Financing

Powered by Amortization Calculator Mortgage Calculator

Powered by Mortgage Rates

 

Summer’s Ending, but great financing deals are still available for the Fall Buying Season!  Here is an exclusive offer for PenFed/Prudential Clients Only.

Up to $10,000 dollars FREE towards your new home!

Prudential Texas Properties offers in house lending opportunities thru PenFed Credit Union.  Members may be eligible for closing cost reimbursement incentives up to $10,000.  Closing costs include but are not limited to:  appraisal fee, tax service fee, CLO access fee, title fees, transfer tax fees, credit report fee, flood certification fee, recording fee, survey if required and work verification fee.  This does not include escrow, interest, homeowner’s insurance or owner’s title insurance, the cost for a structural engineering or similar report, should the appraiser request one, or points to buy a rate down or applied to a loan. Contact Jeremy Sourbeer, Mortgage Loan Officer, at 214-317-9500 to find out how you can qualify.  PenFed is an Equal Housing Lender.

 

Pre-Qualified Vs. Pre-Approved, what’s the difference?

Before you begin your home search it’s best to start by contacting a reputable lender who can review your finances with you and help you set a budget.  If there are any unforeseen roadblocks such as an unexpected credit blemish, you can easily and effectively resolve these issues in advance of your purchase.  It’s also important that you take this necessary step prior to submitting an offer on a home, because most Seller’s will require either a pre-qual or a pre-approval letter before they will negotiate with you.  Your realtor will also want to ensure that you are financially ready to purchase a home before too much time is spent “window shopping” only to find out you can’t qualify for a mortgage.

A pre-qual letter is fairly easy to obtain, most lenders can do this for you by simply placing a phone call and verbally giving them basic information.  It’s a pretty quick procedure with little commitment and for this reason it really doesn’t hold a lot of weight, but it does let everyone know you are serious and have taken the first step.  The lender will give you some mortgage options and recommend which type is best for you and they can give you a rough estimate on numbers of what your payment and closing costs will look like.  At this phase, they do not review your actual credit report.

A pre-approval letter is substantially more significant and this is usually done once you’ve shopped your loan options and committed to your lender.  Getting pre-approved is much more involved then a pre-qual.  In this phase you’ll be asked to supply the lender with the necessary documentation to perform an extensive check on your financial background, including a full review of your credit worthiness.  Once approved, you will receive a conditional commitment letter for a loan amount allowing you to confidently negotiate an offer.

There are many benefits to completing this process in advance before you start to look for a new home.  Most importantly you’ll know exactly what your budget will be so that you won’t be looking at homes beyond your means. And once you do find your perfect home you’ll be able to move swiftly and potentially beat out a competing buyer.

Also, the interest rate you pay on your home mortgage has a direct impact on your monthly payment.  The higher the rate the greater your payment will be.  That’s why it’s important to look at where rates are headed and to shop your options.

 

Preferred Lenders

Call one of these great lenders to discuss the right loan program that fits your specific budget and needs.

Jeremy Sourbeer, PenFed Credit Union – 214-317-9500, jeremy.sourbeer@penfed.org

Cole Homes – AmeriPro Funding – 817-253-5251, cole@coleholmes.com or cholmes.ameriprofunding.com

 

Own Versus Rent

Either way, you’re still paying a mortgage!  Everyone should realize that unless you are living rent free, you are paying a mortgage.  Either your mortgage or your landlord’s.

 

Most common types of residential loans

Conforming Loans have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac. These two stockholder-owned corporations purchase mortgage loans complying with the guidelines from mortgage lending institutions, package the mortgages into securities and sell the securities to investors.  By doing so, Fannie Mae and Freddie Mac provide a continuous flow of affordable funds for home financing.

Jumbo Loans apply to mortgages with a loan value of $417,000 and higher.  These Super Conforming Mortgages, aka Jumbo loans, are intended to provide lenders with much needed liquidity in the highest cost areas of the country, while also lowering mortgage financing costs for borrowers.  These loans often have a slightly higher interest rate.

VA Loans are guaranteed by U.S. Department of Veterans Affairs.  This guaranty allows veterans and service persons to obtain home loans usually without a down payment.  Lenders may limit the maximum VA loan.  You must have a certificate of eligibility when applying for a VA Loan.  Some VA loans make take longer to process then the standard 30 day closing timeframe so this should be factored into your decision when selecting your loan package.

FHA Loans have lower down payment requirements and easier to qualify than conventional loans.  FHA loans are the most forgiving when it comes to marred credit due to bankruptcy or foreclosure.  FHA loan limits vary by counties, in Dallas and Tarrant Counties the maximum loan amount is $287,500.

Balloon Loans are short term fixed rate loans that have a fixed monthly payment based upon a 30 year fully amortized scheduled and a large lump sum payment at the end of its terms.  Usually they offer 3, 5 or 7 year terms.

ARMs, Adjustable Rate Mortgages, are still popular loans offering lower interest rates.  Most ARMs have an interest rate cap to protect you form enormous increases in monthly payments.  A lifetime cap limits the interest rate increase over the life of the loan.  A periodic or adjustment cap limits how much your interest rate can rise at one time.  Your mortgage disclosure will tell you the exact index to be used, whether the weekly or monthly value applies, the lead time for your index, the margin and any caps.