Mortgage questions, answered
Real questions borrowers ask, answered in plain English by The Mortgage Advisory, a mortgage lender and broker licensed in California, Texas, Florida, and Colorado (NMLS #1549739).
5 answers in Buying
Clear searchWith rates above 7%, should I choose an ARM, a rate buydown, or a 30-year fixed?
It depends on how long you'll keep the loan and how much payment change you can handle. A 30-year fixed gives you certainty. An ARM gives you a lower rate for the first 5, 7, or 10 years, then it adjusts. A temporary buydown lowers your payment for the first year or two, usually paid for by a seller or builder. At The Mortgage Advisory, we lay out the full cost of each, side by side, before you choose.
Are there down payment assistance programs in California, Texas, Florida, or Colorado?
Yes. All four states have state housing agency programs that help with the down payment and closing costs, either as a grant or as a low- or no-payment second loan: CalHFA in California, TDHCA and TSAHC in Texas, Florida Housing in Florida, and CHFA in Colorado. Most have income and price limits and require a homebuyer class. At The Mortgage Advisory, we'll tell you straight whether a program actually saves you money compared with a regular loan.
How much house can I afford?
Work backward from a monthly payment you're comfortable with, not the maximum a lender approves. A common starting point is keeping your total housing payment (principal, interest, taxes, insurance, HOA, and mortgage insurance) around 28% to 31% of your gross monthly income, and all your debts together under about 36% to 43%. At The Mortgage Advisory, we show you both numbers, what you qualify for and what you can live with, before you ever make an offer.
How do I choose a mortgage lender, and should I just use the one my agent recommends?
Get two or three Loan Estimates for the same loan on the same day, compare the total cost (not just the rate), and pay attention to who explains things clearly and answers the phone. Your agent's recommendation is a fine place to start, but it isn't the only option. At The Mortgage Advisory, we're happy to be one of the quotes you compare, and we'll tell you upfront who your lender is and how we're paid.
How do I know if my mortgage rate and Loan Estimate are a good deal?
Don't judge it by the rate alone. Check whether the rate is locked (page 1), what you're paying for that rate in points and fees (page 2), and the 5-year cost (page 3). Then compare two or three Loan Estimates for the same loan, pulled on the same day. At The Mortgage Advisory, we'll walk you through any Loan Estimate line by line, even one from another lender.