Blog | Page 3

Mortgage Insurance vs Homeowner’s Insurance: What’s the Difference?

Buying a home is the biggest purchase you will likely ever make. Naturally, you want to protect that investment with homeowner’s insurance in case of an accident or natural disaster. At the same time, banks that lend large sums of money want to protect their own interest with mortgage insurance. Continue reading to learn how these two types of coverage differ and how they affect your monthly payment.

By Kiley Belanga
February 12, 2026

What is Mortgage Insurance?

Mortgage Insurance protects the lender in case you stop making your mortgage payments. While it is not required for every loan, certain factors determine whether you must pay for it.

Key Types of Mortgage Insurance:

Private Mortgage Insurance (PMI): This applies to conventional loans.

Mortgage Insurance Premium (MIP): This is specific to FHA loans.

What is Homeowner’s Insurance?

Homeowner’s Insurance protects you and your home from physical damages and legal liability. Lenders typically require proof of coverage before you can close on your home.

What does Homeowner’s Insurance Cover?

Dwelling: The physical structure of the home.

Personal Property: Furniture, clothes, and electronics.

Liability: Protection if someone is injured on your property.

Additional Living Expenses (ALE): Hotel costs if your home is unlivable due to a covered event, such as a fire.

Mortgage Insurance Requirements by Loan Type

Each loan program has unique rules for mortgage insurance. Here is a breakdown of the most common options:

Conventional Loans: You do not need a 20% down payment to secure a conventional loan, but PMI is required for any down payment less than 20%.

FHA: Mortgage Insurance is referred to as MIP in this case. Most FHA Loans require insurance for the life of the loan. However, if you put down 10% down or more with at least a 15-year term, then the MIP is removed after 11 years.

VA: One of the many benefits of the VA Loan is that there is no monthly mortgage insurance requirement.

USDA: While USDA Loans do not have “PMI” they do require an upfront guarantee fee that is 1%/ of the loan amount paid at closing. They also include an annual fee that’s 0.35% of the loan amount, which is paid as a monthly premium.

How much is Mortgage Insurance?

Typically, fees range from 0.5% to 2% of the original loan amount, per year. This cost is divided into twelve installments and added to your monthly mortgage payment.

How do you get rid of PMI?

If you have a conventional mortgage, lenders are legally required to cancel PMI once the mortgage balance drops to 78% of the home’s original purchase price or when the loan reaches the halfway point of its term.

You can also request cancellation once you’ve reached 20% equity in your home. To do this, you must be current on your payments and may need a new appraisal to verify the current property value.

Removing MIP from FHA Loans

Removing insurance from an FHA Loan depends on when your loan started:

If your mortgage originated before June 3, 2013:

You have made all your monthly payments on time.
You’ve paid at least 5 years of a 20,25,or 30-year loan.
Your mortgage must have a loan-to-value (LTV) ratio of 78% or less.

If your loan originated on or after June 3, 2013:

Your down payment must have been 10% or more at the time of purchase.
You must have made on-time payments for the past 11 years.

If you do not meet these specific requirements, you may be able to refinance your FHA loan into a conventional mortgage to eliminate the insurance costs.

How much does homeowner’s insurance cost?

The cost varies based on the state you live and the value of your home. When choosing your plan be sure to shop around with different companies to ensure you are getting the best deal and the right amount of coverage for your home.

How is homeowner’s insurance paid?

You can pay your insurance company directly, but many homeowners choose to use an escrow account. By using an escrow account, the cost is factored into your monthly mortgage payment. When the insurance bill is due, the lender pays it on your behalf using the funds in the account.

The Takeaway

Both mortgage insurance and homeowner’s insurance are important to the lending process. Mortgage insurance makes homeownership more accessible for borrowers with lower down payments by giving lenders financial security. While homeowner’s insurance helps protect your biggest asset: your home.

Are you ready to start the mortgage process? Contact us today!

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HomeReady® and Home Possible® Extend $2,500 Down Payment and Closing Cost Assistance Grant

By Kiley Belanga
February 11, 2026

Great news for homebuyers! Fannie Mae HomeReady® and Freddie Mac Home Possible® are extending their $2,500 Down Payment and Closing Cost Assistance Grant for loans closed by December 31, 2026.

Continue reading to find out what this means for homebuyers and if you are eligible to receive these funds.

HomeReady® and Home Possible® $2,500 Down Payment and Closing Cost Assistance Grant

Also referred to as the Very Low-Income Purchase (VLIP) credit, this program is designed to make homeownership more accessible for borrowers who may have the credit scores to qualify but need an extra boost to cover upfront costs.
Whether you need help with your down payment or help covering closing costs, this $2,500 credit gives homebuyers a head start.

How It Works:

The $2,500 is applied as a lender credit at the closing table. This means the money goes directly towards your costs, reducing the amount of cash you need to bring to closing.

Best of all, this is a true grant. Unlike other down payment assistance programs, this is not a second mortgage or a lien. There is no requirement to pay this money back if you sell or refinance your home in the future.

Key Eligibility Requirements:

First-Time Status: At least one borrower must be a first-time homebuyer.
Income Limits: Household income must be at or below 50% of the Area Median Income Limit (AMI).
- Research Fannie Mae Income Limits
- Research Freddie Mac Income Limits
Credit Requirements: Minimum credit score of 620 or (680 for manufactured homes).
Minimum Contribution: A down payment of at least 3% is required. The credit must be applied as a credit towards the down payment or closing costs (which can include offsetting costs of lender-paid mortgage insurance).
Homebuyer Education: Homeownership counseling is required before the loan can be cleared to close. Borrowers can complete this course online for free.

Additional program requirements may apply. Consult your loan officer to confirm your specific eligibility.

Available for both HomeReady® and Home Possible®, this grant allows borrowers more options for their loan. Here’s the how these two options stack up against each other.

Compare Your Options: HomeReady® vs Home Possible®

Product	Fannie Mae HomeReady®	Freddie Mac Home Possible®
Great For	Borrowers with a strong rental history	Borrowers looking for property flexibility
Down Payment	3% minimum requirement	3% minimum requirement
Mortgage Insurance	Reduced MI rates and ability to cancel it later	Cancelable mortgage insurance (restrictions apply)
Property Types	Standard Residential Properties	Single-family, manufactured homes, and condominiums

Why Choose HomeReady®

HomeReady® helps makes homeownership a reality for low-income borrowers by looking at the bigger picture of financial responsibility.

Flexible Funding: Use gifts or grants from various sources with no minimum personal contribution required.

Efficiency: Immediate appraisal orders help minimize delays so you can close with confidence.

Affordability: Lower mortgage insurance requirements keep your monthly payments more manageable.

Learn more about HomeReady®.

Why Choose Home Possible®:

Similarly, Home Possible® helps bridge the gap by offering versatile options for various housing types.

Diverse Housing: This program applies to single-family homes, manufactured housing, and renovations to condominium units.

Credit Savings: Includes credit fee caps and additional savings for qualified borrowers.

Long-Term Value: Cancelable mortgage insurance can potentially save you thousands over the life of the loan.

Learn more about Home Possible®

While both options make for great choices for homebuyers, your loan officer can help determine which option best fits your specific situation.

Make Home Happen Today

The extension of the $2,500 VLIP Grant through 2026 helps provide a massive window of opportunity for our community. Contact us today to see if you qualify for this $2,500 grant or other local assistance programs.

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FHLB Grant Funds are Back: Get up to $20,000 Towards Your New Home

By Kiley Belanga
February 11, 2026

📢 Program Update

FHLB Funds have been fully allocated, but that doesn’t mean the door is closed on your homeownership goals. Additional grant opportunities are still available! Contact us today to see which options you qualify for.

Stay in the loop: Program availability can change fast! Follow us to stay up-to-date on grants, down payment assistance, and market news: Facebook | Instagram | LinkedIn

Amazing news for homebuyers! The Federal Home Loan Bank (FHLB) is officially reopening its grant funding February 23^rd, 2026. If you are currently house hunting or planning to buy soon, these funds can significantly lower your out-of-pocket costs.

FHLB offers three grant programs for qualifying homebuyers who can use extra assistance when buying their home.

First-Time Homebuyer Grant: $17,500

This program is specifically designed to help first-time buyers overcome the hurdle of initial costs. Qualified borrowers can use these funds toward their down payment or closing costs.

Key Requirements:

First-Time Status: Must be a first-time homebuyer or have not owned a home in the last three years.
Primary Residence: The home must be used as your primary residence.
Income Limits: Household income must be at or below 80% of the Area Median Income Limit (AMI).
Minimum Contribution: A $1,000 minimum contribution is required from the borrower.

Community Partners Grant: $20,000

We believe those who serve our communities deserve a place to call home. This grant is available to both first-time and repeat homebuyers in specific service-oriented professions.

Eligible Professions Including Any Employee, Active or Retired, from:

Law Enforcement: Includes personnel from agencies administered by state or local government.
Fire & Emergency Services: Including state or local government, both volunteer and career firefighters and other first responders (National Guard, Reservist, or Med Tech)
Private or Public School: Teachers, administrators, and school support staff (including janitorial and office staff).
Healthcare Workers: Accredited or state recognized medical or health care facility or certified, accredited or licensed health care worker.
Military: Veterans, active-duty members, or surviving spouses.

Don’t see your specific title? If you are licensed professional or government employee in these sectors, you likely qualify! Reach out to us to confirm your eligibility.

Key Requirements:

Income Limits: Household income must be at or below 80% of the Area Median Income Limit (AMI).
Minimum Contribution: A $1,000 minimum contribution is required from the borrower.

Workforce Housing Plus+: $15,000

To combat rising home prices and inflation, this grant supports “middle-income” workers who might not qualify for traditional low-income assistance but still need a boost.

Requirements:

Income Limits: Specifically for buyers between 80.01% and 120% of the Area Median Income (AMI) Limit.
Borrower Contribution: A minimum of $1,000 from the borrower’s own funds is required.
Primary Residence: Must be owner-occupied.

Why Choose an FHLB Grant?

Beyond the initial funding, these grants offer incredible flexibility:

Loan Compatibility: Works with almost all loan types, including VA, USDA, FHA, and Conventional.
Stackable Savings: In many cases, these can be combined with state-specific first-time homebuyer programs for even more savings.
Versatile Use: Any excess grant funds can be applied toward increasing your down payment or buying down your interest rate to lower your monthly payment.

Don’t Wait! Apply Today.

Funds are limited and available on a first come, first served basis. Contact a Southern Trust Mortgage loan officer to determine your eligibility and secure yours today!

Additional requirements may apply for each program. Consult your loan officer to confirm your eligibility.

Blog | Page 3

Everything You Need to Know about Conventional Loans

By Kiley Belanga
February 5, 2026

As one of the most popular mortgage options on the market, Conventional Loans offer the flexibility and competitive rates needed to meet the goals of today’s homebuyers. Whether you are looking to buy your first home or invest in a second property, understanding the benefits, requirements, and key features of conventional financing is the first step toward a successful closing.

What is a Conventional Loan?

A conventional mortgage is a type of loan not insured or guaranteed by a government agency (unlike FHA, VA, or USDA Loans). Instead, these loans follow guidelines set by private entities like Fannie Mae and Freddie Mac.

Conventional loans are a great fit for borrowers with stable income and solid credit scores.

Conforming vs Non-Conforming Loans

Conforming Loans: These stay within the dollar limits set by the Federal Housing Finance Agency (FHFA). For 2026, the baseline limit for a single-family home has increased to $832,750 in most of the U.S.

Non-Conforming (Jumbo) Loans: If your dream home exceeds the local conforming limit, it is considered “Non-Conforming” or a Jumbo Loan. These typically require higher credit scores and larger down payments due to the increased risk to the lender.

Conventional vs FHA: Which is Right for You?

Many buyers weigh these two options when considering a mortgage. Here is how they compare at a glance:

Feature	Conventional Loan	FHA Loan
Minimum Down Payment	3%	3.5%
Credit Score Requirement	620+	500–580+
Mortgage Insurance (PMI)	Cancellable at 20% equity	Usually for the life of the loan
Property Type	Primary, Second, or Investment	Primary Residence Only

How Do You Qualify for a Conventional Mortgage?

While every lender has slightly different standards, the general requirements for a conventional mortgage include:

Credit Score: A minimum score of at least 620 is typically required, though higher scores can help secure more competitive interest rates.
Debt-to-Income Ratio (DTI): Your monthly debt payments should ideally be below 36% – 43% of your gross monthly income.
Down Payment: You can secure a loan with as little as 3% down (available for first-time buyers or meeting specific income criteria).
Employment: A stable two-year work history is standard for verifying consistent income.

Flexible Terms and Rate Options

Conventional loans aren’t “one size fits all.” You can customize your loan structure based on your long-term financial goals:

Fixed-Rate Mortgages: Your interest rate stays the same for the entire life of the loan. Common terms include 15, 20, or 30 years.

Adjustable-Rate Mortgage (ARMs): These usually offer a lower initial interest rate for a set period of time (like 5 or 7 years) before the rate adjusts based on current market conditions.

The Truth About Down Payments and PMI

One of the biggest myths in real estate is that you must have a 20% down payment for a conventional loan. This is false. You can purchase a home with as little as 3% down. However, if you put down less than 20%, you will be required to pay Private Mortgage Insurance (PMI).

Pro Tip: Unlike FHA loans, where mortgage insurance often lasts for the life of the loan, PMI on a conventional loan can be cancelled once you reach 20% equity. This simple change can save you hundreds of dollars a month down the road!

Your Home Loan Application Checklist:

Ready to apply? Having your paperwork organized will speed up your approval. To get started, you will generally need:

Income Proof: Pay Stubs from the last 30 days and W-2s/ Tax Returns form the past two years.
Asset Documentation: Bank statements from the last two months.
Identification: A valid government-issued ID (Driver’s License, Military ID, State-Issued ID, or Passport)
Additional Documentation may be Requested

Is a Conventional Loan Right for You?

Conventional Loans are an excellent option for buyers looking for competitive interest rates, flexible terms, and the ability to eventually eliminate mortgage insurance.

Not sure if you meet the credit score requirements or have questions about local loan limits? Contact us today and we will help you find the perfect loan to meet your homeownership goals!

Frequently Asked Questions (FAQ)

Is it better to get an FHA or Conventional Loan?
It depends on your financial profile. Conventional loans are often better suited for those with higher credit scores (620+) and larger down payments. FHA loans are typically good for those with lower credit scores and higher debt-to-income ratios. Your loan officer can help determine which loan option best fits your financial profile.
Can I get a Conventional Loan with 3% Down?
Yes! There are specific programs like (HomeReady or Home Possible) and options for first-time homebuyers that allow for a down payment as low as 3%. This along with cancellable PMI makes conventional financing a competitive alternative to FHA Loans.
What is the difference between a Conforming and Jumbo Loan?
A conforming loan meets the dollar limits and guidelines set by Fannie Mae and Freddie Mac. A Jumbo or Non-Conforming Loan exceeds those limits. Because Jumbo Loans cannot be sold to Fannie or Freddie, lenders often have stricter credit and down payment requirements for them.
How do I get rid of PMI on a Conventional Loan?
Unlike government-backed loans, you don’t have to refinance to get rid of PMI on a Conventional Mortgage. Once your loan-to-value (LTV) ratio reaches 80% (meaning you have 20% equity), you can request that your lender remove the PMI. It is automatically removed once you reach 22% equity.

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Reverse Mortgages: A Mortgage Solution for Homeowners 62+

For many homeowners, the greatest asset they own is the one they’re currently sitting in. After years of making payments and building equity, it’s finally time for your home to return the favor. Introducing Southern Trust Mortgage’s Reverse Mortgage Program, a loan option specifically designed to provide financial flexibility and peace of mind for homeowners aged 62 and older.

By Kiley Belanga
February 3, 2026

What is a Reverse Mortgage?

Unlike a traditional mortgage where you make payments every month, a Reverse Mortgage pays you. You retain ownership of your home, but you convert a portion of your equity into usable cash. The best part? No monthly mortgage payments are required as long as you live in the home as your primary residence, keep up with property taxes, and maintain homeowners insurance.

The beauty of this program lies in its flexibility. Homeowners who choose a Reverse Mortgage typically use their home equity to:

Supplement Retirement Income: Boost your monthly cash flow to cover daily expenses.

Eliminate Existing Debt: Pay off your current traditional mortgage to get rid of that monthly bill.

Cover Healthcare Costs: Manage unexpected medical bills or in-home care.

Home Renovations: Modify your home to make “aging in place” safer and more comfortable.

Is a Reverse Mortgage Right for You?

While a reverse mortgage is a powerful tool, it’s a big decision. It’s generally an ideal fit if:

You are 62+

You have significant equity in your home

You plan to stay in your home for the long term

Ready to take the next step toward financial freedom?

Your retirement should be about enjoying the life you’ve built, not worrying about the next bill. Our team of specialists is here to walk you through the process, answer your questions, and help you determine if this is the right move for your future.

For full program details please click here.

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Key to Buying your First Home

By Wendy Lewis
January 30, 2026

Buying Your First Home? FHA Loans Can Help You Get There Sooner

Buying your first home is an exciting milestone. But it can also feel overwhelming. Navigating the world of mortgages and financing options is complex.

FHA loans offer a solution for many first-time homebuyers. These loans are backed by the Federal Housing Administration. They provide a path to homeownership with lower down payments and flexible guidelines.

FHA loans are designed to help those who might not qualify for conventional loans. They offer more lenient credit score requirements. This makes them accessible to a wider range of buyers.

Understanding FHA loan benefits can help you make informed decisions. It can bring you closer to owning your dream home. Let’s explore how FHA loans can help you get there sooner.

What Are FHA Loans and Who Are They For?

FHA loans are a type of mortgage specifically for homebuyers with limited funds or less-than-perfect credit. They are insured by the Federal Housing Administration. This insurance protects lenders if buyers default on the loan, making them less risky for lenders.

Designed to assist first-time homebuyers, FHA loans are flexible. They allow buyers with credit scores as low as 580 to qualify. This opens the door for many who might otherwise be denied a conventional loan.

FHA loans are ideal for:

First-time buyers
Buyers with limited savings
Buyers with lower credit scores

These loans offer a unique opportunity to enter the housing market with fewer barriers. By reducing financial strain, they simplify the path to homeownership.

Key FHA Loan Benefits for First-Time Homebuyers

FHA loans offer numerous advantages, especially for those buying their first home. One of the most significant benefits is the reduced down payment requirement. You might only need to put down as little as 3.5% of the home’s price.

Another major benefit is the flexible credit score requirements. FHA loans are accessible to those with scores as low as 580. This means that buyers with past credit issues have a better chance of qualifying.

FHA loans also allow the use of gift funds, making it easier to cover down payment and closing costs. Family members or friends can contribute toward these expenses.

Key advantages of FHA loans include:

Lower down payments
Flexible credit requirements
Acceptance of gift funds
Variety of property options

These benefits combined make homeownership more attainable. First-time buyers can secure their dream home without the usual stress.

FHA Loan Requirements: What You Need to Qualify

Qualifying for an FHA loan involves meeting specific criteria. The primary requirement is a steady income and employment history. Lenders want assurance of your ability to repay the loan.

Your credit score is another critical factor. While conventional loans often require higher scores, FHA loans accept scores starting from 580. This opens doors for buyers with less-than-perfect credit.

You also need to demonstrate a manageable debt-to-income ratio. Generally, lenders look for a ratio not exceeding 43%, though exceptions exist.

In summary, here’s what you need:

Steady employment and income
Credit score of at least 580
Acceptable debt-to-income ratio
Willingness to pay mortgage insurance premiums

Meeting these requirements helps you on the path to homeownership. With FHA loans, buying a home becomes a more realistic goal.

How FHA Loans Make Homeownership More Accessible

FHA loans make homeownership more attainable for many. They are specifically designed to assist first-time buyers. This involves accommodating those who might not qualify for standard loans.

A significant way FHA loans help is through lower down payment requirements. You can often secure a loan with as little as 3.5% down. This reduces the upfront cash needed, easing financial barriers.

Additionally, FHA loans allow for more flexible credit requirements. These loans can accept lower credit scores and higher debt-to-income ratios, broadening access to many aspiring homeowners.

Key access points include:

Lower down payments (as low as 3.5%)
Flexible credit score requirements
Acceptance of higher debt-to-income ratios

These factors combine to make home buying feasible for many potential buyers. With FHA loans, owning a home is more within reach.

The FHA Loan Process: Step-by-Step Guide

Getting an FHA loan involves several key steps. First, you need to get pre-approved. This involves working with a lender to assess your financial situation and loan eligibility.

Next, you start house hunting. Look for properties that meet FHA requirements. Remember, your choice affects both your lifestyle and investment.

Once you find the perfect home, make an offer. If accepted, it’s time for a formal loan application. This requires additional paperwork and verification.

Here’s a straightforward guide:

Get pre-approved: Consult one of our STM Loan Officers
Find a home: Work with an Agent to find your home
Make an offer: Your dedicated agent will help you write a promising offer
Finalize application: Submit necessary documents to your STM Loan Officer

Finally, upon approval, you attend the closing and secure your new home. This step confirms the loan and transfers ownership rights. Each stage in the process moves you closer to owning your first home.

FHA Loan Limits and Property Types

FHA loans come with specific borrowing limits. These limits vary by location and are influenced by local housing prices. It’s important to check the limits in your area to ensure you can borrow enough to purchase your desired home.

FHA loans are versatile and applicable to different property types. Options include single-family homes, multi-family homes, and select condos. This variety allows flexibility based on your needs and future goals.

Here’s a quick overview:

Single-family homes: Ideal for individual families.
Select condos: Must meet specific FHA standards.

Special FHA Loan Programs: 203(k) and More

FHA offers specialized loan programs beyond basic loans. One such program is the FHA 203(k) loan. This program allows buyers to finance both buying and renovating a home in one mortgage.

Other special programs include options for energy-efficient improvements. These can integrate energy-saving upgrades into loan amounts, making homes more sustainable.

Key programs to consider:

FHA 203(k): Combines purchase and renovation.
Energy-efficient programs: Supports eco-friendly upgrades.

Pros and Cons of FHA Loans

FHA loans offer distinct advantages for first-time buyers. They require lower down payments and have more lenient credit requirements. However, there are some drawbacks to consider.

For example, they involve mortgage insurance premiums, which can increase monthly costs. Here are key points to weigh:

Pros:
- Lower down payments
- Flexible credit criteria
Cons:
- Mandatory mortgage insurance
- Loan limits based on location

Tips for First-Time Homebuyers Using FHA Loans

Navigating the home buying journey can seem daunting. But with FHA loans, you have some leeway. Keep these tips in mind to make the process smoother.

Get pre-approved early
Consider all costs, not just the down payment
Use a trusted lender familiar with FHA loans

These steps can provide peace of mind on your path to homeownership.

Conclusion: Is an FHA Loan Right for You?

Deciding on the right mortgage option depends on your unique circumstances. FHA loans offer flexibility for those with limited savings or lower credit scores. If you seek affordable entry into the housing market, they could be an excellent choice.

Consider your financial goals and future plans. Understanding FHA loans in depth will guide you toward an informed decision.

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What to Expect and How to Prepare for Refinancing Your Home

If you are a homeowner, it’s likely you’ve heard the term “refinance” before. Whether you’re exploring the concept for the first time or considering your next move, understanding the process is key. We hope to address common questions about refinancing your mortgage and outline exactly what you can expect.

By Southern Trust Mortgage
January 29, 2026

What is Mortgage Refinancing?

When you apply to refinance your home loan, you are essentially attempting to pay off your existing mortgage and replace it with a new one. The new loan pays off the remaining balance of the former loan, and after closing, you begin making payments on the new loan’s principal, interest rate, and terms.

Why Do Homeowners Refinance?

Refinances are not required, but they can significantly improve your financial stability and future. The decision to refinance is typically driven by a desire to improve or secure a family’s financial future, primarily through these goals:

Lowering Your Interest Rate (Rate-and-Term Refinance): Securing a lower rate can reduce your monthly payment and the total interest paid over the life of the loan.
Shortening the Loan Term (Rate-and-Term Refinance): Switching from a 30-year to a 15-year term can save you substantial interest and help you build equity faster.
Using Home Equity (Cash-Out Refinance): A Cash-Out Refinance allows you to tap into the equity you’ve built to fund a large purchase, pay for home renovations, or finance college tuition.
Consolidating Debt (Cash-Out Refinance): Using a cash-out refinance to pay off higher-interest debt (like credit cards or personal loans) can lower your monthly outflows and simplify your finances.
Eliminating Private Mortgage Insurance (PMI): If your home’s new appraised value confirms you have at least 20% equity, refinancing your conventional loan can allow you to drop the costly Private Mortgage Insurance (PMI), immediately lowering your monthly bill.

When Does Refinancing Make Sense?

Refinancing involves costs, so it’s essential to determine if the long-term savings outweigh the upfront fees.

Calculating the Break-Even Point

A key step in determining if refinancing is worth it is calculating your break-even point. This is the amount of time if will take for your monthly savings to cover your closing costs.

Break-Even Point (Months) = Total Refinance Closing Costs / Monthly Savings from New Payment

If you’re planning to stay in the home longer than the calculated break-even period, refinancing is generally a financially sound decision.

Market Rate Conditions

Generally, a good time to consider refinancing is when current interest rates are at least 0.5% to 1.0% lower than your existing rate.

The Costs of Refinancing

Unlike when you purchase a home, you don’t need a down payment for a refinance. However, you will incur closing costs similar to those in the buying process. These fees typically range from 2% to 5% of the loan amount and cover expenses such as:

Lender Origination Fees
Appraisal Fees
Title Insurance and Searches
Attorney Fees

You typically have two options for handling these costs:

Pay Cash Upfront: Paying the closing costs out-of-pocket keeps your new loan principal lower.
Roll Costs into the Loan: You can finance the closing costs into the new mortgage. This means you pay less cash upfront, but your monthly payments and total interest paid will be slightly higher.

How the Refinance Process Compares to Buying a Home

The primary difference you will notice is that since you are already the homeowner, the refinance process is generally simpler. There are no real estate agents, no purchase contracts, and no down payment to worry about.

However, much of the loan process will feel familiar to when you purchased your home:

Application & Evaluation: Your credit score and income will be evaluated. You will complete a new loan application with a Loan Officer, and a team of underwriters will review your financial profile.
Property Appraisal: Most types of refinance loans require a property appraisal. This ensures the lender verifies that the home’s value is sufficient to secure the amount being loaned.

Preparing for a Smooth Refinance

To make your refinance process go as smoothly as possible, preparation is key.

Gather Financial Documents

Assemble your financial documents in advance. You will likely be asked to provide:

Tax Documents: Your W2s and/or tax returns from the past two years.
Pay Stubs: Your most recent pay stubs.
Bank Statements: Your most recent bank statements.

Protect Your Credit Score

Your credit score directly impacts the interest rate lenders can offer you. If you are uncertain of your credit score or think it needs improvement, contact your Loan Officer before you apply.

Review Your Home’s Value

Since the appraised value of your home can directly influence the rate a lender offers, it is in your best interest to ensure your property is in good shape. Also, verify that any major additions or renovations made since purchasing were properly permitted by your city.

Southern Trust Mortgage has been helping clients buy and refinance properties since 1998. Our loan officers are knowledgeable in all aspects of how a home loan refinance can benefit you. Ready to see if refinancing is right for you? Contact us today to discuss your financial goals.

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How to Save for a Down Payment: A Homebuyers Guide

Buying a home is a huge financial milestone, and saving for the down payment is often one of the largest hurdles buyers have to overcome. While everyone’s financial situation is different, the core tips for success are universal. Here are essential strategies to help you save for a down payment and confidently embark on your homebuying journey.

By Kiley Belanga
January 22, 2026

Determine Your Down Payment Goal

The minimum down payment amount is determined by the final price of the home and the specific loan program you’ll be using. You can meet with a Loan Officer to help you determine how much you can afford and how much of a down payment you will need.

Pro Tip: On average, first-time buyers are putting down between 6%-9% (NAR). A larger down payment can significantly lower your monthly mortgage payment and make your offer more competitive in a strong market.

Create a Monthly Budget (and stick to it)

Once you have your total savings goal, set a realistic timeframe (e.g., 24 months). Use this simple equation to calculate your savings target.

Monthly Savings Goal = Total Savings Goal / Number of Months

Breaking the large goal into a manageable monthly savings goal makes it easier to stick to and achieve. It’s important to remember that this needs to be realistic and in line with your income. Closely review all your monthly expenses to find opportunities to save more.

Open a High-Yield Savings Account

Your down payment money should be safe and accessible but still working for you. A High-Yield Savings Account (HYSA) is the perfect place for your funds. It offers safety (FDIC insured) and a competitive interest rate compared to a standard bank account, ensuring your funds grow faster.

Explore Down Payment Assistance Programs

Don’t assume that you must save every dollar towards the down payment yourself! Many state and local agencies offer Down Payment Assistance (DPA) programs and grants to make homeownership more attainable and affordable. The benefit of working with an experienced local lender is that they are familiar with the DPA programs available in your area and can determine what would work best for you.

Saving for a down payment required discipline, but by sticking to a solid plan and working with a team you can trust, homeownership is an achievable reality.

If you know you are ready to begin your homeownership journey, connect with a loan officer to discuss your situation, how much you should save, and your best next steps.

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What’s Your Rent Increase Exit Plan?

While rent continues to climb, more renters are looking for the exit.

By Kiley Belanga
January 20, 2026

If you have recently been faced with the sticker shock of a lease renewal, it might be time to trade that uncertainty for long-term equity.

Rent is on the Rise

Renters have seen some relief in prices since the peaks of 2022, but the overall trend remains steep. According to realtor.com, rent for 0-2 bedroom units remains 17.2% higher than in November 2019.

When you consider that the federal minimum wage has remained at $7.25 since 2009, the “affordability gap” is wider than ever. Even when two minimum-wage earners split the cost, the median rental unity is now unaffordable in 43 of the 50 largest U.S. metro areas. As rent continues to fluctuate, mortgage rates are taking center stage in 2026, offering a much-needed path to financial stability.

Mortgage Rates are Falling & Inventory is Growing

There is good news for those ready to stop renting. Compared to January 2025, mortgage rates have dropped a full percentage point. This is a huge win for buyers who have been waiting on the sidelines for the market to shift.

At the same time, housing inventory is finally returning to healthy levels. We are currently seeing an 8.9% jump in existing inventory, meaning more choices and less intense “bidding wars” for buyers. With the market shifting in your favor, now is the ideal time to determine if homeownership is your best next move.

Timing Your Exit Strategy

One of the biggest hurdles for renters is the fear of “double payments”, paying both a final month of rent and a first mortgage payment. To avoid this, start planning well before your lease ends:

Check Your Notice Period: Most leases require a 30- or 60-day notice. Use this window as your goal for closing on a home

Go Month-to-Month: If your timing doesn’t align perfectly, ask your landlord about switching to a month-to-month lease to gain flexibility.

Analyze the Costs: Even if there is a fee to break your lease early, the long-term benefit of building equity and locking in a lower mortgage rate often outweighs the one-time cost.

Making Home Happen: Grants & Assistance

We understand that saving for a down payment can feel unachievable when you are throwing thousands away on rent each month. That’s why we specialize in helping homebuyers find grants and down payment assistance programs to get them in the door.

These programs, offered by state and local agencies as well as non-profits, are designed to cover initial homebuying expenses. You can read more about available DPA programs here.

Stop the shock of rent hikes and start building your future! Contact one of our loan officers today to see which programs you qualify for and let us help guide you home.

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Lower Your Energy Bills with These Energy-Saving Tips

Saving energy doesn't just help the planet; it also saves you money each month. Many companies now create energy-saving products for the home, making these tips and products more accessible and easier to implement than ever before. You don’t need a massive renovation budget to make a significant impact.

By Kiley Belanga
January 15, 2026

Here’s our guide to the easiest and most cost-effective changes you can make today to reduce your energy consumption and lower your utility bills.

Energy-Efficient Lighting: Switch to LEDs

One of the oldest and best recommendations for easy energy-efficient swaps is to change your light bulbs. If you’re still using old incandescent or even compact fluorescent (CFL) bulbs, it’s time to fully embrace LED lighting.

LEDs use up to 90% less energy than traditional bulbs. They also last significantly longer, reducing replacement waste and hassle.

Pro Tip: Look for “ENERGY STAR” certified LEDs for guaranteed quality and efficiency.

Install a Smart Thermostat for Temperature Control

Smart home technology is a key energy-saving trend, and installing a smart thermostat is a small change that will make a big impact.

Smart thermostats learn your family’s routine and automatically adjust the temperature to maximize energy savings when you’re away or asleep. Many can be controlled through an app, letting you adjust the heat or AC before you even arrive home.

While installation requires a little wiring, it’s a popular DIY project for the average homeowner, or a quick job for an electrician. Once installed, the savings start immediately.

Prioritize Regular HVAC Maintenance

Your home’s HVAC system is likely the single biggest energy consumer. A well-maintained system runs efficiently, saving you money, while a neglected one works harder and hikes your bills.

How can I maintain my HVAC System?

Change the Filter: A dirty air filter restricts airflow, forcing the system to run longer. Change or clean your filter every 1 to 3 months, especially during peak heating and cooling seasons.

Schedule a Tune-Up: Extend the life of your furnace and air conditioning unit and reduce energy consumption by having a professional annually service your furnace and air conditioning unit.

Clear the Area: Keep outdoor air conditioning units and indoor vents free of debris, furniture, and foliage to ensure proper air flow.

Seal Leaks to Prevent Energy Loss

If your home is leaky, you are constantly paying to heat or cool the outdoors. Air sealing and insulation are essential for maintaining a home’s thermal boundary.

Where do I find air leaks in my home?

Windows and Doors: Use caulk and weatherstripping to seal gaps around frames.

Utility Penetrations: Check the areas where pipes, vents, and cables enter your home, like under sinks and in the attic. Use expanding foam or caulk to seal these openings.

Attic and Basement/Crawlspace: Ensure these areas have adequate insulation, as heat moves rapidly through poorly insulated spaces. If your attic insulation is below the floor joists, it’s likely time to add more.

Tackle “Phantom Power” or Standby Energy Loss

Did you know many electronics continue to draw power even when they are turned off? This is known as phantom power or a phantom load, and it can account for up to 10% of your household energy use.

Reducing or eliminating phantom power is a zero-cost way to significantly reduce your baseline energy consumption.

How can you reduce phantom power?

When not in use, unplug chargers, small kitchen appliances (like coffee makers and toasters), and TVs that are not in regular use.

Use power strips for entertainment centers and computer stations, and simply switch the strip off when the devices are not in use.

Optimize Your Water Heater for Maximum Savings

Your water heater is one of the largest energy users in your home. Typically, this is a result of water heaters being set to a higher temperature than needed, using unnecessary energy. Making a few simple adjustments can lead to impressive energy savings.

How can I improve my water heater?

Lower the temperature setting on your water heater to 120°F (49°C). This is a safe and efficient setting that prevents scalding and saves energy.

Make sure that the first six feet of hot and cold water pipes connected to the water heater are insulated with foam pipe insulation to further your energy savings.

Harness Natural Light and Solar Heat with Strategic Window Use

Your windows play an important role in creating energy efficient light and heat. Using them strategically is a simple, no-tech way to maximize your energy savings.

In the winter, open curtains and blinds on south-facing windows during the day to let in solar heat. Make sure they are closed tightly to prevent heat from escaping.

In the summer, close your curtains and blinds exposed to direct sunlight during the hottest parts of the day to avoid excess heat.

Explore Energy Efficiency Rebates and Programs in Your Area

The U.S. Department of energy offers several programs to help homeowners improve their energy efficiency and save on their energy bills each year. Here are a few of the programs available to homeowners:

Tax Credit Advantage

Homeowners can apply for a tax credit for qualifying upgrades made to their home. Visit energy.gov for more information and view the list of qualifying upgrades.

Weatherization Assistance Program

This program, through state and local agencies, helps low-income households reduce their energy costs through enegery efficiency improvements. Learn more about the program and see if you qualify here.

Energy Star Rebates

Many areas offer rebates for switching to ENERGY STAR certified products. These products meet strict energy-efficiency specifications while also helping you save energy and money while also protecting the environment. Find rebates near you here.

Ready to Start Saving?

Every dollar saved on your monthly energy bill is a dollar back in you pocket. Beyond the immediate savings, these energy-efficient upgrades add tangible value to your property, making your home more appealing to future buyers. If you’re considering the next big step in homeownership or are ready to find your own energy-efficient dream home, contact us today!