When shopping for a mortgage, you may have come across the terms “fixed rate” and “adjustable rate.” But what’s the difference, and which one is the best option for you? Here’s a breakdown of the pros and cons of fixed and adjustable interest rate mortgages to help you make an informed decision.

Fixed Interest Rate Mortgages

With a fixed interest rate mortgage, the interest rate remains the same throughout the entire term of the loan. This means that your monthly mortgage payments will also remain the same.

Pros:

Predictability: With a fixed interest rate mortgage, you know exactly what your monthly mortgage payments will be for the entire term of the loan. This can make budgeting easier and can provide peace of mind.
Stability: Because the interest rate is fixed, you don’t have to worry about it going up and increasing your monthly mortgage payments. This can be especially important if you’re on a tight budget.
Cons:

Higher interest rates: In general, fixed interest rate mortgages have higher interest rates than adjustable rate mortgages. This means that you may end up paying more in interest over the life of the loan.
Inflexibility: If interest rates drop significantly after you take out a fixed interest rate mortgage, you may be stuck with a higher rate than what’s currently available.

Adjustable Interest Rate Mortgages
An adjustable interest rate mortgage, also known as a variable rate mortgage, has an interest rate that can change over time. The interest rate is typically fixed for a certain number of years (such as 5, 7, or 10) and then adjusts periodically based on market conditions.

Pros:

Lower interest rates: Adjustable interest rate mortgages often have lower interest rates than fixed rate mortgages, at least initially. This means that you may be able to get a lower monthly mortgage payment in the short-term.
Flexibility: If interest rates drop significantly after you take out an adjustable interest rate mortgage, your monthly mortgage payments could go down.
Cons:

Uncertainty: With an adjustable interest rate mortgage, you don’t know exactly what your monthly mortgage payments will be in the future. This can make budgeting more difficult and can create uncertainty.
Risk of rising interest rates: If interest rates go up after you take out an adjustable interest rate mortgage, your monthly mortgage payments could increase significantly. This can be especially risky if you’re on a tight budget.

Which is Right for You?
Ultimately, the decision between a fixed and adjustable interest rate mortgage will depend on your personal situation and financial goals. If you value predictability and stability, a fixed interest rate mortgage may be the right choice for you. On the other hand, if you’re willing to take on a bit more risk in exchange for potentially lower monthly mortgage payments, an adjustable interest rate mortgage may be worth considering.

Before making a decision, it’s important to carefully consider your financial situation and to speak with a mortgage lender or financial advisor. They can help you weigh the pros and cons of each type of mortgage and determine which option is the best fit for you.

Confused about Down Payment Assistance Programs? We can help! We have helped many people find and apply for the perfect down payment assistance program. Most people need help with down payment and closing costs when purchasing their first home. Down Payment Assistance mixed with the right First-Time Homebuyer Program can make homeownership attainable and affordable.

Layton City – First Time Homebuyer Assistance

Many First-Time homebuyers are unaware of the down payment assistance programs that are available to them on both a city and county level in Utah. We specialize in helping first-time homebuyers apply and obtain down payment assistance.

Layton City has a program called At Home in Layton. The funds are available from a grant agreement with Layton city and HUD. There are a few things to know when applying for down payment assistance. We will go over them below.

Things To Know When Applying for Down Payment Assistance

You must have household income under the required annual limits based on family size
What documentation is required to apply?
How much grant money will I receive?
Do I have to pay the money back?
How do I apply?
What are the income requirements?

Income requirements are based on the applicant’s gross household income. It must be below the 80% Area Median Family income for the Ogden-Clearfield, UT area has determined by HUD.

1 Person Family – $56,300
2 Person Family -$64,350
3 Person Family – $72,400
4 Person Family – $80,400
5 Person Family – $86,850
6 Person Family – $93,300
7 Person Family – $99,700
8 Person Family – $106,150
Source – https://www.huduser.gov/portal/datasets/il/il2022/2022summary.odn

Required Documentation to Apply

Pre-approval letter from a Lender – We can help you with this part
Most recent year income tax returns from all household members
2 most recent months pay stubs from all working household members
A completed Real Estate Purchase Contract (REPC) showing your offer has been accepted
How Much Grant Money Will I Receive?

You can get up to $10,000 to go towards 50% of your down payment, closing costs, or even a principal reduction of your loan amount.
Do I Have to Pay the Money Back?

As long as you live in the home for 5 years, the home will be totally forgiven. If you sell the home before the 5 year period, you will be required to pay back a portion of the grant depending on how long you lived at the home.
If you refinance before the 5 years are up, you will need to subordinate the grant as part of your refinance.
How Do I Apply?

We would be happy to help you apply. Since the documentation required for your home loan is similar to the grant, we can help you apply and help you submit the required documentation to Layton City.

Uncover the facts about reverse mortgages. Here’s a quick look at the most common reverse mortgage myths and the truths behind these misconceptions.

MYTH #1: THE LENDER WILL OWN MY HOME IF I GET A REVERSE MORTGAGE.

Truth: Definitely not true! As with any other home loan, as long as you meet the requirements of the reverse mortgage, you retain ownership and title not the lender.*

MYTH #2: I DON’T OWN MY HOME FREE AND CLEAR, SO I CAN’T GET A REVERSE MORTGAGE.

Truth: A reverse mortgage converts a portion of your home equity into cash. Even if you have an existing home loan, you could qualify for a reverse mortgage with enough equity in your home.

MYTH #3: A REVERSE MORTGAGE HAS HUGE OUT-OF-POCKET COSTS.

Truth: Many reverse mortgage costs and fees are the same as those that come with traditional home loan. You’ll know all your costs in advance so there are no surprises at closing. Plus, most fees can be rolled into your new mortgage, further limiting your out-of-pocket expenses.

MYTH #4: THERE ARE LIMITS ON HOW I CAN SPEND THE MONEY FROM A REVERSE MORTGAGE.

Truth: You can use reverse mortgage proceeds to pay down debts, cover medical expenses or home improvement costs, boost your retirement reserves, or pay for everyday essentials. The possibilities are endless!

MYTH #5: 1 CAN’T LEAVE MY HOME TO MY CHILDREN OR HEIRS.

Truth: You can still bequeath your home according to your wishes. The title will pass to your children or heirs, and they decide how to repay the reverse mortgage loan.

MYTH #6: A REVERSE MORTGAGE SHOULD BE MY LAST RESORT.

Truth: Not so! Today’s reverse mortgages can be helpful to a variety of eligible homeowners aged 62 and up. As with any major financial decision, consider your current needs and overall goals and seek professional guidance. Speaking with an established, licensed loan officer can help you decide if a reverse mortgage is right for you.

WHAT IS A REVERSE MORTGAGE?

This is a type of loan that converts some of your home equity into cash. Unlike a traditional mortgage, you don’t need to make monthly payments to pay
back a reverse mortgage. * Because you don’t have to own your home free and clear to qualify, a portion of the reverse mortgage proceeds will be
to used to repay any existing mortgage(s) on your home at closing. Interest and fees are added to the reverse loan
balance over time. The balance is due once you no longer occupy the home as your primary residence.

HOW DO I DECIDE IF A REVERSE MORTGAGE IS RIGHT FOR ME?

Speaking with a licensed loan officer is great first step! Our team is approved to originate
reverse mortgages, so you can count on us to help you make a well-informed decision. You’ll
learn about options that fit your financing needs and get clear, complete answers to all your questions.
To help you get reverse mortgage ready, keep reading for a quick overview on the process.

INDEPENDENT COUNSELING:

The U.S. Department of Housing and Urban Development (HUD) requires reverse
mortgage borrowers to meet with an approved independent counselor. Plan on spending
about 60 to 90 minutes with your independent counselor over the phone or, if required by
your state, in person. You can search for an approved counselor online on HUD’s website
(https://entp.hud.gov/idapp/html/hecm_agency_look.cfm) or by calling (800) 569-4287.

APPLICATION:

Our team will help you complete your loan application. We’ll give you a detailed list of
supporting documentation you’ll need to provide. As with any mortgage loan, you may
be asked to submit more info or paperworkafter the application stage.

CONTACT US TODAY FOR MORE INFORMATION. WE ARE READY TO HELP!

801-820-7620

Here is a top ten list of questions you should ask before buying a home
1. What is my budget? We mean total budget, not just the sales price. Remember to include property taxes, insurance, any HOA fees, renovations costs and ongoing maintenance.
2. Did I get preapproved? Most realtors want to see that your pre-approved (many won’t even talk to you until you are!). So get preapproved to show you mean business. And we can help! Contact us today for a preapproval letter!
3. Why is the seller moving? This can be useful in seeing how motivated the seller is and can help in negotiating the price.
4. What comes with the sale? Make sure you get in writing what is included in advanced – the washing machine, stove, blinds etc.
5. Is it in a flood or natural disaster area? Make sure you know if its in a FEMA flood zone or other disaster coverage you may need.
6. What is the going rate for houses in the neighborhood? Look at housing prices of other homes sold in the area to get a feel for prices
7. How long has the house been on the market? If its been sitting on the market for a while, that can strengthen your negotiating position
8. How about the neighbors? This is doubly important if you’re moving into an HOA, make sure you do your own intel on this. Talk to neighbors, drive around and see for yourself.
9. How’s the home’s health? Make sure you get a thorough inspection and have any issues with the house identified in advanced and also get a history of renovations.
10. How’s the neighborhood? Lastly make sure you check out the neighborhood too! Make sure to check the local schools, crime rates, what activities are available nearby and if you’re going to have a commute make sure you to check the drive time too!

In the last few years many people began working remotely and interest in second homes has skyrocketed. Here is a primer for those considering a second home.
The first step is where – do you want a vacation home by the beach or mountains, do you want to be near relatives. Do your research and use a local real estate for help with choosing the right area or neighborhood.
Second is why – do you want a vacation house, a second residence if you spend a lot of time in an area for work or family or do you want an investment property? You can actually combine these and use a second home for vacations and AirBNB it while you’re not there (of course check local rules regarding this).
Third and perhaps most importantly is how – as in how are you going to finance it 🤓. You will often need a higher down payment for a second home, as default rates tend to be higher. And with an additional mortgage, you’ll need to make sure your DTI (Debt to Income) ratio is not too high. You’ll also want to make sure a second home doesn’t stretch your budget to much, you should factor in maintenance, property taxes in addition to mortgage payments. If you are planning on renting make sure you factor in the property not being rented immediately and plan to set aside ten percent of rental income towards maintenance.
If you are ready to start looking – apply online and we can let you know how much you can pre-qualify!

There are a lot of benefits to being self-employed – you’re your own boss but when it comes to getting a mortgage secured, its a slightly different process than traditional mortgages. It often comes with additional requirements and red tape.
Here are some tips to help you get organized and approved if you’re self employed. Apply for a mortgage when your income is up (we know this is easier said than done) but lenders will look at your last two years income most closely, and if you’re income fluctuates its best to apply on an up year. This can help you qualify for a greater loan amount and lower interest rate. Get That DTI lower, your debt-to-income ratio is one of the key factors in getting approved. So you’ll want to try to pay down debts (both business and personal) as well as avoid opening new lines of credit a few months before applying. Don’t Mix Business and Personal Keep your business and personal finances separate. Have separate bank and credit card accounts for your business and personal use. This will help lenders easily see the business income and expenses as well as show you are running your business in a professional manner. Give us a call or contact us from our pre-qual app and we can see what product best fits your needs. You may be a candidate for QM (Qualified Mortgage) or non-QM lender, either way we can review and help you get started!