What You Should Know About Rate Locks

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Mortgage rates are near all-time lows right now, but that doesn’t mean they’ll stay that way forever.

That’s where a rate lock can come in. Rate locks guarantee you a certain mortgage rate for an extended period, protecting you from the possibility of rising interest rates while you complete the homebuying process.

Are you shopping for a home? Here’s what you need to know about mortgage rate locks:

Q: What is a rate lock?
A: A rate lock guarantees your initially quoted mortgage rate for an extended period of time. Your rate can’t rise at any point during your lock period (even if market rates rise), giving you plenty of time to close the loan.

Q: How long does it last?
A: The length of a rate lock depends, though it’s usually 30, 60 or 90 days. In some cases, you may be able to pay for a longer lock period if you need more time.

Q: Why would you want to lock your rate?
A: Rate locks are smart if interest rates are very low or fluctuating. They’re also a good move if you have a unique situation — like being self-employed — and it could take a bit longer to close your loan.

Q: Are there any risks?
A: In the event market rates drop, there’s a chance your locked-in rate could be higher than what newer applicants are being quoted. You can pay for a “float down” option when you lock, which essentially means you’d get the lower market rate if they do fall.

Do you have more questions about rate locks? Are you ready to sort out your home financing? Get in touch so we can discuss your options.

How to Refinance a Reverse Mortgage

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While a reverse mortgage is different from a conventional mortgage, the two products have a few similarities. One is that the homeowner may refinance a reverse mortgage at any time during the life of the loan without penalty. When Refinancing a Reverse Mortgage Makes Sense As with a conventional mortgage, the borrower has the option to refinance into a more suitable loan that fits […]

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Buying a Home When You’re Self-Employed

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While being an independent contractor, freelancer or entrepreneur can certainly be a freeing career choice; it also comes with some challenges. For instance, it can make getting a mortgage loan harder.

Without W-2s, a consistent salary, and an employer to back you up, it’s harder to prove your income as a self-employed professional — let alone show you’re not a risk as a borrower.

Are you planning to buy a home or refinance while self-employed? These five tips could improve your chances of approval:

  1. Get your finances in order. You’ll need to prove your income through bank statements, invoices, profit-and-loss statements, and balance sheets. Be sure they’re ready and organized before applying for your loan.
  2. Reduce your tax write-offs. Maxing out your deductions can seem smart, but it can hurt you when a home loan is on the line. The more write-offs you take, the lower your income, making you seem like a riskier bet.
  3. Boost your credit score. Higher credit scores are always more appealing when getting a loan, so take time to improve yourself. Pay down debts, settle any overdue accounts and ensure your credit report is accurate.
  4. Bring in a co-borrower. When you add a second borrower to the loan, their income is factored in, too. Make sure you choose a co-borrower with good credit, a low debt-to-income ratio, and steady pay.
  5. Keep your work consistent. Don’t switch industries just before applying for your loan. It’s best if you’re in the same line of work for at least two years.

Getting a mortgage while self-employed certainly has its challenges, but it’s not impossible. Reach out today for more home financing guidance.

Considerations for Paying Off Your Home

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Paying off your mortgage might seem like a dream come true: no more payments, no more interest and owning your house in full. Who wouldn’t want all of that?

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Should I Get Preapproved for A Mortgage Before House Hunting

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We’ve all likely heard the story, maybe at a cookout or in the break room at the office. The homebuying nightmare of being a week away from closing on the new, beautiful home, and then someone, unfortunately, heard from their lender, the bomb drop of “we may have a little problem.”

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What goes into your credit score?

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When you’re applying for a mortgage, you know that your credit score plays a big role in your approval — and it can affect your interest rate too. But do you know how your score is calculated?

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Your Debt-to-Income Ratio Calculation

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Your debt-to-income (DTI) ratio is an important factor when applying for a mortgage or refinance. Not only does it play a role in your ability to qualify, but it can also influence your interest rate and the long-term costs of your loan.

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A Guide to First-Time Buyer Resources

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Fortunately, if you’re a first-timer — or if you haven’t owned a home in at least three years — there are loads of federal and state resources available. They can make buying a home easier, more affordable, and more accessible.

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4 Key Questions About Mortgage Points

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When you buy a home, you tend to encounter a lot of financial jargon. Whether you’re buying your first home, a move-up space or an investment property, there are countless new phrases that you might not recognize throughout your journey.

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Do you know these mortgage terms?

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The mortgage process can often be a confusing one — whether you’ve bought a home before or not. There’s a lot of prep work and moving parts, and most of the terminology is unfamiliar to the average consumer.

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