- Why work with me to purchase or refinance your home?
- Who do you do your loans through?
- What is the difference between a mortgage broker and a direct lender?
- Why work with a Mortgage Broker?
- What is the difference between the interest rate and the A.P.R.?
- When is the best time to buy a house?
- When is the best time to Refinance my current mortgage?
As a Full-Time, Year-Round Tax & Financial Advisor, I believe I offer something that very few other mortgage professionals are able to provide. Most mortgage professionals are only able to help you with your home loan. They can’t provide you any assistance when it comes to your finances and income taxes. I’m not here just to help you with your home loan. I’m here to assist you with any financial questions you may have. Acquiring a home loan is a huge commitment, and there are many factors to consider… I can help with all of them!!
When doing home loans, I work with LifeSource Mortgage. LifeSource Mortgage was founded in 2006, by an already-seasoned mortgage professional, Shannon Gray. LifeSource Mortgage is a family owned and operated business, as opposed to a “big box” bank. Personalized service and fostering client relationships is the number one priority.
I work with a Mortgage Broker. Working with a Mortgage Broker means that we aren’t tied to any one bank. We can shop around for you and find the best lender, with the best rates, for your particular scenario. Working with a broker also means I’m available when you need me – not just during regular banking hours.
When you work with a direct lender, you are working specifically with one bank. You are tied to their products only and are not able to shop around to find the best pricing with various lenders. Many direct lenders are only available during regular banking hours, and may be difficult to get a hold of when you need them.
I believe there are 5 Advantages to working with a Mortgage Broker.
Advantage #1: Better Customer Service
Have you ever called a bank or large corporation and got the dreaded automated recoding…Press 1 for this, Press 2 for that, Press 15 for xyz, only to miss the pre-recorded message and then have to listen to it all over again? Well, that’s not the case with me! When you call, you are calling my personal phone.
Advantage #2: Options, Options, and More Options…
Mortgage brokers are in a unique position where they are not forced to use one specific product or bank. I am able to use several lenders and shop for the best rates and programs on the market today. Many times direct lenders or banks do not offer special home loan programs, but as a mortgage broker I can search, shop, and secure the home loan that meets your needs!
Advantage #3: Accountability
I take great pride in what I do. I understand that I’m only in business because of my clients and because of their satisfaction in my services. Many times other loan officers/employees at large institutions have no regard in how they treat others and deal with challenges. There is the CEO, several layers of managers, and numerous lower level employees, so the finger pointing game becomes an endless circle of blame.
Advantage #4: Single Point Of Contact
My clients work with me! This makes the whole loan process much more enjoyable for you. Your not talking to someone on the other line whom you’ve never met before.
Advantage #5: No Strict Overlays
Freddie Mac and Fannie Mae have guidelines for banks/lenders when giving out loans. Often times many lenders create “overlays”, which are even stricter guidelines above and beyond what Fannie & Freddie require. These strict overlays make it more difficult to qualify for many individuals. I have the ability to shop around and utilize lenders without overlays.
You’ll see an interest rate and an Annual Percentage Rate (A.P.R.) for each mortgage loan you see advertised. The easy answer to “why” is that federal law requires the lender to tell you both.
The A.P.R. is a tool for comparing different loans, which will include different interest rates but also different points and other terms. The A.P.R. is designed to represent the “true cost of a loan” to the borrower, expressed in the form of a yearly rate. This way, lenders can’t “hide” fees and upfront costs behind low advertised rates.
While it’s designed to make it easier to compare loans, it’s sometimes confusing because the A.P.R. includes some, but not all, of the various fees and insurance premiums that accompany a mortgage. And since the federal law that requires lenders to disclose the A.P.R. does not clearly define what goes into the calculation, A.P.R.s can vary from lender to lender and loan to loan.
The A.P.R. on a loan tied to a market index, like a 5/1 ARM, assumes the market index will never change. But ARMs were invented because the market index changes and makes fixed rate loans cheaper or more expensive to make — that’s why they’re variable rate in the first placed!
So, A.P.R.s are at best inexact. The lesson is that A.P.R. can be a guide, but you need a mortgage professional to help you find the truly best loan for you.
Note when you’re browsing for loan terms that the A.P.R. will not tell you about balloon payments or prepayment penalties, or how long your rate is locked. Also, you’ll see that A.P.R.s on 15-year loans will carry a higher relative rate due to the fact that points are amortized over a shorter period of time.
I wrote about this a while ago. You can read a longer version of my opinion here.
The short answer to this question is, “it depends.”
The longer answer really depends on the individual. You can read the so called “experts” all you want, but it is all just speculation. Most “experts” and communicating to a much larger audience. They’re not considering individual factors, and most are trying to sell us something else (ie. books, seminars, videos).
My #1 Rule when it comes to buying a home is that it should make sense for you TODAY!
Don’t try to project where the market is and where it’s going. Look at your finances, do a thorough analysis, and decide if buying this home makes financial sense today. It kinda sounds like common sense, doesn’t it? But if more people would do this we wouldn’t have housing bubbles and bursts.
Again… when it makes sense for you.
There are an enormous number of refinancing options available to borrowers.
The following are some general things to bear in mind as you consider your options.
Reducing Your Monthly Payments
Are getting better mortgage payments and a lower rate your main reasons for refinancing? If so, the best option might be a low fixed-rate loan. Maybe you are presently in a loan with a high, fixed interest rate, or a mortgage loan with which the rate of interest varies : an adjustable rate mortgage (ARM). Even if interest rates rise, a fixed rate mortgage will stay at the same, low interest rate, unlike an ARM. This can be especially a good choice if you don’t think you’ll be selling your home within the next five years or so. But if you do expect to move more quickly, you will want to consider an ARM with a low initial rate to get reduced mortgage payments.
Getting Out some Cash
Are you hoping to cash out some of your equity in your refinance? It could be you need to update your kitchen, take care of your college kid’s tuition, or take your family on a dream vacation. With this in mind, you need to look for a loan above the remaining balance of your existing mortgage. If your interest rate is currently high and you’ve held it for a long time, you could be able to reach your goals without a rise in your mortgage payment.
Maybe you want to pull out some of the equity in your home (cash out) to use toward other debt. If you have the equity in your home for it, paying off other debt with higher interest than the rate on your mortgage (like car loans, credit cards, student loans, or home equity loans) means you can possible save hundreds of dollars a month.
Getting a Shorter Term Loan
Are you dreaming of paying your loan off faster, while building up your equity more quickly? Consider refinancing to a short-term loan, like a 15-year mortgage. Even though your mortgage payments will usually be increased, you can save on interest; so your equity amount will build up faster. But, you might be able to switch without a higher monthly payment if your longer term mortgage loan was closed a while back, and the balance remaining is somewhat low. You may even pay less!
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