First Time Home Buyers Spend Less and Save More With Upfront Mortgage Options
By Stephen Thaggard, Embrace Home Loans // August 16, 2018
SALES MANAGER OF EMBRACE HOME LOANS
SPACE COAST DAILY TV: Space Coast Daily was live with Stephen Thaggard, Sales Manager of Embrace Home Loans in the Viera, Florida office. Thaggard shares a program for homebuyers (or homeowners) to consider that can help provide the funds needed to repair and rebuild so we can all get back on our feet, and it’s the Fannie Mae HomeStyle Ren
BREVARD COUNTY, FLORIDA – Ever call a mortgage lender or bank and after a few minutes you realize the loan officer isn’t providing enough information or at minimum an upfront loan estimate and if he or she does, it’s always only one estimate for only one mortgage program? Is it because they don’t want to share any other opportunities that may benefit you? Or is it that they don’t know of any? Isn’t this our job as mortgage loan officers?
That is, sharing our years of experience making sure our first time home buyers know all their options upfront?
Today I had the pleasure of meeting our newest first-time buyers who are under contract and scheduled to close at month’s end. The original plan was to secure a gift from a relative and put a full 20 percent towards down payment. This was pre-approved and off we went. Or so I thought.
The buyers later learned the gift was going to be much lower and wanted to know how this would affect their loan terms. A slightly higher payment with the larger loan amount of course, and now, mortgage insurance would increase the payment a bit more.
But of course, I offered instead, a couple of options to consider for our conventional mortgage buyers. There was something I knew that they didn’t and I wanted to check it out and share with them. Was the cash required to close a bigger concern than I knew? I wasn’t sure at this point.
I presented the 10 percent down payment approach which carried a low monthly mortgage insurance payment, as expected, until there was sufficient equity to have it removed. But I couldn’t stop pondering mortgage options and what would I do or want as a home buyer. It just so happens that these particular clients qualified for the FL Housing Authority’s 3 percent Grant program.
This does carry a slightly higher interest rate which is set by the Florida Housing Authority, however, qualified buyers can receive a true Grant that is non-repayable, and as you can imagine I prepared another estimate to include this Grant that is fully forgiven at closing.
An extra benefit for these first-time buyers, besides the almost $8,000 in Grant for down payment assistance, was the MI or mortgage insurance advantage. First-time buyers can enjoy much lower mortgage insurance payments, than when compared to the same loan without the assistance. Also, there are no document stamps or intangible taxes due with this program as the FL Housing Authority program is exempt from this otherwise additional cost.
I was a bit excited explaining the difference between these two options, a conventional 10 percent down payment approach with or without the non-repayment Grant. At the end of the day, the cash required to close was well over $10,000!
So today, once again, our buyers were able to make an informed decision and choose between closing on a mortgage loan with a slightly higher payment (about $95/month) all while keeping $10,000 in their pockets. I’ll let you guess which option they chose. I really enjoy positioning first-time buyers in their best position to choose options with benefits they may not otherwise know existed.
The bottom line is that buyers, especially first time buyers, should be working with someone who is going to exhaust all options available to the buyer can make that educated decision and not be left in the dark with only one approach. Mortgage lending isn’t cut and dry.
If the Loan Officer you are working with isn’t showing you all the advantages and disadvantages of programs that you are qualified for, please call me or Karen Thaggard. We have been providing upfront mortgage advice for as long as we have been married, that’s over 22 years, here in Brevard County where we reside.
Embrace Home Loans, Inc. NMLS ID #2184 is licensed in 46 states plus DC.
CLICK HERE or call 407-733-6425 or 321-987-9876.
ABOUT THE AUTHOR
Stephen Thaggard is the Sales Manager of Embrace Home Loans in the Viera, Florida office. He has worked in the mortgage industry for the last 21 years and focuses on assisting builders, Realtors and homebuyers with Florida mortgage options and solutions. Thaggard, a member of the Embrace Home Loan President’s Club since 2014, is also a member of FAMP – Florida Association of Mortgage Professionals and MBA – Mortgage Bankers Association.
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