It’s no surprise 30-year mortgage rates today are under 3% with good credit, good equity, and good income. What you might not know is that not all loan situations are considered equal. Here are the several types of financing situations that might end up costing you more money…
Please know your neighbor down the street that got a 30-year mortgage for a ridiculously low rate no points well there’s probably more to the story. They probably paid some form of points in most situations, or it was not a 30-year fixed rate, or they have superb credit such as an 800 credit score, and 60% loan to value. In other words when you hear about that mortgage loan situation with the exceptionally low-interest rate and exceptionally low fees and it sounds too good to be true you know what, it probably is. The reality of it is that no borrower no loan and no family are uniquely identically the same, everyone’s financial situation is a little bit different from different credit scores, different loan to values, different property types Etc. Here’s what you need to know going forward.
Is your loan a high balance mortgage? High balance mortgages cost more than conforming loans. You’re hearing that correct so for example the conforming loan limit in most geographic areas of the United States is $510,400 if your loan is bigger than $510,400-year that loan amount might cost more.
Is your loan at 80% loan to value or anywhere in the neighborhood from 70 to 80% loan to value or higher? If yes your loan might cost more.
Is your credit score 700 or lower? If yes your mortgage might cost more.
Is the property that you’re financing is a multi-family property such as a two-unit or a 3-unit property? Yes, this loan will cost more.
If you’re doing a Cash-out refinance loan, that also might make it cost a little bit more.
Is the property a rental property? It will be pricier.
Is the property you’re financing is a manufactured home? Yep, you guessed it. It will also cost more.
The perfect situation for the optimal financing is a loan amount at $510,400 or under, an owner-occupied single-family residence, with an 800 credit score, as well as a loan to value at 50% or less. If you have that situation you can rest assured you will get the absolute lowest possible interest rates available. Without that situation, you can still get an ultra favorable mortgage. This is why it’s always good to work with the lender who can fully articulate and explain the cost-benefit to your situation and give you two to three choices and options so you can figure out what makes the most sense for you and your family.
Most online-only mortgage companies don’t go into granular specific details and they come from an order-taker perspective of pick and choose what you want versus a lender that can articulate the who, how, what, when, where, wh,y and they can really give you the full clarity picture. Typically, someone who has been in the industry a long time, who’s local that you can go meet with face-to-face, that can walk you through this information, has a proven track record of recent reviews could be a good fit in helping you bridge the gap between where you are present, where you’re going and a better vehicle to help you accomplish your financial goals.
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