Five Home-Buying Myth Busters
The truth is, buying a home and getting a mortgage is easier and faster than you might think. Here are five popular myths and the real truth about home buying.
Myth: It will take a lot of time.
Truth: A good mortgage broker can take your application and give you a pre-approval letter in minutes!
Myth: I have to dig up tons of paperwork.
Truth: These days much of the verification process, like collecting pay stubs, bank statements, and tax info can be done automatically by your mortgage broker and lender.
Myth: I need a 20% down payment.
Truth: You can get a mortgage for as little as 1% down and still have a low monthly payment.
Myth: A bank is the best place to get a mortgage.
Truth: Banks don’t offer choices. A local independent mortgage broker can help find the best options and rates.
Myth: I need to be “settled down” first.
Truth: Even with a low down payment, monthly mortgage payments are often lower than rent prices. Plus, when you’re buying a home, you’re paying yourself, not a landlord.
The art of navigating the little bumps.
They happen.
It’s very rare that a loan goes through without a small bump in the road. That’s the reality of our business.
Over the years we’ve been fortunate to work with hundreds of happy customers and real estate agents. One of the keys of our success is anticipating any issues and resolving them as quickly as possible. When problems come up, and they’re gonna come up, we always approach them in an forthright and honest way. We prefer straight talk and open communication. Keeping everyone informed in a timely manner eliminates the those unexpected and often untimely surprises that can lead to delays, or worse, added expense.
The bottom line is this: we work very, very hard to make the road as smooth as possible for real estate agents as well as their customers. We quickly and honestly address any concerns before a little bump becomes a big pothole.
Five HUGE tips for first-time buyers.
First timer or moving up? Aside from the fact that we’re really easy and fun to work with, here are five solid reasons for choosing a mortgage broker like Granite Mortgage Company to help finance your home.
1. We’re with you every step of the way.
We’re experts in mortgage loans. We can help you prequalify for a loan even before you choose a home. Then we’ll find the type of loan (and there are a lot of them) that fits you best and fill out and file all the necessary paperwork (and there’s a lot, too).
2. We can save you money.
As a mortgage broker, we work with lots of lenders so we can find the best available rate so you don’t waste tons of cash on the wrong type of loan for your situation. We can even help first-timers get a loan for as little as 1% down!
3. We will save you time.
We do the legwork. Did you know that shopping for a loan with a lot of different financial institutions could actually hurt your credit score? We already has access to several lenders. That will save you countless hours and could even make it easier to get the loan you want.
4. We have access to a wide variety of solid lenders
Some lenders only work with mortgage brokers. More lenders means you could get a better rate as a result of competition and have a better chance of getting your loan approved. Plus, we usually know the lenders who will approve buyers that banks deny.
5. We handle the negotiating.
Leave the negotiating to us. We negotiate loans just about every day and know how to get the best rates and terms available.
Should I refinance to get out of debt?
The reality is, with today’s low interest rates, if you own a home you could be spending way more than you should be on your mortgage. So if you have other types of debt like credit cards or other loans that you are paying a higher interest rate on, you could use the savings to pay it off. In many cases you could even lower your mortgage payment AND pay off other high-interest debt.
Another lesser-known bonus that most people don’t think about, is that mortgage interest is tax-deductible. So you can cut down on your tax bill too!
Here’s an example: If you can save just 1% on an existing mortgage of $200 thousand, you could put over $100 per month towards your other debts without raising your mortgage payment a dime! Plus you’ll save another $40,000 or more over the term of the mortgage. That’s huge!
In many cases, if you want to get your debt under control, your home sweet home could be just what the doctor ordered. Naturally, every situation is different. Give us a call and let’s talk through options to see if this could work for you!
Why Are Barns Red?
Ever wonder why old barns are usually red in color? Red is (or, perhaps, was) a popular color for barns due not to its color shade but for its usefulness.
Many years ago, choices for paints, sealers and other building materials did not exist. Farmers had to be resourceful in finding or making a paint that would protect and seal the wood on their barns. Hundreds of years ago, many farmers would seal their barns with linseed oil, which is an orange-colored oil derived from the seeds of the flax plant. To this oil, they would add a variety of things, most often milk and lime, but also ferrous oxide, or rust. Rust was plentiful on farms and because it killed fungi and mosses that might grow on barns, and it was very effective as a sealant. It turned the mixture red in color.
When paint became more available, many people chose red paint for their barns in honor of tradition.
Source: http://farmersalmanac.com
Free Money: How to benefit from a no-cost or lender-paid closing cost mortgage.
If someone walked up to you and told you that you could save hundreds, thousands, or tens of thousands of dollars without paying a dime you would automatically think it’s too good to be true or that there has to be a catch. Well, it’s true and there isn’t a catch.
A no-closing cost or lender paid closing cost mortgage is about the closest thing to free money that you can get. You benefit by lowering your interest rate, lowering your loan term, lowering your loan term and interest rate, or pulling cash out of your home without paying any closing costs which can literally save you thousands of dollars.
Here’s how it works.
Closing costs exist on all mortgages. That’s a given. But if we negotiate to have the lender pay for them while still improving your interest rate, that’s a win-win! And the savings are immediate. You don’t need to live in the in the house for a certain period of time to recoup those costs. Don’t need the cash from a refinance? It may be smart to do it anyway. If you apply all of the monthly savings to your principal balance each month, you’ll build equity faster and can possibly pay your loan off years ahead of schedule.
A lender-paid closing cost mortgage can also be a great option for borrowers purchasing a home, especially when there are no seller-paid closing costs negotiated into the purchase agreement. While a no-closing cost mortgage might only have a slight impact on the overall payment, it can save thousands of out-of-pocket dollars that can be used for furnishing the new home or making improvements.
Make sure to ask your mortgage broker if a no-closing cost or lender-paid closing cost mortgage is right for you. And always be sure to work with a mortgage broker who will do the analysis to make sure you’re getting the best mortgage for your needs.
When is the right time to refinance?
There are three main things to consider when thinking about refinancing:
- The interest rate
- How much it costs to refinance
- How long you are plan to live in or own the property
If you’re thinking about refinancing, your current bank or lender might not be the best place to go for advice. Why? Because they make money from servicing your mortgage and if you refinance with someone else, they will lose that income. Talk to an independent broker to get competitive rates and to research scenarios that will work best for you.
Know your break-even point.
There are a variety of rate and closing cost options available to most borrowers. Typically when deciding if a refinance makes financial sense, you should look at two different types of break-even analysis.
How long you’ll have to live in or own the home you are refinancing to recoup the closing costs and maximize the interest savings. For example, if you are going to save $100 per month on your interest and the closing costs on the new loan are $3,000, you will need live in or own the house for the next 30 months or 2.5 years to recoup the costs that you paid to refinance. As long as you’re planning on living in the home for at least the next 30 months or 2.5 years, it should make sense to move forward with a refinance.
Get the best rates available and an appropriate closing cost.
Next analyze the interest rate and amount of closing costs you should pay. Your mortgage broker should be able to give you three different interest rate and closing cost scenarios for review. Usually, the lower the rate, the higher amount of closing costs you will pay. You might even have a no-closing cost option available at a slightly higher interest rate. How long you plan to live in or own the property will determine which is your best fit.
A good mortgage broker will be able to recommend an option that is right. If your bank, credit union, or mortgage company can’t walk you through these options, look elsewhere.
Why use a Mortgage Broker vs. Bank or Credit Union?
That should be a no-brainer. A mortgage broker does your rate shopping so you don’t have to. Plus, unlike banks and credit unions, mortgages are all they do.
Mortgage brokers have access to a wide variety of mortgage loan products that a bank or credit union might not offer. That ensures that you won’t get sold into a mortgage product that meets their needs and not yours.
Mortgage brokers typically can offer more options because they are approved with multiple lenders or banks, so a mortgage broker can pair your application with the lender or bank who has the best rates and fees for your particular scenario.
Another benefit of working with a mortgage broker is that if you do have any issues getting your application approved with a particular lender or bank, a mortgage broker may have alternative options with other lenders or banks that they do business with so you don’t have to start from scratch or walk away from purchasing your dream home.
More often than not, just because a bank or mortgage company tells you no, it’s because they don’t offer a particular loan product or don’t have the underwriting parameters that fit your needs. When it comes to purchasing your dream home, getting the best advice on refinancing, making sure you get the best mortgage that fits your needs, or anything mortgage related, you should always work with a mortgage broker.