Refinancing Your Home During a Divorce

Refinancing Your Home During a Divorce

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refinancing your home during a divorce

When going through a divorce, splitting assets and debts in an equitable manner in which both parties agree can be daunting and stressful. It’s important to know what to expect when it comes to your mortgage. Here are some things to consider when it comes to refinancing your home during a divorce.

Why is it important to refinance your home after a divorce?

If you decide that selling your home and splitting the proceeds is not an option you want to consider, then the best way to resolve the issue is to refinance the home to remove a spouse from the mortgage and deed. 

Even though the divorce decree will state which spouse stays in the home, the mortgage will remain in the name of both parties until refinanced. 

  • IMPORTANT! Each spouse is legally responsible to continue paying the mortgage until the mortgage is refinanced. If the mortgage is not paid or paid late, it will affect the credit score for BOTH parties. 
  • IMPORTANT! Creditors can come after you to collect payment even if your divorce decree states that your ex-spouse is responsible for paying the mortgage.

Keeping the home

If one spouse will be keeping the home, it is important to select a divorce attorney who also understands the mortgage process. 

  • Your attorney and mortgage lender need to work together closely in order to exchange information and have a smooth transaction. 
  • A divorce decree is a court order that officially ends your marriage and details how you and your ex-spouse will deal with things like your home, parenting concerns, and spousal support, as well as the division of any investments, bank accounts, and debts.
  • Your mortgage lender will need to review the divorce agreement after it is finalized. 

Your mortgage lender will need to know if one of the parties will have to pay alimony, maintenance, or child support. 

  • These monthly payments will be included in their debt-to-income (DTI) ratio. The DTI ratio is essential in determining whether or not the spouse who will be owning the home can qualify for a mortgage on their own. 
  • It’s also possible that since the situation might be changing from a 2-income family to a 1-income household, the spouse who wants to stay in the home won’t have enough income to meet the mortgage requirements. 

Your mortgage lender will also need to know if a spouse will be receiving alimony, maintenance, or child support.

  • If the receiving party of the alimony or child support payments needs to use that income to qualify for the refinance and stay in the home, there is a required six-month waiting period to ensure they are receiving these payments in a consistent and timely manner before it can qualify as reliable income. 
  • These payments will also have to continue for at least 3 years.

Furthermore, your divorce attorney might also need to collect some information from your mortgage lender. 

  • They might need some information such as the home’s appraised value and the amount of the new mortgage payment. The title company will also do research to determine if there are any unknown liens that may be on the property. If there are additional liens, they will have to be addressed in the divorce decree.
refinancing your home during a divorce

Can I just do a Quitclaim Deed?

A quitclaim deed transfers ownership of real estate to someone else and releases your legal claim to the home. 

  • It is important to note that if you only file a quitclaim deed to remove your name, you will give up your rights to the property. This is very risky because you are now still liable to pay the mortgage on a home you do not own. The only way to properly release yourself from the mortgage debt is to sell the home or have the other spouse refinance the home by themselves. 
  • You should only file a quitclaim deed after the home is refinanced. This will remove your name from the mortgage and the deed.

How can Mortgage Warehouse help with refinancing your home during a divorce?

Divorces are difficult and although we can’t help you with every decision you will have to make, we can certainly help with the mortgage! As you can see, there are many details involved with dividing up assets and property in a divorce and it takes a great amount of experience and knowledge for it to be handled properly. 

We have helped many of our clients begin refinancing their homes during a divorce. Our mortgage team are experts in this area. Let us help guide you through the process! Click here to get started.

Cash Out Refinance

Cash Out Refinance

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Over the past couple of years, house prices across the country have increased dramatically. Some homeowners who took out a mortgage years ago could find themselves in a situation where they now have thousands of dollars of additional equity in their home.

What is a Cash-Out Refinance?

Home equity is the current market value, minus any liens, such as a mortgage. A cash out refinance allows clients to tap into that equity and turn it into cash. Cash-out refinances can have many benefits, including consolidating debt. If a borrower has a lot of high interest debt, they can use a cash out refinance to pay it off. Now, instead of paying a high interest rate on their past debt, they pay a much lower rate with a residential mortgage. This can save a great deal of money in the long run.

A cash out refinance can also be used for other expenses. Instead of using a credit card that has a high interest rate, borrowers can use a cash out refinance for home repairs or renovations, like building a swimming pool, updating the kitchen, or putting a fence around their backyard. The options of what you can do with the cash from a cash out refinance loan are endless.

How Much Cash Can I Get?

A common question that many clients have is, “How much money can I get if I do a cash out refinance?” The answer varies depending on the amount of equity you have in your house.

In most scenarios, we recommend that you not borrow more than 80% of your home’s value. If you go above that amount, you will have to pay Mortgage Insurance. Mortgage insurance is an additional loan cost that you will have to pay monthly.

Below are some common scenarios that demonstrate how a cash out refinance could help you:

Scenario 1: John Doe purchased a house 2 years ago for $200,000. He took out a mortgage for $160,000 and put $40,000 down for a down payment. Over the past 2 years, the value of his house has grown and it is now valued at $250,000. Unfortunately, John has accrued $45,000 in high interest credit card debt and wants to eliminate it. John called Mortgage Warehouse and his loan originator advised him to consider a cash out refinance. With the cash out refinance, John can increase his loan amount to get $45,000 to payoff his credit card balances.

John is now paying significantly less interest overall. It is not unusual for homeowners to save over $500 a month with a cash out refinance to consolidate credit card debt.

Scenario 2: Jane Doe purchased a house 1 year ago for $300,000. She took out a mortgage for $270,000 and pays Mortgage Insurance because she has less than 20% equity in her house. Over the past year her house has appreciated to $350,000. She wants to put a fence around her backyard because her family recently got a dog. Jane got a quote for the fence and it is going to cost her $10,000.

In Jane’s Scenario, her cash out refinance has two benefits:

  • She will get the cash she needs to build the fence.
  • Because her home has increased in value compared to her purchase price, her new loan will not have mortgage insurance

These are two great examples of how a cash out refinance could be a good move financially. If you are interested in doing cash out refinance to take advantage of the increased equity in your home, please get in touch with one of our mortgage loan originators today.

The Best Way to Protect Your Home: Homeowner’s Insurance

The Best Way to Protect Your Home: Homeowner’s Insurance

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Whenever you have a loan against the value of your home, whether it is a mortgage or a home equity loan, your lender will require homeowners’ insurance. They will also require specific coverage amounts and policy types.  As a condition of closing, they will ask for proof of insurance in the form of a binder or certificate of insurance.

Here are some statistics for 3 states where we do business:

  • Kentucky – On average, 24 tornadoes touch down in Kentucky every year. The state has also experienced wildfires, heavy rains, and ice storms.
  • Indiana – There are an average of 22 tornados that happen each year in Indiana. It is also susceptible to earthquakes, ice storms, and flooding.

With “Tornado Alley” slowly shifting towards Western Kentucky, it is more important than ever to have the proper type and amount of insurance.

Mortgage Warehouse suggests that our buyers choose an insurance agent and provide us with a binder and invoice within 5-10 business days of an executed sales contract. Issuing a new policy can sometimes take a few days or weeks, depending on the underwriting process. Binders are often provided as temporary evidence of insurance coverage prior to the issuance of a formal insurance policy. 

Why do we need it so quickly?

  • It affects your DTI Ratio – We will need to calculate your new DTI (debt-to-income ratio). The cost of your homeowners’ and/or flood insurance (if needed) could be escrowed and added to your mortgage payment. We will need this information in order to send your file to underwriting.
  • Closing – We need to make sure that your Title Company has an invoice to pay your Insurance Agent at closing, if necessary.
  • A named storm can delay your closing – In Florida, if a named Tropical Storm or Hurricane enters an approximately 16,000 sq. mile box extending over the state or in the Atlantic Ocean, then the insurance companies will suspend binding coverage. This occurrence is also referred to as “The Storm is in the Box.”

In Kentucky, a Homeowners’ Policy is generally the only policy a lender will require since it covers wind damage from tornadoes. 

Most lenders require your policy to at least cover your loan amount. However, if you have a large down payment on your home, your coverage amount should be higher. In the event of a disaster, you want to make sure you will have enough coverage to be able to rebuild your home at today’s cost. Your insurance agent may offer you 2 types of coverage: Replacement Cost and Market Value.

  • Replacement cost is the amount you would need to replace or rebuild your home.
  • Market value is what your home is worth on the real estate market.

There are pros and cons to both types of coverage, so you should review both options with your insurance agent to make sure you are not underinsured.

Although most homeowner policies include an inflation guard endorsement to automatically increase your coverage annually, you should check with your insurance agent once a year to make sure you have adequate coverage.

When comparing homeowners’ insurance policies, be aware that one policy might be cheaper only because the coverage is less or the deductible is higher. They also might list certain exclusions.

Additional policies to consider:

  • Replacement Cost Coverage (RCV) Option
  • Flood Insurance
  • Hurricane Insurance
  • Earthquake Insurance
  • Sinkhole, Water or sewer backup, Debris removal, Mold, Termites
  • Endorsements/Riders for exempt items in the policy like jewelry, antiques, artwork, etc.

If you are purchasing a Condo, contact your Property Management Company to determine what kind of coverage is required. You may need a Form HO-6, which provides some coverage for the structure but primarily covers the personal property and liability of the insured.

Even though Homeowner’s Insurance is a necessary expense, it does offer the homeowner peace of mind and comfort in knowing that you have protection if your home or any structures on it are damaged, if someone gets injured on your property, or after a burglary. Homeowners insurance helps protect one of your biggest and most important investments- your home and its contents.

Are We Headed for Another Housing Crisis?

Are We Headed for Another Housing Crisis?

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When you take a look at what today’s real estate market is doing, it’s hard not to wonder if history is about to repeat itself. Are we looking at another housing crisis similar to 2008? Due to high demand and a shortage of workers and supplies, house prices are on the rise and so are interest rates. Buyers are finding themselves in bidding wars and sometimes paying over the asking price to secure the property they want. Are homeowners overpaying? Will their homes still be worth more than what they owe on them a couple of years from now? 

Looking Back

If we look back to 2008, we will discover that the subprime loans that lenders were participating in were the primary reason for the housing market crash. According to TransUnion, between 2007 and 2008 alone, the mortgage delinquency rate rose by 53%. When borrowers started defaulting on these loans, the foreclosures caused turmoil in the financial market as well as the stock market, causing what is being termed a global “Great Recession”. It was an epic financial and economic collapse that cost many ordinary people their jobs, their life savings, their homes, or all three.

The Bureau of Labor Statistics reported that nearly 9 million Americans lost their jobs from the late 2007s through mid-2009. By the end of 2009, more than 3.9 million homeowners received foreclosure notices. Americans also experienced a severe loss of household wealth or home equity. Not only could they not afford to pay their mortgage, but if they tried to sell their house, it was worth less than what they owed on it, meaning that the mortgage was “underwater” or “upside-down”.

What about today? 

Lenders have since tightened their belt straps to lessen their risk by revising guidelines and being stricter with the requirements of mortgage approval. Prior to 2008, subprime mortgages like no income/no asset verification and stated income loans were very common. Interest Only and Adjustable Rate Mortgages were popular too. However, buyers were finding that once the initial fixed-rate period expired and the new, higher market rate went into effect, they could no longer afford their homes. Some economists would even say that, in some cases, lending was too lax and reckless, sometimes deceptive, and the recession was inevitable. 

Today’s stricter lending practices mean that today’s borrowers are stronger financially than in the past. Lenders are warier and want to be assured of the borrower’s ability to pay back these mortgages.

When we compare what happened then to what is happening today, there are some major differences: 

  • Lenders now have access to enhanced mortgage underwriting tools that are better predictors of collateral risk assessment and performance, while also being better able to identify fraud. This has resulted in higher-quality loans. 
  • A new rule published by the Consumer Financial Protection Bureau (CFPB) amended Regulation Z, which implements the Truth in Lending Act (TILA). Regulation Z currently prohibits a creditor from making a higher-priced mortgage loan without regard to the consumer’s ability to repay their residential mortgage loan. Loans that comply with Regulation Z’s requirements qualify for certain protections from liability.
  • The Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 restricted some of the riskier activities of the biggest banks, increased government oversight of their activities, and forced them to maintain larger cash reserves. On the consumer side, it attempted to reduce predatory lending.
  • Recently, the household debt-to-income ratio reached a four-decade low.  The maximum DTI ratio is now at a maximum of 50%. So, fewer homeowners are at risk of defaulting on their mortgages. 
  • As the pandemic and supply shortages come to an end, new home building will be increasing. With more options for home buyers, current home prices will have to level off, if not decrease.
  • In 2008, there was a lot of real estate inventory from short sales and foreclosures, but there were few qualified borrowers. In today’s market, we have a very low inventory of real estate and lots of qualified buyers.

Therefore, we are now better prepared if a downturn does occur. It is important to note, however, that the market is cyclical and what goes up, eventually goes down.  When interest rates increase, a buyer’s ability to afford a home decreases. As demand slows, the market stabilizes and home prices go back down. As rental prices continue to increase, the best, and cheapest option for many is to look into home ownership. 

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Whether you’re looking to purchase or refinance, please contact Mortgage Warehouse or complete our quick application. We can help navigate you through the ups and downs of the housing market and provide you with advice specific to your needs. Checking your mortgage eligibility is usually the best way to get started.

Choosing the Best Mortgage

Choosing the Best Mortgage

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Quite often, we receive a call from a potential client and their first words are “what’s your rate?”.  As we all know, a low-interest rate is a good thing but the lowest interest rate is not always the best loan.  In fact, the lowest rate is often the option that has the most fees.  Here are the factors that we recommend homeowners and home buyers consider when choosing the best mortgage.

Loan Amount 

The loan amount is the total amount you plan to borrow to purchase or refinance your home. This amount is different than the purchase price or value of your home. 

When refinancing, pay close attention to your loan amount because closing costs and fees are typically rolled into your loan.  The more you borrow, the more you have to pay back.  

Your loan amount will be compared to your appraised value to determine your loan-to-value (LTV) ratio. This ratio will be used to compute your loan’s financial risk. If you’re buying a house with a conventional loan an LTV ratio greater than 80% may mean you’re required to pay private mortgage insurance (PMI), which covers the lender against loss if you fail to repay your loan.

Closing Costs

We’ve heard every trick in the book that other lenders will use to avoid being transparent about the total amount of closing costs.  You need to know the total closing costs even if you are told any of the following: “the closing costs are rolled in” or “nothing out of pocket” or “no lender fees”.  We recommend that you get it in writing.

A lender is required by law to provide you with a Loan Estimate form within three business days after receiving your mortgage application. Closing fees will vary depending on your state, loan type, and mortgage lender, so it’s important to pay close attention to these fees. The Loan Estimate outlines the estimated closing costs and other loan details.

Loan Program

The loan program matters. For example, it is not unusual for the lowest interest rate option to be a government loan program such as an FHA loan but quite often these loan programs can result in a higher payment due to additional upfront and monthly fees. 

There are many factors to consider before selecting a loan program. Mortgage Warehouse knows the right questions to ask to get you into the best program for you. 

Term

The rule of thumb is the shorter the loan term, the lower the interest rate.  However, the shorter the loan term, the higher your monthly payment since you are forced to pay off the loan within a shorter period of time.

Conventional loans come in 10, 15, 20, 25, and 30-year terms, but there are advantages and disadvantages to each term. If you are interested in paying your mortgage off quicker, Mortgage Warehouse can guide you through all of these options. 

Interest Rate

A lower interest rate is a good thing unless it negatively impacts any of the items mentioned above.  With that said, never base your decision solely on the interest rate.  Instead, take all of the factors above into account before you make your final decision.

Compare Lenders 

As we mentioned above, your Loan Estimate must be provided to you no later than three business days after you submit a loan application. You should review your Loan Estimate to make sure it reflects what you discussed with your loan originator. The form provides you with important information, including the estimated interest rate, monthly payment, and total closing costs for the loan. The Loan Estimate also gives you information about the estimated costs of taxes and insurance, and how the interest rate and payments may change in the future.

Once you receive your Loan Estimate form, you will have everything you need to know about your potential mortgage. This form is a great tool to use to compare each lender’s offer, but don’t compare just the interest rates, this document will show you the whole picture and with Mortgage Warehouse, there won’t be any surprises.

Let’s Sum It Up

Once you take all of these factors into consideration, there is one last thing to consider. Can your lender pull it off? What do their reviews say? What is their average length of time to get approval? Are they understaffed or have a history of overpromising and underdelivering? Will they be available for you when you have a question? Will you just be another number to them?

At Mortgage Warehouse, we will help you choose the best loan for your situation. We welcome you to check out our reviews, as a matter of fact, we encourage it. We also underwrite our loans in-house, which means a quicker approval time for you. We pledge to answer any questions you may have as soon as possible. Lastly, we take the time to really understand your goals and dreams. With us, you’ll know what to expect— hope, guidance, and superior customer service. 

Contact us today to get started!

Why the Lowest Interest Rate is Not Always the Way to Go

Why the Lowest Interest Rate is Not Always the Way to Go

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Most Important Thing to Know

The lowest interest rate loan is often the most expensive loan.

How Long you Own the Home Does Not Equal How Long you Keep the Mortgage

Even if you are buying your “forever home”, that does not mean you are securing your “forever loan”.  Homeowners often assume that they will keep their mortgage for the same period of time that they live in the home.  This assumption is almost always incorrect.  Statistics show that the majority of homeowners will refinance multiple times throughout their lifetime.

Low Rate vs. Low Cost

Buyers Beware! This saying not only applies to your actual home selection- but also to the lender that you choose for your mortgage.

Many lenders will resort to misleading a borrower by quoting a low interest rate that will end up adding additional costs to the loan. These additional fees are sometimes hidden as origination fees, miscellaneous fees, points or even called a buydown. The borrower might obtain a lower interest rate but will end up paying more money at closing, sometimes thousands more! Depending on the lender, these fees and additional costs may or may not have been fully explained when you were rate shopping.

How long do you plan on staying in your home?  

This is a major factor to consider. According to a 2021 report done by the National Association of Realtors: Overall, buyers expected to live in their homes for a median of 15 years. For buyers aged 22 to 30, the expected length of time was only 10 years compared to 20 years for buyers aged 56 to 74 years.

 2021 Home Buyers and Sellers Generational Trends Report

Here are some reasons why paying a large amount of costs upfront might NOT be your best option:

  • You may prefer to pay less in closing costs and use that money to put down a larger down payment which will improve your equity position.
  • You may want to refinance if interest rates improve
  • You may want to refinance to a shorter term
  • You may want to refinance to remove mortgage insurance (if applicable)
  • You might need to move in the future because of a growing family
  • You need to downsize to get ready for retirement 
  • You might need to relocate to secure new employment
  • You might need to move closer to family members
  • You might want to do a cash-out refinance in the future to pay bills or other expenses

If you think any of these situations might apply to you in the future, then the additional cost may not be worth it. When you call Mortgage Warehouse, we can go over your circumstances and figure out your break even point (how many years you need to keep your loan in order to absorb the cost and start reaping the benefits of the lower rate) . We can help you decide which option is best for you.

On the other hand, if you are planning on staying in your new home for several years, it might make sense to look at the low rate option. This is a great strategy for lowering your monthly payment and saving on the amount of interest you pay in the long run, assuming you keep the mortgage for many years. The typical break even point for loans with higher costs upfront can be between 5 to 7 years and after that you are saving money for the remainder of the loan.

So, what does this all mean when rate shopping?

First, you need to make sure you are not comparing apples to oranges. By that we mean, if one lender is quoting you a rate with points and one isn’t, it is going to be hard to compare. At Mortgage Warehouse, we can provide you a low cost option and a low rate option and provide you some guidance on which one might be the better fit for you.

Beware of the lenders who do not disclose that they are assessing points to lower your rate. Not only will you be paying more at closing to get this “lower rate”, you will also be working with a lender that you cannot trust.

Here at Mortgage Warehouse, we get many callers wanting us to beat a low rate given by another lender. However, the extra costs were never explained to them and their life circumstances were never considered.

We take pride in knowing that when we provide you with your rate quote options, you will not only fully understand the difference, but you will come away with the knowledge that we discussed every scenario and devised the best choice for your particular needs- which isn’t always the lowest rate.

Can I Afford a Home?

Can I Afford a Home?

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Purchasing a home can be exciting and stressful. It is a big, long-term commitment and an investment in your future. There are a lot of things to consider before purchasing a home and the most important is- Can I really afford it? 

Pre-Approval

A mortgage pre-approval is the most important step before house-hunting. You will need to know what you can afford before searching for a home. Most Realtors and sellers will only work with pre-approved buyers.

A pre-approval tells you how much money you can borrow to buy a home. Lenders should look at your full financial profile including income and asset documentation when deciding whether to approve a loan.  Lenders will also verify your employment and credit history.

If there is a co-borrower on the loan, their information will also have to be considered in determining whether or not you can be pre-approved.

Savings

Once you know how much you can borrow, you will need to determine how much cash you will need. 

When you undergo a contract, it is customary to provide the seller with an earnest money deposit. This good faith deposit shows you are serious about the home purchase. This money is held in escrow and can be 1-3% of the sales price. 

In most situations, you will also need money to bring to closing. This includes the total closing costs (if any), your down payment (minus your earnest money deposit), other fees such as deed or mortgage taxes, survey, prepaid items such as your first year of home or flood insurance, money to set up an escrow account, etc…

Monthly Home Costs

Be careful not to overextend yourself financially or you could end up being “house poor” – and not having the money to do any fun things, like vacations, eating out, or money for future purchases. Sometimes buyers can factor in future raises, or better jobs after completing a degree, but those aren’t always guaranteed.

Once you know what sales price you are aiming for and what your estimated monthly mortgage payment will be, it’s time to create a budget to find out if you can afford the monthly costs of owning a home.

When you rent, you don’t have to worry about property taxes. You may only have renter’s insurance- not homeowners or flood insurance. You might also have to consider higher utility bills (if you are moving to a larger home), Homeowner Association or Condo dues, and ongoing home repairs and maintenance, including landscaping upkeep, air conditioner and water heater servicing, and appliance repair.

Don’t forget to also put some funds away for rainy-day savings. If you can budget for all of your expenses and still have a cushion, then you can confidently move forward.

Knowing your Debt-to-Income ratio is also important.  For example, some loan programs could limit your housing-related expenses each month to 43% of your monthly income. We can help you determine if you meet this requirement.

Interest Rates

Are interest rates increasing or decreasing? This can make your estimated loan payment change.

A rate lock on a mortgage loan means that your interest rate won’t change between the time it is locked and closing, as long as you close within the specified time frame and there are no changes to your application.

It is important to know that a pre-approval does not lock you into a specific interest rate. As soon as you obtain a purchase contract that is completely executed, you should talk to your loan originator about locking your interest rate. 

If your rate is locked, it can still change if there are changes in your application—including the loan term, loan program, loan amount, appraised value, credit score, or verified income.  Also, rate locks have an expiration date, so it is important to keep the loan progressing and to work with an experienced lending team like Mortgage Warehouse which has a reputation for closing loans on time.

Need more info? Contact us today!

Benefits of a No Closing Cost Refinance

Benefits of a No Closing Cost Refinance

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Our No Closing Cost Loan is our most popular loan program. Here are some reasons why:

YOU PAY $0 for:

  • Appraisal Fees
  • Underwriting Fees
  • Processing Fees
  • Title Fees

Mortgage Warehouse pays for all title, appraisal, and 3rd party fees resulting in absolutely zero closing costs paid by the borrower. How do we do that? By providing you with a Lender Credit at closing!

Unlike some lenders, Mortgage Warehouse’s No Closing Cost refinance does NOT roll your closing costs into your loan balance or into your monthly mortgage payment.  With us, you end up having more equity in your home.  Keep in mind that more equity in your home is important because it means more money for you whenever you sell your home.   

4 Benefits of our No Closing Cost Mortgage

  • Refinance for free if mortgage rates improve in the future.
  • There is no guesswork or itemizing fees because there are no fees
  • Finance a lower total loan amount 
  • Easier to eliminate PMI (private mortgage insurance) by adding to your home’s equity instead of using your hard-earned money for closing costs. Plus, removing your PMI means not having that additional monthly expense added to your loan payment. 

The average homeowner will not keep the same mortgage for 15, 20, or 30 years. In reality, most will move or refinance within 3-5 years. This means that with average closing costs around $3,000 or more, the typical homeowner will have five different mortgages and spend more than $15,000 in closing costs over their lifetime. So essentially, over the years, you will be increasing your loan amount and never recoup the benefits of your lower rate. 

A No Closing Cost loan can provide more savings than a loan with a slightly lower interest rate.  A low-interest rate might seem like the best option but a lower rate will often come with higher fees and a higher loan amount.  

If you plan on selling or paying off your mortgage within 5 years, a no closing cost option can be more beneficial than a loan with closing costs.  In most cases, it takes multiple years to recoup the closing costs when refinancing.

How do you know if this type of loan is right for you?

  • You do not want your loan balance to go up due to refinancing.
  • You plan to sell or refinance your home in less than five years
  • You want to remove your mortgage insurance (PMI) and have more of your monthly payment going towards reducing your loan balance.
  • You need as much money as possible to pay off debt or other needs

Ready to get started?

We are experts in No Closing Cost loans! Mortgage Warehouse has been offering our No Closing Cost loan program for over 15 years. Our licensed loan originators can quickly assess your needs and goals and determine if you qualify for this program. We will compare our No Closing Cost loan program to our other programs to see which scenario will be the best one for your situation.

Contact us today to find out more or for a detailed Q&A on our No Closing Cost Mortgage!

Certain restrictions apply.

Why Refinance?

Why Refinance?

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Refinancing allows you to get a new mortgage, typically with more favorable terms that will pay off and replace your existing mortgage. Refinancing is usually an easier process compared to purchasing since there are fewer parties involved (no realtors or sellers).

You can also get a Cash Out Refinance Mortgage. With a cash-out refinance, you get cash back after closing. These loans work best when you have a large amount of equity in your home. Equity is the difference between what you owe on your mortgage and what your home is currently worth. 

When doing a cash-out loan, you might choose to receive a lump sum of cash back at closing that you can use however you choose.  In some situations, you might be required to pay off some items on your credit report if your debt-to-income ratio is high.  

Benefits of Refinancing

  • Lower interest rate
  • Pay off your mortgage faster
  • Lower your monthly payment
  • Save money on interest over time
  • Consolidate debts
  • Get cash out for home improvements
  • Get approved for a different, less expensive loan program
  • Eliminate mortgage insurance
  • Convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or vice versa
  • Remove an ex-spouse from the mortgage

Getting a mortgage with a lower interest rate is one of the best reasons to refinance. We recommend that you consider how much you can reduce your interest rate versus the cost of refinancing.  With our No Closing Cost mortgage, we’ve seen situations where as little as a 0.50% reduction in the interest rate on larger loan amounts can produce enough savings to justify refinancing.

When interest rates drop, consider refinancing to shorten the term of your mortgage and pay significantly less in interest each month and over the life of the loan

Switching to a fixed-rate mortgage from an adjustable-rate one can make sense depending on the rates and how long you plan to remain in your current home.

Tapping equity or consolidating debt are other reasons to refinance—but beware, doing so can sometimes worsen debt problems.  Many homeowners refinance to consolidate their debt. At face value, replacing high-interest debt with a low-interest mortgage is a good idea. Unfortunately, refinancing does not bring automatic financial prudence. Take this step only if you are convinced you can resist the temptation of future consumer debt once the refinancing relieves you from your current debt obligations.  It also pays to remember that a savvy homeowner is always looking for ways to reduce debt, build equity, save money, and eliminate their mortgage payment. Taking cash out of your equity when you refinance does not help to achieve any of those goals.

Refinancing can be a great financial move if it reduces your mortgage payment, shortens the term of your loan, or helps you build equity more quickly. When used carefully, it can also be a valuable tool for bringing debt under control. Before you refinance, take a careful look at your financial situation and ask yourself: How long do I plan to continue living in the house? How much money will I save by refinancing?

Some experts say you should only refinance when you can lower your interest rate, shorten your loan term, or both. That advice isn’t always correct. Some homeowners may need short-term relief from a lower monthly payment, even if it means starting over with a new 30-year loan. Refinancing also can help you access the equity in your home or get rid of monthly mortgage insurance premiums.

Even borrowers who have fairly new mortgages might be able to benefit from refinancing. Say you were approved for your mortgage last year. Although you might be only 6-12 months into your loan, the ability to lower your interest rate by one-half to three-quarters of a percentage point can substantially lower your monthly payment and reduce the interest over the life of the loan.

Refinancing to Get a Shorter Loan Term

If you refinance from a 30-year to a 15-year mortgage, your monthly payment will often increase.  However, the interest rate on 15-year mortgages is typically lower which will shave years off your mortgage and you will pay less interest over time.

When should I talk to a Loan Officer about Refinancing

Online research and mortgage calculators are all well and good, but they might get your hopes up or underestimate your potential savings.  Online articles and mortgage calculations don’t take into account your personal situation, financial goals, your credit score, your type of employment, or your home’s current value. To make this kind of decision, it is best to speak directly with one of our experienced loan originators. We can determine if refinancing makes sense for you.

Contact us today for a free no-obligation mortgage review!

4 Things to Consider Before Purchasing a Home

4 Things to Consider Before Purchasing a Home

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1. Choosing a Real Estate Agent

There are many realtors to choose from. Ask your friends and neighbors for recommendations. We also have a partnership with many realtors we trust. You are looking for a Buyer’s realtor that has the experience, knows the area well, and has resources at their disposal. They may get notices of property listings before they are even advertised. They are concerned with your best interests, not the sellers.

An experienced Buyer’s Agent can assist you in skillfully negotiating the purchase price of your home and should also have a list of home inspection companies, moving companies, handymen, and other services that they can recommend. Best of all, a Buyer’s Agent doesn’t cost the buyer anything. They get paid out of the Listing Agent’s commissions.

2. Home Size and Use of Space

The next step is determining what size house you need, including the number of bedrooms and baths. Are you expecting to grow your family or are you empty-nesters? If you desire a yard, then a condo may not work for you. If you can’t manage steps, then a townhome is not for you. Would you consider getting a fixer-upper and then doing some repairs and remodeling, or do you need something move-in ready? Would you prefer furnished or unfurnished? Do you absolutely need a home office? Swimming pool or a shady lanai? Providing your realtor with a list of NEEDS and then a list of WANTS could be the best approach. You don’t want to waste your time touring homes that won’t meet all the items on your “Needs List”.

3. Location, Location, Location!

What is the neighborhood like? Are you searching for a family neighborhood with lots of kids, or a quiet street? What is the speed limit on the street? Is it a cut-through street or a dead end? Is it near a noisy stadium or bars with outside entertainment? Is there a vacant lot by your home that is zoned for commercial or agricultural use? Crime statistics, good schools and bus transportation, commuting time to work, age and condition of the other homes in the area, and Home Owners Association rules are more things to consider. If you are looking for a home in a managed community, they may not allow company trucks or boats in your driveway, street parking, certain dog breeds, swing sets or basketball goals, or a change in your home’s paint color, along with other restrictions, so make sure to ask your realtor these questions.

Next, you may also want to consider what you like to do in your spare time and what amenities may be nearby. Do you crave a Starbucks coffee every morning, want to belong to a gym, need a playground for the kids, maybe a dog park, walking and jogging trails, close to the beach or the airport, or great shopping and restaurants?

Also, ask your realtor about the property taxes in that county and if the home is on sewer or septic, has well or city water, or has any special assessments. A septic system has to have regular maintenance, whereas a sewer system does not. A well may need a new pump someday. These may be additional expenses that will have to be considered.

4. Your Emotional Readiness

Buying a home is a huge commitment. A homeowner needs to think about their job security, how long they plan to stay in the area, and if their employer might require them to relocate or if they plan to retire soon. If you like to travel, you may need a house-sitter or someone to take care of your lawn while you are away or inspect for pests or damage. Depending on the age of your home, sooner or later you will need to re-paint, update appliances, and get a new roof or a new air-conditioning system. You might also have other personal expenses in the future like needing a newer car, having a baby, your children’s college or weddings, your retirement, and other family events.

Owning your own home is often a lifelong goal and can be very rewarding. After reading about everything that goes into buying a home, do you feel more excited – or more stressed? You may not be ready to be a homeowner yet, or this could be the perfect time to make that life change. Only you can know that answer.

Whether you are ready to be a new homeowner or are purchasing your next home, we can be there to provide hope, guidance, and get you into the home of your dreams. Contact us today to get started!

The #1 Mortgage Mistake: Paying too much for Closing Costs

The #1 Mortgage Mistake: Paying too much for Closing Costs

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Rate shopping for a mortgage is probably the least exciting part of purchasing your new home or refinancing your current one, but there is more to consider than just the interest rate. 

So, how can you really save your money? -By lowering your closing costs! This is money that can be used for a larger down payment or other things you need now.

So, what exactly are closing costs? 

  • Closing costs are any fees required to set up and close a mortgage. They include any lender fees, appraiser fees, title company fees, government fees, transfer taxes, and other third parties involved in the mortgage transaction.
  • They can range from 2% – 5% of the mortgage amount for both home purchase and refinance loans. Closing costs vary from state to state and do not include your down payment.

It is common that a No Closing Cost loan will provide even more savings than a loan with a lower interest rate for the average homeowner. No closing cost mortgages are a great alternative for buyers who otherwise qualify for a mortgage but might be short on the amount of money they have saved for their home purchase.

The Facts

  • Homeowners in the US will average between 4 or 5 mortgages during the first 20 years of homeownership.  
  • How is that possible?
    • The average homeowner will move several times.  They will also refinance their mortgage a couple of times to take advantage of lower rates or to get cash out for home improvements.

The Problem

  • Nationwide, the average homeowner paid the following amounts in closing costs in 2021.
    • $6,837 average closing costs for states that impose transfer taxes, and these costs are rising every year. The 2021 figure is an increase of $750 over the prior year.
    • $3,470 average closing costs for states that do not impose transfer taxes

The Math

  • If a homeowner has 5 different mortgages over the course of 20 years in a state that imposed transfer taxes.

5 Mortgages x $6,837 closing costs per mortgage = $34,185 total paid in closing costs!! 

The Law 

  • Every lender is required by law to provide you with a loan estimate within three business days after receiving your mortgage application. This estimate will outline the estimated closing costs and other loan details. 
  • This is the perfect time to go over all of the fees with your lender, so you know exactly what to expect to pay at closing and whether or not they are within your budget.

The Solution 

  • Mortgage Warehouse offers a No Closing Cost loan program.  That’s right… 
    • $0 Closing Costs! 
  • With our program you can:
  • Save yourself the financial burden of paying closing costs at closing
  • Put more money toward your down payment
  • Keep more of your money for emergencies or other expenses
  • Put yourself in a better financial position if you plan to sell or refinance in a few years.

Call to speak to one of our loan originators today to see if our No Closing Cost program is right for you or click here for more information.

Why Choose Mortgage Warehouse

Why Choose Mortgage Warehouse

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Here are some details that make us stand out:

No Closing Cost Loan Program

This is our #1 loan program. Closing costs can add up quickly and that is why we offer the No Closing Costs loan option for both purchases and refinances. Is our No Closing Cost program right for you? Click here to find out more:

Highest Rated Mortgage Company

Very few lenders come close when you combine these 4 key factors:

  • Combined Savings.  Interest Rate + Lowest Closing Costs
  • Dependability.  In-House Processing, Underwriting, and Closing Departments
  • Experience.  Industry Knowledge + Employee Tenure + Local Expertise
  • Customer Service.  National Award Winner with over 400+ “5 Star” Reviews.                 

Past Clients are Raving Fans

Look at our online reviews to find out what others are saying about our team.

Local Expertise 

  • We have originated, approved, and funded over $1 billion in loan volume
  • Our Senior Loan Originators have an average of over 15 years of mortgage experience.
  • Most of our business comes from repeat clients and referrals within the local communities where we work and live.  

In House Decision Making

  • We have our own qualified underwriters on staff. This allows us to make decisions regarding your loan approval much quicker than other companies that depend on outside sources. 
  • This also means that your questions and concerns are addressed immediately, so you are never left wondering about the status of your loan.
  • We are here to assist you from pre-approval to closing. From start to finish, we will be with you every step along the way.

Home Purchase Incentive Program


 Free Pre-Approvals

  • In this ever-changing market, sellers are looking for a buyer who is guaranteed to close. Don’t be left out of the negotiations of your dream home. Make sure you qualify for a mortgage before you start house hunting. 
  • We offer free no obligation pre-approvals so you can be assured that you are only making offers on homes you can afford.  
  • Start by completing our application: Mortgage Warehouse – Quick Application

Building Relationships

  • At Mortgage Warehouse, you will always receive our VIP treatment. You are never just a loan number to us. When you get a loan through us, we want to exceed your expectations so that you will be a raving fan of ours. 
  • Even after closing, we will be reaching out, not just to show our appreciation for choosing us, but also to get your feedback about the loan process and how we might do better. Our reputation is important to us, so we want to make sure that you have only the best experience. We might also take this opportunity to answer any questions you may have about your loan servicing or market conditions.
  • We are not, “One and done!”. Our goal is to build a relationship with you. We have many clients that not only referred their friends and family but are now referring their children to us! We want to maintain a lifelong commitment and dedication to you and make sure that you are taken care of, not just for now, but throughout the years.

Whether you are looking to purchase or refinance, we can offer the perfect loan for your needs, including Conventional, FHA, VA, Jumbo, and USDA loans. 

Benefits of No Closing Cost Mortgage to Purchase Your Home

Benefits of No Closing Cost Mortgage to Purchase Your Home

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No closing costs = Less money at closing

Closing costs are not allowed to be rolled into the loan when purchasing a home. With our No Closing Cost Mortgage, you can expect to bring $2500-$5000 less to the closing table.

No closing costs = Less debt

The average homeowner will move three times and refinance twice over the next 20 years. With average closing costs of around $3000, the typical homeowner will have five different mortgages and spend $15,000 in closing costs. It is difficult to pay off or pay down a mortgage if you pay closing costs every time you move or refinance.

No closing costs = More money for your down payment

Instead of using your money to pay closing costs, let us pay your closing costs and you will have more money for your down payment, moving expenses, new furniture, etc.

Refinance with no closing costs if rates improve

After purchasing your home, you can refinance to a lower rate for free (No Closing Costs) if mortgage interest rates improve. Some people think they will have the same mortgage for 15, 20, or 30 years. In reality, the average homeowner will move or refinance within 3-5 years.

Eliminate PMI sooner

If you do not have a down payment of 20% or more, you will likely have PMI (private mortgage insurance). With PMI on your home loan, you will definitely want to avoid paying closing costs. Instead of paying closing costs, you are better off using that money toward a down payment so you have more equity. You will eventually want to remove PMI by refinancing once you have 20% equity. You do not want to pay closing costs on a home loan that you won’t keep for very long.

Learn more about the Benefits of No Closing Cost Mortgage to Purchase your Home