Meet Laura Tolbert (NMLS #1200280), our loan officer at The First National Bank of Mount Dora. Interest rates are still very attractive, even in the COVID-19 environment, so if you need to purchase a home, or if you’re wondering whether to refinance, here are some things to keep in mind.
Are interest rates generally low right now?
Laura: Yes, mortgage interest rates are still considered very low at this time, but the rates can increase or decrease in moments! If you want the best rate, then we would suggest starting the application process with us, and we can monitor the rate for you. Once the rate hits your desired target, we can lock it in for you and proceed towards the loan closing. Since interest rates fluctuate throughout the day, week, and month, this is the best way to get the best rate.
Is now a smart time to purchase a home?
Laura: It is always a smart time to buy a home if you need a home. We offer several different options for mortgages, including Federal Housing Authority (FHA) loans, Veteran Administration (VA) loans, conventional loans, United States Department of Agriculture (USDA), Lake County Ship loans, adjustable rate loans, and bridge loans. We also do Lot Purchase mortgages and Construction mortgages, too!
Qualifications for each loan have changed due to the COVID-19 pandemic. For example, if you have been furloughed, we will need to verify your active job status 24 hours prior to closing. You may also need to show more cash in reserves, from sources such as a 401K, or proof of other assets. Self-employment income must show recent deposit trends in keeping with prior year’s income. Our mortgage advisors can help you navigate this process.
What are some good ways to help determine whether refinancing makes sense?
Laura: Now is a great time to refinance if there is a reduction in the interest rate or other measurable impact, such as taking cash out for a home improvement project. The rule of thumb for refinancing is to ask three important questions:
1. Is there a 1% savings or more on the interest rate?
2. How long am I(we) going to stay in the home?
3. And, am I(we) getting rid of extra debt or private mortgage insurance (PMI)?
We do not recommend refinancing if you plan to move in the next couple of years unless there is a significant savings when comparing your new monthly payment savings vs the closing costs. That typically means staying in your home for the next two to four years.
When should I consider a HELOC?
Laura: A Home Equity Line of Credit (HELOC) can only be taken out if you have equity in your home. A HELOC is a great option if you have a short-term borrowing need and a short-term payback window. It’s better not to use a HELOC for long-term balances. HELOCs typically have adjustable interest rates, so your rate will re-adjust based on the index interest rate. You don’t want to be stuck with a balance on a HELOC if rates start to climb.
What are the first steps to getting pre-qualified?
Laura: Typically, you will need your current mortgage statement, paycheck stubs (to prove income), bank balance information for all your accounts, tax returns (if you are self-employed), and information on any debts.
It’s important to know your numbers, such as your income and existing debt monthly payments, the price range of the home you are looking to purchase, how much you have for a down payment and closing costs, and fees associated with the home like an HOA fee. Knowing this information before coming in will make it easier for us to determine which option is best for you.
Give us a call and we can set up a time to discuss the pre-qualification process.
Any other home loan or mortgage tips?
Laura: We will do our very best to help you get the best loan terms and the best rate, but we do have to comply with underwriters and industry guidelines. There are a lot of offers out there for no-closing-cost or other low-cost loans. Be sure to clarify the interest rate and make sure there is no prepayment penalty or other hidden fees. Banks have to make their money somewhere, so just make sure you are aware of all of the fine print.
Give Laura Tolbert (NMLS #1200280) call at 352-383-2111 if you’d like to learn more about purchasing or refinancing a home. We’re always here to help!
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