Don't be fooled by fake rates. Many companies advertise rates. All companies don't give you the rates they advertise everytime.
At ADRMortgage.com a quick email, text or call gives you the ammo you need to know what your rate will be. The mortgage process has gotten complicated over the last 10 years....banks aren't regulated by states and customer may wind up paying tens of thousands more at the closing table when using a bank.
I just had a customer go with a Kentucky bank. At the closing his payment was $1600 higher then he expected and he paid a ton more. Work with a company that has ZERO BBB complaints ever to date (nearly 15 years). Call Andy May 919 771 3379
Well that was a quick drop in rates. We locked someone at 3.75% and another at 4% in the last few weeks. The best way to get a great rate is to start your app with us, and have most of the documentation lined up. Then hang out until rates drop again, which they will. The worst way to do it is to believe a California Bank that you can get a rate that's 1% less then reality.
But some consumers don't have the experience to understand that these fake rates are non-existent. That's how people learn. I can't tell you how many clients ask if they'll be charged an extra $10k at the closing for the rate. We are regulated by the States of NC and VA and we can't behave like that (banks are not regulated for mortgages by the State in which you live). Nearly all credit unions don't offer 30 year fixed rates directly and subcontract that product out to brokers (which we are).
Call us and we'll get your app started. You tell us the rate you want and we'll hang out and wait for rates to drop. Then we'll lock you in and you'll get the rate you want. 919 771 3379. Andy May.
Just a reminder that rates typically edge up in the Spring and go down in Winter. We just locked 4.375% on a 30 year fixed (this is not an offer). This is still higher then the 3.25% 30 year fixed we locked someone into back about 5 years, but it's also lower then the near 5% rates we saw last year (for a 30 year fixed).
Remember, new HELOCs are no longer tax deductible. But cashout refinances are more then likely (depending on your tax status). ADRMortgage.com does cashout refinances. Rates are generally about 5/100ths of 1% higher for a cashout refinance. Gone are the days of high cost cash outs. HELOCs are now about 2% higher then standard 30 year fixed rates.
Call us to do a general home mortgage checkup. We're here to help, with zero BBB complaints ever to date and counting.
Andy May 919 771 3379
Many new homebuyers make the mistake of rushing out to buy things to fill their home with as soon as the seller accepts their purchase offer and the lender pre-approves their loan. But there are still a few major hurdles to overcome before the keys are handed out. Here are some things to avoid during the home buying process to assure your transaction goes as smoothly as possible:
Don't make an expensive purchase. Put the cash back in your pocket. Don't get the Home Depot credit card (it'll lower your credit score anyway). Call ADR if you want to purchase furniture. We have a unique deal with the largest furniture company in the world and have saved our customers tens of thousands of dollars by referring you to this $200 million a year furniture store.
Don't get a new job. Lenders like to see a consistent job history. Generally, changing jobs will not affect your ability to qualify for a mortgage loan - especially if you are going to be making more money. But for some people, getting a new job during the loan approval process could raise some concern and affect your application. We can still get you a loan though. We had one borrower get a new job 2 days before closing, and we closed on time. Another happy customer. Remember, even if you are retired we can get you a loan. We can also get you a loan at a great rate if you don't have a job, but do have sizable assets. Call us to see what we can do to make your life easier.
Don't switch banks or move money around. As your lender reviews your loan package, you will likely be asked to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other liquid assets. To eliminate potential fraud, most loans require a thorough paper trail to document the source of all funds. Changing banks or transferring money to another account - even if its just to consolidate funds - could make it difficult for the lender to document your funds. We don't like to see borrowers put the house on the credit card. Neither do our investors.
Don't give a good faith deposit directly to the seller in a FSBO purchase. As a rule, your good faith deposit belongs to you, not to the seller, until the deal closes. Your FSBO seller may not know that your good faith funds should be applied to your expenses at closing. Get an attorney or other neutral party who can hold the deposit or put it in a trust account until you close on the home. Your purchase contract should dictate to whom the funds go should the transaction fall through. Remember, you get what you pay for. If you think you'll save $500 by doing xyz, you may wind up losing a $300,000 home. Hire a professional Realtor. Realtors can save you a bundle. Call your ADR loan professional if you need a Realtor. We would greatly appreciate being able to refer you to one of our professional Realtors.
Don't disregard your lenders requirements. You may have been pre-approved for the loan but your work with the lender is far from over. In order to process your loan, you need to meet certain requirements. Your lender will need copies of your bank statements, W2s and other paperwork. It is up to you to get it to him or her as soon as possible. Failure to submit certain qualifying documents could cause you to lose your loan and the financing you need to buy your home. Find out how much you qualify for by using one of our MortgageCalculators
A critical step in the mortgage loan application process is to verify the sources for your down payment, closing costs and assets, as well as documenting income and debts. The lender uses this step to determine your qualifications as a borrower.
Down Payment & Closing Costs
Documenting that the down payment comes from your savings and that you will have savings and/or assets over and above the down payment gives the lender confidence in your strength as a borrower and your ability to repay the loan.
Take extra care to document the sources for any monies to be used for the down payment or closing costs.
Acceptable Down Payment & Closing Costs Sources
Cash in a bank account
Mutual funds / stocks / IRA / 401(K)
Proceeds from the sale of another property
Gift from an immediate relative
Collect information about your personal assets that add to your net worth and help to prove your credit worthiness.
Common Assets Considered in a Mortgage Loan Application
Stocks, bonds, mutual funds, 401(K) and retirement accounts
Personal property estimate - cars, boats, antiques, jewelry, etc.
Other real estate or property
Income and Employment
The lender will want to confirm your current gross income and have evidence of stable employment. Documentation requirements vary depending upon a number of factors - including the source of income (hourly, salary, salary + bonuses, salary + commission, commission, self-employed, etc.).
Your lender will want to review a list of all your current debts. This along with your credit report will provide the lender with a snapshot of your obligations. The lender will want to confirm that you will not be overextended when the mortgage payment is added to your current debt load.
Approximately 85% of ADRMortgage customers get a 30 year fixed rate. We have done a few ghastly bank options arms (with plenty of disclosures). And the remaining 14% of loans are short term interest only ARM loans. Consult with a professional ADR Loan Officer to find out what's best for you.
With a fixed-rate loan, your monthly payment of principal and interest never change for the life of your loan. Your property taxes may go up (we almost said down, too!), and so might your homeowner's insurance premium part of your monthly payment, but generally with a fixed-rate loan your payment will be very stable.
Fixed-rate loans are available in all sorts of shapes and sizes: 30-year, 20-year, 15-year, even 10-year. Some fixed-rate mortgages are called "biweekly" mortgages and shorten the life of your loan. You pay every two weeks, a total of 26 payments a year -- which adds up to an "extra" monthly payment every year.
During the early amortization period of a fixed-rate loan, a large percentage of your monthly payment goes toward interest, and a much smaller part toward principal. That gradually reverses itself as the loan ages.
You might choose a fixed-rate loan if you want to lock in a low rate. If you have an Adjustable Rate Mortgage (ARM) now, refinancing with a fixed-rate loan can give you more monthly payment stability.
Adjustable Rate Mortgages -- ARMs, as we called them above -- come in even more varieties. Generally, ARMs determine what you must pay based on an outside index, perhaps the 6-month Certificate of Deposit (CD) rate, the one-year Treasury Security rate, the Federal Home Loan Bank's 11th District Cost of Funds Index (COFI), or others. They may adjust every six months or once a year.
Most programs have a "cap" that protects you from your monthly payment going up too much at once. There may be a cap on how much your interest rate can go up in one period -- say, no more than two percent per year, even if the underlying index goes up by more than two percent. You may have a "payment cap," that instead of capping the interest rate directly caps the amount your monthly payment can go up in one period. In addition, almost all ARM programs have a "lifetime cap" -- your interest rate can never exceed that cap amount, no matter what.
ARMs often have their lowest, most attractive rates at the beginning of the loan, and can guarantee that rate for anywhere from a month to ten years. You may hear people talking about or you may read about loans that are called "3/1 ARMs" or "5/1 ARMs" or the like. That means that the introductory rate is set for three or five years, and then adjusts according to an index every year thereafter for the life of the loan. Loans like this are often best for people who anticipate moving -- and therefore selling the house to be mortgaged -- within three or five years, depending on how long the lower rate will be in effect.
You might choose an ARM to take advantage of a lower introductory rate and count on either moving, refinancing again or simply absorbing the higher rate after the introductory rate goes up. With ARMs, you do risk your rate going up, but you also take advantage when rates go down by pocketing more money each month that would otherwise have gone toward your mortgage payment.
The amount you have available for a down payment will affect what types of loans for which you can qualify. Down payments typically range from 3 to 20 percent of the sales price for the property.
Tips for Accumulating a Down Payment
Look for ways to reduce your monthly expenditures to save toward a down-payment. You could enroll for an automatic savings plan at your bank to have a portion of your payroll automatically transferred into savings. Most people save a couple of years for their down payment.
Borrow the down payment from your retirement plan
Check the provisions of your retirement plan. You can borrow funds from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Be sure you understand the tax consequences, repayment terms and/or possible early withdrawal penalties.
You may be able to save additional funds if you can move into less expensive housing.
Reduce other higher interest rate debt
Paying off credit cards will initially reduce your savings, but the money you will save from higher interest rates will pay-off in the long run.
Make a deal with the seller
In some circumstances, it is appropriate to ask the seller to carry a second-mortgage to cover your down payment. Typically, you will pay a slightly higher rate for this second mortgage.
Sell some investments
Get a second job and save your earnings
Skip a year's vacation
Gift from Family
Parents and other family members are often anxious to help children buy their first home and may have the means to give you a gift of money for a portion or all of your down payment.
No-down and low-down Mortgages
The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in helping low- to moderate-income families qualify for mortgages. FHA assists first-time buyers and others who would not qualify for a conventional loan, by providing mortgage insurance to private lenders. Interest rates for an FHA loan are usually the going market rate, while the down payment requirements for an FHA loan are lower than conventional loans. The required down payment can be as low as 3 percent and the closing costs can be included in the mortgage amount.
VA Loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can qualify for a VA Loan, which usually offers a competitive fixed interest rate, no down payment and limited closing costs. While the VA does not issue the loans, it does issue a certificate of eligibility required to apply for a VA loan.
A second mortgage that closes with the first. Often the first mortgage is for 80% of the purchase price and the "piggyback" is for 10%. The home buyer covers the remaining 10% with their down payment. (Some lenders will write a second mortgage of 15% or even 20% of the purchase price.)
"Carry Back" Mortgage
In the case of the seller "carrying back a second mortgage", the seller loans you part of his or her equity. In this scenario, you would finance the majority of the loan with a traditional mortgage lender and finance the remaining amount with the seller. Typically you will pay a slightly higher interest rate on the loan financed by the seller.
Housing Finance Agencies
These agencies offer special loan programs to low- and moderate-income buyers, buyers interested in rehabilitating a home in a targeted area, and other groups as defined by the agency. Working through a housing finance agency, you can receive a below market interest rate, down payment assistance and other incentives.
The primary mission of Housing Finance Agencies is to boost home ownership in targeted areas, among first-time buyers and those with little money for down payments. Most of these non-profit agencies were funded with state government seed money and now operate independently.
Click here for a list of Housing Finance Agencies.
Documenting Your Down Payment
Mutual funds / stocks / IRA / 401K
In many cases, lenders need a professional, independent appraisal of the property you want to buy or refinance to ensure that it is worth at least as much as they are being asked to lend on it. If you are making a smaller down payment and have a lower credit score, the lender is going to be even more interested in making sure the property that will be collateral for the loan is worth lending the amount requested.
A professional, independent appraiser will usually visit your home and inspect its interior and exterior. The appraiser doesn't want to buy your home, and isn't a visiting head of state. So whatever you do, do not postpone the appraisal until you get a chance to "clean up a little." Cleaning does not make your appraised value higher! And delaying adds time to an already lengthy process.
The appraiser will form an opinion on the probable market value of the property considering sales of similar homes in the area among other factors. He or she will prepare an appraisal report explaining the conclusion. The appraisal belongs to the lender considering lending money with the home as collateral. Often, you can receive a copy of the appraisal either as a courtesy or in keeping with state law. Let us know you're interested and we'll help.
The lender wants to know first of all whether the property is worth at least as much as the loan amount. In the unlikely event the lender would have to foreclose, it wants to know it should be able to recoup at least the loan amount. But if your loan program depends on you borrowing, for example, 95 percent of the property's value and no more, the appraisal can impact your eligibility for the loan that's right for you. In a "close" case like that, the best solution is almost always to increase your down payment, or we can help find another solution such as another loan program that works.
An appraisal can cost from $400 to $900 or more for very complex properties. You as the borrower pay the appraiser for the appraisal fee upon ordering the appraisal.
The federal government, as of April 2009, became heavily involved in the mortgage appraisal business. Thousands of appraisers have folded their companies as the U.S. Government implements "Management Appraisal Companies" that actually force the independent appraiser to close their company and work for this new layer of "management". This has increased your cost to do a loan and extends the time to appraise a loan. HR 3044 invalidates what Andrew Cuomo and the Federal Govt. have done to the appraisal industry. This bill is working its way through the House of Representatives and will hopefully pass. Stay tuned for new updates. David E. Price, Raleigh House of Representatives, at the time of this writing is not supporting this bill. We will update you if he changes his mind, and encourage you to contact Mr. Price to support HR 3044 (rolls back the damage Andrew Cuomo and the Feds have done to the appraisal industry).