With house prices skyrocketing, us Utahn’s need new, innovative, and up-to-date strategies on getting the home of our dreams.
As I’m sure you’ve noticed, the market is not the same as it used to be. It’s a new frontier now. And we’ve gotta be prepared, ready, and informed on the best strategies.
With that in mind, here are FOUR of my favorite low-rate mortgage loan products that could help you save a truckload of money, qualify for your dream home, or increase your investment opportunities.
#4: The Mortgage Insurance Buster
Summary: The MI Buster (as we call it) is an innovative way to lower payments for anyone buying OR refinancing that ONLY HAS 10% DOWN but DOES NOT WANT MORTGAGE INSURANCE.
Yep, you heard that right: no mortgage insurance for the life of the loan if the borrower brings 10.01% down or only has that amount of equity. This is a normal, straight up conventional loan with a low interest rate. Why get punished for having only 10% down?
If you only have about 10% equity in your home but are looking to get out of mortgage insurance, this could be a great option as well.
As with any mortgage qualification, restrictions apply, but this loan can help bring payments down without having a whopping 20%.
#3: 3% Down, first-time home buyer program
Are you a first time home buyer without a ton of cash in the bank? Or, have home prices gone up so much that the down payment you saved isn’t enough?
Our 3% Down program for first time buyers could be just the loan for you!
Unlike other first time home buyer programs, our program won’t nail you with a high interest rate. In fact, our 3% Down program carries a mortgage rate that is almost the same as a conventional mortgage!
Gone are the days of needing 20% down.
Have NO down payment? You may have options too! This program easily couples with local grant programs, allowing some of our clients to come to closing with no down payment at all.
Additionally, down payments can come from a variety of sources, including family, employers, etc. And since it’s only 3% anyway, it’s not such a big chunk for a loved one to come up with.
Unlike other first time home buyer programs, the mortgage insurance cancels at 20%.
In many ways, this program runs neck-and-neck with the elite conventional mortgages often obtained by long-time homeowners.
And of course, restrictions apply, but if you don’t have a very big (or none at all) down payment, this program just may fit the bill.
#2: The 5-6 Adjustable Rate Mortgage-This ain’t your daddy’s ARM (see what I did there?)
Adjustable Rate Mortgages have a scary connotation to most people, but if they’re understood and deployed correctly, they could save borrowers a lot of money.
How do they work? Fundamentally, an ARM (as they’re called) is still a 30 or 15 year mortgage. The only difference is what the RATE does during the repayment period. On a 5-6 ARM, the rate is FIXED for five years (hence the “5”) and can adjust based on the market forces of the day. In the case of a 5-6 ARM, the 6 shows how often the rate can adjust, which in this case is every six months. A 5-1 ARM adjusts once per year.
How far the rate can adjust depends on the terms of the loan itself, but the 5-6 is popular because it only allows a max 1% change per adjustment.
Why would anyone ever consider this loan? The interest rate for the first five years is usually MUCH LOWER than the 30 year rates of the day.
However, MOST clients that utilize an ARM keep these loans for less than than the fixed period, taking advantage of a low interest rate.
So, if you’re looking at holding a mortgage for five years or less, or understand and don’t mind your rate being subject to adjustments down the road, then is could work our really well for you.
#1: The Cash-Out Refinance
Super popular in 2021 and possibly even more popular in 2022 is the cash out refinance.
Many homeowners are sitting on a mountain of wealth, and it can be extremely inexpensive to access. Low rates and high equity are giving homeowners opportunities and chances they’ve never had before.
Not just debt consolidation or home improvement, but investment opportunities, retirement building, nest-egg creation, etc. All sorts of ways that a lump sum can accelerate one at lightning speed.
Consider a recent client who took cash out to consolidate all their debts, PLUS getting extra to begin a substantial emergency fund. After factoring in all of the eliminated debts payments and new mortgage terms, this individual’s total monthly budget actually dropped AND they were scheduled to pay off their home even sooner than planned.
Lots of opportunities and ways to structure a cash-out refinance that could allow you to get ahead much faster than you ever planned.
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