10 Things To Keep In Mind When Selling Your House During a Divorce

Selling Your Home During A Divorce

Sellers decide to sell for many reasons - a job relocation, downsizing, lifestyle change, etc., and for many sellers, their reason for selling is due to a divorce. A divorce, in itself, is a big, life-changing event that requires patience and flexibility, and the same goes for selling a house. In both cases, there will always be unexpected twists and turns that pop up where having an experienced professional to walk you through the process, support your questions and concerns along the way, and understand the ins and outs of the details allows for the transaction to run as smoothly as possible. 

Often, it can feel isolating and confusing when getting ready to list your house before hiring a real estate professional. Experienced Realtors will give you the comfort, support, and reassurance of knowing you can rely on their years of experience troubleshooting and problem-solving previous deals, which now gives them the tools to successfully handle your home. But before you start the process of listing your house, there are certain things we recommend you keep in mind, especially when handling divorce and selling your house. 

10 Things Every Seller Should Keep In Mind… 

Hire a Realtor That Has Experience With Divorce Deals

• The best way to support yourself when selling your house during a divorce is to hire a Realtor with previous experience working with home sellers going through a divorce. Other than their expert knowledge of the process of a real estate transaction, they’ll have a firm understanding of how a divorce can impact or influence the details of the deal. Plus, they’ll already have experience collaborating with the courts, and attorneys, and understand the specific needs of the deal. 

  Pay Attention To The Pitch 
  

• During the listing presentation, make sure to pay attention to the kind of experience the Realtors you interview offer. How many years have they been practicing real estate? How much experience do they have navigating a divorce deal? As these Realtors go through their listing presentation (you’ll know if they’re experienced professionals by whether or not they even have a listing presentation), ask specific questions so that when you officially hire them to sell your house, you have confidence in their ability to list, market, and sell, especially while handling the nuances of a divorce. 

  Mutual Agreement on Sale Price & Showing Schedule 
  

• Before you list your house, confirm the best sale price based on the condition of the home and the current real estate market, and then come to an agreement on the showing schedule. What time can the showing begin and end every day? Are there any days that don’t work? What about the weekends? Do you work from home? Will you be able to step up during the showings? To proceed with listing the house and prevent any time wasted, discuss these items with all parties as soon as you hire your Realtor. 
  
  

  Maintain a Mutual Respect For One Another & Be Patient 
  

• This can be a very stressful time - balancing two life-changing events is a difficult thing for anyone to deal with, which is why it’s so important to remember to maintain mutual respect for all parties involved in the transaction. This includes your spouse, the process, your realtor, and any other people or services involved. Things do always go as planned, unexpected hiccups pop up, and tensions are high, so remember that your Realtor is hired to guide and support you during this difficult time, and do the best possible job for you. 
  
  

  Save Money Where You Can 
  

• Fixed Rate Real Estate is a full-service, flat-fee real estate company in Colorado that specializes in a flat-fee model. This means we sell houses for a flat fee of $5,000, only, saving our sellers over $16,000 on average. When it comes to real estate assets, we know that our sellers want to save as much money as possible. So not only do we have the experience and knowledge of working in the Colorado real estate market for the last 10+ years, many of our clients found us because of the need to sell their house due to a divorce, but purposely set out to hire a flat-fee realtor to save as much money as possible and work with an experienced, top-producing real estate company.  

  Communication Is Key
  

• Whether that’s between spouses or with the Realtor, a lack of communication can halt, stop, or prevent a deal from moving forward if all parties are not on the same page. It’s essential for your Realtor to establish an open line of communication between all parties involved, but it’s even more important to remember to always communicate any sudden changes or needs that come up with your Realtor, and/or spouse, to ensure everyone is on the same page and no one feels like they’re missing vital information. 

  Choose a Realtor Both Spouses Trust

• It’s important to choose someone you both can trust, can rely on, and is neutral. When interviewing potential Realtors, it’s recommended to interview these candidates together and choose someone you both agree on. 

  Stay In Touch With Your Attorney
  

• Your Realtor’s job is to sell your house during your divorce, not give legal advice. So make sure to communicate any legal questions or concerns with a real estate attorney, not your realtor, if needed. 

  Establish Expectations & Guidelines Before Listing
  

• The best, experienced Realtor should be guiding you with a list of questions to answer before they list your house for sale regarding price, timeline, condition of the home, etc. Some of those questions could be: What is the lowest offer you’ll accept? What is the showing schedule going to be? Is the house ready to sell? Is staging, cleaning, or repairs needed? Once you meet with the right Realtor, they will guide you to understand if your house is in ready condition to sell, help you understand how to find the right listing price, and any other matters that need to be addressed head-on before the process begins. 

  Pick Your Battles

• It’s essential to maintain a level of patience and respect for all parties involved in the process, but, as in any high-stress environment, patience levels will be tested. When collaborating and decision-making with your spouse and the Realtor, choose to look at the big picture rather than getting consumed by small details. It’s very easy to get sidetracked or argue over small-ticket items, but with the help of your Realtor through decision-making and processing all options available, they’re there to help mediate and find the best possible outcome for you.

Do you need an experienced Realtor to help you sell your home after your divorce? Contact Fixed Rate today for a free, no obligation consultation with one of Denver’s most experienced agents.

LoDo

Looking for Denver Real Estate? LoDo is Denver’s oldest neighborhood, which means it’s home to some of the city’s most prominent and beloved landmarks, some of which are what define the Denver experience. Denver has always had a variety of nicknames, but the first nickname to ever stick to the Mile High City is LoDo, which applies to the old warehouse area of lower downtown by Union Station, according to Westword Magazine. Now, LoDo is known as the mixed-use historic district, home to some of Denver’s most loved and recognized restaurants, bars, hotels, and entertainment. Take a look at the article below if you’d like to learn more about the wonders that LoDo has to offer. 

If you’re looking to buy, sell, or invest in LoDo and you’d like to learn more about the neighborhood market, then please contact us here. 

If you’re looking to explore LoDo during the day, don’t forget to start off by exploring the lovely boutiques. After you’ve grabbed your morning coffee from one of Denver’s most loved coffee shops, take a walk into some of Denver’s most loved boutiques. If you’re in Larimer Square, head over to Hailee Grace where you can find this season’s hottest clothes, swimwear, and accessories. Once you’ve finished up at Hailee Grace, head on over to Alchemy Works, a coastal California retail, gallery, and event space concept located at Free Market. Featured in Vogue, Conde Nast Traveler, and Style.com, Alchemy Works carries brands like Warby Parker, Sandoval, Casa Clara, and Mau Jewelry. Next time you’re taking a stroll through the city, don’t forget to stop into these boutiques to pick up your next favorite pieces. 

Once you’ve finished up your morning shopping, spend the rest of the day outside enjoying the beautiful weather that Colorado has to offer. Whether you’re looking to host a picnic at the park, or buy some tickets for the Rockies game, with 300 days of sunshine, nearly any day is perfect to spend time outside. If you’re looking to host a sweet picnic outside with your friends and family, find your perfect spot at Confluence Park or Commons Park, two of downtown Denver’s most popular parks right in the middle of the city. Confluence Park lies at the joining of Cherry Creek with the South Platte River. If you love biking or talking long walks along the South Platte River, then definitely take your time to take a scenic walk. Or if you’re feeling a little more adventurous, consider renting a kayak from Confluence Kayaks and kayak down the river (yes you can actually do that!) If kayaking feels like too much, then you’re also able to bring down your tube and go tubing.

So you’ve officially done one of the coolest things ever; tubing in the middle of the city, what to do next? Nowhere better to relax than at the Colorado Rockies game at Coors Field with a delicious hot dog, refreshing drink, and ice cream on a sunny day. If you’ve ever explored Denver during the summer before or after a rockies game, then I’m sure you’re familiar with experiencing the spirit and excitement from the fans all across the city. You’ll be sure to see crowds with purple gear all over the city and outdoor patios around the stadium overflowing with fans, before, during, and after the game. If eating delicious snacks for three hours isn’t your thing, then walk on over to Union Station, one of Denver’s most loved and transformed landmarks. If you’ve visited friends in Denver, then I’m sure they’ve taken you to Union Station to either grab a special drink from Terminal Bar, grab some brunch from Snooze an A.M. Eatery, or maybe even to just pop in and grab some ice cream from Milkbox Ice Creamery and a cup of coffee from Pigtrain Coffee Co. Regardless of why you’re here, if you’re looking for the center of downtown Denver, then Union Station is the heart of it all.  

So far, you’ve had quite the long day, so where better to chill out for a couple of hours and take a sweet nap than in your fabulous airbnb or historic hotel room at The Oxford Hotel. Whether you’re visiting Denver from out of state, or a Denver native that’s looking to get to know the city from a tourist point of view, staying in an airbnb or a historic hotel in the middle of the city is the best way to get to know the culture of a city. If you’re looking for a unique stay experience, we recommend checking out the “Historic Carriage House”, LoDo’s coolest airbnb. This home originally sheltered horses in the late 1800s and has been featured in Architectural Digest online as Colorado’s most unique and beautiful Airbnb property. If you’d like to take an alternative route to your overnight stay, then there’s no better hotel in LoDo than The Oxford Hotel. With roots dating back to the 19th century, The Oxford offers 80 guest rooms and suites, a breathtaking collection of art through the halls, the Oxford Club Spa, and one of Denver’s most loved bars, The Cruise Room. Whether you’re looking for a rustic or luxurious stay, you’ll find it in LoDo. 

Okay, so you’ve had your nap in your luxurious bed and facial at the Oxford Club Spa, now it’s time to get your most favorite night-out outfit and head on over to dinner before your late night fun. LoDo is one of Denver’s most loved neighborhoods for nightlife; whether you’re looking for a 1920s speakeasy, romantic dinner for two, or wanna have a laugh or two at a comedy club, you can find everything you need in LoDo. 

If you’re looking for a romantic dinner for two, or celebrating a special occasion, make a reservation at Fogo de Chao Brazilian Steakhouse, one of Denver’s most loved steakhouses. Fogo de Chao takes the experience of a steakhouse to a whole new level, bringing the churrasco grilling tradition to Denver. If you’re looking for a more casual occasion for your night out, look no further than Hopdoddy Burger Bar in Union Station, blocks away from Coors Field. If you’re in need of a delicious burger with Hot Honey & Sage Sweet Potato Fries and a boozy vanilla milkshake, then head on over to Hopdoddy immediately to fulfil your late night cravings. Maybe you're in search of dinner and a show? If so, make a reservation at Ophelia’s Electric Soapbox to indulge in the ‘70s swank and vintage soft-core art at this adult-themed fun house. At Ophelia's, you can enjoy their small-plate menu of eclectic offerings, while overlooking their sunken stage and dance floor with live music. If a loud, wild scene isn’t your thing and you’re looking to just have a good laugh, then buy some tickets for Comedy Works where you can experience world-class laughs from comedians known locally, nationally, and internationally.

For any information on Denver’s real estate market, check out Denver’s Flat Fee Realtor!

What Factors Affect A Credit Score?

From opening new accounts to making a late payment, there are a lot of things that can affect your credit scores. Learn which factors are generally most important, and which may only have a minor impact on your scores.

If you have a goal to reach a particular score or just want to learn more about credit scores in general, it’s important to know what affects your credit scores and how your actions could improve or hurt your creditworthiness.

Although there are many credit scoring models, all the scores are trying to figure out the same thing — the likelihood of you paying your bill on time, or even at all. And whether you’re looking at a FICO® or VantageScore® credit score, your scores are based on the same information: the data in your credit reports.

While various credit scoring models may weigh each factor differently, the leading ones, FICO® and VantageScore®, place similar relative importance on the following five categories of information. We’ve ranked them by which ones are often most important to the average consumer.

1. Most important: Payment history

Your payment history is one of the most important credit scoring factors.

Having a long history of on-time payments is best for your credit scores, while missing a payment could hurt them. The effects of missing payments can also increase the longer a bill goes unpaid. So a 30-day late payment might have a lesser effect than a 60- or 90-day late payment.

How much a late payment affects your credit can also vary depending on how much you owe. Don’t worry though, if you start making on-time payments and actively reduce the amount owed, then the impact on your scores can diminish over time.

If you’re having trouble making payments at all, you could also wind up with a public record, such as a foreclosure or tax lien, that ends up on your credit reports and can hurt your scores. Sometimes a single derogatory mark on your credit, such as a bankruptcy, could have a major impact.

2. Very important: Credit usage

Credit usage is also an important factor, and it’s one of the few that you may be able to quickly change to improve(or hurt) your credit health.

The amount you owe on installment loans — such as a personal loan, mortgage, auto loan or student loan — is part of the equation. However, even more important is your current credit utilization rate.

Your utilization rate is the ratio between the total balance you owe and your total credit limit on all your revolving accounts (credit cards and lines of credit). A lower utilization rate is better for your credit scores. Maxing out your credit cards or leaving part of your balance unpaid can hurt your scores by increasing your utilization rate.

Sarah Davies, senior vice president of analytics, research and product management at VantageScore®, says that for VantageScore® credit scores, your overall utilization rate is more important than the utilization rate on an individual account.

However, utilization rates on individual accounts can also affect your credit scores. This means you should pay attention to not just your overall credit utilization, but also the utilization on individual credit cards. Having a lot of accounts with balances might indicate that you’re a riskier bet for a lender.

Keep in mind that you can pay your bill in full each month and still appear to have a high utilization rate. The calculation uses the balance that your credit card issuers report to the bureaus, often around the time it sends you your monthly statement. You may have to make early payments throughout your billing cycle if you want to use a lot of credit and maintain a low utilization rate.

3.  Length of credit history

A variety of factors related to the length of your credit history can affect your credit, including the following:

• The age of your oldest account

• The age of your newest account

• The average age of your accounts

• Whether you’ve used an account recently

Opening new accounts could lower your average age of accounts, which may hurt your scores. However, the hit to your scores could also be more than offset by lowering your utilization rate and by increasing your total credit limit, making sure to make on-time payments to the new card and adding to your credit mix.

Closed accounts can stay on your credit reports for up to 10 years and increase the average age of your accounts during that time. But once the account drops off your credit reports, it could lower this factor, and hurt your scores. The impact could be more significant if the account was also your oldest account.

4. Credit mix and types

Having experience with different types of credit, like revolving credit card accounts and installment student loans, may help improve your credit health.

Since your credit mix is a minor factor, you probably shouldn’t take out a loan and pay interest just to add to your credit mix. But if you’ve only ever had installment loans, you may want to open a credit card and use it for minor expenses that you can afford to pay off each month.

5.  Recent credit

Creditors may review your credit reports and scores when you apply to open a new line of credit. A record of this, known as an inquiry, can stay on your credit reports for up to two years.

Soft inquiries, like those that come from checking your own scores and some loan or credit card prequalifications, don’t hurt your scores.

Hard inquiries, when a creditor checks your credit before making a lending decision, can hurt your scores even if you don’t get approved for the credit card or loan. But often a single hard inquiry will have a minor effect. Unless there are other negatives marks, your scores could recover, or even rise, within a few months.

The impact of a hard inquiry may be more significant if you’re new to credit. It can also be greater if you have many hard inquiries during a short period.

Don’t be afraid to shop for loans, though. Credit scoring models recognize that consumers want to compare their options. So multiple inquiries for mortgages, auto loans and student loans from a single 14- to 45-day period (depending on the loan and credit scoring model) may be treated as a single inquiry when calculating your scores.

Bottom line

There are many credit scores, and you may not know which one a lender is going to use when considering your application. However, consumer credit scores, which are determined based on the information in your consumer credit reports, weigh factors in a similar manner. If you focus on improving these factors, you could improve your credit health across the board.

What Is An Interest Only Mortgage?

In an interest only mortgage, the borrower covers interest on payments for a specific period of time, paying the cost of borrowing money up front, while the principal remains unchanged. This allows for reduced monthly mortgage payments early in the loan term. An interest only home loan can offer flexibility to buy a more expensive home than a borrower initially qualifies to buy. They can also be a great way to lower payments so you can divert your cash flow toward retirement, college tuition or a rainy day fund.

In traditional mortgages, payments are applied to both interest and principal. Through amortization the balance of the loan decreases over the term of the loan. Interest only mortgages are structured differently: The most common version pushes back the amortization schedule, usually 5 to 10 years, while the borrower pays interest only. The other type lasts the duration of the loan, with an agreement principal that will be settled with one balloon payment at the end of the term.

While initial payments as part of an interest only mortgage are lower, borrowers should be aware that over the life of the loan they are more expensive than traditional mortgages. Interest only loans can also be subject to adjustable interest rates. Negative amortization, a feature where missed interest payments are applied to the principal balance, is also a risk inherent to interest only loans. Keep reading to learn more and explore the circumstances that make the most sense to purse an interest only loan.

Is an interest only mortgage right for you?

Here are five questions to help you determine whether an interest only mortgage is the perfect match:

• Are you confident your income will grow in the future, but want to purchase high-value real estate now?

• Are you more interested in lower monthly mortgage payments than building home equity?

• Are you looking to invest your money in something other than your home?

• Are you fine with the prospect of your monthly mortgage payment going up when the interest-only term ends?

• Do you own investment homes and rent them out?

If you answered “YES” to any of these questions, an interest only mortgage might be your best bet! A word of consideration—while interest only home loans offer low monthly payments during the initial term of your loan, your monthly payments will rise after this term ends to cover the principal. If you don’t expect your income to increase in the foreseeable future or if you’re unsure you’ll be able to make the larger payments later on, a 15 or 30-year fixed rate mortgage could be a better fit. In addition, it may be more difficult to refinance your mortgage if your home value doesn’t increase during the lifetime of your loan. Those buying a home for the first time may find interest-only mortgages particularly beneficial. For new homeowners, who are unaccustomed to the higher cost of mortgage payments and the other costs of maintaining a home, the first years of home ownership can be particularly challenging. In many cases, you are buying a house you expect to pay off years down the line, when you are more established and may be making more money, thus the initial costs may seem daunting. If a water heater suddenly needs replacing or a roof suddenly needs to be fixed, the option to exercise an interest only mortgage at that time can come in handy, as long as you are able to cover the higher monthly payments later on.If your income is subject to fluctuation either because of freelance work or commissions and bonuses, rather than a typical flat salary, an interest-only mortgage can be similarly beneficial. Pay interest-only payments during leaner months and years with the anticipation of paying more later on. Risks of interest only payments. Making a smaller monthly payment for a period of time, with the anticipation that you’ll have the money to make larger payments down the line, always carries a risk. The total balance of what is owed on your mortgage is not changing, thus if your financial circumstances do change you may find monthly payments more difficult down the line. Additionally, the housing market can be fickle and the property purchased may fail to appreciate in value. Even if the value remains much the same, if the borrower has negative amortization you may wind up owing more on the mortgage than the actual value of the house making it difficult to make a profit on the house when and if they decide to sell. How much is an interest only payment?

When considering an interest only mortgage, do the math to figure out if you're able to handle the amount of the monthly payment. Figuring out the monthly interest only payment on your mortgage is easy. Say that the unpaid loan balance on your property is $400,000 with an interest rate of 7%. Multiply those numbers together for an annual interest of $28,000. Divide that number by 12 months and you can find your monthly interest payment: $2,333. Keep in mind that after the interest-only period, your payments will increase as you begin to pay back the loan principal.

What Is A VA Loan?

What is a VA home loan?

The US Government's VA loans program helps veterans, active-duty service members and their families qualify for a home loan. Though they are issued by private lenders like Guaranteed Rate, VA home loans are backed by the US Department of Veterans Affairs. Created during World War II to help returning service men and women purchase homes, this program has guaranteed over 22 million VA loans since 1944.

VA home loans feature no down payment or private mortgage insurance (PMI) requirements, making them a great choice for any veteran or active service member looking to purchase a home. Since the housing market collapse of the 2000s, VA home loans have become even more critical in the wake of stricter lending requirements. For this reason, a guaranteed VA loan is often the best and easiest way for veterans to purchase a home of their own.

What are VA home loan requirements?

A VA loan is a no-brainer for qualified homebuyers and refinancers. The intended candidate is a service member or surviving spouse with a clean financial record. Ask yourself these four questions to determine if you meet the minimum VA home loan requirements:

• Are you a current or ex-military personnel?

• Are you the surviving spouse of a current or ex-military personnel?

• Have you defaulted on a home loan within the last 12 months?

• Have you declared bankruptcy within the last two years?

If you answered "YES" to either of the first two questions and a resounding "NO" to questions three and four, you most likely meet the basic VA home loan requirements.

Other VA home loan requirements have to do with military service time. Specifically, you must have serve for 90 or more days in wartime or 181 or more days in peacetime. In both cases, the stipulation is waived if you are discharged due to a service-related disability. Reserves and National Guard soldiers must serve for at least 6 years to be eligible.

Spouses of deceased service members are eligible for VA loan benefits, provided they have not remarried and that the deceased either:

• Died in service or from a service-related disability.

• Was missing in action or a prisoner of war for at least 90 days.

• Was rated totally disabled and was eligible for disability compensation at the time of death.

Children of deceased veterans are not eligible for VA loan benefits.

The VA loan home advantage

VA loans are fully backed by the government and offer a myriad of advantages for your home purchase or mortgage refinance. Here are the six biggest:

No money down

While conventional loans generally require down payments that can reach up to 20%, no such thing is required with a VA home loan at or under the local conforming limit. Down payments are still an option, of course, but they are not a requirement. The VA allows you to purchase jumbo loans, but requires you to supply 25% of the difference between the loan amount and the loan limit.

No PMI

Private Mortgage Insurance (PMI) is a requirement when you put less than 20% down on the purchase of a home and typically adds 0.2-0.9% of expenses to your monthly mortgage. With a VA loan, you can wave goodbye to PMI!

Competitive interest rates

Since VA loans are guaranteed by the federal government this can provide lenders with a greater sense of safety and flexibility. This can ultimately lead to a more competitive interest rate than you may otherwise receive.

Easier to Qualify

Similarly to the interest rates, the VA loan being backed by the government also lets the banks assume far less of the risk. This can lead to less stringent qualification standards, once the aforementioned qualifications are met.

Fewer credit restrictions

Reduced restrictions mean easier qualification. With a VA loan, you’re allowed a higher debt-to-income ratio and afforded more leniency with your credit score.

Seller assistance

The VA allows sellers to assist with up to 4% of closing costs.

Easy refinance

Borrowers can refinance their homes with a VA streamline or cash-out loan. The streamlined version lowers the mortgage rate of an already existing VA loan, usually for less than the current principal and interest. This means it doesn't require a credit check or appraisal. The cash-out option involves a credit check and appraisal, since the home’s value represents the maximum loan amount and the new loan will be larger than the existing loan.

What Is An FHA Loan?

FHA home loans are mortgages insured by the federal government through the Federal Housing Administration (FHA), a branch of the Department of Housing and Urban Development. FHA home loans reduce the barrier to entry for homebuyers and refinancers by featuring low down payments, flexible credit requirements and more purchase power. If funds are limited, an FHA home loan can help you finance more than 80% of your home value.

What are FHA loan requirements?

In order to ensure that you meet the minimum FHA loan requirements, you need to consider the following factors.

• Are you over the age of 18?

• Do you have a valid Social Security number and lawful residency in the United States?

• Do you have a steady employment history? If not, have you at least worked for the same employer for the past two years?

• Can you afford the minimum down payment of 3.5% or 10% (depending on credit score)?

• Do you have a credit score above 620?

• Have you been out of bankruptcy for at least the past two years?

• Will this home be your primary residence?

You’ll likely need to be able to answer all of these questions with a hearty ‘YES’ in order to meet FHA home loan requirements.

The FHA home loan advantage

FHA home loans are backed by the federal government and offer you a myriad of advantages for your home purchase or mortgage refinance.

Minimum down payment option of 3.5% for qualified buyers

For those with credit scores of 620 and above, the down payment for an FHA loan is 3.5%. (For those with credit scores below 620, a 10% down payment is required.)

Easier to qualify

FHA requirements are, typically, less strict than typical loans. Although a credit score below 620 does not allow you to take advantage of the 3.5% down payment option, conventional lenders require a minimum credit score of 620 or higher.

No maximum income restrictions

Seller assistance with up to 6% of closing costs

FHA home loans allows the seller to pay up to 6% of the closing costs, including any costs of the appraisal, title expenses and a credit report.

203k renovation loans with a minimum 620 FICO score.

If you need extra cash to repair or renovate your home, FHA offers 203(k) loans that offer you loans based not on the current appraised value of the home, but the projected value after these renovations would take place. The extra money you receive from the loan after the purchase of the home can then go towards these renovations. This can be used to cover painting, roofing, plumbing, heating and air-conditioning and full room remodels. This is generally only eligible for those with a credit score of 620, more along the lines of a minimum credit score for a conventional loan.

Loan limits adjusted annually

FHA home loans have a maximum loan amount (or “ceiling”) that is regularly adjusted every year and vary according to the cost of living in a given area. This annual adjustment increases your likelihood of getting an FHA home loan that meets your current needs.

With an FHA loan, you can use borrowed money and other gifts from family members to cover down payments and closing costs. And don’t worry about prepayment penalties! An FHA loan lets you refinance or pay off your home early without having to deal with extra fees or other sticking points. As long as you meet FHA requirements, an FHA home loan may be within your future!

What Is A Jumbo Loan?

A non-conforming jumbo mortgage can help you purchase a lot of real estate. This mortgage is needed for loan amounts over the conforming loan limit of $484,350 and $726,525 in high-cost areas. If you need to take out a loan over the conforming limit, a fixed or adjustable rate jumbo mortgage could be your ticket to a big and beautiful home.

View Today's Jumbo Mortgage Rates

There is, however, one key difference: Jumbo loans are ineligible for purchase by Fannie Mae or Freddie Mac and must be sold in the secondary market. What does this mean? Jumbo loans can require more stringent credit guidelines and larger down payments than conforming loans.

Is a jumbo mortgage right for you?

Can you afford high-value real estate but don’t have enough saved up to bring a loan down to the conforming limit? A jumbo mortgage can help you make your move! If your financial situation is on the upswing, a jumbo loan can be a good way to bypass a starter home and purchase the full-sized home of your dreams.

Jumbo loan features

A jumbo mortgage is a great way to rapidly build your credit. On-time payments will improve your score by leaps and bounds. One important note—it may be more expensive to refinance a jumbo loan due to higher closing costs.

What Is An Adjustable Rate Mortgage?

An adjustable rate mortgage (ARM) is a home loan with an interest rate that changes after a fixed amount of time—usually 5-7 years. Adjustable rate mortgages s typically offer lower interest rates and lower monthly payments than a fixed rate mortgage. After the allotted time passes, the rate may adjust and your monthly mortgage payments will adjust accordingly.

View Today's 5-Year ARM Mortgage Rates

View Today's 7-Year ARM Mortgage Rates

If your top priority is a low monthly payment or you don't plan on staying in your home for more than 5-7 years, an adjustable rate mortgage (ARM) could be right for you. If flexibility is your top priority, this loan can be a viable alternative to a 15 or 30-year fixed rate mortgage.

Is an adjustable rate mortgage right for you?

An adjustable rate mortgage can give you low rates and extra security—important considerations when searching for your perfect home. The benefits of an adjustable rate mortgage include:

• ARM rates can be lower than a 30-year fixed rate.

•  ARMs can feature lower monthly payments early on in the loan term, allowing you to maximize cash flow.

•  ARM rates do not change during the initial term (5, 7 and 10-year options available).

•  Adjustment rate caps offer extra protection.

•  ARMs may benefit first-time homebuyers and those looking to refinance. With the lower monthly payments of ARMs, you may be able to buy a larger home you wouldn’t be able to otherwise.

As the borrower, you take advantage of lower initial payments by leveraging the possibility that the mortgage interest rate could increase after the initial term. This means that your adjustable rate mortgage transfers part of your home loan’s interest rate risk from the lender to the borrower, giving you the lowest rate on the market.

An adjustable rate mortgage is also a great way to qualify for a higher loan amount, giving you the means to purchase a more expensive home. Many homebuyers will take out large mortgages to secure a 1-year ARM and later refinance to prevent a rate hike.

However, ARMs are not the ideal mortgage solution for everyone. The following are some particularities of adjustable rate mortgages that may be less than ideal, causing you to rethink a standard fixed mortgage rate. .

•  Over the life of a loan, rates and payments can rise rather dramatically over the life of the loan. Depending on rates, is not uncommon for an ARM to double over just a few short years.

•  ARMs are generally more complex to understand than a typical fixed rate. An adjustable rate mortgage affords lenders the flexibility to determine adjustment indexes, margins, caps and more.

•  Negative amortization loans, a certain type of adjustable rate mortgage, can cause borrowers to wind up owing more money than they did to begin with. The reason is that the payments are set so very low, that even the interest is not being completely paid off. All of this then, naturally, gets rolled over to the balance, which can be formidable when all is said and done.

So, what’s the better choice? An adjustable rate mortgage or a fixed rate mortgage? This is a determination you will, of course, have to make yourself. Each offers something different. Fixed-rate mortgages offer a permanent rate and a sense of security but at rates that can seem daunting. An adjustable rate mortgage costs less initially, which is appealing, but may ultimately lead to uncertainty.

These key differences will be a huge factor in your decision but there are other important questions to answer when deciding which loan is better for you:

1. What is the current interest rate environment?

A major determining factor may be the current interest rate environment. If rates are low, a fixed-rate mortgage makes the most sense – you’re in an ideal financial environment that you won’t want to jeopardize. However, if rates have become high, things change. With an adjustable rate mortgage, you have a lower initial rate to begin with and if (and when) rates eventually fall, you may well wind up with lower payments. In the meantime, you get to enjoy the benefits of owning your own home.

2. Do you plan on staying in the home long?

If not, an adjustable rate mortgage may be the right call. Your initial payment and rate will be low and, if you’re only planning to stay for a few years, you’ll avoid exposure to the huge rate adjustments that can be an ARMs downfall. Meanwhile, you can build up your savings for the more ideal home you may have your eye on.

3. When is the adjustment for the ARM made? How frequently does it adjust?

After an initial fixed period, odds are your adjustable rate mortgage will adjust fairly frequently. Usually, this is on the same date as the initial mortgage making it a yearly anniversary you can count on, but in some cases they adjust much more frequently – sometimes even every month. For some, this can be volatile and overwhelming making a fixed-rate mortgage more appealing.

What Is A 15 Year Fixed Rate Mortgage?

A conventional 15-year fixed rate mortgage is similar to a 30-year fixed rate mortgage in many respects. A conforming 15-year fixed rate loan features a limit of $484,350 ($726,525 in high-cost areas) and a consistent rate throughout its lifetime, giving you secure and predictable monthly mortgage payments. So what does this loan offer that a 30-year fixed rate loan doesn’t?

View Today's 15-Year Fixed Mortgage Rates

The main difference is the length. With a 15-year mortgage, you’ll pay off your mortgage in half the time, putting you on the fast track to full amortization. A 15-year fixed rate mortgage also features lower rates than its 30-year counterpart. A shorter loan term plus lower mortgage rates means less interest on your loan and more money in your bank account! Conventional 15-year fixed rate mortgage features include:

• 3-5% minimum down payment options for qualified homebuyers.

• Regular, qualified income required.

• No private mortgage insurance (PMI) with 20% or more down.

• Seller assistance with up to 3% of closing costs.

• Loan options up to $5 million for non-conforming mortgages.

• Home Style renovation loans with options as little as 5% down.

• 203k renovation loans with a minimum 620 FICO score.

Is a 15-year fixed rate mortgage right for you?

A 15-year fixed rate mortgage is popular with two different demographics. Younger homebuyers with sufficient income often use it to pay off their home before their children start college, while older homebuyers with established careers and higher income use it to pay off their mortgages before retiring. A word to the wise: 15-year fixed rate mortgages feature higher monthly payments than a 30-year loan. You’ll need to factor that into your budget when deciding whether this loan fits your needs.

What Is A 30 Year Fixed Rate Mortgage?

What is a 30-year fixed rate mortgage?

A conventional 30-year fixed rate mortgage features a steady interest rate throughout its lifetime. Spanning three decades, homeowners with this mortgage can look forward to consistent monthly payments for many years to come, which can provide peace of mind and help them budget their finances. A conforming 30-year fixed rate loan offers amounts up to $484,350 in most of the US and a maximum of $726,525 in high-cost areas. To decide if a 30-year fixed mortgage is right for you, ask yourself these four questions:

View Today's 30-Year Fixed Mortgage Rates

• How long are you planning to stay in your home? If you are considering a 30-year fixed rate mortgage, you should be planning to stay put for the long haul. We recommend a minimum of 5-10 years in your new home.

• Would you prefer consistent monthly mortgage payments? Like the sun rising in the east, the terms of a 30-year fixed rate mortgage never change. A consistent interest rate throughout the lifespan of your loan keeps your monthly mortgage payments the same for 360 months. Kiss those fluctuating mortgage payments goodbye!

• Would you prefer a low mortgage payment? Due to the long-term nature of this loan, a 30-year fixed rate mortgage makes your monthly mortgage payments more affordable than a fixed rate mortgage with a shorter time frame. You end up paying more interest over three decades, but the principal repayment is spread over that same period of time. Lower monthly mortgage bills mean you can afford more house!

• Are you purchasing or refinancing? Looking to buy a new home? This mortgage option is tailor-made for you. Looking to refinance your home at a lower rate? A 30-year loan may be too long. Consider a shorter term fixed mortgage or an adjustable rate mortgage based on your budget and refinancing goals.

Conventional 30-year fixed rate mortgage features include:

• 3-5% minimum down payment options for qualified homebuyers.

• Regular, qualified income required.

• No private mortgage insurance (PMI) with 20% or more down.

• Home Style renovation loans with options as little as 5% down .

• Seller assistance with up to 3% of closing costs.

• Loan options up to $5 million for non-conforming mortgages.

• 203k renovation loans with a minimum 620 FICO score.

30-Year Fixed Mortgage Payments

As with most amortized loans, the initial payments of your 30-year fixed rate mortgage are primarily devoted to paying off interest. As the years roll by, this will gradually shift and you’ll reach a point where your monthly payments cover more principal than interest.

What does this mean? As you embark on your 30-year fixed rate mortgage, your first couple years of mortgage payments won’t make much of a dent in your loan’s principal balance. Once you pay off most of the interest, the latter years of your mortgage will be devoted to your principal and you’ll see your mortgage balance decrease dramatically.