WHAT TYPES OF MORTGAGES ARE THERE IN SEATTLE & THE GREATER PUGET SOUND?
There are many options when you call Fast Track Mortgage in Seattle:
Adjustable-rate mortgages - The interest rate on an adjustable-rate mortgage will fluctuate, which means the interest portion paid on your monthly payments will change.
Government-insured loans - These loans are insured by the government, and typically include FHA loans Seattle and VA loans.
Fixed-rate mortgages - The interest rate on a fixed-rate mortgage remains steady throughout the entire term of your loan, which means your payments will always be the same.
You lock into a specific interest rate, which will not change until the term is up. Then the amount you pay towards interest will be large at first, but will gradually decrease as you make payments. This option is generally favorable if the current rates are low.
Conventional loans - These mortgages are not guaranteed by the federal government.
WHAT IS A MORTGAGE?
A mortgage is a loan that a lender extends to a home buyer to help finance the purchase of a property in Seattle or other locations nation wide that Fast Track Mortgage facilitates. The monthly mortgage payments are made up of:
- Principal - the amount that goes towards the equity;
- Interest - the rate you are charged to obtain the loan;
- Insurance - if your down payment is less than 20% of the purchase price;
- Taxes - calculated based on the property’s value.
The purchased house acts as collateral in exchange for the borrowed funds.
CAN FAST TRACK MORTGAGE IN SEATTLE REALLY GET A BANK TO LOAN ME 100% OF WHAT I NEED?
Yes, depending on your credit score and financial history. With 100% home financing loans, there’s no need to put a down payment towards the purchase.
New & repeat buyers could be eligible for 100% financing through various government-sponsored programs.
So, in some cases yes. However, give us a call at our office in Seattle and let's see what we can do.
WHAT IF MY CREDIT SCORE IS NOT LOOKING GOOD?
That depends on how low your score is. Typically, anyone with a score under 520 will likely be denied a conventional mortgage in Seattle. However, there may be private lenders out there willing to extend a loan for those with a lower score. Keep in mind, the interest rate charged will be very high.
Generally speaking, the lower your credit score, the higher interest you’ll be charged. Lenders providing mortgages to those of you in Seattle or the Greater Puget Sound need to protect themselves in the event of a mortgage default.
Borrowers with a credit score that is low is less likely to be capable of making payments in full and on time, which is why a higher rate is typically tacked onto riskier mortgages in Seattle, WA.
CAN I HAVE MORE THAN ONE MORTGAGE?
Yes, however the amount of mortgages that you take out will depend on the loan program.
It’s not illegal, nor are you breaking the law. However, you’ll be paying for these services with higher interest rates and fees. Many Americans take out additional mortgages to finance other properties, such as a rental property , vacation homes or investment properties.
WHAT IS MORTGAGE AMORITIZATION?
Understanding Amortization
Mortgage amortization in Seattle is a loan that has scheduled payments over any given amount of time that include both principal and interest.
The monthly payment will be partially earmarked for the loan interest while the rest will pay the principal.
The interest is the primary focus in amortized mortgages and will need to be satisfied each month before the principal is decreased.
Call Fast Track Mortgage today and have one of our loan officers in Seattle will answer any questions or concerns you could have.
HOW DO REVERSE MORTGAGES IN SEATTLE WORK?
When you have a regular mortgage, you pay the lender every month to buy your home over time. In a reverse mortgage, you get a loan in which the lender pays you. Reverse mortgages take part of the equity in your home and convert it into payments to you – a kind of advance payment on your home equity. The money you get usually is tax-free. Generally, you don’t have to pay back the money for as long as you live in your home. When you die, sell your home, or move out, you, your spouse, or your estate would repay the loan. Sometimes that means selling the home to get money to repay the loan.
There are three kinds of reverse mortgages in Seattle: single purpose reverse mortgages – offered by some state and local government agencies, as well as non-profits; proprietary reverse mortgages – private loans; and federally-insured reverse mortgages, also known as Home Equity Conversion Mortgages (HECMs).
If you get a reverse mortgage of any kind, you get a loan in which you borrow against the equity in your home. You keep the title to your home. Instead of paying monthly mortgage payments, though, you get an advance on part of your home equity. The money you get usually is not taxable, and it generally won’t affect your Social Security or Medicare benefits. When the last surviving borrower dies, sells the home, or no longer lives in the home as a principal residence, the loan has to be repaid. In certain situations, a non-borrowing spouse may be able to remain in the home. Here are some things to consider about reverse mortgages:
- There are fees and other costs. Reverse mortgage lenders generally charge an origination fee and other closing costs, as well as servicing fees over the life of the mortgage. Some also charge mortgage insurance premiums (for federally-insured HECMs).
- You owe more over time. As you get money through your reverse mortgage, interest is added onto the balance you owe each month. That means the amount you owe grows as the interest on your loan adds up over time.
- Interest rates may change over time. Most reverse mortgages have variable rates, which are tied to a financial index and change with the market. Variable rate loans tend to give you more options on how you get your money through the reverse mortgage. Some reverse mortgages – mostly HECMs – offer fixed rates, but they tend to require you to take your loan as a lump sum at closing. Often, the total amount you can borrow is less than you could get with a variable rate loan.
- Interest is not tax deductible each year. Interest on reverse mortgages is not deductible on income tax returns – until the loan is paid off, either partially or in full.
- You have to pay other costs related to your home. In a reverse mortgage, you keep the title to your home. That means you are responsible for property taxes, insurance, utilities, fuel, maintenance, and other expenses. And, if you don’t pay your property taxes, keep homeowner’s insurance, or maintain your home, the lender might require you to repay your loan. A financial assessment is required when you apply for the mortgage. As a result, your lender may require a “set-aside” amount to pay your taxes and insurance during the loan. The “set-aside” reduces the amount of funds you can get in payments. You are still responsible for maintaining your home.
- What happens to your spouse? With HECM loans, if you signed the loan paperwork and your spouse didn’t, in certain situations, your spouse may continue to live in the home even after you die if he or she pays taxes and insurance, and continues to maintain the property. But your spouse will stop getting money from the HECM, since he or she wasn’t part of the loan agreement.
- What can you leave to your heirs? Reverse mortgages can use up the equity in your home, which means fewer assets for you and your heirs. Most reverse mortgages have something called a “non-recourse” clause. This means that you, or your estate, can’t owe more than the value of your home when the loan becomes due and the home is sold. With a HECM, generally, if you or your heirs want to pay off the loan and keep the home rather than sell it, you would not have to pay more than the appraised value of the home.
Types of Reverse Mortgages
As you consider whether a reverse mortgage is right for you, also consider which of the three types of reverse mortgage might best suit your needs.
Single-purpose reverse mortgages are the least expensive option. They’re offered by some state and local government agencies, as well as non-profit organizations, but they’re not available everywhere. These loans may be used for only one purpose, which the lender specifies. For example, the lender might say the loan may be used only to pay for home repairs, improvements, or property taxes. Most homeowners with low or moderate income can qualify for these loans.
Proprietary reverse mortgages are private loans that are backed by the companies that develop them. If you own a higher-valued home, you may get a bigger loan advance from a proprietary reverse mortgage. So if your home has a higher appraised value and you have a small mortgage in Seattle, you might qualify for more funds.
Home Equity Conversion Mortgages (HECMs) are federally-insured reverse mortgages and are backed by the U. S. Department of Housing and Urban Development (HUD). HECM loans can be used for any purpose.
HECMs and proprietary reverse mortgages may be more expensive than traditional home loans, and the upfront costs can be high. That’s important to consider, especially if you plan to stay in your home for just a short time or borrow a small amount. How much you can borrow with a HECM or proprietary reverse mortgage depends on several factors:
- your age
- the type of reverse mortgage you select
- the appraised value of your home
- current interest rates, and
- a financial assessment of your willingness and ability to pay property taxes and homeowner’s insurance.
In general, the older you are, the more equity you have in your home, and the less you owe on it, the more money you can get.
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