Buying a home is one of the biggest and most exciting financial decisions you’ll make in your life, so it’s important to be choosy when selecting a mortgage company. While there are many lenders to choose from, not all of them are created equal. Choosing the right mortgage company can be the difference between a smooth and successful buying experience, or one filled with stress and delays. Let’s take a closer look at how to find the right lender for you.
Do Your Research
Doing your research is key to finding the right mortgage company. Start by investigating reviews online and asking friends and family for referrals. Once you’ve narrowed down your list, ask potential lenders about their rates, terms, fees, and loan types available. Ask about their experience in working with programs like FHA or VA loans as well as conventional loans if that applies to your situation. Also inquire about any additional services or advice they provide such as debt consolidation or credit counseling services if needed.
Check Their Reputation & License
Checking the credentials of potential lenders is an important step in the process before making a decision. Make sure the company has undergone background checks and licensing requirements, which should be easily accessible online or through state agencies. Also, find out if there are any complaints against them or if they are accredited by any organizations such as Better Business Bureau (BBB).
Personalized Service
Finally, when it comes time to pick your mortgage lender, it’s best to go with someone who provides personalized service specific to your needs rather than just going with the lowest rate or most convenient option available. A good mortgage professional will take the time to get to know you and understand what you are looking for in terms of financing options and services. In addition, they should be able to provide helpful advice tailored specifically for your situation without pressuring or pushing you into anything that isn’t right for you.
Be Open & Honest With Your Lender
Choosing a reputable lender is just one part of getting approved for a mortgage loan; being open and honest with your lender is essential too. This means providing all necessary documents up front such as tax returns, pay stubs, bank statements, W-2s etc., so that your lender can get an accurate picture of your financial situation when considering you for approval on a loan request. Providing this information upfront helps lenders assess whether you can afford the home you’re interested in buying so that they can approve or deny your application quickly and efficiently.
Choosing the right mortgage company can be daunting but understanding what options are out there and doing some research beforehand can help ensure that you get the best rate possible on your loan while also receiving exceptional customer service throughout the process from start to finish! An experienced real estate professional can also be a great resource when looking for reliable lenders who will work hard on behalf of their customers to get them approved quickly without sacrificing quality of service along the way!
If you’re considering buying a home, it’s important to understand the different types of mortgages available. The two most common types of mortgages are fixed rate and adjustable rate. Fixed rate mortgages have the same interest rate over the entire life of the loan, while adjustable rate mortgages can have changing interest rates that fluctuate depending on market conditions. Let’s take a closer look at the differences between fixed rate and adjustable rate mortgages.
Fixed Rate Mortgages
Fixed rate mortgages are ideal for home buyers who want to stick with a budget. With this type of mortgage, your monthly payments will remain consistent throughout the life of the loan—no matter what changes in market conditions or interest rates might occur. Fixed rate mortgages typically have terms from 15 to 30 years, although some lenders offer longer terms as well. This is good for budgeting, because it allows you to know exactly what your payments will be each month.The downside is that you could end up paying more than necessary if interest rates drop after you sign your loan agreement. Additionally, if you want to refinance your loan at any point during its term, there may be fees involved depending on your lender and loan terms.
Adjustable Rate Mortgages
An adjustable-rate mortgage (ARM) has an interest rate that changes over time according to market conditions and other factors like inflation. ARMs usually have initial fixed-rate periods ranging from 5 to 10 years, after which they adjust annually or semi-annually (twice a year). With an ARM, your monthly payments could potentially decrease or increase depending on what happens with interest rates in the market. This type of loan is attractive because they often come with lower initial interest rates than a fixed-rate mortgage, thus making them more affordable initially; however, this also means that payments can change significantly over time if interest rates rise dramatically in the future. As such, ARM loans carry more risk than fixed-rate loans since you could end up paying much more than expected due to increases in monthly payments caused by rising interest rates.Choosing between a fixed rate or adjustable rate mortgage comes down to understanding your financial needs and goals over time. If you don’t expect major changes in income or expenses anytime soon, then a fixed-rate option may be best for you since it offers stability and predictability when budgeting for monthly payments throughout your loan term. If you anticipate needing some flexibility when it comes to budgeting for your mortgage payments or want lower initial costs, then an ARM might be worth considering; however, keep in mind that this type of loan carries more risk due to potentially increasing payments over time if interest rates go up significantly in the future. Ultimately only you can decide which type of mortgage is best suited for meeting both short term and long term financial objectives. Potential home buyers should weigh all options carefully before committing either way so they make sure their decision works best for them now and into the future!
One of our Loan Originators, Angie Vance, is here to give share some do’s and don’ts on the home loan process.
Gulfside Mortgage Services is your best source for the lowest-rate financing on the market. Why? Because as mortgage brokers we access mortgages at wholesale rates and pass the savings on to you.
According to the Mortgage Bankers Association, adjustable-rate mortgages are now reaching the highest level since 2008 and are expected to continue to rise. Despite their role in the 2008 housing crash, adjustable-rate mortgages are skyrocketing in popularity. Their re-emergence should not worry you, though lending standards have tightened since the housing crash. Experts say the mortgage industry is in a safer space for both borrowers and lenders.
ARMS, adjustable-rate mortgages, are home loans with an interest rate that adjusts over time depending on the fluctuation of market rates. They’re less predictable than fixed mortgages because they tend to change periodically. They are generally considered ‘risky’ because borrowers run the chance of paying much higher mortgage payments than they may have budgeted for. On the other hand though, the borrower could pay lower mortgage rates as well depending on the mortgage market, which is why ARM mortgages are appealing.
Roughly 35% of all mortgages were adjustable rates during the mid-2000s housing boom. During the Covid-19 housing market, ARMs regained momentum as the Federal Reserve’s rate raises put pressure on mortgage rates. Applications for ARMs are predicted to continue to rise. Buyers are utilizing ARMs to combat higher rates. Although the 2008 crash led many ARMs borrowers into foreclosure, this will not happen again. Our lending standards are different now which means that today’s borrowers aren’t walking through a financial battleground like those before. There have been many improvements in the real estate industry in areas such as underwriting, technology, and quality control. The Dodd-Frank Act was created as a direct response to the financial crisis of 2008. It addresses issues in banking and lending that contributed to the economic turmoil.
Overall, the mortgage industry has evolved into a healthier space for both borrowers and lenders which means that ARMs mortgages should not cause you distress. Speak with your mortgage lender about your options to have peace of mind.
One source: https://www.businessinsider.com/adjustable-rate-mortgages-helped-trigger-housing-crash-not-this-time-2022-5
Before the start of 2022, many in the real estate industry believed that home prices would decelerate in growth this year. The latest real estate firm to change up its 2022 forecast was Fannie Mae. Last year, the agency predicted that the average home price would climb 7.9% year, and now Fannie Mae is reporting an 11.2% price jump. If home prices rise to that level, it would mark a deceleration from the current rate. Fannie Mae believes the relief from the market will come, but it just won’t happen until the end of 2022 going into 2023.
For most of the pandemic, supply has been an issue. Many believed housing inventory would increase. However, housing availability levels have only gotten worse. Fannie Mae is now stating the median home price in 2022 will jump from $355,000 to $384,000. Inflation has been hitting consumers hard as prices rise at the fastest rate in nearly 4 decades. Mortgage rates are spiking as inflation rises as well.
Though our current economic market does not look promising, there is still hope for a cool-down period in the housing market. Hopefully, with higher rates, the market will become less competitive. If that happens, home growth could finally become normal again, or as close to normal as possible, given our current climate. If buyers are being priced out, then there should be fewer bidding wars which should slow house price appreciation. This is believed to begin at the start of 2023. This cooldown will not be like it was when the market crashed in 2008. Instead, we should expect to see fewer bidding wars and high-stakes competition. Home prices will continue to surge, which is not great news for first-time buyers, but from a macro perspective, a strong housing market could be what the United States needs to evade a potential recession.
