May 24th, 2013
I have so many interesting questions to share with you. I hope you find this information to be a true resource. Let's get started...
- We are purchasing a home, it is new construction and will not be ready to close until November, 2013. We are nervous about the interest rates and would like to know our options for locking the rate once we are under contract. What are our options? There are several options for locking your rate long term. Anything in excess of 60 days usually incurs a cost, but the funds for the cost are refunded on your final settlement statement at closing. The most important thing is to first know that your closing date is a good date. Extensions on long term locks are punitive. An example of how they work is as follows: Current pricing if we were looking at a 180 day lock would be... 0.50% of the loan amount paid up-front for the long term lock. We would take the 60-day price and add .50% to the rate. When you were ready for your float down option - 30 days prior to closing, we would use the current 60-day price and add .125% to the rate. This can get confusing and tricky, please always feel free to ask questions.
- We are married and both have VA eligibility. Do we have to split eligibility to purchase a home, if we are both on the application? No. We can use one certificate of eligibility to purchase a property as long as the borrowers has full entitlement to maintain the 25% required VA guarantee. If you are not married and both want to be on a VA loan, both borrowers have to use eligibility, and the eligibility does have to be split.
- I have my current home for sale and own it free-and-clear. I want to purchase another property, I am not sure how I want this to work - what are my options? It depends upon whether you need the equity from the current home before purchasing another. Options include borrowing on a short-term basis against the property for sale. If you have enough savings, you may want to use this as a down payment and then replenish, when you existing home sells. Some banks can cross collateralize the properties, but you would need to refinance upon the sale of your existing home. Things to think about.
Please feel free to contact me with any questions you might have. I look forward to working with you and your clients.
Jennifer Keenan, Senior Mortgage Consultant
NMLS# 101837, Tidewater Home Funding (757) 366-8690