Home Buyer Q & A

  • I am negotiating a contract to purchase a new home. The purchase price is going to be around $525,000, we plan to live in it full time. What is the least amount of money we can put down? First, this is jumbo money. Our professionals program will allow you to borrow 89.9% of the purchase price with no mortgage insurance. But, the program is a 5/1 ARM. If you are strictly interested in a 30-year fixed, you will need to put a minimum of 15% down. With this program, you would have monthly mortgage insurance.
  • We have negotiated a contract to purchase a new home. We will be closing in approximately 60 days. When should we lock our rate? A 60-day lock is free. We can compare the current 30-day rate with the 60-day rate to see the difference. It may be a .125% to .250% difference in rate as you are hedging against the market. If you are happy with the payment, you may want to go ahead and lock. Oftentimes, clients are very rate driven, it may be better to be payment driven. Depending on the loan amount, the payment may only differ by a small amount of money. So the true determinant is your comfort level. Are you willing to risk what you can have today for what you might get tomorrow? Is it better to be safe than sorry? The time to lock the rate is when you are ready.
  • If I want to monitor mortgage rates, what is my best resource? The best resources are to watch the 10-yr Treasury and the trading of MBS (Mortgage Backed Securities). MBS's are bonds. When the stock market is doing well, people will move their money from a fixed position (bonds) into stocks or mutual funds. The market is driven more by the instutional trades. Large portfolios like mutual funds who transact large blocks of buying and selling. When the yield on MBS's decline, mortgage rates increase. When the yield is positive and increasing, mortgage rates will improve.
  • I am purchasing a condominium. I would like to use FHA financing. My agent said something about the FHA approval expiring - what does this mean and what can be done about it? Currently, there are a number of condominiums with expired FHA approval. To get approval, your loan officer can work with the homeowners' association to assist with obtaining a new approval. We can submit the paperwork to FHA and monitor the approval process.

- Jennifer Keenan, Senior Mortgage Consultant, NMLS# 101837, Tidewater Home Funding 757-366-8690