A Clear Mortgage Strategy
At Portland Home Loan, we believe that the decision making process leading up to your ultimate financing decision is a bigger deal than most people realize. Once you decide how to finance your real estate, this home loan and the subsequent monthly mortgage payment will have far reaching implications on your cash position, budget, and ability to save in the future. (Not to mention the immediate lifestyle and future lifestyle ramifications.)
Sierra Pacific, as a direct to agency lender, takes pride in an inherent pricing advantage. The Portland Home Loan agency direct platform combined with our strategic planning advice is a winning combination for mortgage loan shoppers.
Having an experienced mortgage lender in your corner to help you find ways to fully seize the entire home loan process is a clear advantage.
Look, there are many types of mortgage loans to choose from and the wrong fit can be a drag on your household for decades to come. This is why strategic planning is so critical beforehand.
Finding the right loan is so much more than simply seeking the lowest mortgage rate. Our process is designed to help borrowers uncover the lowest overall cost of borrowing.
Most borrowers go into the financing decision without an understanding of the inner workings, factors, and synergies of the industry. However, during the mortgage loan process, what borrowers know and do is just as important as what they don’t do or fully grasp at the time. Let’s make a deal you’ll be retrospectively confident in. After all, hindsight is 20/20 as they say.
So if you’re asking yourself: “Should I use a mortgage broker?”
For these reasons and innumerable others, the answer to this question for the sake of your future financial well-being is a resounding “Yes.”
THE CREDIT SCORE NEEDED FOR MORTGAGES VARIES: MORTGAGE DOWN PAYMENTS AND LOAN LIMITS
First and foremost, we’d like to suggest taking a few steps back and examining the the complete mortgage picture. The way we save families money is by helping them better understand the home loan and mortgage industry as a whole. At Portland Home Loan, we want to help demystify the entire mortgage process so that you can better understand the financial sector and make an informed, proactive, and thoughtful home loan decision.
Yes, the mortgage rate is important, but so too are the fees, tax considerations, liquidity implications, and the added cost of mortgage insurance. These components can add (or deduct) tens, or even hundreds of thousands of dollars to the overall cost of the mortgage plan over time. Unfortunately, most mortgage lenders won’t help you strategize from this vantage point.
As a case study, let’s look at mortgage rates and juxtapose two types of mortgage loans side by side. For example, let’s consider the 15- and 30-year mortgages options. Generally speaking, 15 year mortgage rates and 30 year fixed mortgage rates are two very common home loan options and these rates of course vary.
Look, we are not means bad-mouthing the 30 year fixed mortgage rate option — it’s versatile and allows households to choose a fixed mortgage rate which certainly offers an invaluable level of peace of mind for some borrowers.
Nonetheless, the less common 15-year mortgage rate variations often feature a comparatively lower interest rate but the payments are of course much higher. This monthly mortgage payment may not fit into an individual’s fiscal plan.
Our process is designed to help clarify these decisions based on clear trade offs, including improved cash flow vs. lower interest rate and greater leverage vs. larger down payment.
It’s a synergistic business and the conventional loan down payment itself as well as the less mentioned cost of waiting (for yet another federal interest rate hike, for example) will factor in. Over the course of the weeks, months, and years of your mortgage this could easily add up to thousands of dollars. Thousands of dollars you could potentially used toward that vacation home mortgage or rental property down payment. (And this hypothetical rental property of course streamlined with the right online rental agency could’ve hypothetically paid for itself at this juncture — Not to get too far ahead of ourselves.).
Nonetheless, this is the sort of planning and proactive forward thinking investment strategy we are bringing to the table with each and every client. Remember, this deal is a package between a mortgage broker and a borrower. From start to finish and even after the fact we are quite literally in this together.
MORTGAGE INTEREST TAX DEDUCTION: THE NEW TAX CODE AND YOUR HOME LOAN
Many clients are eager to learn more about the the Tax Cuts and Jobs Act (also known as TCJA) and how this latest tax code shift will affect home mortgages. The TCJA legislation certainly changes long-standing staples in home loan mortgage interest deductions but all is not lost for homeowners moving forward.
Starting in 2018, new home loans will have to match new tax deduction criteria however older home loan mortgage interest deduction may be grandfathered in. Is the interest on your mortgage tax deductible? Let’s take a look…
Leading up to the final drafting of the TCJA, there were rumblings that the mortgage interest tax deduction could be getting the ax. Fortunately, this wasn’t the case, although there are new limits and guidelines. Under the old tax code, homeowners could deduct interest on home loans up to $1,000,000.
Now, in most cases, homeowners will be able to utilize the mortgage interest tax deduction on primary residence loans up to $750,000. This mortgage interest deduction is different for many couples who choose to file separately.
Older home loans up to the $1,000,000 limit are still eligible for the mortgage interest tax deduction as long as these home loans were taken out before December 16, 2017 or were in the process of closing by this date and officially closed on by April 1, 2018. Is your home equity line of credit or home equity loan eligible for the new mortgage interest tax deduction? Come in for a consultation today and find out!
DON’T SELL YOURSELF SHORT: HOW MUCH IS MORTGAGE INSURANCE? WELL, THAT DEPENDS...
Many borrowers attempt predict and correlate mortgage rates by credit score, however, the process is strikingly more complicated. You don’t need a stellar credit score to lock in a great deal. Clients often have many of the same questions going into the mortgage process and we are happy to answer them. What’s the minimum credit score for FHA loan approval? What are typical conventional loan down payment requirements?
It’s not as cut and dry as many borrowers like to think. There is financial wiggle room to work with and a below average credits score isn’t a death sentence by any means. As a home loan barometer, know this, it’s possible to lock in a great FHA loan with credit scores as low as 580.
Let’s say you currently have no credit history whatsoever. No problem! There are ways to qualify with “alternative credit” in the event that you have absolutely no credit history at all. And none of these options mean you’ll have to wheelbarrow in an exorbitant mortgage down payment.
Sound like a sweet deal? Well, remember mortgage insurance and mortgage insurance premiums are also central to the FHA loan program. And it’s fundamental to remember that FHA mortgage insurance is built into the loan no matter how large of a lump sum the borrower puts toward the FHA down payment.