Mortgage Education

FHA loans are government-backed mortgages that offer a variety of benefits to homebuyers, particularly those who may not have the best credit score or a large down payment. In this article, we will discuss the advantages of using an FHA loan, the considerations you need to make when buying a condo with an FHA loan, and situations where FHA is not the best option.

Benefits of FHA Loans:

Lower Down Payment: One of the biggest advantages of FHA loans is that they allow homebuyers to put down a lower down payment, as low as 3.5%, making it easier for homebuyers to get into the housing market. Conventional loans will require at least 5% down, unless you are a first time homebuyer.

Easier Qualification: FHA loans have more lenient credit score requirements, which makes it easier for people with lower credit scores to qualify for a mortgage. It also is a much friendlier program with regard to pricing for lower credit scores compared to Conventional loans.

Lower Interest Rates: FHA loans typically have lower interest rates than Conventional loans, which can save you a good amount of money over the life of the loan. Of course, every situation is different but as a rule FHA loans are almost always worth evaluating.

More Flexible Requirements: FHA loans have more flexible requirements when it comes to debt-to-income ratios, which can make it easier for homebuyers to qualify for a mortgage.

Considerations when buying a condo with an FHA Loan:

If you’re considering buying a condo with an FHA loan, there are a few things you need to keep in mind. First, the condo project needs to have FHA approval. This means that the condo project has been reviewed and approved by the FHA, and meets certain requirements, such as having adequate insurance coverage, sufficient reserves, and no more than 50% of the units being rented out. You can check the status of a condo project by visiting the FHA’s website.

Another consideration is the condo association’s fees and rules. Make sure you understand the monthly fees, as well as any rules or restrictions on renting out the unit or making modifications. Additionally, you should be aware of any pending or current litigation involving the condo project.

FHA does allow single-unit approvals if the condo project is not currently approved by FHA, but those are approved on a case-by-case basis. We can help you determine if the condo you’re looking at might fit an FHA loan or not.

When is FHA not the best option?

While FHA loans are great loans, there are situations where they may not be the best option. For example, if you have a high credit score and a sizable down payment, you may be able to get better terms and lower fees on a Conventional loan. This is especially the case if you are putting down 20% because Conventional loans will not have monthly mortgage insurance when putting 20% or more down, like an FHA loan would. FHA loans require monthly mortgage insurance premiums no matter the size of your down payment.

FHA loans can be a great option for homebuyers who may not have the best credit score or a large down payment. They offer lower down payments, easier qualification, lower interest rates, and more flexible requirements. However, when buying a condo with an FHA loan, it’s important to make sure the project has FHA approval and to understand the condo association’s fees and rules. Additionally, if you have a high credit score and down payment, you may want to explore other loan options. When working with us, we always evaluate every program you qualify for to ensure you’re getting the best financial fit for you and your family.

Thinking about moving to Franklin, TN? Here’s a little bit about the place we call home! Franklin, TN is a charming, historic, and vibrant city located just 21 miles south of Nashville. It’s close enough to be outside Nashville but still drive to for a game, concert, or if you just want to hit Broadway. Franklin is known for its rich history, beautiful architecture, and thriving arts and culture scene. Franklin is a great place to live or visit.

One of the things that makes Franklin unique is its plethora of local events. From live music performances to outdoor festivals, there’s always something going on in Franklin. One of the most popular events is the Main Street Festival, which takes place each April. This festival features over 200 artisans, food vendors, and performers, and draws in thousands of visitors each year to our little downtown. Other popular events include the Pumpkinfest in October and the Dickens of a Christmas celebration in December.

If you’re looking for fresh, locally sourced produce and handmade goods, Franklin’s farmers’ markets are not to be missed. The Franklin Farmers Market takes place every Saturday from May to October and features a wide range of vendors offering everything from fruits and vegetables to homemade jams and baked goods. The market is also a great place to grab lunch, with food trucks and other vendors offering delicious eats.

Another highlight of living in Franklin is the revitalization of the Factory at Franklin. Originally built in 1929 as the headquarters of the Dortch Stove Works, the Factory has been transformed into a mixed-use facility featuring shops, restaurants, event spaces, and more. Today, the Factory is home to over 70 businesses, including a brewery, a chocolatier, and a fitness studio.

If you’re a business owner, you’ll also be happy to hear that Franklin is part of the Williamson County Chamber of Commerce. It’s an extremely active and supportive chamber that goes out of its way to help small business and large businesses build connections and prosper. This is a very business friendly area.

If you’re in the area or just looking to move in the future, be sure to come check out our the Main Street Festival in April for another year of live music, food, and shopping. In June, the Franklin Rodeo will take place, with bull riding, barrel racing, and other rodeo fun. And in July, the Franklin Jazz Festival will showcase some of the best jazz musicians in the region.

Franklin, TN is a great place to live and raise a family. There’s always something to see and do.

Discount points are one of the most commonly used tools in mortgage financing. They allow you to lower your interest rate, which can save you thousands of dollars over the life of your loan. In this article, we will explore what discount points are, how they work, and what you get by paying them.

Discount points, also known as mortgage points are an upfront fee paid to the lender at closing in exchange for a lower interest rate on the mortgage loan – the cost “discounts” the interest rate. One discount point is 1% of the loan amount and can typically reduce the interest rate by around 0.375%. However, depending on the market sometimes one discount point can reduce the interest rate by more than .375% or less. We can help you weigh the overall interest rate savings vs cost in your exact situation.

Discount points work by lowering the interest rate on your mortgage loan. When you pay discount points, you are essentially prepaying a portion of the interest that would be due over the life of the loan. This reduces the lender’s risk and allows them to offer you a lower interest rate.

For example, let’s say you are taking out a $300,000 mortgage with an interest rate of 4.5%. If you pay one discount point, or $3,000, the interest rate may be reduced to 4.125% or 4.25%. This can save you a lot of money over the life of the loan, as you will be paying less interest over the term. However, if you are planning on refinancing or selling in the near future – it’s important to discuss that with us so we can make sure you will benefit from that up front cost.

By paying discount points, you can get a lower interest rate on your mortgage loan, which saves you a lot of money over the life of the loan. This can be especially beneficial if you plan to stay in your home for a long time, as the savings really add up over the years.

Paying discount points can also help you qualify for a larger loan amount, as it reduces your monthly mortgage payment. This can be particularly helpful if you are on a tight budget, or weren’t able to use some of your income in the qualification process for one reason or another.

In summary, discount points can be a very useful tool in mortgage financing. They allow you to lower your interest rate and save money over the life of your loan. By paying discount points, you can also qualify for a larger loan amount and reduce your monthly mortgage payment. If you are considering paying discount points, it’s important to weigh the cost and your long term plans with the home against the potential savings to determine if it’s the right option for you. As always, if you have questions we can help guide you through this evaluation and make recommendations.

One of the biggest misconceptions about the mortgage industry is that mortgage companies sell their customers’ personal information. However, this couldn’t be further from the truth for 99% of them. In reality, it is the credit bureaus – Experian, Equifax, and TransUnion – that sell customer information to third-party companies for mere pennies, leading to the bombardment of phone calls and mailings from other companies. In this article, we will explain how this process works and how customers can opt out of pre-screen offers.

Mortgage companies take customer privacy very seriously and are legally bound to protect their customers’ personal information. They do not sell customer information to third-party companies or share it without their customers’ explicit consent. In fact, mortgage companies are subject to strict regulations under federal and state law, which require them to protect customer information. If there is any sharing of information whatsoever with any affiliated companies they are legally required to disclose that to you in writing.

On the other hand, credit bureaus such as Experian, Equifax, and TransUnion are not bound by the same privacy regulations as mortgage companies. They collect and compile customer information, including credit history, address, phone number, email, employment information, etc and sell it to third-party companies for marketing and pre-screening purposes. This is how some mortgage lenders obtain customer information and reach out unsolicited to potential borrowers with offers via phone, mail or email.

If you are tired of receiving pre-screened offers for mortgage loans and other financial products, you can opt out of these offers by going to www.optoutprescreen.com. You can also opt out by contacting the credit bureaus directly online or by phone. The process is simple and free but www.optoutprescreen.com is the most efficient way to opt out. Once you opt out, the credit bureaus will stop selling your information for pre-screening purposes, and you will no longer receive these offers.

It is important to note though, if you opt out online then the opt out is only good for 5 years. If you choose to, when you visit www.optoutprescreen.com you can fill out the mail in form and be permanently opted out.

In conclusion, mortgage companies do not sell their customers’ personal information, and the phone calls and mailings that consumers receive are a result of credit bureaus selling customer information to third-party companies. By opting out of pre-screen offers, you can reduce the number of unsolicited calls and mailings you receive when you apply for a mortgage.

If you’re looking to buy a home in Franklin, TN, you may be considering different types of mortgages, such as fixed rate mortgages and adjustable rate mortgages (ARMs). Understanding the differences between these two types of mortgages can help you make an informed decision that aligns with your long-term financial goals.

Fixed rate mortgages in Franklin, TN offer the benefit of a predictable monthly payment that stays the same throughout the life of the loan. This can make it easier to budget and plan for the future. Fixed rate mortgages tend to have slightly higher interest rates than ARMs, but that changes with the market and many times fixed rate mortgages will still have lower rates and more security than adjustable rate mortgages.

One of the biggest advantages of an ARM is the potential for a lower interest rate initially. Depending on varying market conditions, ARM loans can have a slightly lower introductory interest rate. This can result in a lower monthly payment, which can help you qualify for a larger loan. However, it’s important to remember that the interest rate on an ARM can change over time, which can lead to a higher and unexpected monthly payment based on market movement. If you plan to keep your home for an extended period of time, an ARM is usually viewed as a more risky choice due to the potential rise in interest rates.

When it comes to choosing between a fixed rate mortgage and an ARM in Franklin, TN, it’s important to consider your long-term financial goals. If you plan to stay in your home for a long time, a fixed rate mortgage may be the better choice, as it offers the stability of a consistent monthly payment. On the other hand, if you plan to sell your home or refinance before the interest rate adjusts, an ARM may be a viable option.

Ultimately, the decision between a fixed rate mortgage and an ARM will depend on your individual financial situation and goals. If you’re unsure which option is right for you, it’s a good idea to speak with a mortgage broker who can help you weigh the pros and cons of each type of mortgage and the financial benefit of each one. By doing so, you can feel confident that you’re making the best choice for your financial future here in Franklin, TN.