You’ve come to the right place if you are building a new home. Whether you need financing for a single-family home or a condominium, PenTrust Mortgage Group will guide you through the process from completion of your application to closing. Building a home can be stressful and it typically takes longer to complete these purchase deals. We strive to make the process as smooth as possible with attractive features:
Purchasing a home can be a rewarding, yet challenging experience for cash-strapped first-time homebuyers. Due to out-of-pocket costs associated with buying a home, you might doubt your ability to secure a mortgage. PenTrust Mortgage Group offers a variety of mortgage solutions to help first-time homebuyers attain financing, such as government-sponsored bond programs.
These programs provide down payment and/or closing costs assistance to first-timers who have limited cash reserves. Borrowers who haven’t owned in the previous three years may also be eligible for a bond program.
A common misconception is that you need a 20% down payment for a home purchase. However, whether you are a first-time homebuyer or a repeat borrower, you can purchase a property with far less cash. Speak with a PenTrust Mortgage Group specialist for information on down payment assistance programs or low down payment mortgages. FHA home loans require as little as 3.5% down and a standard conventional home loan only requires 5% down.
Lack of a down payment is one of the biggest obstacles to homeownership, but down payment assistance programs may be available in your area. This type of assistance can include grant programs and interest-free second mortgages. If you don’t qualify for assistance, a PenTrust Mortgage Group specialist can provide information on low down payment mortgage options such as FHA home loans. Plus, many mortgage programs allow down payment and closing costs gifts from relatives, as well as closing costs assistance from home sellers.
If you are looking for a place to call home that is far removed from the hustle and bustle of life in the city, our USDA mortgage product may help you get there. For eligible suburban and rural home buyers, it's a 100%, no-money down mortgage loan backed by the U.S. Department of Agriculture (USDA).
If you are a veteran, an active-duty service member or the eligible surviving spouse of a veteran, a VA home loan can help you realize your dream of homeownership. Choose between a fixed-rate or an adjustable-rate mortgage when purchasing a primary residence, or refinance an existing VA home loan to lower your mortgage rate and monthly payment. Program benefits include:
Will you live in your home longer than three, five or seven years? If so, predictable monthly payments make it easier to budget and manage your money. A fixed-rate mortgage provides this type of stability by protecting you from higher mortgage payments in the future. A fixed interest rate never changes, so your payments remain the same over the life of the loan.
Some people assume they need perfect credit to qualify for a mortgage loan. Even though it takes between seven and ten years for derogatory information to fall off a credit report, it is possible to purchase a home with a foreclosure, bankruptcy, late payments or short sale on your credit record. Several mortgage programs have low credit score minimum requirements to accommodate borrowers with past credit issues. Talk with one of our mortgage specialists to discuss your options.
PenTrust Mortgage Group offers HUD-Section 184 Loans, which are specifically designed to assist Native Americans with a home purchase. This program takes into consideration the unique challenges Native Americans face when buying a home by offering flexible credit and income underwriting.
Eligible borrowers can use funds for new purchases, new construction homes, refinances and rehabilitation projects on or off native lands.
A lower monthly payment can significantly improve your financial outlook. If you are struggling to pay your current payment, refinancing your mortgage might be the solution. Refinancing replaces your current mortgage with a new one, often resulting in a more favorable interest rate and terms. Other benefits of refinancing include:
As a medical physician or dentist (or newly licensed and in residency) you have unique financial circumstances and housing needs. Within your profession, large amounts of student loan debt are common, and employment earnings can vary wildly from residency to practice. Additionally, as you begin to earn more income and start to look at homes with higher sales prices, you may find yourself looking at loan amounts that exceed conforming loan limits and require more specialized financing. All of these issues can make for a confusing and difficult home buying experience. At PenTrust Mortgage, we take time to learn about your needs and circumstances in order to connect you with the right loan - for your situation – with the right rate that fits with your overall financial goals.
If you are interested in a property that exceeds Fannie Mae and Freddie Mac’s conforming loan limit of $453,100, securing a mortgage requires specialized financing. PenTrust Mortgage can help you find the right mortgage for your situation. Ask about our exclusive Medical Loan Program to see if you are eligible for a loan limit up to $894,700 (with a down payment as low as 5%), or a loan limit up to $1,665,000 (with a down payment as low as 10%).
Fannie Mae is implementing significant guideline changes that will help those with student loan debt to more easily qualify for a mortgage including:
These changes are welcome news for consumers with student loan debt. Whether you’re looking to purchase or refinance a home, connect with us today to learn more about these updated guidelines and to find out if you qualify.
A Reverse Mortgage or Home Equity Conversion Mortgage (HECM) enables homeowners 62 & older to convert home equity into tax-free cash without selling their home. A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage; obligations which include maintaining the property and keeping your property taxes, homeowner’s insurance and HOA dues current. Talk with one of our mortgage specialists about your reverse mortgage options.
If you are looking for a place to call home that is far removed from the hustle and bustle of life in the city, our USDA mortgage product may help you get there. If you meet the program’s income requirements and are purchasing a property in an eligible rural area, it allows you to borrow up to 100% of the home’s purchase price. 100% financing is also available for home buyers who qualify for a VA loan. Plus, we also offer a broad range of low down payment and down payment assistance programs in many areas that can help limit your out-of-pocket expenses.
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You are ready to buy a home! After you receive your pre-approval, it’s very important to inform us of any changes to your financial picture or credit history as this could impact the amount or type of loan for which you’ll qualify once your loan is fully underwritten.
Many people are surprised to learn that rates change on a daily and sometimes hourly basis. Interest rates fluctuate in response to changes in the financial markets. The bond market is generally a good indicator of the trend of interest rates, with higher bond rates usually producing higher mortgage rates.
Not everybody qualifies for the same mortgage rates. If you think about the times you have applied for a loan, you’ll remember that the interest rate the lender gave you was partly determined by your credit score, your debt to income ratio, and the amount of money you were planning to put down on the loan. These are some of the strongest factors that influence rates (though they’re not the only ones).
While home buyer John might qualify for a mortgage rate of 5% based on his credit score and other risk factors, home buyer Jane may only qualify for a rate of 6.25%. The offers you receive will be based on various factors, in addition to your credit score.
Much of it has to do with risk. Lenders typically use risk-based pricing models when assigning interest rates. Simply put, this means they charge more interest for riskier borrowers (those with bad credit, high debt ratios, etc.). Low-risk borrowers, on the other hand, typically pay less over time by securing a lower rate.
We are often asked why there is so much paperwork mandated by the bank for a mortgage loan application when buying a home today. It seems that the bank needs to know everything about us and requires three separate sources to validate each-and-every entry on the application form.
Many buyers are being told by friends and family that the process was a hundred times easier when they bought their home ten to twenty years ago.
There are two very good reasons that the loan process is much more onerous on today’s buyer than perhaps any time in history.
1. The government has set new guidelines that now demand that the bank prove beyond any doubt that you are indeed capable of affording the mortgage.
During the run-up in the housing market, many people ‘qualified’ for mortgages that they could never pay back. This led to millions of families losing their home. The government wants to make sure this can’t happen again.
2. The banks don’t want to be in the real estate business.
Over the last seven years, banks were forced to take on the responsibility of liquidating millions of foreclosures and also negotiating another million plus short sales. Just like the government, they don’t want more foreclosures. For that reason, they need to double (maybe even triple) check everything on the application.
However, there is some good news in the situation.
The housing crash that mandated that banks be extremely strict on paperwork requirements also allows you to get a mortgage interest rate as low as 3.43%, the latest reported rate from Freddie Mac.
The friends and family who bought homes ten or twenty years ago experienced a simpler mortgage application process but also paid a higher interest rate (the average 30 year fixed rate mortgage was 8.12% in the 1990’s and 6.29% in the 2000’s). If you went to the bank and offered to pay 7% instead of less than 4%, they would probably bend over backwards to make the process much easier.
Instead of concentrating on the additional paperwork required, let’s be thankful that we are able to buy a home at historically low rates.
There are some common scenarios that can lead to a longer processing time. Here are some factors that might cause a mortgage lender to take a relatively long time with processing.
1. New mortgage rules require more verification.
In 2014, a new set of mortgage rules took effect, and they’ve had an impact on how lenders originate home loans. The Ability-to-Repay rule, for example, requires mortgage companies to thoroughly verify and document a borrower’s financial ability to repay the loan. As a result of these and other government regulations, mortgage lenders might take a long time to process and approve loans (longer than in the past, anyway.)
2. There are lots of players and paperwork involved.
When you apply for a home loan, your application and paperwork might pass through the hands of half-a-dozen different people (or even more, if you use one of the “big banks”). Loan officers, processors and underwriters, oh my! And additional documents might be requested at each stage. Think of a snowball getting larger as it rolls downhill.
This is another reason why mortgage lenders can take a long time when processing loans. There are many steps in the process, many documents to review, and several different people involved.
Granted, some lenders have made big advancements with streamlining in recent years. This is especially true for those companies that put an emphasis on technology, web-based applications, and the like. But by and large, it’s still a cumbersome process with lots of paperwork along the way.
3. Underwriters often request additional documents.
Home loan applications go through several screening processes. Underwriting is the most intense review. This is when the mortgage lender’s underwriter (or underwriting department) reviews all paperwork relating to the loan, the borrower, and the property being purchased.
Underwriters often request additional documents during this stage, including letters of explanation from the borrower. It’s another reason why mortgage lenders take so long to approve loans.
4. Home appraisals and title searches can delay the process.
In a standard residential real estate transaction, the buyer’s mortgage lender will have the home appraised to determine its current market value. Additionally, a title company will usually step in to verify the seller’s right to sell (and transfer ownership of) the property.
Sometimes these things go smoothly — other times they don’t. For instance, the appraiser might decide the home is worth less than what the buyer has agreed to pay (in the purchase agreement). This can delay or even derail the mortgage process. The title company might have to find and fix problems relating to the title. All of this can make the process take longer.
Sometimes It All Goes Smoothly
Let’s end on a positive note. I don’t want to give you the false impression that mortgage lending is always a slow process. Sometimes it moves quickly and smoothly, with no hang-ups or obstacles along the way.
Some lenders can process an application and approve a borrower in 7 – 10 days. This is especially true when there are no underwriting issues or conditions to resolve.
But if the mortgage company has a backlog of applications, and/or the borrower has a host of financial and paperwork issues, it can take a relatively longer time.
Mortgage insurance is generally required in one form or another when the down payment is less than 20%, and it protects the lender in the event of loan default. The lower the down payment, the higher the risk for the lender, and thus the higher the monthly mortgage insurance premium. Depending on your particular situation, there may be loan options available that either don’t require monthly mortgage insurance payments or allow your monthly mortgage insurance payments to be dropped at some point in the future.
(Disclaimer: *BPMI = Borrower Paid Mortgage Insurance; LPMI = Lender Paid Mortgage Insurance. LPMI may not be cancelled by the borrower; it terminates only when the loan is refinanced or paid off, and it usually results in a loan with a higher interest rate than BPMI unless discount points are added to lower the rate. BPMI may be cancelled or terminated when the loan reaches 80% of the original value of the property.)
It is a policy provided by the title company guaranteeing the accuracy of the title work done on your home at the time of purchase. As a buyer, you are required to purchase a lender’s policy of title insurance as part of your standard closing costs, which only protects the mortgage company. You may also choose to purchase an owner’s policy, which would protect you against any loss in the event of any legal issues relating to the title of your home.