An adjustable rate mortgage (ARM) is a type of mortgage in which the interest rate can fluctuate over time. The key advantage of an ARM is that its initial interest rate is usually lower than that of a similar fixed-rate mortgage, making your monthly payments more affordable initially. Depending on the terms of the ARM, these lower payments can last for several years or even a decade. This makes it a good option for those who plan to stay in their home for a short period of time, and move before the ARM resets to a variable rate. As interest rates rise, payments will also increase. ARMs can also be beneficial if you anticipate a significant increase in income or assets in the future. When the ARM resets, you will be able to pay off the loan or refinance into another mortgage. Additionally, choosing an ARM can be a wise strategy when interest rates are on the rise, but haven’t reached their peak yet. This allows you to lock in a rate that protects you from further increases. By the time the ARM resets, interest rates may have dropped, making it possible to refinance into a lower fixed-rate mortgage.
Here are some general requirements (but these are guidelines and check with us for specific details)
For a conventional ARM the credit score will generally need to be at least 620 (FHA and VA may be lower). 
ARM DTI (Debt-to-Income ratio) generally can’t exceed 50%
ARM down payments are generally at least 5% on conventional loans and lower for FHA.
Schedule a free consultation with us on our website and we can review your specific situation to see what best fits your needs.

As we continue to see low inventory in the housing market and high rent prices, many home owners are adding ADUs (which stands for Accessory Dwelling Units).
ADUs often called granny flats, are guest houses or rooms added to garages to create rental income for home owners. Home owners typically add ADUs to increase cash flow, as well as looking for their property value to appreciate. Whether ADUs are right for you, depends on a number of factors. ADUs often costs at least $100,000 to build so being in a high rent market helps to offset the initial investment. You’ll also need to make sure local ordinances allow them and what the regulations are.
The old real estate adage about location stays true for ADUs as well. If you are in an area where rents are high or a popular vacation destination, then ADUs can make sense. Again you’ll need to check the local zoning and if you build one you will also need to have updated insurance to cover the ADU. Check with us to learn more and to see what financing terms you qualify for.

If you’re in the market for a new house, you’ve probably heard that you want to get pre… qualified or pre-approved?
What’s the difference anyways?
There’s actually a big difference. Pre-qualified is more of a preliminary step. It gives you a general idea of much home you can afford. We will examine your credit, income, assets, and debts and you’ll have a general idea of the price range you’re looking for. You may also see that you need to increase your savings or lower debts before you buy. While pre-qualifying is an initial step, pre-approval is a deeper dive and being pre-approved carries more weight with sellers.
To get pre-approved we will verify you income, assets, etc. and you will be more official (of course you still have to apply for a mortgage). Being pre-approved is almost a necessity in competitive housing markets, as realtors do not want to waste time and you will have a better chance of having your bid accepted. Now that we know the difference you may wonder what’s the point of getting pre-qualified – why not just get pre-approved? Good question – basically its much faster and it gives you a good starting point to start your home search. Pre-qualify or pre-approve we can help you with both – apply on our website or call us to get started.

If you were recently denied for a mortgage application, it doesn’t mean you can’t get approved somewhere else. There are some application issues that are fixable. The first thing you’ll want to know is why you were denied. We can take a look and shop for other loans options.
Credit issues are a common reason for getting denied. The first thing to do is to examine your credit report to see if there are any errors that can be fixed. There are also other loan programs if your score doesn’t fit conventional loans.
Debt to income ration or DTI that is too high is another common reason to be denied. The first thing if possible, would be to pay down debt. Another common source of debt is student loans – you may want to look into applying for the new student loan forgiveness program.
Simply being denied once does not mean the end of the road, we can consider multiple loan options. A co-signer is another option to consider, although this will make the application process less streamlined. Complete our quick qualifier and we can schedule a consultation to see what you can qualify for and for how much.

As the Federal Reserve has indicated lowering inflation is a top priority and raising short term interest rates as its primary tool to do this, we have seen mortgage markets react with higher rates (mortgage rates are not directly tied to the Fed rate, but they often move in the same direction).
The 30 year rate moved up to 5.89% this week accord B ing to Freddie Mac. While these rates are higher than pandemic lows, the still fall into the historic “normal” range.
While the Fed is taking a strong position against inflation, we are seeing market conditions improve in some areas. As Dawit Kebede, an economist for the Credit Union National Association noted recently, “there are signs that some of the main drivers of inflation are easing, such as lower oil and other commodity prices in July, slower wage growth, and declining supply chain pressures.”
There is also a renewed interest in ARM loans with the 5/1 ARM at an average of 4.52% last week.
Every loan scenario is unique so fill out our loan analyzer on our website and we can see what program is a good fit for you!

If you are shopping for a new home and looking for some good market news, there is some in the increase of housing supply. After dealing with monthly price increases and bidding wars, because demand was far higher than supply, we are looking a somewhat more balanced market (but still a seller’s market in most areas). According to the National Association of Realtors the stockpile of homes in months of supply has dropped from a record low of just 1.6 month in January and has slowly ticked up to 3.3 months in July.
So while it is still a seller’s market conditions are moving towards more balance – if you are looking, go to our website and fill out our pre-qual analysis to see how much you can qualify for and we can analyze what best fits your situation.

PMI is private mortgage insurance. If you’re getting a conventional loan and are making of down payment of less than 20% of the purchase price, you generally need to purchase PMI. This insurance is designed to protect the lender in case of default on the loan and it also allows the borrower to buy a house when they can’t afford to make the traditional 20% down payment. PMI is provided by a third party, requirements and rates will be provided before the closing. Once you reach 20% equity in the home – either through mortgage payments or rising home values, the PMI will be terminated. PMI rates are generally between 0.5 percent and 1.8 percent of the original loan amount. According to Freddie Mac, it estimates that most borrowers pay between $30 and $70 each month for every $100,000 borrowed. The key factors in determining the PMI rate are the loan to value ratio. If you put down 5% you are typically going to have a higher PMI rate than if you put down 15%. The other key factor is the borrower’s credit score. There are different types of mortgage insurance and borrowers normally make an annual lump sum payment or pay in monthly installments. Of course we can give you a more detailed explanation of what to expect and your options based on your borrowing needs.

As we enter beach and pool season – many people ask if a swimming pool will add value to their home (to be clear we are talking about in ground pools here). The answer is it depends.

Studies show that it can add 5% or more to the value of your home (but these studies are pre-Covid). If you are in a warmer climate like Texas or Florida, pools can add more value and be more desirable. In fact if your home is in a high-end area where most homes have pools then it can lower your home’s value if you do not have one. Of course you have to take into account building and maintenance costs, as well as if your yard has enough space to accommodate a pool and still have enough area left over. It’s probably a good idea to want a pool for enjoyment rather than just building one to increase resale value. If you want to get more feedback on your property and how it fits in the market feel free to schedule a consultation with us on our website for more details and the latest market conditions.

If you are a first time home buyer and looking for help with your down payment and closing costs, there are actually a number of grant programs both nationally and on the state and local level.
Grants are not loans and not required to be paid back. Qualifying for different grant programs varies, it often requires you to be a first time home buyer and you must live in the residence (not rent it out).
You may also need a minimum credit score as well as fit income criteria.
Give us a call or schedule a consultation on our website and we can see what grants and programs may be available to you.

Looking to buy a home but short on cash? With our national DPA (Down Payment Assistance) program, you could be eligible for a grant of either 2% or 3.5% of the purchase price that can be used toward your down payment. Our DPA program provides a wide variety of eligible borrowers with down payment assistance in the form of a grant equal to 2% or 3.5% of the purchase price on eligible FHA home purchases. Our program can also be used with the FHA 203(b) program or many FHA renovation programs, as well as the FHA OneTime Close Construction-to-Permanent program (excluding 3.5% grant).

Our program has no income limits for any borrower on the loan application who is a current, retired, volunteer, non-paid, or plans to become

No Income Limits for The Following:
➥First-time home buyers
➥Any borrower on the loan application who is a current, retired, volunteer, non-paid, or plans to become:

– First-responder: police officer, firefighter, public safety officer, paramedic, or emergency medical technician (EMT), including volunteers or similar
– Educator
– Medical personnel: nurse, doctor, phlebotomist, or health ambassador, or hospital, American Red Cross worker, or similar
– Civil servant in a federal, state, or local municipality
– Military personnel

Contact us today to learn more and see if you qualify.