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Your credit score determines what type of mortgage and interest rate you’ll qualify for, so it’s important to take these steps BEFORE you start shopping. 

1. Pay all your bills on time. These include your mortgage statements, car payments, credit cards, etc. 
2. Keep your credit cards lines open. As you build your credit, more opportunities will become available with new cards and benefits. If you open a new credit card with better benefits, keep your old line open. Even if you aren’t using the card, having a long credit history helps keep your credit scores strong.
3. Get copies of your credit reports and dispute any errors. If there are any discrepancies with your credit, the sooner you catch them, the better. Staying up to date with your usage and reporting is essential. 
4. Avoid applying for new credit. Unless it is absolutely necessary and you need to buy a new car, home, or open a new credit card, avoid having your credit run by applying for new credit. 
5. Resolve delinquent accounts. Sometimes, despite doing our best, we can keep up with our financial responsibilities. If you do become delinquent with any of your accounts, reassess your financials and see if there’s any room to re-budget. It would also be beneficial to contact the financial institution(s) that you have delinquent accounts with and see if there is a repayment plan you can enroll in.

Want more helpful advice? Give our team a call and let’s work to get you the best mortgage possible! We are here to assist you in purchasing a new home or refinance an existing mortgage at unbeatable rates. 

When you are ready to refinance or purchase a new home, the first step is finding a knowledgeable professional to help guide you through securing your new mortgage. Turning to a mortgage broker is often the best option, as they have access to an abundance of lenders and loan options. Before you begin, you will likely have some questions in mind for your loan officer.

What Loan Terms Are Best For Me?

The best loan terms for you depend entirely on what your financial goals are when it comes to your mortgage. If you are buying a home, it is common to select longer loan terms such as 30 years. As you slowly pay off your loan, it will make sense to refinance at a lower interest rate because you will owe less on your mortgage and have more equity in your home. Selecting shorter terms will can increase your payments (not always), but will decrease the amount of interest you will pay over time. It is very important to keep track of rates throughout the life of your loan. If you’ve stayed in the same loan for many years, you may be paying more than you should in interest. The most common loan terms are 10, 15, 20, and 30 years, but there are offerings in between starting at 8 years. There are also adjustable rate mortgages. ARMs are oftentimes an excellent choice. Most homeowners stay in their loan for less than 10 years. That being said, it can make perfect sense to secure an ARM loan at a lower rate knowing it won’t matter that the rate will adjust with the market because you would have already refinanced by then. This is also a great choice for those who are not looking to stay in the home long term. This is great for starter homes, or even people who flip homes. Why pay more in interest in that situation when ARMs offer lower rates? There is some risk that comes along with selecting an ARM. You have to time the market right and refinance when rates are low. If you wait too long, you may be scrambling to refinance before your rate begins to adjust. There’s no saying what the market will look like and you could get stuck paying adjustable rates that are costing you more money or have to refinance into a higher rate. As long as you stay on top of your loan and rates, you shouldn’t have a problem. 

I’m Buying A New Home. How Much Do I Need For My Down Payment?

In most cases, it is ideal to have at least 20% of the value or purchase price to use as a downpayment. This shows the seller, as well as the lender, that you are a serious candidate. However, there are special exceptions and assistance for some first time home buyers, VA & FHA loans. Your mortgage loan professional will have more information on what your options are. 

What Loan Costs Should I Expect?

When you buy a new home or refinance, there are costs you need to be aware of. To begin, there may be a cost for the actual loan itself. If you want to secure a lower interest rate, you can buy the rate down and accept the loan cost. There are “no cost” options in which the loan itself does not cost you anything. This all depends on the selected rate. You can still refinance and secure an excellent rate without having to buy down the rate. Other costs to consider are third party fees. These fees are paid out to your title and escrow companies, the notary, your appraiser if applicable, etc. There are often credits that are awarded to the borrower to cover these fees, in which case you would be relieved of some or all of these fees. If not, you can cover the costs up front or incorporate the cost into your loan. If you are including escrows in your loan (your taxes and insurance) you will also see these charges. Some get confused thinking these are a part of the costs of your loan. In reality, they are used to pay your taxes and insurance. Once you close on your new loan, you may receive a reimbursement from your previous lender with the remaining balance in your old escrow account. 

Do I Need A Mortgage Insurance?

As a  lender, a property is sometimes the only collateral to recover their investment if the borrower fails to pay for one reason or another. Due to this, borrowers that are considered “high risk” are oftentimes required to pay mortgage insurance. This makes financial recovery less burdensome for the lender in the event you foreclose on your home. You can be considered high risk if you foreclosed or filed bankruptcy, or failed to have an adequate down payment. Although mortgage insurance can be a hefty additional cost, it is a burden many are willing to bear to buy or stay in their home. You can eventually get out of paying this additional cost by refinancing if you meet the qualifications. 

What Will My Mortgage Interest Rate Be?

You won’t know the exact interest rates available to you until you sit down with your mortgage loan officer and discuss your options. There are a number of factors that contribute. Employment status, income, home value, equity, and credit are all considered. You will of course have access to the best rates if you are in a favorable bracket. Someone in a top tier bracket will have consistent employment history, high credit scores, 40% equity in the home, and good income. Your mortgage loan officer or mortgage broker will assess all these factors and see what lender can offer you the most favorable rates. 

How Soon Can I Refinance? Will My Work History Affect My Ability To Secure A Mortgage?

Usually, you wait about 6 months between refinancing. Lenders require consistent payments made for a set period of time. If you are self-employed looking to refinance, you must have a 2 years history of self employment. If you are a W2 employee, you must show two years of history with little to no gaps. Even if you were employed at multiple places over those two years, as long as you were W2 and there are no unexplained gaps, you will be eligible.

Many individuals are facing financial problems in their life, especially due to the unexpected pandemic. However, one positive thing that was brought about by this situation is low mortgage interest rates. Many people are turning to mortgage loan officers and mortgage brokers to refinance their home to save on their mortgage. The Vieira Mortgage team is the perfect team to lean on and look to for guidance on your mortgage. They take time to understand your needs and financial situation to help you reach your goals. Jason Vieira of Clear Mortgage Capital, a California-based Mortgage Broker, is an experienced loan officer who has helped clients reach financial freedom for 17 years. So why choose Jason as your loan officer? 

•  Complete knowledge about the industry after 17 strong years in the field, allowing him to find creative solutions to problems that may arise.
• Quick turn time due to a productive workflow. 
• Has an intimate team that is familiar with every loan and every client 
• Offers a one on one experience where you can share your entire story and all your short and long-term goals. This allows him to create a financial mortgage plan for you and offer guidance.  
• As a mortgage broker, offers competitive rates from an abundance of lenders.

With Jason’s expertise and a reputable mortgage brokerage backing him, clients have a stronger chance of not only getting approved but securing the lowest rates and fastest turn times. When you are ready to take the next steps, the following guide can be a tool. 

How to secure the best rate with your mortgage broker:

Strengthen Your Credit

In preparation for a refinance or home purchase, you must take special care in securing strong credit scores. This is done so by making all of your payments on time and keeping your credit usage low. The rule of thumb is to stay below 30% of usage for credit cards and other similar accounts. If you are over 30% of usage, you can still be approved for a loan, but you will have less favorable pricing. No matter how great of a mortgage broker you are working with, bad credit will hurt your chances of approval and opportunity for low rates. It is highly recommended to check your credit before beginning your process. This allows you to have time to build your credit back up in the event your scores are surprisingly low. This is especially important for time-sensitive transactions such as cash out for a special purpose or a home purchase. However, there are specific ways in which to raise your credit. Our mortgage loan officer Jason Vieira can perform a credit diagnostic and create a credit rescore plan for you. 

Budget Determination

When you are ready to buy a home, you must create a budget that includes not only your mortgage but all the other costs of owning a home. When you already have this information prepared, it allows your mortgage loan officer to hit the ground running with your file. If you need help determining what you can afford, your mortgage loan officer can help you. They are a good resource to use, as they have industry knowledge and work with endless clients in similar financial situations as yourself. The same applies to homeowners looking to refinance. Loan officers can calculate how much you will save through the life of the loan through a refinance and help you determine and meet your financial goals. 

Know Your Mortgage Options

Depending on where you are, your mortgage options can change. Certain areas have different loan limits. In one area, your loan can be considered a high balance. In another, that same loan amount could be a standard conventional loan. If you refinance in Orange County, your bracket will be much different than if you refinance in Stanislaus County. Different brackets offer different rates. Your mortgage loan officer will have this knowledge and can help guide you. Once you know if your loan will be standard conventional, high balance, or Jumbo, you can decide your terms. The most common loan terms are 30 year fixed, however, homeowners are refinancing more than they have historically. Many homeowners are choosing to opt-out of 30 years and are securing ARMs (Adjustable-Rate Mortgage) because they offer lower rates. There is a certain level of uncertainty with ARMs, as your rate will adjust after a certain period. With homeowners refinancing more frequently, that risk goes away knowing you will refinance before your rate will even adjust. This is also a perfect loan option for those who don’t plan on staying in their home for a long period of time. Aside from ARMs and 30 fixed-rate loans, Jason’s mortgage team offers all other traditional terms (10 years, 20 yrs, etc) as well as everything in between (9 yrs, 11 yrs, 13 yrs, etc). This allows you to save money on your mortgage without having to add on years to your terms or have to shorten terms. 

Comparing Your Options 

Previously when securing a mortgage, homeowners/buyers would have to inquire at multiple banks and financial institutions. Now that there are mortgage brokers who have access to multiple lenders, it is much easier for borrowers to secure the best rates with much less hassle. 

Get Pre-Qualified For Mortgage (Purchase)

There can be more at stake when taking out a purchase loan versus refinancing. This is because a purchase is usually more time-sensitive, especially in today’s markets. Competition is at an all-time high and inventory is extremely low. There’s no time to waste when making an offer on a home. It is wise to seek out a mortgage loan officer or mortgage broker beforehand to get pre-qualified. That way there’s no lag between you finding your dream home and making an offer when sellers have the absolute advantage. 

Final Words

There are a few things you can do to secure the very best rate available to you. The first is strong credit scores. Your loan officer or mortgage broker can help you make improvements if needed. It is important to have an understanding of your financial goals and create a budget. This allows you to weigh all your options and determine what loan is best for you. When buying a home, seek out a mortgage professional to help you get pre-qualified. This will give you the very best chance and have a strong offer.

Refinancing presents a great opportunity for homeowners to benefit from the lower payment and save money. However, to refinance in the right way, you should consider a few things. This will guarantee you prepare well before contacting the right lender for refinancing. The best course of action is to seek a professional like a mortgage broker. Here are tips that will be helpful in securing the best mortgage rates. 

1. Know your credit score

Having a clear idea about the credit score is highly essential as it determines the loans you qualify for and other factors such as interest rates Thus it is vital to focus on improving the credit score before applying for refinancing, especially when on the lower end of the spectrum.

2. Understand your equity

You must understand the equity you have currently in your property and is built by making payments timely. Remember, equity determines rates available to you. The more equity you have in your home versus your desired loan amount (Loan to Value) determines your pricing and rates. To understand this calculation more specifically, you may contact a professional mortgage broker. The Vieira Mortgage Team is a great choice whether you are looking to  refinance in Orange County or anywhere else in the state of CA. 

3. Don’t forget closing costs 

Some loans have higher closing costs than others. Depending on your unique situation, you may or may not have closing costs with your loan. The lower the rate, the higher the cost of the loan. If you are planning on staying in your home for a longer period of time, it makes sense to “buy down” your mortgage rates, meaning you pay for a lower rate. Although there is an upfront cost, you save money over time with a lower rate. In a good market, cost of rates are low and it’s possible to secure no cost loans where you don’t have to pay anything out of pocket or include any costs in your loan. Some common fees include cost of the loan, appraisal fees, application fees, title and escrow fees, condo fees, etc. 

4. Set yourself for appraisal success

As discussed previously, the loan to value ratio is one of the main factors that determine what’s available to you as far as rates and costs. There are many instances where you will not need an appraisal and the value is calculated by your loan officer. This is called receiving an appraisal waiver. Other instances require an appraisal to visit the property and evaluate its value using forms provided by either Fannie Mae or Freddie Mac (the two mortgage institutions). Specific criteria are evaluated such as neighborhood demographics, housing trends, utilities, home measurements, site characteristics, property condition, general improvements, etc. It’s very important to notify your appraiser of any improvements made on your home. It’s essential to make sure your home is in good order, as the goal is to receive the highest value for your home. 

5. Respond quickly to lenders inquiry

Generally, refinancing takes 30 to 45 days. However, the Vieira Mortgage Team closes in 30 days or less. If you are looking to refinance right away, it’s important to be attentive and be responsive to your loan officer, as it does take some back and forth to gather all necessary documents to fund your loan. Since the loan officer works with underwriters at lending institutions, it is not up to the loan officer to decide what is and isn’t needed. You can make things easier by making yourself accessible for your mortgage loan officer and processor. 

Contact a trusted professional for refinancing.

If you’re thinking of refinancing, then contact The Vieira Mortgage Team, a company that offers great mortgage rates and programs for both refinancing and purchasing. Our professional mortgage broker and team bring forth the best mortgage experience. We can serve you right here in our home time if you are purchasing or refinancing in Orange County or anywhere else in California

Contact us to know more.

Fixed-Rate and Adjustable Rate Mortgages are the two most common loan options. An adjustable-rate mortgage, also known as an ARM, is a mortgage loan option in which the interest rate adjusts throughout the life of the loan. The rate remains consistent for a specific period of time, then will increase or decrease depending on the market at a specified interval, usually 5-10 years. This means that your rate will change every 5-10 years for the life of the loan.
 A Fixed Rate Mortgage is set at one rate and remains the same throughout the life of the loan. Traditionally, fixed-rate loans have a life of 10, 15, and 30 years. Although, there are untraditional options in between depending on the lender.

 These two loan options are very different and it’s important to know when each of these options makes the most sense for you. When the market is favorable, homeowners can take advantage and secure a great rate for an extended period of time with a fixed-rate mortgage. There’s no need to wonder how the market and your rate may shift down the road. It can be the safer option with more stability. In today’s markets with rates so low, many homeowners have chosen this loan option. One downside is if the market improves and there are lower rates available, the only way to take advantage is to refinance your home again. For some, this defeats the purpose of locking in a 30-year mortgage. In today’s market with record low fixed rates, a market shift downward is less of a concern. Although you can secure a great rate on a fixed mortgage, ARMs usually have favorable rates, but there’s a catch. As stated before, your ARM is only locked in for a set period and that isn’t always a good thing. Even if you can secure a better rate initially than you would have with a fixed mortgage, there’s a chance your ARM may adjust to a higher rate, leaving you in an unexpected and tough situation with higher expenses. There’s always the option to refinance if your rate increases, but there’s no telling if the market will offer desirable financing and you may get stuck with a higher rate. However, there are times when an ARM makes the most sense. For someone focusing on their short-term goals, an ARM is ideal. Most people who secure an ARM loan are not looking to stay in their loan for its entirety and will likely refinance in the near future. This is a great way to secure a low rate on your property but one must understand this is usually not an ideal long-term position.

 There are many questions one must ask themselves before deciding between a fixed or an adjustable mortgage. Determine how long you want to remain in your loan and your home. If you are planning on refinancing again in a couple of years because you have a child going off to college and need to take cash out, it may make the most sense to stick with an ARM for a lower payment. Assess your needs and goals. If you want to sell your house in the next five years, the possibility of an increased adjustable rate is not a concern because you don’t plan on staying in your loan. If you started your family in your dream home and plan to stick around for a while, locking in a long-term, consistent rate could make the most financial sense and be easier to budget for in the long run. These are all things to think about in order to make a decision that’s best for you and your family. If you have a financial planner, seek their advice. They have the best idea of your financial position and goals and would be the ideal person to seek advice from.

Although mortgage rates are at record lows, demand for homes creates a new challenge in 2021. This year has seen a large increase in demand for homes fueled by historic low rates. Now the average home buyer needs to offer ABOVE asking price, often by 10’s of thousands of dollars. Inventory is dwindling while prices and competition climb. Buyers have to prepare for the highly competitive market. But how? 

In a world where offers above asking are turned down and a dozen offers are made on a single property, buyers must put their best foot forward at all times to stand a chance. That means making a strong first offer. Depending on the market where one is buying, there may not be a chance to counteroffer. Buyers should give a solid initial offer. Yes, that may mean above asking. Today, the average house sells above asking.

Buyers should be prepared to offer above asking and get pre-approved beforehand. Because agents have a surplus of applicants, they won’t spend their time with buyers who aren’t already preapproved. One must show they are a serious buyer. This will save both the buyers and the agent time and energy. The offer should be clean. This includes avoiding seller concessions and asking for personal property. There’s a high chance a similar offer is on the table. It will make a difference if one offer has contingencies and the other does not. 

As stated before, it is a good idea to come in strong right off that bat. This isn’t always the right strategy, but in today’s market, it’s essential. There will be other offers on the table for the seller to consider. It may be wise to add an escalation clause to your offer. This tells the seller that you plan to outbid other offers on the table. 

The other, more obvious factors that help buyers are a larger down payment or an all-cash offer. This may not be an option for everyone and you can still be selected without doing so as long as you make yourself a desirable candidate. 

Lastly, write a letter to the seller. For some, this makes all the difference in the world. Tell them all the things you love about the home. Take a page out of “How to Win Friends and Influence People” by Dale Carnegie. Flatter them on specific details you enjoy, whether it be the renovated kitchen or lovely garden. People take pride in their homes and if they know you notice the love and effort they put into it, it may give you a leg up to a similar offer. Tell them why you want them home, what it will mean for you and your family, and the memories that will be created there. Tell them about the love and effort YOU would put into the home. It can bring the seller peace knowing that you will take just as good care of it as they did. People hold sentimental value in their homes. Sharing a letter that resonates with the seller could end up being the final factor that lands you a home.