Blog | Archives for March 2019

Don’t Miss These First-Time Homebuyer’s Grants and Programs

By Southern Trust Mortgage
March 14, 2019

You’ve decided to become a homeowner. Congratulations! This is the start of an exciting new chapter in the life of your family. While you’ll need to find a home that meets your needs, the importance of finding a home loan that fits you just as well cannot be understated. With all the options available to you, it might seem hard to pick. Below, we’ll outline a handful of the options you have available to you as a first-time homebuyer.

FHA Loans

FHA loans are by far the most popular choice for first-time homebuyers, and for good reason. With FHA loans, your loan is guaranteed by the Federal Housing Administration, making this type of loan a government loan. Part of why this loan is popular with first-time homebuyers is the fact that some of the criteria and restrictions are more lenient than other loan types. FHA loans have a lower credit score minimum than many other programs and also allow for a lower down payment requirement (as low as 3.5% of the purchase price). In exchange for these favorable terms, borrowers are asked to pay mortgage insurance premiums, which protects the lender from risk. Since this makes the loan less of a risk for the lender, they are able to offer you better loan terms.

The Advantage Program

Working in conjunction with the FHA 203(b) program is a grant called The Advantage Program. This grant is offered by approved government entities and is practically available nationwide. While there are eligibility criteria to meet, if you qualify, this program would allow you to put only 1.5% down and equals 2% of the purchase price. As well, it may be combined with up to 6% seller concessions for the closing costs and there is no resale or borrower repayment restrictions.

USDA Loans

Like the name suggests, USDA loans are loans guaranteed by the US Department of Agriculture, but don’t let the name deter you; these loans are not restricted to those only in the agriculture industry. This program is designed to benefit buyers looking for home in rural areas and holds many appealing factors for first-time buyers. Among these factors is that USDA loans do not require a down payment, allowing you to finance up to 100% of your mortgage, and you may even be able to finance the closing costs. USDA loans also allow you to buy a home with larger acreage, something that other loan types restrict. While there are income maximums limits and other restrictions, if you qualify, the USDA loan is a loan type you might want to consider.

VA Loans

VA Loans are guaranteed by the US Department of Veteran’s Affairs and were designed to offer long-term financing options to veterans and/or their surviving spouses. A key benefit of VA loans is the loan type allows financing for eligible veterans with no down payment or private mortgage insurance required. As inferred by the name, VA loans are only available to veterans with certain restrictions and minimums in regard to enlistment and time served, or to the surviving spouse of a veteran who died from service-related disability or while serving on active duty. If you are a first-time buyer who is a Veteran, a VA loan may be the perfect choice for you.

Other grants available from Southern Trust Mortgage

In addition to loan types and programs listed above, Southern Trust Mortgage also offers several other grants in varying amounts. For the first-time homebuyer, see if you qualify for our First-Time Homebuyer Program. This is a grant that may be used for down payments, closing costs, or principal reduction assistance. For the first-time homebuyer that is also a Veteran, there is a grant called the Veterans Purchase Product, which is closing cost assistance for the purchase of an existing home. Lastly, there is a grant available specifically for the women and men who serve our communities called the Community Partner’s Program. This grant offers the same options as the First-Time Homebuyer Program but is specifically for our neighbors that serve in law enforcement, education, or health care, and has a slightly higher cap than other programs.

As you can see, there are several options available to you as a first-time buyer, but the best way to be sure you choose the right product or program is to consult with a professional. Since 1998, the loan experts at Southern Trust Mortgage have been helping buyers, first-time or otherwise, into new homes with ease. Contact us today and let us help make home happen for you.

Blog | Archives for March 2019

Mortgage Market Update – March 7th, 2019

By Southern Trust Mortgage
March 7, 2019

Mortgage Market Update – March 7th, 2019

Recent Events Recap and The Fed

Hi guys! It has been a few weeks since our last market update, but there has really not been any material change to the overarching themes in the economy with Fed activity and global trade still decidedly in the driver’s seat. The Fed has successfully pivoted from a cadence of quarterly rate hikes to more of a wait and see approach, prompted in large part by the significant equity collapse at the end of last year, a general slowing of global economic growth, and muted inflation. The Fed’s plan for winding down or “normalizing” its massive portfolio of Treasuries and mortgage-backed securities has also shifted with most expecting operations to reduce its size subsiding later this year. Together, these actions have created a pretty favorable rate environment.

Trade

Moving on to trade, fresh headlines about negotiations between the US and China seem to make their way into the daily news cycle, though developments have been modestly incremental at best. It is pretty clear that a deal of some sort can be achieved, and risk markets have largely priced this in. So when a deal is announced I expect the kneejerk reaction to send both equities and rates higher, but we could quickly find ourselves in a buy the rumor, sell the fact scenario.

The Fed

Meanwhile, the Fed is trying to thread the needle with its monetary policy. Market participants have been pushing for a pause to this cycle of rate hikes and getting more aggressive in their appeal as stock prices have fallen. It wasn’t too long ago that 3 more 25 basis point hikes in 2019 was the consensus view, but that steadily faded. Now Fed fund futures are suggesting that not only will there be no hikes in 2019, but there could actually be a rate cut.

Interest Rates

Interest rates have been very stable in recent weeks, and the 10yr yield is firmly planted in the middle of the 2019 range. A recent technical development saw the 10yr move in an increasingly narrow short term range before yields broke out higher. Typically a break out of this sort of range results in significant follow through in the direction of the breakout—meaning I was expecting rates to move a fair amount higher. Fortunately, that did not come to fruition as they seem contented to drift about in the middle of the longer term range.

Employment Report

The monthly employment report is scheduled for release on Friday and may offer some short term direction for equities and rates. Bigger picture, I am still in the camp that interest rates will remain lower for longer and this should set us up well for the spring house-hunting season. We just need to see some more inventory come online.

Have a great week everyone.

Hance Thurston
Head of Capital Markets, Southern Trust Mortgage

Have questions about the mortgage market or looking to start the homebuying journey? Get started by contacting a local Southern Trust expert. We are standing by to help!

Blog | Archives for March 2019

Five Mistakes Every Homebuyer Should Avoid

By Southern Trust Mortgage
March 4, 2019

You’ve decided to buy a home. Congratulations!

Whether it is your first time buying a home or you are a returning customer, the preparation involved in this major purchase is similar and, most often, extensive. In fact, there are mistakes that you should avoid making any time you buy a new home, no matter whether it’s your first time or not. In this post, we’ll outline a few of those mistakes and what you can do to avoid them.

Mistake #1- Shopping for a new home without knowing your loan amount.

You’re welcome to look for a home in what you believe to be your price range, however, it is a mistake to trust the mortgage estimates provided by most listing websites. These estimates are often inaccurate and do not take into consideration the rates of the day or your unique financial situation. To avoid this mistake, we suggest you find your mortgage company before you begin shopping. At Southern Trust Mortgage, we offer something called Priority Approval. Unlike the pre-qualification letters issued by other lenders, Priority Approval is a true credit approval issued by our team, guaranteeing your loan amount. Having a true credit approval allows you and your real estate agent to shop confidently, as well as making any offer you put down on a home that much more appealing to sellers who may otherwise have to entertain offers that do not have approvals attached to them.

Mistake #2- Making a large purchase during the loan process

You’ve gotten the approval, your mortgage is proceeding, you’re about to be in your new home… perfect time to finance a new couch, right? Sorry, but no! As tempting as it may be to furnish your new home, avoid making any new purchases, especially those that require financing, such as a buying new car or furniture, until afteryour loan has closed. Making large purchases affects the amount of money you have available and financing large purchases will have an impact your credit score; given that much of the loan process is tied to your credit score, you don’t want to bring your score down. If at all possible, save making large purchases until after you buy your house.

Mistake #3- Changing or quitting your job while buying a house.

It’s true that you only control so much of your employment, but to the best of your ability keep your current employment situation stable while you shop for and buy your home. Mortgage lenders check your income and your continued employment to verify that you will have the income to pay for your home mortgage. If you willingly change your employment situation during the loan process, it may delay or derail your ability to buy a home for a little while.

Mistake #4- Not providing documentation in a timely manner.

Occasionally during the loan process, your loan officer or the team they work with (usually the loan processor, who works in conjunction with the loan officer and loan underwriter to get your loan closed) will contact you and request additional information before your loan can close. The documentation needed can vary from person to person, but usually is needed to explain and verify a person’s credit and income. To make sure your loan closes on time, provide your loan team with the documents requested in a timely manner.

Mistake #5- Not utilizing the help of real estate and mortgage professionals.

Buying a home is a process that is at times intense and arduous; during those moments, it’s easy to feel overwhelmed. The team of people you are working with are there to help you. If you have questions at any point during your home buying process, reach out to your agent or loan officer. They want you to feel informed and comfortable through every step of the home-buying process, and are only a phone call, text, or email away.

At Southern Trust Mortgage, we’ve been helping customers buy new homes since 1998. Our team of loan experts are readily available to help you avoid these and other home-buying mistakes and are dedicated to making the process as easy as possible. Contact us today and let us make home happen for you.