Thinking about purchasing a condo? For city dwellers, singles, couples, and anyone looking for a low-maintenance lifestyle, condos offer a unique homeownership experience. They’re often more affordable than detached homes, making them appealing for first-time buyers or those who want to downsize.

What is a Condo, Exactly?

A condo lets you own your individual unit while sharing ownership of common spaces with other residents. Your monthly “condo fee” helps cover maintenance and repairs in these areas, providing a convenient lifestyle with fewer home maintenance demands. Condo options range from high-rise apartments to townhouse-style setups, so there’s something for many preferences and budgets.

Why Buy a Condo?

Condo ownership provides many benefits, such as potential tax deductions, possible appreciation in value, and a community-oriented setup. However, understanding the financial and lifestyle aspects unique to condos is key to deciding if it's the right choice for you.

Key Considerations

Here are a few things to think about when considering a condo:

• Community Fees and HOA Dues: In addition to your mortgage, be prepared for monthly condo fees. These can impact your budget, so it’s essential to understand what’s included and how they may affect your financing.

• Rules and Regulations: Condo communities come with specific rules around property use, renovations, and shared responsibilities. Knowing these will help you decide if the lifestyle is the right fit.

Curious about what else you need to consider? Download the our Free Condo Buying Guide to learn:

• Is a condo the right choice for you?

• What makes a condo unique

• How to qualify the property

• Key questions for your real estate pro, lender, and condo association

• Tips for a successful condo purchase

• Glossary of must-know terms

 

 

With this guide, you'll be fully prepared to make confident, informed decisions on your condo journey. From choosing the right property to navigating the process with ease, this guide covers it all. Get started today and discover if condo living is right for you!

Have questions? The team at Greenway Mortgage is happy to help. Give us a call at 888-616-9885 or email us at leads@greenwaylending.com.

 

Does Waiting for Lower Mortgage Rates Make Sense?

Many renters are waiting for mortgage rates to fall before purchasing a home. However, if home values rise while you wait for rates to drop, you may not save as much on your payment as you think. Plus, you could end up spending a lot of money on rent!

Let’s explore some examples of initial principal and interest payments on a hypothetical 30-year fixed-rate mortgage of $400,000 compared to a payment one year later after rates have dropped and home values have risen.

Example 1: One-Point Drop in Rates with 5% Appreciation

1. Loan Amount if Bought Now: $400,000

2. Interest Rate: 6.50%

3. Monthly Principal & Interest Payment: $2,528.27

Now, let’s assume you wait one year, and the home appreciates by 5%:

1. New Loan Amount: $420,000

2. New Interest Rate (after a 1% drop): 5.50%

3. New Monthly Principal & Interest Payment: $2,384.71

4. Monthly Savings: $143.56

If you pay $2,000 in rent for the 12 months you wait, it would take 167.2 months (or 13.93 years) of payment savings to recoup your rent cost. Instead of paying the extra $20,000 at sale, you would have earned an average of $1,667 in equity each month during that time.

Example 2: Two-Point Drop in Rates with 10% Appreciation

1. Loan Amount if Bought Now: $400,000

2. Interest Rate: 6.50%

3. Monthly Principal & Interest Payment: $2,528.27

Assuming you wait one year again, and the home appreciates by 10%:

1. New Loan Amount: $440,000

2. New Interest Rate (after a 2% drop): 4.50%

3. New Monthly Principal & Interest Payment: $2,229.42

4. Monthly Savings: $298.86

In this scenario, waiting would also cost you. It would take 80.3 months (or 6.69 years) of savings to recoup your rent costs. Instead of paying the extra $40,000 at sale, you could have been earning an average of $3,333 in equity per month.

The Bottom Line

There’s no guarantee that home values will rise or that mortgage rates will drop. However, if you have the ability to buy now, waiting for a better rate could end up costing you more in the long run.

If you're considering your options, don't hesitate to reach out. The Greenway Mortgage team is here to help you navigate this decision!

Contact us today at 888-616-9885 or click here. 

 

 

Navigating the mortgage application process can feel overwhelming, but it doesn’t have to be. By following a few straightforward guidelines regarding your bank statements and deposits, you can significantly streamline your application and approval process. Here’s a simple guide to help ensure everything goes smoothly.

1. Provide All Numbered Pages of Each Account Statement
When submitting your bank statements, always include all numbered pages of each document. For instance, a statement labeled “Page 1 of 8” might only be a cover sheet, while “Page 8 of 8” could be blank or feature advertisements. Underwriters need to see every page to fully understand your financial picture, so don’t omit anything!

2. Identify Your Deposits Clearly
Deposits that are not clearly identifiable as coming from your employer may raise questions during the underwriting process. If the source of these funds is unclear, you may be asked to provide additional documentation to clarify their origin and purpose. To avoid potential scrutiny, make sure your deposits are easily traceable.

3. Document Your Deposits
Start keeping copies of all checks and deposit slips. This simple habit will help you maintain clear records of your transactions and provide the necessary proof when it’s needed. Proper documentation can expedite the underwriting process and minimize the likelihood of complications.

4. Handle Cash Deposits with Care
Cash deposits can complicate matters significantly. Avoid mixing cash with checks, as this can create difficulties in tracking where the funds came from. If you must make cash deposits, ensure you can document their source. Transparency is crucial when it comes to handling cash transactions.

5. Understand Fund Transfers
Transfers between your accounts are treated similarly to deposits. If you’re moving money from one account to another, you’ll need to provide statements for both accounts. Additionally, if the transfer is a gift from a family member, it’s essential to consult with us about the proper documentation process to follow.

Bottom Line:

By following these guidelines, you’ll make it easier to demonstrate that the funds going into your accounts are not borrowed. Underwriters need to be confident that any debt is accounted for, even if it comes from private loans.

When in doubt, remember that we are here to assist you. If you have any questions about the mortgage application process or need clarification on any of these points, don’t hesitate to reach out. 888-616-9885

 

Understanding Rate Locks: Why Longer Locks Come with Higher Costs

When you apply for a mortgage, one of the most crucial decisions you'll face is locking in your interest rate. But why do longer rate locks tend to cost more? It all comes down to risk—both for you and the lender.

The Role of Interest Rate Fluctuations

Between the time you apply for a loan and the moment you close, interest rates will fluctuate. Sometimes, these changes are subtle, but they can also be quite volatile, even shifting from one minute to the next. Locking in your rate serves as a safeguard against rising rates, much like purchasing an insurance policy.

The Lender's Perspective: Risk Management

When you lock in your rate, you're effectively transferring the risk of rising rates to the lender. To manage this risk, lenders often purchase financial instruments called "hedges," such as U.S. Treasury Bonds, which move inversely to interest rates. However, these hedges come at a cost. The longer the lock period, the more expensive the hedge, which is reflected in the cost of your loan.

How Loan Type Influences Rate Lock Costs

The type of loan you're considering can also influence the cost of a rate lock. Some loans, like adjustable-rate mortgages (ARMs), are tied to indexes that move more slowly compared to the daily fluctuations in the broader market. This reduced volatility can result in lower costs for longer rate locks.

Making the Right Decision for You

Predicting interest rate movements is nearly impossible, which is why choosing the right rate lock duration often comes down to personal comfort. If the thought of fluctuating rates makes you uneasy, opting for a longer lock—even at a higher cost—might be worth the peace of mind. On the other hand, if you're comfortable with a bit of risk, a shorter lock could potentially save you money.

Whatever your choice, we're here to guide you through the process and ensure you feel confident every step of the way.

 

If you’re lucky enough to have a low, pandemic-era mortgage rate, congratulations! You’re benefiting from record low interest expenses and likely have accumulated a fair amount of equity, too! As time passes since your purchase, you may be considering financing some repairs or improvements to your home.

Here are a few ways to access cash from your equity without losing your current interest rate:

#1: Home Equity Loans or Lines of Credit: A home equity loan or HELOC allows you to borrow up to 95% of your home’s value beyond your current loan(s). This option typically offers lower interest rates compared to other loans and can be a flexible way to fund larger projects. 

#2: Home Improvement or Construction Loans: These loans can be based on your existing equity or, with the right loan type, on the projected value of your home after the project is completed. This option is perfect for significant renovations that increase your home's value. Consult with a Greenway Loan Officer to understand the terms and ensure it aligns with your financial goals.

#3: Personal Loans: Unsecured personal loans are based on your credit history and ability to repay rather than the equity in your home. These loans can be a quicker and simpler solution, though they often come with higher interest rates compared to secured loans.

#4: Credit Cards: Credit cards are often the easiest to use but can be the most expensive option due to high-interest rates. Some homeowners initially charge expenses on their credit cards and later refinance or use an equity loan to pay off the balances. This method requires careful planning to avoid accumulating high-interest debt.

#5: Cash: Using your savings to pay for home improvement can make sense too as it avoids the need to take on additional debt.However, it's important to remember that by tying up your cash in your home, you may need to borrow or sell in the future if unexpected expenses arise.
 

 

Bottom Line:
There are multiple avenues to finance your home improvements without sacrificing your low mortgage rate. It’s essential to evaluate your options and choose the one that best suits your financial situation and goals. Reach out when you’re ready, and the Greenway Team can help you find the best option for your specific scenario. With our expertise, you can make informed decisions to enhance your home and financial well-being.