Thursday, October 15, 2015

What Mortage Product is Right For You When Buying a Home?

What Mortgage Should I Choose: An infographic from The Mortgage Reports

Find your local mortgage loan limits at The Mortgage Reports.

The Mortgage Reports Infographic : How To Choose Which Mortgage Product Suits You Best

Ten years ago, it was tough to get a mortgage. Lenders were stingy and guidelines were tight. Few loans were approved and the housing market suffered.

Today, the mortgage market looks different.

Home values have (finally) surpassed last decade's peak prices, and mortgage lenders are more willing to make loans than during any period this decade.

More than 70% of purchase loans are getting approved right now, according to Ellie Mae, whose mortgage software helps to process more than 3.5 million loan applications annually.

This is the largest approval percentage since such data has been tracked.

But, there's more to it for today's buyers than just "Will my mortgage get approved?". There are more mortgage choices available than during any part of this decade, too.

A proliferation of low- and no-downpayment mortgages have helped spur homeownership among long-time renters; and the return of the 80/10/10 loan is making it easier for existing homeowners to "move up" to something bigger.

Not sure which mortgage loan is best for you? This chart should be a help.

Click to see today's rates (Oct 15th, 2015)

The mortgage market is expanding. Mortgage lenders are offering new products for the first time in a decade; and, it's getting easier to getting approved for low- and zero-downpayment mortgages.

However, it's not always clear which loan is best for your needs. For example, just because you qualify for an FHA loan, should you use one?

Or, if you're eligible for a 100% USDA loan but you plan to make a downpayment of 10 percent, should you still use the USDA loan for your purchase?

To help you with your mortgage choices, The Mortgage Reports presents this flowchart.

The graphic uses three specific loan traits as a starting point -- (1) Downpayment Amount, (2) Loan Size and (3) Credit Score -- then follows-up with specific questions to help you find your "optimal" mortgage loan program.

In addition to identifying conventional loan opportunities via Fannie Mae and Freddie Mac, the flowchart identifies loan possibilities via the Federal Housing Administration (FHA), via jumbo mortgage lenders, and via niche mortgage programs including the USDA Rural Housing loan, the Department of Veterans Affairs VA loan, and the Fannie Mae Conventional 97 program.

Some of the questions asked include :

What is your local loan limit?
Are you borrowing more than your local loan limit?
Do you plan to make a downpayment of 20% or more?
Do you plan to make a downpayment of 5% of less?
Depending on your answers to the above questions, the flowchart might recommend a conforming loan with private mortgage insurance (PMI); or a jumbo mortgage that allows for loan sizes in excess of your local loan limits; or some different program which may be more suitable.

Your loan choice may also be affected by where you live.

Buyers in less-densely populated areas may find the USDA Rural Housing program to be their best fit. Note that 97% of the United States is "USDA-eligible" and the USDA mortgage allows for 100% financing.

Furthermore, buyers may be routed to specific loan program depending on whether their downpayment is a gift from family, or is sourced from their own funds.

Once you've found a suitable loan program, pump your numbers into a mortgage payment calculator to determine your expected mortgage payment (and make sure you're using accurate mortgage rates).

When you know your expected monthly payment, you can better budget for a home -- whether you're buying today, next month, or next year.

Click to see today's rates (Oct 15th, 2015)

Posted OCTOBER 13, 2015


Dan Green is a mortgage market expert, providing over 11 years of direct-to-consumer advice. You can also connect with Dan on Twitter and on Facebook

Mark Slade
Keller Williams
Good Homes

Selling a Maplewood/South Orange/Millburn/Short Hills area home involves many steps and having an experienced Maplewood New Jersey Real Estate Agent and Realtor®, specializing in the Bedroom Communities of New York City in Essex/Union County— Millburn, Short Hills, Montclair, West Orange, South Orange, Livingston, Maplewood, Springfield, Summit, Madison, Chatham, Scotch Plains, Fanwood, Cranford and Westfield--by your side will make the transaction run a lot smoother. I would love to be your Maplewood/South Orange New Jersey Area Real Estate Professional! I assist both buyers and sellers in the Bedroom Communities of New York City, mostly served by NJ Transit’s Mid-Town Direct Train Lines, offering commutes of 45minute or less to NY Penn Station, with either the purchase and or sale of residential real estate.

As an Accredited Buyer’s Agent (ABR), I have received special training to guide and educate you through the entire home buying process. From start to finish, I listen to your needs and desires in what you would like and take the information you give me to find you home. My GO-TO team can provide you the best in Real Estate advice with regard to attorney choices, Home Inspectors and Mortgage Loan Officers

As your Maplewood/South Orange/Millburn/Short Hills/Essex/Union County New Jersey listing agent I am well versed on as your local expert in all things in the Maplewood and South Orange area Real Estate Market. You can expect personalized service that includes a detailed consultation on how to best position your Mid-Town Direct home to be competitive in today’s market with training to provide my clients with an in-depth Advanced Comparative Market analysis, and advice on staging. As my office’s technology officer as well as both a Zillow Platinum Premier and Trulia Premier agent, I use the latest and most up-to-date marketing methods to get your home in front of as many buyers as possible. Being your New Jersey Real Estate Agent and Realtor ® not only involves just finding the home or selling the home, but being your guide, negotiator, advisor and advocate and making sure that your needs and goals are met. Being your New Jersey Essex/Union County area Realtor® (with a little bit of Morris County thrown in for good measure) is one of my truest passions, and “Helping You Find Your Dream Home” is my number one priority.

Mark Slade

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