Fixed Rates

A fixed rate loan is a popular product among our clients as it gives borrowers long-term security.

• Secure rate, never changes
• One fixed payment every month

Adjustable Rates

An adjustable rate loan can save you money every month and makes sense for many borrowers.

• Low rate for a set number of years
• Save money every month

Interest Only

For some borrowers, an interest-only option makes financial sense and can keep initial payments low.

• Lower initial monthly payments

Jumbo Loans

A jumbo loan carries a loan amount that exceeds $417,00. All the same products above apply to a jumbo home loan but often with different criteria.

• Loans in excess of $417,000

Stated Income and Other Special Circumstances

Most loans don’t fit into conventional lending standards. For example, many borrowers choose to “state” what they earn rather than document it. When you have special circumstances, there a few things to expect:

• Potentially higher interest rate
• Fewer available programs

Pre-Approved, Not Pre-Qualified

Many borrowers take the step of getting pre-qualified, which is a good step. The difference is that nothing is guaranteed as the information you provide to a lender is not verified and acts only as an estimate of what you can afford.

A pre-approval takes longer and actually involves verification of certain aspects such as employment, assets, income and credit score to name a few items. A pre-approval will typically be good up to a certain loan amount within a certain time frame.

How a Pre-Approval Works to Your Advantage

When a seller sees that you are already pre-approved for a loan, they instantly know that a home sale with you has a much greater likelihood of closing. A lender has already made the comittment to your loan amount, effectively stating that you will be able to close a loan fitting the stated criteria.

In addition, you can worry less about closing the loan within the required time period that the the sale requires because much of the work has already been done.

How We Can Help

You can submit information with us online or call one of our loan officers to begin the pre-approval process. It will be just like any other loan application and you will be asked for certain documentation. A few examples include:

• W-2 forms
• Pay stubs
• Tax returns
• Bank statements

A pre-approval is not a guarantee that your loan will close, but it’s a huge step that every borrower should take when purchasing a home.

Your Loan as a Financial Instrument

You should consider your full financial – and personal – situation when applying for a mortgage. What are your goals? Will you be in the same house five years from now? Ten? Do you expect an increase in income? What are you doing for retirement? Are there major expenses in your future? These are all questions that should be asked as you consider your loan. The mortgage you have can have a direct impact on all of the above.

Stop Thinking About Rate and Start Thinking About Cost

Many borrowers make the huge mistake of focusing too much on an interest rate. A rate can be influenced by a number of factors including points paid, type of loan, loan amount, available equity and much more. It’s important to understand what mix of costs and rate is going to deliver the lowest cost over the life of the loan.

Work With a Knowledgeable Professional

There are a lot of people in the mortgage business willing to do anything to sell you a loan. Our mortgage professionals take the time to understand your situation and make recommendations that will fortify your financial future.

Utilize the Variety of Loan Programs

In many cases, a borrower thinks a 30 year fixed is the only option when a 5/1 ARM (or another loan program) actually makes more sense based on the individual’s situation. Through our mortgage analysis, we can determine which program will be the best for your long-term financial well-being.

The Impending Doom of a Rate Adjustment

If you find youself in the position of experiencing a rate adjustment you can’t afford, talk to us about solutions. We may be able to find the perfect loan to avoid exorbitant payments and even foreclosure.

Over 130 Approved Lenders to Find You a Solution

There’s no getting around it – finding a way to refinance out of a difficult situation is not easy in the curent market. We have relationships with over 130 lenders which means we have access to many programs that others do not know about. Even if your equity is poor, we may still be able to get you refinanced into a manageable monthly payment.

Work With a Knowledgeable Professional

Our loan officers have years of experience and know how to find the right solution for your unique situation.

If you’ve built up some equity in your home, when you refinance, you may be able to “cash out” some of that equity to pay off credit cards or other revolving debt, improve your home, help pay for college, or anything else you can think of. The same is true of refinancing costs: If you have enough equity in your home, you may be able to roll some of the cash due at closing into your loan.

Some of the “cash needed to close” as it’s sometimes called includes settlement costs and fees, prepaid interest, escrow reserves, state or local government charges, or even extra funds needed to pay off your existing mortgage. Some or all of those costs can sometimes be financed as part of your new mortgage loan.

But you have to be careful. It’s not always the case that you can borrow up to 100 percent of your home’s value. Many loan programs are based on what’s called a “loan-to-value” ratio. You may qualify for a very advantageous refinanced mortgage if you borrow no more than 80 percent of your home’s value, but may not qualify for the same terms if you borrow 90 percent. We can help you qualify for refinance loan programs above 80%, but the lower your loan-to-value ratio (that is, the less you borrow), the better terms you’ll generally qualify for.

The bottom line is that in many cases you can reduce your up-front costs for refinancing your mortgage in exchange for higher monthly payments for the life of the loan. But whether, and to what extent, you can do this depends on the value of your home and the amount of your new mortgage, and what options you decide are best for you.

If you’ve had your current mortgage for a few years, chances are you’ve built up enough equity to finance cash needed to close and still have a smaller loan balance than your original — and a balance that will qualify you for a favorable mortgage program tied to your loan-to-value ratio. We can help you decide!

Many people find that it’s advantageous to pay the cash needed at closing from checking, savings or money market accounts or from other assets. This is because the less you borrow on the new refinanced loan, the lower your monthly payment will be. But we’ll work with you to see if there is an advantageous refinancing program for you based on your ability and willingness to pay closing costs and other fees and the amount you wish to borrow.

We want to make the best loan for you, work for you!

This insurance covers replacement costs for damages caused by fire, wind or other disaster that might affect the value of the property. Typically, the insurance also includes personal liability and theft coverage.

Flood or Quake Insurance

Additional hazard insurance coverage that is required for homes located in a designated hazard zone as established by the Federal Emergency Management Agency (FEMA). As we tour houses, I will let you know if the property resides in a hazard zone.

Private Mortgage Insurance (PMI)

Insurance required for conventional mortgage loans when the borrower’s down payment on the house is less than 20 percent of the loan value.

Title Insurance

This policy protects both the buyer and lender by insuring a clear chain of title. (In other words, it insures that that the person who sells the house has the legal right to do so.)

This is the one closing cost that is often prorated between the buyer and seller. If the seller has already paid the annual property taxes, the buyer typically reimburses the seller for the period in which the buyer will be occupying the property. Likewise, if the taxes have not yet been paid, the seller typically reimburses the buyer for the period in which the buyer occupied the property.

Transfer Taxes and Recording Fees

This is the cost for transferring ownership of the property and recording the purchase documents. The fee is often calculated as a percentage of the sales price.

This covers the administrative expenses in setting-up and processing the loan. The loan origination fee may be a percentage of the mortgage amount.

Points (optional)

An option for the home buyer is to pay points to lower the interest rate at which the loan will be repaid. Each point equals 1 percent of the mortgage amount. For example: on a $150,000 loan, 1 point would equal $1,500.

Appraisal Fee

The fee for having the house appraised may be incorporated into the closing costs or payment may be required by the lender at the time the loan application is submitted.

Credit Report

The lender uses a credit report to determine the creditworthiness of the loan applicant. This fee is often paid when the loan application is submitted.

Interest Payment

Typically the buyer is required to pay interest on the mortgage loan to cover the time between the closing date and when the first mortgage payment period begins. For example: If closing is on May 15. Your first monthly payment begins to accrue interest on June 1 with your first mortgage payment due July 1. At closing an interest payment covering the accrual period between May 15 and May 31 may be required.

Escrow Account

At closing a payment may be required to fund the escrow account if the lender is paying home insurance, property taxes and/or other expenses out of the escrow account.

For a refinance, you are completely responsible for any costs associated with the loan unless there is an agreement in place to waive certain fees. Keep in mind that most closing costs come from a third party and not First Equity Direct.

Good Faith Estimate

Buyers will receive a “Good Faith Estimate” of closing costs at the time the loan application is submitted to us. The estimate is based on the loan officer’s past experience and may not include all the closing costs. We will be glad to review the “Good Faith Estimate,” answering any questions you have about the document.

Get Prequalified

Knowing how much you can afford will keep your home shopping focused to homes you can afford and give you credibility with sellers.

Familiarize Yourself with Industry Practices

You should know what an appraisal is, how your credit score affects your ability to get a good loan and what to look for on your Good Faith Estimate (GFE) just to name a few.

Research, Research, Research!

The more you know about the process and the neighborhoods you are looking to purchase in, the more likely you are to get a deal that makes you happy down the road. You’re not buying a new pair of jeans here. This is probably the most important purchase you’ll ever make. This site has numerous articles for you to learn more about mortgages and you’d be wise to read them.

Understand How Much You Can Afford

We have many calculators on our site that analyze your financial situation. While not all of them are intended for a first time home buyer home loan, there are many that can give you an overview of your situation and what you can afford. Remember that these are just a guide, though. The actual payments on your first time home buyer mortgage will be determined when you apply for a loan.

Ask Yourself the Tough Questions

A first time home buyer is going to be somewhat unprepared for the total cost of owning a home and would be wise to ask tough questions before completing a loan.

• Is your job and income reliable?
• What kind of contingency fund do you have for emergencies?
• Can you afford a down payment? What about closing costs?
• What’s your long term plan? Will you be moving soon?
• Are you ready for the added responsibility of owning a home?

Check Out Government Programs for First Time Home Buyers

There are a multitude of programs that can make that first home purchase a bit easier and more affordable. For example, California residents may qualify for a program called CalHFA that often features below-market rates (check with your local government to find similiar programs). Teachers are an example of a group of people that are given beneficial rates as well.

Check out the FHA website for national government first time home buyer program info.

First Equity Direct is an approved lender able to help with many government programs. Ask us about current rates.

The important thing to remember in securing a first time home buyer mortgage is that the process takes a lot of work and dilligence. If you put in the time, you will most likely end up satisfied.