As a full service mortgage broker, Capital Financial Group has many lending options that allow us to find the best loan at the lowest overall cost and best rate for our clients. As a result, our clients receive the very best rate and lowest closing cost available for their situation. In addition, we provide exceptional service in the form of educating our clients about their various mortgage options, helping them navigate the challenging mortgage environment to close their loan on time and with no surprises.
Finding the right loan for you starts by defining your financial goals. This includes your purpose in buying the home; will you live there for 3-5 years or 10-15 years? When you decide to move from the home will you keep the home and use it as a rental or sell the home? The answers to these types of questions will help determine if a long-term fixed rate loan is best or if a shorter term adjustable rate mortgage is a better option.
In addition, your personal situation may dictate a specific loan type. Factors such as your credit score, your debt-to-income ratio and how much money you will be using for a down payment or how much equity you have in your current home will help to define your options. For example, FHA, VA and USDA loans allow lower credit scores, but may have a higher monthly payment. Conventional loans typically require 5% down, but may have a higher interest rate than other types of loans.
The important thing to remember is that there is no universal or “one size fits all” solution to getting a mortgage. Your situation is unique, so the best loan for you is one that fits your specific circumstances. This will require a mortgage professional that can both present you with your available options, and explain why one might be better than the other for your unique goals and needs.
Lending guidelines have been tightening over the last several years and a foreclosure, bankruptcy or short-sale have become more impactful on your ability to get a loan. Typically, you will need to wait at least 2 years from the time of a bankruptcy, 3 years from the time of a foreclosure and 3 years from the time of a short-sale before you can purchase a new home. There may be exceptions for your unique situation so it is always a good idea to discuss the details of your circumstances with one of our mortgage professionals.
There are several key factors that help to determine your credit score. We have years of experience and excellent up-to-date technology that can help show what steps you need to take to improve your credit. We can guide you through that process to help you get approval for your new home purchase or refinance. Whether it takes a couple of months or a couple of years, we will work with you until you are approved.
Buyers often confuse pre-qualification with pre-approval. A pre-qualification means that you have completed a loan application either on the phone or in person and that a credit report was pulled for you. A pre-approval means that you have taken the steps necessary for pre-qualification but then have also provided the documents needed to actually review your file and obtain a loan approval. The loan approval will improve any purchase offer that you make as the seller will now be able to see that your financing is clear and you are approved to move forward with a loan.
Either way, the credit report needed to complete a pre-qualification is good for 90-days. This means that if you are looking for a home to purchase, we will need to periodically review your credit in order to keep you pre-approval or pre-qualification in place.
APR is the Annual Percentage Rate which represents the amount of certain costs that you pay to get a mortgage as a percentage of the loan. The closer your APR is to the actual note rate for your loan, the lower your costs are for that financing.
Do not fall into the trap of thinking that the lowest APR or the lowest rate is also the best option. For example, adjustable rates will typically have lower rates and APR’s than a fixed rate, but may not be a good idea for your situation as the rate could go up over time. Also, a lower rate may come at a cost that is higher than what is justified by the monthly savings from rate reduction. APR is only an indicator of how certain closing costs will impact your finances. In addition to reviewing the APR, it is wise to also do a review of the actual costs for the loan and to examine whether a different option (i.e. slightly higher rate with no closing costs) would be better for your financial goals.
Interest rates change every day and sometimes multiple times during the day. After you have completed a loan application and have a closing date, you will be able to lock the interest rate for your loan. This means that you are fixing the pricing for your selected rate based on the rates from the day that you lock.
This does not mean that you are committed to close on the loan. This means only that the lender has now committed to close the loan at the quoted rate once you have met all qualifications and requirements.
When you lock an interest rate, you can select a timeframe for the lock (typically 15, 21, 30, 45 or 60-days). Keep in mind that the longer term you choose to lock your rate, the more expensive your costs will be for that interest rate. If your lock expires, you may be subject to additional costs or fees to relock or extend the rate, so plan carefully before requesting a lock to insure that you will be able to close within that timeframe.
Closing time requirements vary depending on the type of loan you are seeking and your specific situation. Typically, plan on 3-4 weeks to close on the purchase of a home or refinance your current loan. Certain types of loans (e.g. USDA Rural Development loans) may require additional steps and take a longer timeframe. During your application, it is a good idea to discuss your needs and expectations so that we can help meet your goals and timeline.
A Good Faith Estimate (GFE) is a document that lists all the costs and fees associated with the loan you are seeking to obtain. This will include all lender, appraisal and title fees as well as estimated figures for insurance, taxes and interest that may be needed to be paid at the time of closing. There are specific fees on a Good Faith Estimate that cannot change, some that can vary by a tolerance of 10% and others that can change with no notice. When we are reviewing your Good Faith Estimate, we will point out what those fees are and what you can expect to change.
Because of this, if you are comparing a Good Faith Estimate from another lender, you will want to look at each line item separately. For example, title fees may be quoted differently by another mortgage source, but the actual fees at closing will not differ due to your choice of a lender. The same is true for taxes, insurance and interest that is quoted on your GFE. Make sure you are doing a true “apples to apples” comparison so you are able to get the best financing for your situation. We are happy to review any competitors’ Good Faith Estimate and we will tell you if they are quoting fees that are truly better than what we can offer. Because of our experience and lending relationships, we are a low-cost leader and happy to help you compare our great fees and rates with a competitor.
ARM is an acronym for Adjustable Rate Mortgage. This is a loan where the rate will be fixed for a period of time and then will adjust on a regular basis over the remaining term of the loan. For example, a 5-year ARM means that the rate is fixed for the first 5-years and then will change, typically annually, after that time. ARM loans have maximum caps for adjustments, but those can result in a substantial increase in your interest rate over time.
Before you get an ARM, you should look carefully at fixed rate options, compare the rate and costs of the two loans, and decide if it is likely that you will still own the home after the fixed rate has expired. ARM loans have an increased risk, and so they should be carefully analyzed before moving forward.
Mortgage insurance is a fee that you will pay on a loan when you are borrowing more than 80% of the lessor of purchase price or appraised value; or on any FHA or USDA mortgage loan.
For conventional loans, mortgage insurance can be paid either as a monthly cost or as a one-time upfront charge. The amount you pay for either option is based on your loan amount, your credit score and the percentage of the value that you are borrowing. Generally, the higher your credit score and lower the percentage of the value that you are borrowing, the less you will pay for mortgage insurance. Monthly mortgage insurance for conventional loans “drops off” after you have paid the loan down to 78% of the original purchase price or appraised value.
FHA and USDA loans now typically require mortgage insurance for the life of the loan. FHA mortgage insurance is also generally more expensive than conventional mortgage insurance so you should compare both options before moving forward with a certain type of loan.
A professional, ethical, knowledgeable realtor is an invaluable member of your real estate team. This is particularly true in areas like Utah where the only way to get information about comparable sales is from the Multiple Listing Service (MLS), and realtors have exclusive access to that system. Keep in mind that not every licensed agent meets the criteria you should be looking for: professional, ethical, knowledgeable and available. Also, not every realtor has the market knowledge necessary to give you good advice in every area and at every price. Realtors tend to develop expertise in specific geographic areas and even at certain prices points in that area. For example, an agent that typically sells homes in the $200,000 – $300,000 price range may not be a good choice if you are seeking to purchase a home of substantially greater value. Equally, agents that work in Northern Utah may not have the area knowledge to properly advise you on a home purchase in Central Utah.
It is always a good idea to start with a good agent referral and then to interview agents to determine if their business practices and expertise is in line with what you are looking for. We work with hundreds of agents every year and have found a handful of great agents that meet our criteria. Contact us and we will put you in touch with an agent that has expertise in the area and price range that you are considering. We will also send you a copy of our Agent Interview Sheet showing questions to ask and when choosing an agent.
Most loans will allow for a co-signor to help qualify for mortgage financing. However, all signors on the loan must meet the credit criteria for financing and some loan types will not allow for a co-signor’s income to be considered equally as the income of the occupant of the home. Through the pre-qualification and pre-approval process, we will help you find the best solution for your situation.
“No Cost” loans are kind of a misnomer. There are always costs when you obtain a mortgage that may include title, underwriting and appraisal fees. On a “No Cost” loan, the costs are still present, but the lender is paying them for you. “No Cost” loans in this sense are always a great option as you incur no fees either out of pocket or rolled into the loan. Typically the trade-off for a “No Cost” loan is that the rate is slightly higher than if you had chosen to pay the costs yourself. This can still work in your advantage in a variety of ways. For example, if you are purchasing a home and the seller is not willing to help pay your costs, you may want to use a “No Cost” option so that you won’t have to come up with extra money to close. For refinancing, a “No Cost” loan can allow you to reduce the rate on your current loan without adding to the balance.
As with any mortgage, there are lots of options and you should look at a few before deciding on any single solution. We will help you look at a
“No Cost” option as well as other options that will have lower rates so you can decide which one best meets your financial goals.
A second mortgage is a loan that is recorded on your home after your primary or first mortgage. These are used for several reasons. First, you may use a second mortgage when purchasing a home and putting less than 20% down to avoid paying mortgage insurance. Second, a second mortgage can be a cost-effective way to access your home equity for improvement or debt consolidation. These are neither inherently good nor bad, but the value depends on your situation and how this may help you to meet your goals.
846 South Main Street Bountiful, Utah 84010