Is It Possible To Qualify for a Good 30-Year Fixed Mortgage Rate In Our Current Market Condition? What Are The Important Factors Being Considered Today?

For most people, buying a home is the single largest purchase they’ll ever make. It’s worth it to get the best 30-year mortgage interest rate you can. Just one more percentage point of interest and you will pay thousands of dollars more for your home over the course of a 30-year mortgage. A 30-year mortgage includes 360 monthly payments. If you can save $200 per month by getting a lower interest rate, this equals $72,000. A quick visit to an investment calendar can show you how much money you’d have if you’d saved $200 a month for 30 years and invested it: at an average 6% rate of return, you’d have an investment fund of over $196,000. 

So, what can you do to qualify for a good 30-year fixed mortgage rate?

Improve your FICO credit score

Keep your credit score as high as possible. Pay your bills on time and don’t keep more than 20% to 30% balances on your credit cards. Ideally, you should be able to pay your credit cards off every month. Check your credit report regularly. Make sure you have no derogatory reports like collection accounts or liens. Don’t make major credit purchases like a new car or appliances before you pre-qualify for a mortgage. 

Save as much as possible for a down payment

Conventional mortgages often require a 20% down payment. We get it: it’s challenging to save a 20% down payment on a $750,000 home. You can have options for other loan programs like FHA and VA home loans that don’t require such a large down payment.

Have a strong record of earnings and employment

These days, more people are working independently or combine self-employment with traditional salaried jobs. Be sure you can document at least two years or more of steady earnings at the level you need to qualify for the mortgage you want.

Shop multiple lenders

You’ll get different answers from different lenders on interest rates and loan terms. That’s one reason working with an experienced independent mortgage broker who is a loan professional can help you get the best deal on your 30 year fixed mortgage.  That SINGLE INDEPENDENT MORTGAGE BROKER can SHOP dozens or hundreds of with a  LENDERS on your behalf with a SINGLE LOAN APPLICATION.  And with a SINGLE CREDIT PULL.  This is a huge benefit of working with an independent mortgage broker, they only have to run your credit ONCE and can instantly compare rates and shop your loan with dozens if not more lenders finding you the best rates and lowest costs.  Whereas, a consumer went to dozens of lenders to shop the rates, each lender would need a complete application and would have to run the consumers credit in order to accurately quote a rate.  Since rates are a factor of much more than just a FICO Score, and the LTV, Loan to Value of a property.  Pricing models take into account DTI debt to income, and debt to available credit ratios along with many other factors that can only be accurately priced with a complete application and a tri-merge mortgage credit report.

So that’s why an independent mortgage broker who has your complete loan application and has run your credit can accurately compare and shop rates on your behalf with multiple lenders simultaneously.  Without having each of them re-running your credit.  Since through the wholesale channel a broker can just re-issue the same credit report to as many lenders in their channel without any additional hard hit inquiries on the consumers credit.

Now once you have the best mortgage rate and know your loan terms, consider locking in your loan rate while you’re in the closing process. This is a service many lenders offer for free, as well as for a modest one-time cost for those wishing to buy down to an even lower rate.

Source

https://www.forbes.com/advisor/credit-score/how-to-raise-your-fico-score/

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Are You a Veteran? Well, Today Is Your Lucky Day! You Can Now Afford Any Home You Are Qualified For In The Golden State

Veterans have some amazing financial news as a New Year’s gift: the long-standing county VA loan limits will be completely lifted. A qualified veteran can now borrow as large a VA home mortgage as they can afford and need without worrying about loan limits. The current VA mortgage cap of $726,525 for high housing price counties will no longer be in effect.

Can I buy a multi-million dollar home with a VA mortgage?

After January 1, 2020, yes! You can apply for and receive a VA mortgage of more than $726,525 up to $2 million, $3 million, $5 million or more.

Will I need to pay a down payment?

The VA is not requiring lenders to cap the amount of mortgages they issue with zero money down. You may not need to pay a down payment for the new VA home mortgages that will be issued without the VA county loan limits. However, in some areas and with some lenders, you may need to pay a down payment that will be calculated by a formula using the difference between the mortgage amount and the county FHA loan limit. In general, this type of down payment is limited to no more than 25 percent of the difference between your home’s purchase price and the FHA loan limit.

Is the VA funding fee going up?

Yes — for a short period — and the amount will vary depending on your entitlement status and how many times you’ve used your VA home loan benefit. If you’re a first-time VA home buyer, your funding fee will be 2.35 percent. The current first-time funding fee is 2.15 percent for regular military. 

The funding fee for a subsequent use of the VA loan benefit will be 3.6 percent of your loan amount. This is an increase from the current 3.3 percent rate.

Can I roll the funding fee into my VA loan?

This depends on your situation.  Check with an independent mortgage broker such as California Platinum Loans on how you can qualify to roll your VA funding fee into your VA home mortgage. 

Overall, the new change in guidelines or some like to call it change in VA Law,  for VA loans is fantastic news for veterans. You can now buy the home you want and can qualify for using your VA mortgage benefit. It’s worthwhile to check your options for your new, larger VA home loan with a qualified VA home mortgage expert.

 

Sources

https://www.nerdwallet.com/blog/mortgages/va-home-loan-limit-and-funding-fee-changes-2020/

plus the VA mortgage Powerpoint presentation

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Should I Start Refinancing My 30-Year Fixed Mortgage Soon Or Should I Aim For A Shorter-Term Mortgage? Need A Sound Advice Now.

If you can reduce your mortgage payments by refinancing and lock in a payment you know you can afford, you should consider refinancing. Here are a few financial tips for mortgage refinance that fit the current financial climate:

Do you have high-interest debt you’re working to pay off?

You may owe $10,000 or $20,000 in credit card debt. Have you looked at the difference between how much you’re paying in interest and how much on the balance you owe? You may find that 50, 60, and even 80 percent of your monthly payment is paying interest. 

Using a mortgage refinance to pay off high-interest debt with a low-interest 30-year fixed-rate mortgage could save you thousands of dollars. Refinancing your mortgage to pay off high interest credit card debt may be a lot of work but your financial result will be worth it. 

Do you have student loan debt you want to eliminate?

Student loan interest rates may not be quite as high as high-interest credit cards, but the average unsubsidized student (or parent) loan starts at 6 percent interest and can go up from there. Similar to credit card debt, you can save money on interest by refinancing to a lower-interest 30-year fixed rate mortgage.

Can you reduce your monthly mortgage payment?

Lowering your monthly mortgage payment is one of the best reasons to refinance. If you can locate a loan which has a lower annual percentage rate (APR) than your current loan, it’s worthwhile to investigate your refinancing options.

Can you afford a shorter-term mortgage?

If your finances have improved significantly since you got your initial mortgage, you may benefit financially from refinancing from a 30-year fixed mortgage to a 15-year loan term, or any other term such as 27 year, 25 year, 21 year, 18 year etc.  The options are limitless with a savvy independent mortgage broker on your side. The savings in interest can be substantial. 

For example, if you have a $500,000 30-year fixed rate mortgage at 4 percent, you’ll pay approximately $859,300 in principal and interest over the course of your loan. If you refinance your loan to a 15-year mortgage, even at the same 4 percent interest, your total payments will be $665,719. That’s a difference of almost $200,000.

Refinancing your 30-year fixed rate mortgage can be a smart financial decision for a lot of reasons. An experienced independent mortgage loan broker such as California Platinum Loans can let you know what your options are so you can make the right financial decision.

Sources

https://www.cnbc.com/2019/08/09/millennials-drive-mortgage-refinance-boom-and-lenders-are-scrambling.html

https://www.nerdwallet.com/blog/loans/student-loans/student-loan-interest-rates/

 

 

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