a few more terms you should know about when shopping for a mortgage:

Interest Rates

To make sure your mortgage is affordable, it is crucial to get the best interest rate possible. Do your research to find out what the latest mortgage interest rates is before seeking out a mortgage lender. This means you will know what to expect and prepares you for potential negotiations. For example, if you know that the national interest rate average is around 4.5% in the morning and a particular lender offers you 5%, you know you have room to negotiate. Get quotes from at least four lenders to compare your options, but make sure you are comparing rates on the same types of loan.

Points

When speaking to potential lenders, ask about how many points you will have to pay to obtain the specific interest rate. Mortgage points are pre-paid interest. One point equals 1% of the loan amount. The more points you pay upfront, the lower your loan’s interest rate. This can be beneficial for Gresham home buyers in the long run.

Annual Percentage Rate (APR)

Although some people use “APR” and “interest rate” interchangeably, your APR is something very specific. Your Annual Percentage Rate shows the true cost of obtaining a loan, including points, the interest rate, broker fees, and any other charges. Ideally, Gresham home buyers want to aim for an APR that is as low as possible, because a lower APR means you are getting a better deal.

After taking into consideration the type of loan, interest rate, repayment terms, and APR Gresham home buyers can sit down and make the choice about which loan is best.

Locking In Your Rate

The next step for Gresham home buyers, after finding a mortgage loan that suits them and receiving preapproval, is to ask the lender to lock in the interest rate and provide you with a document in writing that states the interest rate you locked in, the number of points you must pay, and how long the interest rate will be locked in before the offer expires.

This is a way to secure your mortgage being what you need it to be. Locking in an interest rate means that even if interest rates rise within the specified time that you were guaranteed, you can still option a mortgage loan for the lower rate that you locked in. However, this can also work the other way. Should the interest rate lower within that time, you could be stuck with a higher rate. All things considered, though, it is generally a wise idea if to lock in your interest rate if you are serious about purchasing a home soon.

After all of the above, it is time to shop around. There are a variety of ways to shop around for a mortgage in today’s market – whether it be by going to an independent mortgage broker, calling local banks and credit unions, or shopping online. Carefully consider your options before committing. If you have any questions about mortgages, you can always rely on Stonebridge Mortgage Group for help.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

Call us today at 503.661.5580

 

How To Shop Around For A Mortgage, Part One

Stone Bridge Mortgage_Mortgage Broker vs Bank Lender

 

Most home buyers, even beginners, know that you don’t settle on the first home you find. You’re meant to shop around. Something else Gresham home buyers may not know, however, is that it’s wise to shop around for a mortgage, too. Finding the right mortgage loan is incredibly important. Choosing your mortgage has a big impact on your finances for the foreseeable future.

Gresham home buyers should consider all of their mortgage options before settling on just one. Here’s a quick guide to understanding mortgages as you start shopping around:

The Stages of a Mortgage Application

  1. Pre-qualification: Before shopping for a house, Gresham home buyers should get a mortgage pre-qualification letter. In today’s competitive housing market, a pre-qualification letter lets your Realtor and other potential sellers know that you are serious about looking for a home. It acts as an assurance that you have the ability to by the home you are interested in. Remember that having a pre-qualification letter does not mean you’re approved for a mortgage. These letters informal and optional, but they just might ease sellers’ fears that financing will fall through if they accept your offer.
  2. Pre-approval: Gresham home buyers can get mortgage pre-approval after putting an offer on a home. Getting a pre-approval involves submitting a mortgage application to the bank. The bank will run your credit and research the home you want to buy. If you meet qualifications, they’ll give you pre-approval. This means that if all the conditions are met, the bank agrees to finance the home.
  3. Closing: This is where the mortgage is finalized and you become a homeowner.

Loan Types

The four most common types of institutional mortgage loans include conventional, FHA, VA, and jumbo mortgages. Gresham locals looking to buy a home should first research which types of loans they qualify for and which would be best suits your needs. Each type of loan has benefits and drawbacks.

  1. VA loans are guaranteed by the Department of Veterans Affairs. VA mortgages require as little as no down payment, but they are only available to qualified veterans.
  2. FHA loans are backed by the Federal Housing Administration and require as little as 3.5% down if you qualify. For Gresham home buyers who have trouble putting back savings, this can be a good option. The drawback, however, to putting less than 20% down payment is that you will be required to pay private mortgage insurance (PMI), a monthly payment used for security in case of default.
  3. Conventional mortgages require at least 20% down and don’t require PMI. Generally, a conventional loan the best choice for Gresham home buyers who have enough money in savings to cover the down payment and associated closing costs.
  4. Lastly, jumbo mortgages must be used if you are financing more than conventional conforming loan limits. Due to their amount, these loans have special restrictions and credit requirements.

Repayment Terms

Your repayment term is the term over which you pay back your mortgage. The two choices Gresham home buyers have for repayment terms include a fixed interest rate mortgage, where the interest rate remains the same over the life of the loan, or an adjustable interest rate, where the interest rate can decrease or increase at specific intervals such as annually.

  1. Fixed-rate mortgages tend to be a safer option, especially for Gresham families who plan on staying in a home for more than a few years. There are many different mortgage terms to choose from, such as mortgage terms of 15, 20, or 30 years. 30 years is the most common mortgage rate terms and keeps your monthly payments low. However, while monthly payments on a 15-year mortgage are higher, you ultimately save money because there is less interested accrued over 15 years than over 30.
  2. Adjustable-rate mortgages can save you a lot of money if you play on living in the residence a short time. Your interest rate is much lower than a fixed-rate mortgage for the first five or seven years, but will then adjusts to the average interest rate every year thereafter, which could be much higher. If you still own the home, your mortgage payment could go up dramatically, so it is riskier.

Stonebridge Mortgage Group Offers Guidance on All Mortgage Matters

Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

 

Call us today at 503.661.5580

 

Home Appraisals and Inspections

 

Stone_Bridge_Mortgage_Home Appraisals and Inspections

If you’ve begun looking for your first home, you’ve likely heard of a getting a home appraisal and home inspection. What exactly are home appraisals and home inspections, though? Is there a difference between the two? Are they really necessary?

Home Appraisals

A home appraisal determines the value of a house based on certain factors, including “comparables.” An appraiser will take a few things into consideration when deciding the market value of a home. For example, they often look at comparable homes in the area which have recently sold and certain amenities in the house. It is important to remember that an appraisal doesn’t decide the “worth” of the home, but the market value.

The appraisal helps determine how much money your lender will give you to buy the house. Having the home appraised is therefore necessary when seeking out a loan. If you’re selling a home, it’s more beneficial to you if the appraisal is high. When you’re buying, however, a low appraisal is better. Appraisals can differ from one appraiser to the next, but they’re usually closely based on the assessment of the above-mentioned factors.

Home Inspections

Home inspections involve an inspection of the house itself, focusing on things like structural issues. Generally, home inspections include a look at the roof, the heating and cooling system, plumbing systems, and electrical systems. While home inspections are not exhaustive and therefore may not uncover every possible issue, home inspections are still a very important step in the home buying process.

Some mortgage programs may require specific inspections. However, generally speaking, home inspections are not a hard requirement for every mortgage option. Still, it is best to choose to have a home inspection done anyway. Buying a home without inspections could potentially leave you open for some major issues. It’s better to spend the money on an inspection that could save you more costly expenses down the road.

Count on Stonebridge Mortgage Group for all your mortgage needs.

In addition to appraisals and inspections, there are a lot of ins and outs to familiarize yourself with over the course of the home buying process. For professional assistance with mortgages, look no further than Stonebridge Mortgage Group. If you’re ready to apply for a loan and want to go through the process online, Stonebridge Mortgage Group offers online applications. We also help get you pre-approved for a mortgage and help with your real estate loans and other Stonebridge Mortgage Group serves the greater Portland area and are in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

 

Call us today at 503.661.5580

 

FHA Loans And How To Qualify

Stone Bridge Mortgage Group_FHA Loans and How to Qualify-2

If you want to buy a home, but don’t have 20% of the mortgage to put down and your credit is less than perfect, you don’t have to give up on your dream of homeownership. With the right loan, you can still get a home! FHA loans are very popular among first-time homebuyers because of the low credit score and down payment requirements.

Just what, exactly, is an FHA loan? How can you figure out if you can qualify for one?

FHA stands for Federal Housing Administration. This Government agency dates back to 1934, when HUD, the U.S. Department of Housing and Urban Development, created it to increase homeownership in America. The credit score and down payment requirements are lower for this type of loan to allow more homeowners to qualify for home loans. Those who qualify for FHA loans are required to pay a monthly mortgage which totals about 0.85% of the loan amount annually. Should a borrower default on an FHA mortgage, it is foreclosed on and the HUD will pay the balance to the lender, then take possession of the property.

A minimum credit score of 500 is required to qualify for an FHA loan for a 10% down payment. However, with a score so low it is unlikely that you will be approved as a subprime borrower. With a score of 580, you are more likely to be approved and will only be required to have a 3.5% down payment. If your score is below 580, you would benefit greatly by improving it to at least that amount.

As of 2019, you must meet the following requirements to be approved for an FHA loan:

  • 500-579 FICO score requirement with a 10% down payment
  • 580+ FICO score requirement for borrowers with at least a 3.5% downpayment
  • An appraisal must be done by an FHA approved appraiser
  • Mortgage insurance (MIP) is required
  • Steady employment and be able to prove income with recent tax returns, W2’s, and paycheck stubs
  • Two years of employment at the same company
  • Non-occupying co-borrowers are allowed
  • At least 18 years of age
  • Must occupy the home as the primary residence

For more detailed information on qualifying for FHA loans, look in the HUD Handbook HUD 4155.1.

With such low requirements, it’s no wonder FHA loans are so popular with new homebuyers. For those of you looking to buy your first home, finding out if you qualify for an FHA loan is highly recommended.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

Stonebridge Mortgage Group can help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other We serve the greater Portland area and are in Gresham, Oregon.

Call us today at 503.661.5580

 

IMG SRC: FHA Mortgage Guidelines by ,

Mortgage Loans: Fixed Rate vs. Adjustable Rate

Stone Bridge Mortgage_Mortgage Loans - Fixed Rate vs Adjustable Rate

If you plan to stay in your home for at least seven to 10 years, a fixed-rate mortgage offers stability with your monthly payments. On the other hand, if you don’t plan on staying in your home for a while an Adjustable Rate Mortgage (ARM) could save you big on interest payments.

Let’s go into some detail and provide pros and cons for each type of loan.

What is a Fixed Rate Mortgage?

The rate that is fixed (stays the same) is the interest rate. Fixed-rate mortgages keep the same interest rate over the life of your loan. This means you can expect that your monthly mortgage payments will be consistent month-to-month. Fixed rate loans typically are offered in terms of 15, 20 or 30 years.

Pros and Cons of Fixed Rate Loans

The pros of a fixed rate loan are your monthly principal and interest payments stay the same throughout the life of the loan, making it easier to budget. The cons could mean paying more interest in the long-term and it might take longer to build equity.

What is an Adjustable Rate Mortgage?

Unlike the stability of fixed-rate loans, adjustable-rate mortgages (ARMs) have fluctuating interest rates that can go up or down with market conditions. Many ARM products have a fixed interest rate for a few years before the loan resets to a variable interest rate for the remainder of the term.

Pros and Cons of an Adjustable Rate Mortgage

The pros of an Adjustable Rate Mortgage are during the initial fixed-rate period you can pay lower rates and over the long-term you could spend less on interest. The cons include relying on factors outside of your control, like the real estate market. Your mortgage rates could increase, possibly becoming too unaffordable.

Stonebridge Mortgage Group can help you decide which best fits your goals. We can also help get you  pre-approved for a mortgage and help with your real estate loans and other We serve the greater Portland area and are in Gresham, Oregon. 

Call Stonebrige Mortgage at 503.661.5580 for help in choosing the right mortgage loan for you.

 

 

When to Consider a Reverse Mortgage

Stone Bridge Mortgage Group_When to Consider a Reverse Mortgage

There are lots of factors to consider when deciding if a reverse mortgage is right for you. The largest factors include: your age, do you plan on staying in your home and will you still be able to afford taxes, what you plan on leaving your heirs, and home upkeep.

Below we list three reasons for and against a reverse mortgage. Reverse mortgages are not for everyone, but it can be a viable source for more revenue.

WHY YOU WANT A REVERSE MORTGAGE

Access to more money. A reverse mortgage is technically a loan and it illuminates your existing mortgage. The loan gives you access to cash. This money can be used anyway you want. To make ends meet, increase your monthly spending budget, or buy something you always wanted.

High Value, Low Rates. When your house value increases, so does your loan amount. The loan amount also increases when interest rates are low. Housing values are generally up and rates are still at a historic low.

Staying in the Home. If you plan on staying in your home, a reverse mortgage makes sense. A reverse mortgage can be an alternative to downsizing and moving into a smaller place. A reverse mortgage means you still own your home, you are only borrowing against your equity.

WHY A REVERSE MORTGAGE MIGHT NOT BE RIGHT

Upkeep Costs.  A reverse mortgage makes your mortgage payments go away, but you still must be able to pay taxes, insurance, and maintenance costs for your home. If you are not financially able to pay for these items in addition to your cost of living, a reverse mortgage is not right for you.

Assets for Heirs. A reverse mortgage lets you retain ownership of the home and allows you to pass this asset on to your heirs, but they are also responsible for paying back the loan. Most heirs pay back the loan by selling the home. They will never owe more than the value of the home.

Leaving the Home. If you do not plan on staying in the home that you are getting a reverse mortgage for then a reverse mortgage may not be for you. The cost of a loan is best spread over a minimum of five years.

These are very general guidelines to help you get started. It is recommended that you consult an expert in Reverse Mortgages to get the information that is tailored for you situation.

Stonebridge Mortgage Group can help you with your reverse mortgage and other We serve the greater Portland area and are in Gresham, Oregon.

Call us today at 503.661.5580

 

Important Information to Understand

  1. At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds.
  2. Charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees.
  3. The loan balance grows over time and interest is charged on the outstanding balance.
  4. The borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home.
  5. Interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full repayment.

 

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