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.
 

 

Worried about affording a home? You're not alone. Homeownership may seem out of reach, but with the right strategies, you can turn that dream into a reality. Here are 5 effective approaches to help you turn your homeownership dreams into reality:

1. Don't go at it alone: Combine your purchasing power with a coborrower's. It's common for couples to borrow together, yet it's possible to have "non-occupant co-borrowers" too. You can even have more than 2 coborrowers on one mortgage loan.

2. Consider a Hybrid: Increase your buying power with the lower starting rate of a mixed loan program. You'll have a fixed rate and payment for 3 to 10 years before transitioning to an adjustable-rate loan. If you sell or refinance before the fixed period ends, you can avoid paying potentially higher adjustable rates.

3. Go Multi: A multi-family home comes with built-in additional income that can help you better manage your payments and increase your buying power. Some loan programs do not allow the inclusion of the rental income to qualify, so discuss the possibility with us before you decide if it's right for you.

4. Bid Yourself ADU: Just like a multi-family home, a property with a second livable unit (Accessory Dwelling Unit or ADU) can potentially help you qualify for a larger loan.

5. Reduce Your Rate: Seller paid buydowns, paying points, or alternate loan programs can all provide a lower rate.

Taking the first step towards homeownership is easier when you have the right guidance and strategies. By exploring these options, you can enhance your buying power and make homeownership more attainable. Remember, a consultation with us is the best way to determine a comfortable price range for your unique situation. Reach out when you're ready, and we'll be happy to help you find the perfect home within your budget. Your dream home is closer than you think!

You can also get started by getting pre-approved online today!

 

 

With listings harder to find and prices still strong, it may be a good time for homeowners who are still in their larger-than-needed homes to sell.

The current real estate market offers a unique opportunity to unlock substantial equity, which can be a prudent move towards better enjoying your retirement.

The Benefits of Trading Down Can Include:

A Newer Home May Require Less Maintenance

Moving to a newer, smaller home often means less maintenance and fewer repairs. This can be especially beneficial for retirees who want to spend their time enjoying life rather than managing home upkeep.

Reduced Exterior Maintenance

Some homes, such as condominiums, eliminate exterior maintenance and lawn care/snow removal entirely. This can lead to significant savings in time and money, allowing you to focus on activities you enjoy.

Enhanced Lifestyle and Community

A retirement home can come with new friends of the same age, plus abundant activities and amenities for staying active and entertained without breaking the bank. Many favorite retirement areas extend the season for enjoying outdoor activities and provide plenty of incentive for visits from family and friends.

Tax Benefits

You may earn up to $500,000 of gains tax-free if you're married and file jointly. As always, check with your tax professional to be certain.

Financial Freedom 

Purchasing a smaller home may allow for a smaller loan, less general expense, and even the possibility of more cash on hand, all while increasing your quality of life.

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Potential Challenges of Trading Down

Emotional Attachment

Leaving a long-term family home can be emotionally challenging. Acknowledge these feelings and consider ways to honor the memories while embracing the benefits of a new home.

Find the Right Smaller Home

Finding the perfect smaller home can be challenging. Look for a home that meets your current needs and offers future resale value. Consider location, amenities, and the overall community.

Costs of Moving

Moving can be expensive. Plan for potential costs such as hiring movers, closing costs, and any necessary renovations to your new home.

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Practical Steps to Take

Evaluate Your Needs

Assess your current and future housing needs. Think about the size of the home, necessary amenities, and the type of community you want to live in.

Financial Planning

Consult with a financial advisor to understand the full financial implications of trading down. This will help you make an informed decision. You can also reach out to Greenway Mortgage with any questions you have. 

Preparing Your Home for Sale

Maximize your home's value by decluttering, making minor repairs, and staging it to appeal to potential buyers.

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Bottom Line
Trading down your home can offer numerous benefits, from financial savings to an enhanced lifestyle. While it may be emotionally challenging, the potential rewards are significant. If you're considering trading down, evaluate your needs, plan financially, and prepare your home for sale.

Whatever your interest, reach out with any questions. We're happy to help.

888.616.9885 or email us at leads@greenwaylending.com