Monthly Archives: December 2014

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31 12, 2014

Mortgage Banker vs. Mortgage Broker – What’s the Difference?

December 31st, 2014|Blog|

mortgage_banker

From the borrower’s point of view, there’s not much difference between a mortgage broker and a mortgage banker – a lender is a lender. However, knowing the differences between mortgage bankers and brokers can save you frustration, time and in some cases, money.

 

Mortgage Banker

Mortgage bankers underwrite, approve and close loans for borrowers. They may then sell the loan to retail banks, investment firms, or agencies such as Fannie Mae and Freddie Mac.  Mortgage bankers are more of a one-stop mortgage shop. With access to multiple lenders, bankers are able to offer a variety of home loans, such as conventional, jumbo, FHA, VA and USDA. Unlike traditional banks, mortgage bankers focus solely on mortgage lending without the distraction of other lending products or personal finance services. When you conduct business with mortgage bankers you are working with federally licensed professionals. Licensed loan officers have chosen to sell mortgages as a career and are well-versed in lending laws, lender guidelines and are 100 percent vested in counseling you, structuring your loan and closing the deal.

 

Mortgage Broker

Mortgage brokers are federally licensed firms or individuals who sell loan programs on behalf of lenders. A broker doesn’t lend any money. These companies’ help borrowers obtain loans through retail banks or mortgage banks and try to match you with the one who will give you the best rate and term.  The lender then decides whether or not to underwrite the loan and at what terms, not the broker. The advantage of using a broker is choice because the broker will have lots of lenders to match you with. But once the match is made, the broker is usually out of the picture so you might have difficulty staying in contact with the person who is underwriting and funding your loan.

 

23 12, 2014

Happy Holidays from First Ohio Home Finance

December 23rd, 2014|Blog|

 

happy-holidays-ribbon-graphic

To all of our loyal clients, friends and associates, we would like to take a moment to thank you for all of your support, hard work and dedication throughout the year. We wish you and your loved ones a very happy and safe holiday season and a prosperous New Year.

 

19 12, 2014

FHA Facts for First-Time Homebuyers

December 19th, 2014|Blog|

FHA 

What is an FHA loan?

An FHA loan is a mortgage that is insured by the Federal Housing Administration. The actual loan is funded by a traditional mortgage lender, but FHA backing means the lender is protected if the borrower defaults on mortgage payments. FHA-insured loans are less risky for lenders, allowing them to offer more lenient qualification standards. Because FHA loan programs offer easier qualifying guidelines than many other loan types, they can be a good option for borrowers who have poor credit or who may not have the funds to make a large down payment. Here are some facts about FHA loans.

 

An FHA loan allows a low down payment

The FHA only requires a down payment of 3.5 percent of the purchase price of the home. That’s significantly less than what is typically required on most other loans and is a huge advantage to borrowers.  Borrowers can use their own savings to make the down payment, but other allowed sources include a gift from a family member, or a grant from a state or local government down payment assistance program.

 

FHA loan are easier to qualify for

Lenders are willing to give you a break because they are protected by the FHA if you default on mortgage payments. This can help first-time homebuyers, and borrowers with less-than-perfect credit qualify for a home loan.

 

Closing costs may be covered

The FHA allows sellers, builders, and lenders to pay some of the borrower’s closing costs, such as an appraisal, credit report or title expenses.  If lenders agree to pay closing costs they typically charge a higher interest rate on the loan. Borrowers can figure out which loan option is right for them by using the good faith estimate (GFE) to compare interest rates and closing costs.

 

Lender […]

12 12, 2014

What is a Conventional Home Loan?

December 12th, 2014|Blog|

Conventional-Home-Loan-Real-Estate-Dallas-Mark-Pfeiffer

While an FHA loan might be the ideal solutions for some buyers, if you have good credit and a decent down payment, a conventional loan might be a better option.

A conventional loan is any type of mortgage that is not guaranteed or issued by the Federal Government. Conventional loans can be both fixed or adjustable-rate mortgages, including hybrid ARMs. They typically have higher down payment requirements than government loans, and private mortgage insurance is required if a down payment of less than 20% is made.

If you have a steady income, a low debt to income ratio, and a good – excellent credit score, then a conventional loan could be a great option.

 

Conventional Loan Advantages:

 

  • Mortgage Insurance may not be required – Mortgage insurance is only required if you make a down payment of less than 20%
  • Higher loan amounts There is more flexibility when it comes to loan amounts
  • Even though conventional loans may have higher interest rates, their monthly payments may still be lower
  • Can be used on all property and occupancy types
  • More loan program options
  • Can hold numerous conventional loans

 

Conventional Loan Disadvantages:

 

  • Higher down payment requirements
  • Higher credit score requirements
  • Higher mortgage rates
  • May be more difficult to qualify for than FHA loan
  • Mortgage insurance still required for loans with less than 20% down

 

 

 

5 12, 2014

Mortgage 101: Common Types of Home Mortgages

December 5th, 2014|Blog, Mortgage 101|

Common-types-of-Mortgages

Fixed-Rate Mortgage

With a fixed-rate mortgage, the interest rate remains the same for the life of the loan. The interest rate is set when you take out the loan and will not change, regardless of how interest rates change in the marketplace. A fixed-rate mortgage can be a good choice for those more comfortable with predictable monthly payments and those planning to stay in their home for 10 or more years.

Pros:

  • Locks in your best interest rate for the term of the loan
  • Your monthly payment remains the same even if your principal and interest rates change
  • Initial loan payments are applied toward your interest—and less to principal—although that reverses over time.

 Cons:

  • Principal and interest payments are usually higher than most adjustable rate mortgages, at least in the initial years
  • To take advantage of an interest rate decrease, you would have to refinance

 

 

Adjustable-Rate Mortgage (ARM)

The interest rate on an adjustable rate mortgage can go up or down. Initially, many ARMs will start at a lower interest rate than fixed-rate mortgages. However, after this introductory period ends, your interest rate unlocks and adjusts periodically based on an outside index. Meaning your monthly payment may increase.

Pros:

  • Offers lower rates at the beginning of the loan, so you’ll have lower payments to start
  • If rates drop, payments may become lower without refinancing
  • While various types of ARMs are available, they adjust either annually or semi-annually; most of these loans come with caps that prevent your monthly payment from increasing significantly.

Cons:

  • If rates increase, your monthly payments can increase

 

 

FHA Loan

An FHA loan is a mortgage that is insured by the Federal Housing Administration. The actual loan is funded by a traditional mortgage lender, but FHA backing means the lender is protected if the borrower defaults on mortgage payments. FHA-insured loans are less risky for lenders, allowing […]

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