Tag Archive for: pre-approval

The True Value of a Mortgage Advisor

July 20, 2022
blog mortgage advisor

When you’re getting ready to buy a new home or refinance a mortgage, an experienced mortgage advisor can make all the difference. Unfortunately, every big bank and mortgage lender seems to promise the lowest rate and fastest close. So how can you tell who to trust when seeking the best mortgage lender? Mortgages aren’t one-size-fits-all anymore. 

The truth is that every homeowner has a different story and different financial goals. A qualified mortgage advisor listens, understands, and works with you to build a mortgage that meets your long-term goals and saves you money at the same time. What’s more, a qualified mortgage advisor will work hard to secure the right financing for your current budget while also helping you build wealth through home equity.

One of the best early moves you can make is to lock in your rate today by getting pre-approved.

Financing your home is one of the biggest financial commitments most people ever make. When you partner with a mortgage advisor you can be confident that they are working on your behalf to create a mortgage that fits your goals. While big banks and online lenders treat every borrower the same, our mortgage advisors build genuine relationships and often become a trusted advisor for life.

How a Custom Home Loan Can Save You Money

This might seem obvious, but mortgages are not one-size-fits-all. Loan programs are becoming increasingly specialized to meet the growing needs of homeowners with personal goals about homeownership, financial security, and building wealth.

What’s more, securing the lowest mortgage won’t always save you money or give you the lowest mortgage payment. Consider just a few costly variables that go beyond the advertised “low mortgage rate” you might see from big banks or online lenders:

  • Fees
  • Points
  • Closing costs
  • Adjustable terms
  • Variable terms
  • APR vs. Interest Rates
  • Balloon payments
  • Private Mortgage Insurance
  • Prepayment penalties

These are just a few variables that could end up costing you a lot of money in the long term. Every mortgage has fine print and there are a lot of variables to consider. This is one of the biggest reasons why working with an experienced mortgage advisor in your area is a smart move.

Custom Loan Programs to Keep You Competitive

A great mortgage advisor will also make sure that you’re ready to compete when it’s time to make an offer. They can help expedite paperwork, fast-track your mortgage pre-approval, and execute a fast close. What’s more, a qualified local mortgage advisor knows every hurdle that might come up and will make sure the entire process moves seamlessly from start to finish. 

We can even set you up with our Keys on Time™ program, which guarantees the seller that your loan will close on time or we’ll pay a $2,000 commitment fee (restrictions apply). 

Another custom mortgage solution is the CashBuys™ program, which allows you to operate like an all-cash buyer while still financing your mortgage. With the CashBuys program, you can get pre-approved for your mortgage and finance your mortgage behind the scenes, then make a real-time all-cash offer to the seller. Find out more about the CashBuys program here.

Related: How to FAST TRACK your mortgage pre-approval

How to Unlock the True Value of Your Home

Finally, a qualified mortgage advisor can help set you up with a mortgage payment you can afford and put you on the fast track to building home equity. They can also show you the true cost of homeownership over time, including historic appreciation rates and average annual costs. As a trusted advisor, they can guide you through different strategies that will help you save money over the life of your loan, as well as opportunities to leverage your home through its equity. 

The bottom line: An experienced mortgage advisor will take the time to understand your unique situation and offer custom home loan options to meet your financial goals.

Connect with your local mortgage advisor and start your application and get pre-approved for your best home loan.

Taking Action

From buying and selling property, investing in real estate, wealth-generation strategies, and providing opportunities to improve your financial situation, our trusted mortgage advisors are here to help guide you along your homeownership journey. Connect with a local mortgage advisor today to get started. We’d love to help.

Get Approved for an FHA Mortgage with 3.5% Down

July 27, 2022
mortgage blog, fha mortgage, home loans, preferred rate

An FHA mortgage is one of the best options for new homeowners and first-time homebuyers. FHA home loans have more flexible requirements for approval and offer some of the lowest mortgage rates available. What’s more, with an FHA loan, you can get approved with a lower down payment and an imperfect credit history.

FHA loans are government-backed mortgages which means they are widely available. Still, be sure to partner with a mortgage lender who underwrites FHA mortgages and has experience in your local housing market. An experienced local mortgage advisor will talk through your big picture goals and make sure your mortgage helps you build financial security. After all, a new mortgage in 2022 is one of the biggest financial commitments many people will make this year.

One of the best early moves you can make is to get pre-approved and lock in your mortgage rate.

Finding The Right Mortgage Advisor for an FHA Mortgage

For the best FHA mortgage, partner with a mortgage advisor who does custom mortgages. FHA loans are fairly straightforward, but every mortgage has subtle differences that can end up costing you thousands of dollars over the life of your home loan. Even when a lender promises a low introductory interest rate, it can cost you more through one-time fees at closing.

Partnering with a local mortgage advisor who writes custom mortgages and FHA loans on a regular basis can get you a better home loan every time. They’ll look at your whole profile — the purchase price and appraisal, along with your credit score, income, debt-to-income ratio, assets, employment history, and your down payment.

Quick tip—not all mortgage lenders are licensed to write FHA loans. So it’s best to make sure your lender writes FHA mortgages before you start working together. Make sure to check client reviews, too. Your mortgage is one of the biggest financial commitments you’ll make.

How to Get Approved for an FHA Home Loan

FHA loans are easier to qualify for compared to most other home loans.

There are three main financial buckets that lenders evaluate for your mortgage: your income, credit score, and total assets. Combined, this provides your lender with your DTI ratio (debt-to-income ratio). Your DTI is one of the most influential factors mortgage lenders use to determine risk.

Here’s a snapshot to get approved at a preferred rate:

  • 3.5% Down Payment: The minimum down payment required for an FHA loan is 3.5% of the amount you want to borrow. If your credit score is 500-579, a minimum down payment of 10% is required.
  • Minimum Credit Score: The minimum credit score to qualify for an FHA loan is typically 580, though some lenders will approve a borrower who has a credit score between 500-579. Note that you must be free of 30-day late payments within the past year and no foreclosures within the past three years.
  • Debt-to-Income (DTI) Ratio up to 45%: Your debt-to-income ratio (DTI) measures your monthly income against any recurring debt obligations and is one of the biggest factors that affects your mortgage offer. Most mortgage lenders require a DTI of less than 45% to qualify for an FHA. In addition, your mortgage payment should be below 32% of your gross monthly income.
  • Low Closing Costs: Closing costs for an FHA mortgage are the one-time fees associated with writing the loan. Prepare to pay 2%-5% of the total loan amount at closing. This is in addition to your down payment.

Related: How to FAST TRACK your mortgage pre-approval

A Few Restrictions With FHA Loans

First, the property must be your primary residence when you decide to apply for an FHA loan. It can be a single-family home or a multi-unit property (up to four units), as long as you live in one of the units full-time.

Second, FHA loans include an additional fee referred to as a mortgage insurance premium (MIP). This is similar to PMI (private mortgage insurance) that is typically added to a conventional mortgage for homebuyers who put less than 20% down.

For the mortgage insurance premium required with FHA loans, there are two fees: a 1.75% fee due at closing and an annual installment that is typically added to your mortgage payment each month. Many homebuyers roll the up-front fee into their mortgage. Also, the MIP payment is typically added directly to your mortgage payment each month for convenience.

Quick tip: many homeowners refinance their mortgage once they’ve built some home equity. Once you own at least 80% of your home, you can qualify for a number of custom loan programs that may reduce your mortgage payment. Also, you’ll be able to get rid of your mortgage insurance premium.

Connect with your local mortgage advisor and start your application and get pre-approved for your best home loan.

Summary

FHA loans offer homebuyers an opportunity to make homeownership a reality in 2022 with a down payment of 3.5% and less than perfect credit history. Be prepared for closing costs and a mortgage insurance premium that will be added to your mortgage payment. 

Finally, partner with a local mortgage advisor who is licensed to write FHA loans and specializes in custom home loans. This will give you the best of both worlds and a mortgage that will save you money.

Taking Action

Applying for an FHA loan in 2022 is a smart move for homebuyers looking for a low mortgage rate and a low down payment. From buying and selling property, investing in real estate, wealth-generation strategies, and providing opportunities to improve your financial situation, our trusted mortgage advisors are here to help guide you along your homeownership journey. Connect with a local mortgage advisor today to get started. We’d love to help.

Good News for First-Time Homebuyers

August 17, 2022
mortgage blog, first-time homebuyers, preferred rate

As mortgage rates swing upwards along with inflation, it can be discouraging to wonder if homeownership can ever be a real possibility. What’s more, as housing costs increase, many people are choosing to relocate, even change careers to move to areas with more affordable housing and a balanced lifestyle. But there’s good news for first-time homebuyers! Keep reading to learn first-hand about the benefits and advantages that are available to you.

Even if you’ve owned a home before, many repeat homeowners can still qualify as first-time homebuyers right now, so keep reading to see if you’re eligible. Homeownership might be closer than you think.

One of the best early moves you can make is to get pre-approved and lock in your mortgage rate.

How to Qualify as a First-Time Home Buyer

According to the U.S. Department of Housing and Urban Development (HUD), a first-time homebuyer meets any of the following conditions:

  • An individual who has not owned a principal residence for at least three years.
  • An individual who has owned a home (but their spouse has not) can still purchase a new home together as first-time homebuyers.
  • A single parent who has only owned a home with a former spouse while married.
  • A displaced person who has only owned a home with a former spouse while married.
  • An individual who has only owned a principal residence not permanently affixed to a permanent foundation (following applicable regulations).
  • An individual who has only owned a property that was not in compliance with state, local, or model building codes, and cannot meet compliance for less than the cost of constructing a permanent structure.

Top Mortgage Benefits for First-Time Home Buyers

A few highlights:

  • Down payments as low as 3.0%
  • Use of gift funds to help with closing costs
  • HUD-issued grants and down payment assistance
  • Government-backed loans with lower interest rates
  • Withdraw IRA funds for use without penalty
  • Tax deductions for points and origination fees

Many first-time homebuyer programs allow you to use gifted funds from family or friends, withdraw from retirement funds without a penalty, and even access down payment assistance. Talking with a mortgage expert can help you get access to the best options based on your goals.

Related: How to FAST TRACK your mortgage pre-approval

Top Home Loans for First-Time Home Buyers

One of the biggest obstacles for a lot of first-time homebuyers is the down payment. These popular first-time homebuyer mortgages can help lower your down payment and get you into a house without massive fees or unexpected costs:

  1. FHA Loan – 3.5% down payment
  2. VA Loan – 0% down payment
  3. USDA Loan – 0% down payment
  4. Conventional 97 Home Loan – 3% down payment
  5. HomeReady Home Loan by Fannie Mae – 3% down payment
  6. Good Neighbor Next Door Program – $100 down
  7. 203(k) Section Loans – 3.5% down payment

Connect with your local mortgage advisor and start your application and get pre-approved for your best home loan.

Depending on your unique situation (including your employment status and credit rating), there are custom solutions that can take advantage of government-backed loans, get you super low rates and save you money.

You can finally stop renting and start building equity in your first home. Homeownership is possible.

Down Payment Assistance for First-Time Home Buyers

FHA grant and loan programs and down payment assistance programs are available across the country, and many are state-specific.

Find out more about FHA Home Loans and Down Payment Assistance programs that are offered to first-time homebuyers available in 2021 in your state: find your state.

You can even learn about government programs that make it easier to purchase a home. Go here to check information on vouchers, state programs, and even foreclosures in your state.

Taking Action

If you’re dreaming about buying a home and you’re curious to see if you qualify for first-time homebuyer advantages, start the process today by connecting with your local mortgage advisor. Talk with your advisor and ask them to show you which home loan programs will give you the best advantages. Getting pre-approved early on can help you move fast when you find your dream home. We’d love to help.

Mortgage Rates are Rising: How Much Can I Afford?

April 27, 2022
mortgage blog, mortgage rates, how much can I afford, preferred rate

Mortgage rates are ticking up right alongside inflation, and home prices continue to rise in many areas across the country. So if you’re looking to buy a home in 2022, it can be difficult to figure out how much you can afford.

One of the top questions we’re hearing from homebuyers across the US is, how much can I afford right now?

It makes sense. The minute you start shopping for a new home, you want to know how much you can afford and what your mortgage payment will be. With rates increasing it’s hard to plan ahead. After all, the last thing you want is to make an offer on your dream home only to watch your loan fall through.

One of the best moves you can make is to lock in your rate today by getting pre-approved, which we blogged about here.

5 SMART TIPS TO DECIDE HOW MUCH YOU CAN AFFORD

If you’re looking for a ballpark figure, be sure to check out this mortgage calculator. Just a reminder that daily mortgage rates can change and mortgage calculators only offer you a general idea of what you can afford.

The truth is, when you apply for a mortgage, your borrower profile determines your mortgage rate: income, employment, credit history, assets, and debt-to-income ratio. For this reason, mortgage calculators are useful, but they are only a starting point.

The best action you can take is to connect with a local mortgage advisor. Start here to find an experienced advisor in your neighborhood.

Tip #1 – Evaluate your spending habits.

When you start shopping for a new home, look at your current spending patterns. This might seem like a simple approach, but it’s common for some borrowers to qualify for a mortgage they can’t really afford.

This is because home loans are largely based on algorithms defined by mortgage lenders to calculate risk. If your spending habits aren’t in line with your new mortgage payment, it’s better to know your limits before you apply.

Also, think about creating a new budget based on being a homeowner. For example, do you plan on hosting backyard BBQs, putting in new landscaping, or maintaining a pool? Remember, you’ll have new monthly costs such as homeowner’s insurance, property taxes, home maintenance, and unexpected repairs.

Related: How to FAST TRACK your mortgage pre-approval

Tip #2 – Follow the standard 28/36% rule.

Most financial advisors recommend putting 28% or less in monthly income toward housing. As a homeowner, this amount (before income taxes) should be able to cover all housing costs, including your mortgage payment, utilities, property taxes, and homeowner’s insurance. 

The 36% rule extends the recommended monthly allotment to include debt repayments. For this model, all housing costs plus all debt repayments (such as credit cards, auto loans, student loans) should fall at or below 36% or your monthly gross income.

Some borrowers decide to set up a mortgage escrow account, which can help create a monthly budget. With an escrow account, your mortgage payment will include your property taxes and homeowner’s insurance. For homeowners, this is a convenient option that can help to establish financial stability.

Related: Does every mortgage need an escrow account?

Tip #3 – Evaluate your debt-to-income ratio (DTI).

Your debt-to-income ratio is one of the main factors mortgage lenders use to determine risk. To determine your debt-to-income (DTI) ratio, simply measure your gross monthly income against your monthly debt obligations.

Monthly expenses such as groceries or utilities are not taken into account here. Instead, only debt obligations count toward your DTI. For example–car payments, student loans, and credit cards would be included to determine your DTI when you apply for a home loan.

If you have a debt-to-income ratio above 43%, it will be more difficult to qualify for a mortgage at a low rate. Ideally, the lower your DTI, the better home loan you’ll secure.

That said, there are a number of custom loan programs to help homebuyers qualify even with a high DTI. So talk to your mortgage advisor and start your application to lock your rate and get pre-approved for your best home loan.

Mortgage rates rising, but this doesn’t mean you have to max out on your mortgage. It’s wise to keep a buffer in your finances when it comes to how much house you can afford. An affordable mortgage payment can help you breathe easier. Connect with a local mortgage advisor to get started.

Tip #4 – Boost your credit score.

It’s always a good idea to download a free copy of your credit report. This will give you a chance to fix any errors, dispute incorrect information, and know your credit score.

One of the best ways to boost your credit score fast is to pay down credit cards (start with the highest balances), keep your credit accounts open, and don’t apply for any new credit. Be prepared to offer an explanation for anything on your credit report that is out of the ordinary. This can help you get a better mortgage.

Related: Boost your credit score in less than 60 days

Tip #5 – Plan your down payment.

If you’re able to put down at least 20% toward your new home, you’ll have more loan options at the best rate. Staying below 80% LTV (loan-to-value) typically means the mortgage lender won’t require PMI (private mortgage insurance). As a result, you’ll secure a lower mortgage payment and a better mortgage rate.

That said, there are several loan options and custom mortgages available. Many home loans for first-time homebuyers offer home loans with 0-5% down. FHA loans only require a 3.5% down payment. Conventional 97 requires only a 3% down payment.

Take the best next step and connect with a mortgage advisor to lock your rate and get pre-approved. An advisor can look at the big picture, offer the best loan options, and help you decide which home loan is best based on your homeownership goals.

Taking Action

Get pre-approved and lock in your mortgage rate now. Deciding how much you can afford can help you fast-track your mortgage pre-approval, especially in today’s housing market. When you’re ready, an experienced mortgage advisor can help you get approved, lock in the lowest mortgage rate, and secure the right home loan. Connect with a local mortgage advisor to discuss your options and save money on your mortgage. We’d love to help.

Buying a Townhouse to Get an Affordable Mortgage

August 26, 2021
blog townhouse 2

Want an affordable mortgage? One strategy is to aim for a property with a low purchase price. Even better, find a low-priced property in a desired location where home values are on the rise. Enter townhouses, condos, and fixer-uppers. Buying a townhouse can be a great first step to becoming a homeowner, with a few payoffs along the way.

Townhouses and condos both offer lower maintenance and community living. On the other hand, a fixer-upper offers a solid opportunity to buy an under-priced house in a great location. But does the idea of a fixer-upper sound like a mountain of stress? Sometimes DIY is better on Netflix.

Townhouses are growing in popularity for a handful of reasons–prime locations, minimal maintenance, lifestyle amenities, and a sense of community in a home that still offers privacy. So if you’re looking to become a homeowner in 2021, buying a townhouse is worth considering. 

RELATED: Are you a first-time homebuyer? Check out these special advantages for first-time homebuyers in 2021

Condo vs. Townhouse vs. Single-Family Detached Home

What’s the difference? And which is best? In broad strokes, all three are individually owned properties and are considered single-family dwellings. As a new homeowner, it comes down to lifestyle and what’s important to you in a home. Do you want a low-maintenance property that’s close to downtown and has shared amenities? Would you rather spend your weekends on a fixer-upper with lots of privacy?

CONDOMINIUM

Condos offer lifestyle amenities similar to apartment living. Homeowners are responsible for the interior and that’s it. The exterior, landscaping, facilities and community spaces are maintained by the HOA (Homeowners Association). Be prepared to share a few walls and the noise that comes with it. The upside: condos are low-maintenance and offer shared access to amenities like fitness gyms, pools, and parks.

TOWNHOUSE

Townhouses might just be the perfect balance between condos and single-family detached homes. When you buy a townhouse, you own the dwelling plus the land (usually a small space in the front and back). As the homeowner, you’re responsible for the interior, exterior, and land maintenance within your property line.

A townhouse offers more square footage in a multi-story dwelling. You’ll have a private entrance and 1-2 shared walls (on either side of your property.)

Townhouses offer more privacy than condos, front and backyard spaces, a private driveway and garage, and community amenities. The HOA is responsible for maintaining shared amenities such as pools, tennis courts, clubhouses and the like.

SINGLE-FAMILY DETACHED HOME

Detached means no shared walls! Single story, multi-story, or a sprawling compound, your home is privately owned right up to the property line defined by the title. As the homeowner, you own both your dwelling and the land. 

You’re free to use your land however you’d like (limited by city ordinances). Build a workshop, raise chickens, install a built-in kitchen, or plant an orchard. What’s more, with a detached home you’re free to tear it down and build your dream home. You own everything within your property lines. Ask your real estate agent about any restrictions set by the city.

One Caveat on HOA fees: Many single-family detached homes are built as part of a planned community that includes a Homeowners Association. You’ll enjoy shared amenities such as pools and tennis courts, but you’ll also have to pay HOA fees. In addition, any home renovations or landscaping updates will need to meet HOA regulations. 

Find Your Neighborhood 

Location is still the biggest determiner of home prices, and buying a townhouse is no exception. Look for a townhome property that fits your lifestyle and your wallet. Consider a few things: Do you want to buy a bigger home after a few years and keep a townhouse as a rental? Are you downsizing now and the townhome is your new forever home? Take note of resale values, school districts, lifestyle and community events in the area.

Find a qualified mortgage expert in your local area

Q&A on Buying a Townhouse (what our clients are asking)

Is buying a townhouse less expensive than a single-family home?

Not always. Townhouses are often viewed as a low-cost alternative for first-time homebuyers. But townhouses can often be in a similar price range as single-family homes, especially in desired locations with rising home values. You’re paying a premium for the area, not necessarily the square footage of your home.

For example, let’s say you are looking to buy a property for under $700k in a premium location with well-rated schools, high safety ratings, and rising home values. You find a townhouse and a single-family home, and both list for $680k. Both properties are in the same school district with similar neighborhoods and access to restaurants, public transportation, parks and the like.

The difference here will most likely be the condition of the home. The $680k detached single-family home might be on the lower end of the housing market for the area. As a result, it will probably be much older and need a fair amount of work and renovation.

By contrast, the $680k townhouse will likely be newer and in better condition, updated with modern appliances and amenities.

As with any new home purchase, don’t forget about closing costs, which we blogged about here.

Do you have to pay HOA fees when you buy a townhouse?

Yes. Homeowners Association (HOA) dues are standard when you buy a townhouse. The fees are paid quarterly or monthly to cover ongoing upgrades and maintenance for all shared amenities. 

Worth noting, not all HOA fees are created equal. When you’re ready to buy a townhouse, take time to compare amenities and costs with other townhouse developments in the area. Are the grounds and facilities well maintained? Do they have the amenities that are important to you, like tennis courts or expansive poolside areas?

You get to decide if the fees are reasonable and whether or not the community spaces offer what you want.

Is it easier to qualify for a mortgage when you buy a townhouse?

The easiest way to qualify for a mortgage is to work with an experienced mortgage advisor to get pre-approved. Buying a townhouse isn’t much different when it comes to home loan options, but there are a few factors to consider. 

Buying a townhouse will require a few more steps required by mortgage lenders to get approved. Often, the home appraisal will include an inspection of the entire grounds to ensure the community spaces are well-maintained and up to code.

A mortgage advisor can keep things moving forward stress-free. Find out how to get pre-approved quickly, which we blogged about here.

Get Pre-Approved For the Best Financing

Getting pre-approved is the best way to secure an affordable mortgage at a low mortgage rate. You’ll know exactly how much you can afford and shop with confidence.

Note that financing a townhouse is different than getting a mortgage for a condo or single-family detached home. Mortgage lenders have specific regulations when it comes to buying a townhouse. Be prepared to provide additional documentation to meet mortgage requirements. 

Getting pre-approved for a mortgage will help ensure you’ve got everything in place before you make an offer.

Talk to a local mortgage advisor about your financial goals. Buying a townhouse in 2021 can put you on the fast track to financial freedom. Getting preapproved for a mortgage is the best next step!

The Final Remix

Buying a townhouse can be a perfect choice when you want a low-maintenance home with modern appliances, good square footage, and a small footprint. Enjoy the benefits of community spaces, shared amenities, and privacy without the maintenance required for a detached single-family home. When you’re ready to get pre-approved for an affordable mortgage, buying a townhouse is the perfect next step.

Take Action

Mortgage pre-approval is a smart move when you’re buying a townhouse. An experienced mortgage advisor can help you get pre-approved and get your financing secured, so you can shop with confidence. Connect with a mortgage advisor to discuss your options and get an affordable mortgage that saves you money. We’d love to help.

Build Your Dream Home with the Right Mortgage

October 26, 2022
blog backyard patio


Deciding to take the leap and build your dream home can be challenging. Especially in today’s market with higher mortgage rates, inflation, and a shifting housing market. However, as supply chains begin to open up and construction begins to grow again, it might be a good time to start dreaming again.

These past few years have given many of us the opportunity to take stock of our lives and move toward what’s important. All over the country, the housing market continues to shift as people decide to buy a first home, refinance a home, relocate to a new area, or build a dream home as their new forever home. If you’re looking to build your dream home, you’re not alone.

The truth is, financing your dream home from the ground up can feel overwhelming, but an experienced mortgage advisor can guide you through the entire process with ease.

Whether you’re buying land, planning construction, or starting to build, take the first step and connect with an advisor who can help you get the best financing and guide you through every step.

If you’re thinking about building your dream home, these considerations can help you cross the finish line.

Top Benefits of Building Your Dream Home

1. Avoid bidding wars and competition in the housing market.

Okay, let’s face it—you could end up in a bidding war for the best contractors in the area. But when you decide to build a home, you get to set the timeline and plan construction around your lifestyle. You won’t have to compete in a bidding war or make multiple offers on a home only to watch your dream home slip away. 

If housing prices in your desired location are jumping up, you can rest secure. Whether the housing market shifts or not, you won’t have to worry about the competition. Your dream home could already be in construction with financing secured.

2. Build a dream home to match your lifestyle and your values.

This is obvious but worth mentioning. When you buy a house in 2022, there might be a dozen things you want to change about the house once escrow closes. Updates and changes require more financing and more decisions.

Building your own home allows you to create every detail. Face the master bedroom toward the sunrise, set dual fireplaces in the living room, or build out a home office to include every tech tool.

You can build your dream home to fit your lifestyle, your work, your family, and your future. It’s also a smart move to get financing approved early to keep things moving forward.

Talk to a mortgage advisor today if you’re ready to build your dream home. An experienced mortgage advisor can start the process quickly and help you lock in the lowest rate possible. What’s more, they’ll uncover hidden opportunities and custom mortgage financing that will meet your immediate and long-term financial goals.

Use this mortgage calculator to see how much you can afford

3. You can build your dream home with custom financing before you start to build.

An experienced mortgage advisor can guide you through the process and help you secure financing before you start to build.

Construction costs can vary widely, but there are a number of custom loan programs that can set the stage for success. Most new construction is priced per square foot and based on the location where you want to build. . Finish work and details will vary dramatically though, so be sure to consider the following:

  • General Construction (avg. price per square foot)
  • Plot / Land – market rate for the area
  • Level / Clear the land
  • Foundation
  • Framing
  • Plumbing, HVAC, electrical
  • Exterior – windows, roofing, driveway
  • Interior – bath/kitchen, flooring, cabinetry, appliances
  • Landscaping – soft scape, plants, patio, pool, kitchen
  • Blueprints – design and architectural
  • Building permits

Costs will vary widely depending on your style, quality of materials and preferences. Labor costs can also vary greatly based on who you hire.

Connect with a local mortgage advisor who can recommend custom financing so you can build your dream home with a steady plan that meets your financial goals.

A few considerations before you build your dream home.

1. Buying a home instead of building a home can be a simpler process.

Buying a home can be much easier than building a home. The costs and fees will vary based on the area, but getting a fast pre-approval for a mortgage can help you stay competitive. High-cost areas are still very competitive, so be patient in your search and talk with your realtor about the best strategies.

The upfront costs are fairly standard. And getting a mortgage pre-approved can relieve stress, so you don’t have to worry about financing falling through. In general, the upfront costs to buy a house are predictable:

  • Earnest money down
  • Down payment
  • Mortgage points (if applicable)
  • Property taxes
  • Private mortgage insurance (if down payment is < 20%)
  • Homeowners insurance
  • Closing costs (loan fees, mortgage points, appraisal, title insurance)

RELATED: Talk with a local mortgage expert to get preapproved for your best mortgage

2. Move-in schedule is predictable when you buy a home.

Typically, escrow closes on a new home within 30-45 days. Often this means new homeowners can move into a new home in less than 60 days from the day an offer is accepted.

Scheduling the move to a new place can be a lot of work, but it’s a sprint to the finish line.

RELATED: Learn the Truth About No-Closing Cost Loans

Next Steps

If you’re ready to take action and build your dream home, we can help you get the right financing to help you reach your homeownership goals. There are dozens of options and custom loans available to meet your dreams. Whether you’re ready to buy land, secure an architect, or start construction, we can help you get the best financing. Connect with a local mortgage advisor to discuss your goals. The right home loan can help you build financial security and save money on your mortgage. We’d love to help.

Decision Time: Should I Build or Buy a House in 2022

February 22, 2022
mortgage blog, build or buy a house, preferred rate


We all envision our dream home. Three stories high with a clear view of the mountains. A sprawling flat in the middle of a vibrant city. Wrap-around porches with a neighborhood vibe.

When it’s time to invest in our dream home, many homebuyers ask the same question: should I build or buy a house?

Deciding whether to build or buy a house in 2022 comes with challenges, for sure. Rising mortgage rates and inflation make it difficult to predict the housing market. What’s more, the pandemic has caused a bottleneck on supplies, materials, delivery, and even labor.

What about financing? Getting pre-approved for a mortgage is the best first step, whether you’re buying a house, buying land, or starting to build.

Financing a mortgage to build your dream home in 2022 could feel complicated compared to buying a house that’s for sale. But building a home has advantages that might make the payoff worth the extra effort.

If you’re deciding whether to build or buy a house in 2022, these considerations can help you cross the finish line.

Benefits to Building a Home in 2022

1. Avoid the bidding wars and housing market competition.

Okay, let’s face it—you could end up in a bidding war for the best contractors in the area. But when you decide to build a home, you get to set the timeline and plan construction around your lifestyle. You won’t have to worry about losing out on a bid or making an offer on the perfect home only to watch it slip away. 

If housing prices in your desired location are jumping up, you can rest secure. Whether the housing market shifts or not, you won’t have to worry about the competition. Your dream home could already be in construction with financing secured.

2. Build a custom home to fit your lifestyle.

This is obvious but worth mentioning. When you buy a house in 2022, there might be fifty things you want to change about the house the minute escrow closes. Updates and changes require more financing and more decisions.

Building your own home allows you to create every detail. Face the master bedroom toward the night sky, dual fireplaces in the living room, or build out a home office to include every tech tool.

You can build a home in 2022 to fit your lifestyle, your work, your family, and your future. It’s also a smart move to get financing approved early to keep things moving forward.

Talk to a mortgage advisor right away if you plan to build a custom home. An experienced mortgage advisor can start the process quickly and help you lock in the lowest rate possible. What’s more, they’ll uncover hidden opportunities and customize mortgage financing to meet your immediate and long-term financial goals.

Use this mortgage calculator to see how much you can afford

Drawbacks to Building a Home in 2022

1. Be prepared for delays and extra costs, especially in 2022.

Deciding to build a home can be unpredictable along the way. It’s normal to expect delays in construction or supplies. The downside is that you may need to rent longer than expected or live somewhere temporarily that isn’t convenient.

Along the same lines, you may face challenges with contractors or suppliers. Again, be prepared to address delays and be flexible. There will be times you’ll need to operate as a project manager, and other times it will help to stay adaptable. 

Be prepared to face shortages and change orders as a result of the current supply change shortages across industries.

In 2022, there are still a lot of logistics out of everyone’s control—delays in shipments, distribution and deliveries, manufacturing, and production. There is almost no industry that remains untouched by the pandemic. 

Find a qualified local mortgage advisor

2. It can be difficult to estimate the cost to build your dream home.

You can search average construction costs via zip code across the country, as most new construction is priced per square foot. The finish work and details will vary dramatically though, so be sure to consider the following:

  • General Construction (avg. price per square foot)
  • Plot / Land – market rate for the area
  • Level / Clear the land
  • Foundation
  • Framing
  • Plumbing, HVAC, electrical
  • Exterior – windows, roofing, driveway
  • Interior – bath/kitchen, flooring, cabinetry, appliances
  • Landscaping – soft scape, plants, patio, pool, kitchen
  • Blueprints – design and architectural
  • Building permits

Costs will vary widely depending on your style, quality of materials and preferences. Labor costs can also vary greatly based on who you hire.

3. Change orders can cause costs to escalate.

Even with contracts in place, costs can grow out of control if you’re not careful. New materials, change orders, and requesting updates along the way can run up the costs quickly. You’ll have hundreds of decisions to make along the way, from architecture to design elements to textiles and finish work. 

Try to work through the entire project ahead of time and be as detailed as possible.

For example, changing out kitchen cabinets or flooring midway can cause costs to increase dramatically. 

Be careful not to over-extend beyond approved financing or get too far into a project that’s beyond your budget and timeline.

Pros and Cons: Buying a Home in 2022

PRO: Buying a home is a straightforward process.

Buying a home in 2022 is much easier than building a home. The costs and fees will vary based on the area, but getting a fast pre-approval for a mortgage can help you stay competitive. High-cost areas are still very competitive, so be patient in your search and talk with your realtor about the best strategies.

The upfront costs are fairly standard. And getting a mortgage pre-approved can relieve stress, so you don’t have to worry about financing falling through. In general, the upfront costs to buy a house are predictable:

  • Earnest money down
  • Down payment
  • Mortgage points (if applicable)
  • Property taxes
  • Private mortgage insurance (if down payment is < 20%)
  • Homeowners insurance
  • Closing costs (loan fees, mortgage points, appraisal, title insurance)

RELATED: Talk with a local mortgage expert to get preapproved for your best mortgage

PRO: Move-in schedule is predictable when you buy a home.

Typically, escrow closes on a new home within 30-45 days. Often this means new homeowners can move into a new home in less than 60 days from the day an offer is accepted.

Scheduling the move to a new place can be a lot of work, but it’s a sprint to the finish line.

RELATED: Learn the Truth About No-Closing Cost Loans

CON: Immediate repairs or maintenance may be required.

The professional home inspection may have alerted a number of projects that will need to be taken care of once you’re the new owner. You may need to consider costs for repairs, maintenance, or upgrades that are needed right away. The home may have structural damage or simply design elements that you don’t like.

CON: Outdated electrical, plumbing, or HVAC may need updating.

When you buy a house, it may have outdated electrical or plumbing. Insurance rates will most likely be higher for an older home, especially if it’s not energy efficient.

Once you start making updates, contractors may uncover older details that need to be brought up to code. This could result in additional costs and work that you didn’t expect to take on.

RELATED: Top 7 ways to increase the value of your home in 2022

Next Steps

If you’re deciding whether to build or buy a home in 2022, take time to consider the pros and cons in the face of today’s economy. Think about your lifestyle, how you’ll prepare for the unexpected, and what type of mortgage you want. Connect with a local mortgage advisor to discuss your goals. The right home loan can help you build financial security and save money on your mortgage. We’d love to help.

Top 5 Benefits to Tenancy in Common Financing in 2022

March 15, 2022
mortgage blog, tenancy in common, preferred rate

Tenancy in common financing offers couples, investors, friends and family, and other interested parties the ability to purchase and finance a property together while dividing ownership however they wish. 

Qualifying for a mortgage isn’t always a straightforward process and your financial picture might not fit a simple profile. Tenancy in common offers a modern financing solution to help you build your wealth through property ownership.

In addition, tenants in common financing allows each owner to have an equal stake in the property, but more often than not, buyers own different percentages based on their interests. There are several benefits to tenancy in common arrangements which you’ll find below.

Let’s get started.

Related: Learn the rules for declaring a primary residence, and why it matters

Tenancy in Common Explained

“Tenancy in Common” and “Tenants in Common” are interchangeable terms and are sometimes called TIC dwellings.

The easiest way to think of tenancy in common is when a property has more than one buyer, and each buyer has a unique stake in the property. While some buyers decide to distribute the equity equally, most decide to split the ownership differently based on their investment interests.

Tenancy in common allows buyers to decide how much each party will own and how the property title is structured.

One party can own 30% while another owns 10%, etc. Tenancy in common also offers owners unique abilities to sell their ownership stake whenever they want, and to designate beneficiaries as well.

Quick Tip: “tenants” commonly refers to occupants of a rental or purchased property. However, tenants in common is a different term. Tenants in common (and tenancy in common) refer only to the ownership structure of the property’s title.

Who Owns the Property Title? Joint Tenancy vs. Tenancy in Common

The property title declares who owns any given property. When you buy a property with other investors, whether they are partners, friends, family, or others, there are several types of ownership structures. However, the two most common types of ownership are Joint Tenancy and Tenancy in Common.

Joint Tenancy is most common among married couples or long-term partners who decide to buy a home together.

In joint tenancy, both parties enjoy equal ownership of the home. Each will own 50% equity, and each owner can borrow against their equity portion. If one of you dies, the surviving co-owner will automatically own the property in full.

Tenancy in Common is different. A tenants in common agreement allows buyers to split the equity however they wish.

Notably, ownership does not need to be split equally among the investors. After purchase, each owner can sell their ownership stake in the property at any time and invest elsewhere.

Tenancy in Common is also an agreement that allows each owner to sell their portion of the property at any time. You can further designate your ownership to heirs or other beneficiaries.

Related: Find out how much you can afford in today’s housing market

Top 5 Benefits with Tenancy in Common 

1. Tenancy in Common allows you to divide ownership as you see fit.

Property ownership doesn’t always need to be 50/50 or equal among property owners. With tenancy in common, you can structure the agreement to better suit your needs–both as a property owner and an investor. Decide how much ownership you’ll be willing to take on and how many property owners you’d like to include. Buying a home doesn’t need to be a solo venture.

2. Tenancy in Common allows each owner to designate a beneficiary.

If or when an owner passes away, their ownership interest does not automatically go to the other owners. In a tenancy in common arrangement, each owner can designate their beneficiary or heir to assume ownership when they pass away.

At the same time, any owner can designate other owners of the same property to inherit their stake of the property if they die. The benefit here is that you have the choice.

Related: How to buy a house with friends or relatives, everything you need to know

3. Tenancy in Common financing might help you qualify for a better mortgage

Mortgage lenders have strict criteria to get the lowest mortgage rate and the best home loan. Buying or investing in a property with others could help you qualify for better financing than you could on your own. Together, you’ll have a larger combined income and more cash reserves. In addition, if each buyer has a strong credit rating, you’ll be able to qualify for better financing.

4. Tenancy in Common financing could help you own property sooner.

Investing in a property with others can reduce financial stress and increase your buying power. You’ll be able to make an affordable down payment based on your ownership stake in the property and not overextend yourself. For example, you can decide to be a 10% property owner instead of a 50% owner. This could help you become a property owner sooner and begin to build equity.

5. As a co-owner, you’ll be able to share the financial costs of property ownership.

Tenancy in common property owners often write co-ownership agreements to clarify how maintenance costs, property taxes, and insurance will be covered.

Drawbacks to Tenants in Common Arrangements

  • As co-owners, you’ll need to agree on everything when it comes to the house. Home repairs, maintenance, and insurance. These decisions are typically made through a co-ownership agreement.

  • Any owner can sell their stake in the property without permission from the other owners. While the agreement’s terms must be upheld, no owner is required to keep their stake in the property. For this reason, you may find yourself co-owners with new investors as time goes on.

  • When a co-owner sells their stake in the property or dies, the remaining co-owners don’t automatically assume property rights for that portion.

  • All co-owners are equally liable to the mortgage and property taxes. You could risk foreclosure if one owner stops paying the mortgage or property taxes.

How to Apply for a Mortgage with Tenants in Common Financing

Connect with a local mortgage advisor to discuss your options.

When you apply for tenancy in common financing, mortgage lenders treat each buyer equally as co-applicants. Each buyer will be required to provide financial documentation, a current credit report, bank statements, income and employment history.

We’re committed to helping you secure the best mortgage at a competitive rate that helps you save money on your mortgage. Tenancy in common financing is a modern solution that can help you build your wealth today through property ownership.

Mortgage financing is never one-size-fits-all. Connect with a local mortgage advisor and find the answers to your questions.

Related: Compare the benefits of Renting vs. Buying in 2022

Summary

Qualifying for a mortgage isn’t always a straightforward process and we understand that your financial picture might not fit a simple profile. Tenancy in common offers a modern financing solution to help you build your wealth through property ownership.

Related: Find out how to get a fast mortgage pre-approval before you make an offer

Taking Action

If you’re considering a tenancy in common arrangement for 2022, getting pre-approved for a mortgage is the best action you can take. You’ll be able to make competitive offers and take action quickly when you find the right property.

We can guide you through the process and help you get approved for your best mortgage. Connect with a local mortgage advisor to discuss your goals. The right mortgage can help you build financial security and help you build wealth and stability. We’d love to help.

How to Pay Closing Costs Without Going Broke

March 30, 2022
mortgage blog, how to pay closing costs, preferred rate

Closing costs can be an unwelcome surprise to every homebuyer, even if you aren’t a first-time homebuyer. The truth is, every home loan includes closing costs as part of the transaction—new home loans, home renovation loans, investment properties, condos, and refinancing. If you’re getting approved for a new mortgage, deciding how to pay for closing costs is important.

The good news is that homebuyers have several options for paying closing costs.

An experienced mortgage advisor can help explain the different ways to cover closing costs and the best programs to help you meet your financial goals. This article offers a few top highlights.

Related: How to win the bidding war for new homebuyers in 2022

HOW TO PAY FOR CLOSING COSTS: KNOW YOUR OPTIONS

Many homebuyers choose to pay closing costs upfront once the purchase or refinance is complete.

However, paying a large sum of money out-of-pocket sometimes isn’t the best financial option.

Closing costs are one-time expenses due at closing—typically 2-5% of the home loan amount. Line items covered by closing costs often include loan origination fees, appraisal fees, title insurance, property taxes, and more. You can find a more extensive list here.

Top 5 Ways to Pay Closing Costs

If you’re looking for a way to lower your out-of-pocket expenses at closing, these are the most popular options:

  • Pay closing costs upfront when you sign the new loan
  • Roll the closing costs into your loan
  • Agree to have the lender pay closing costs in exchange for a higher rate
  • Negotiate with the seller to cover some fees
  • Apply for HUD-approved grants to help pay for closing costs


1. Pay for closing costs upfront.

This is a common approach to paying closing costs. When you get ready to sign the final papers and close on your new mortgage, there will be a final balance due. You can pay this in full (typically with a cashier’s check) right then and there.

For homebuyers short on cash, this can be costly. Especially since you want to have enough savings to cover new home expenses or unexpected repairs that might come up.

2. Roll the closing costs directly into the mortgage.

Adding closing costs to a home loan is another option that helps homebuyers lower out-of-pocket expenses. When you decide to roll the closing costs into your mortgage, the lender simply adds the amount of the closing costs to your original loan amount.

For example, if your purchase price is $400,000 with a down payment of $40,000 (10%), your home loan would be $360,000. Let’s assume closing costs for your new mortgage are $10,800 (3%). The mortgage lender would add that amount to the loan, putting your new mortgage at $370,800.

This can be an attractive solution for new homeowners who can afford a slightly higher mortgage payment and don’t want to pay closing costs upfront.

Related: How to refinance a mortgage without an appraisal fee

3. Ask your mortgage lender about a no-cost or zero-cost loan to cover closing costs.

Some mortgage lenders offer what’s called a no-cost mortgage. In this case, the mortgage lender will pay all (or most) of your closing costs upfront and increase the mortgage rate in exchange.

This is a profitable option for the lender since the lender will have a higher return over the life of the loan, and closing costs are a fixed amount.

For first-time homebuyers, lowering out-of-pocket expenses could help you become a homeowner sooner.

4. Negotiate with the seller to decide who pays for closing costs.

It’s common for a seller and buyer to negotiate who pays for some of the closing costs as part of the final contract. Often the seller will offer to cover some of the closing costs, but if the property is in a high-demand area, the buyer will cover the closing costs in full.

5. Apply for housing grants that help pay for closing costs.

Sometimes, rolling the closing costs into the mortgage isn’t affordable. Often, it can cause the home loan amount to jump beyond your approved loan amount, or the new mortgage payment isn’t affordable.

Many first-time homebuyers and borrowers with low-to-moderate income can apply to HUD-approved housing agencies for help. These agencies offer grants to help with closing costs. If you think you might qualify, give us a call. We can connect you with some information that might help.

How to Apply for a No-Cost or Zero-Cost Mortgage

Connect with a local mortgage advisor to discuss your options.

Closing costs are to be expected when you apply for a mortgage, whether you pay them out-of-pocket or roll them into a home loan.

Mortgage financing is never one-size-fits-all, and we understand it can be overwhelming to understand all the options available to you. We’re committed to helping you secure the best mortgage at a competitive rate so you can save money on your mortgage.

Connect with a local mortgage advisor and find out which option helps you meet your financial objectives.

Related: Compare the benefits of Renting vs. Buying in 2022

Taking Action

Don’t let closing costs keep you from your best mortgage.

If you’re considering buying a house or refinancing in 2022, connect with a local mortgage advisor to discuss your options. We can guide you through the process and help you decide which path meets your financial goals. We’d love to help.