Fixed Rate Mortgages

Fixed Rate Loans are perfect for those customers who want the security to know that their monthly payments and interest rates will not change over the life of the loan.  Apex offers these loans at 15, 20 and 30 year terms.  Fixed rate loans typically cost more in upfront fees and may have higher interest rates than Adjustable Rate Mortgages. 

         Advantages of Fixed Rate Loans:

·         Long-Term Savings if interest rates rise.                                                 If you are planning to stay in your home for a long period of time and if interest rates rise, you may end up paying less than if you had an Adjustable Rate Mortgage.

·         Fixed payments and interest rate over the life of the loan.

Adjustable Rate Mortgages (ARMS)

ARMs are perfect for those customers that want to keep their interest rates in line, or below, present market rates.  ARM interest rates vary according to the index on which they are based.  Typically, ARM interest rates are linked to the LIBOR index, Treasury Bills, or Cost of Funds Index (COFI), and come with interest rate caps that limit how much an interest rate can change each year, and over the life of the loan.  When interest rates go up, your monthly mortgage payments may go up in time, and when interest rates go down, your monthly mortgage payments may go down in time.  Apex offers these loans at 15, 20 and 30 year terms. 

            Advantages of ARMs:

·         Upfront Savings.  If you are planning to stay in your home for a short period of time, you may end up paying less in mortgage payments than if you had a Fixed Rate Mortgage.

·         Lower Monthly Payments.  Typically, an ARM allows a customer to reduce their monthly payment

·         Lower Interest Rates.  Typically, ARMs have lower interest rates than Fixed Rate Loans.

Fixed Period Adjustable Rate Mortgages

Fixed period ARMs allow customers to take advantage of the short-term stability of the Fixed Rate Mortgage interest rates and mortgage payments of the ARM.  Typical Fixed period ARMs include the 2/28, where the interest rate is fixed for the first 2 years and then adjusts to the financial index rate for the remaining 28 years. 

            Advantages of Fixed period Adjustable Rate Mortgages:

·         Fixed payment and interest rate for a short designated time.

·         Lower Interest Rates.  Typically, a Fixed period ARM has lower interest rates than a Fixed Rate Mortgage.

·         Flexibility to refinance.  The Fixed period ARM allows the customer the flexibility to take advantage of the Fixed Rate for a short period and then refinance if the interest rates rise when the rates adjust.

Piggy Back Loans

Piggy Back Loans are primarily second mortgages that are typically not more than 5% to 10% of the value of your home.  However, Apex may offer these second mortgages up to 20% of the value of your home.  Piggy Back second mortgages typically yield a higher interest rate than first mortgages.  Here are some of the advantages of taking out a Combo loan of a first mortgage at 80% and a second mortgage at 20%:

             Advantages of Piggy Back Loans

·         Reduces the cash needed to bring to closing.

·         Lowers your total monthly cash payments.

·         May eliminate Private Mortgage Insurance.

·         Increases your tax deductibility and lowers your after-tax monthly payments.         

Jumbo Loans

Jumbo Loans range from $300,700 and higher.  These loan amounts can go up to $10 million dollars.  Jumbo Loans exceed the conventional loan limits or do not conform to the guidelines of Fannie Mae or Freddie Mac.   Apex is very competitive in this market and is able to finance up to 100% on these loans. 

Full Documentation loans typically require the following:

      Income Documentation

   Hourly or Salaried Employment

• W2 forms for the last two years and most recent pay stubs covering a 30 day period.

Self-Employment

• Federal tax returns for the last two years

• Year-to-date Profit and Loss Statement

• Corporation or Partnership tax returns

Retirement Income

• Pension Award Letter and/or

• Social Security Awards letters

Rental Income

• Tax returns for previous year

• Lease agreements for all properties

Child Support/Alimony

• Fully executed divorce decree

• Evidence of 1 full year receipt of payments

Asset Documentation

In order to verify the assets for our customers, the two most recent statements for all checking, savings, stocks, mutual funds, 401k, IRA or any other asset accounts may be requested. 

No Documentation Loan types typically include the following:

Stated Income Loan/No Verification (NIV) Loan

These loans require the borrower to state their income on the application.  No tax returns, pay stubs or other documentation is required.  The borrower is approved based on the income shown in the application.  These loans typically yield a higher interest rate than full documentation loans.

No Income/No Asset Loans (NINA)

These loans do NOT require the borrower to state income nor assets on the loan application.  The borrower is approved based on the borrower’s source of employment and credit history.  These loans typically yield a higher interest rate than full documentation loans.

No documentation loans (NO DOC) Loan

The loans do NOT require the borrower to disclose any information regarding income, employment, assets or other sources of income.  Loan approval is approved strictly on the borrower’s credit history.  These loans typically yield a higher interest rate than full documentation loans. 

FHA Loans:

FHA, also known as the Federal Housing Administration, operates under the control of the Department of Housing and Urban Development (HUD) and has the primary responsibility for administering the government home loan insurance program. This program allows buyers who might otherwise not qualify for a home loan to obtain one because the risk is removed from the lender by FHA.

The most popular FHA home loan program nationwide is the 203(b) FHA home loan (see below) that only requires a minimum of 3% from the borrower and permits 100% of their money needed to close to be a gift from a relative, non-profit organization, or government agency

The main advantage to a FHA home loan is that the credit criteria for a borrower are not as strict as FNMA or FHLMC. Someone who may have had a few credit problems should not have a problem obtaining FHA financing. Also, FHA home loans are assumable, allowing a person to take over the mortgage without the additional cost of obtaining a new loan. In addition, the seller must pay for part of the "traditional" closing costs (called non-allowable costs) while a borrower's allowable costs can partially be wrapped into the loan. 100% of the down payment and closing costs can be gifted. 

FHA Streamline:

The FHA streamline refers to the amount of documentation and underwriting that needs to be performed by the mortgage company.

The basic requirements of  a streamline refinance are:  

• The mortgage to be refinanced must already be FHA insured.
• The mortgage to be refinanced should be current (not delinquent).
• The refinance is to result in a lowering of the borrower's monthly principal and interest payments.
• No cash may be taken out on mortgages refinanced using the streamline refinance process.

VA Loans:

The more you know about our home loan program, the more you will realize how little "red tape" there really is in getting a VA loan. These loans are often made without any downpayment at all, and frequently offer lower interest rates than ordinarily available with other kinds of loans. Aside from the veteran's certificate of eligibility and the VA-assigned appraisal, the application process is not much different than any other type of mortgage loan. And if the lender is approved for automatic processing, as more and more lenders are now, a buyer's loan can be processed and closed by the lender without waiting for VA's approval of the credit application.

Additionally, if the lender is approved under VA's Lender Appraisal Processing Program (LAPP), the lender may review the appraisal completed by a VA-assigned appraiser and close the loan on the basis of that review. The LAPP process can further speed the time to loan closing.

Why buying a home is a smart investment

Why throw away your rent money? You can typically spend the same amount in monthly payments and own your home with all the benefits of home ownership.  In general, homes appreciate about four to five percent a year.  This may not seem much at first, however, it is a long-term safer investment that will enable you to establish equity and future buying power.

 If you were to purchase a home for $100,000 and put down $10,000, at an annual appreciation rate of 5%, you will have made $5,000 on your initial investment of $10,000.  Of course you are making principal and interest payments, however, the interest on your mortgage and property taxes are deductible. 

Determine how much you can afford

In order to prepare yourself for one of the most important investments you will make during your lifetime, have a clear understanding of what you can afford.  When you have an idea of what you can afford, focus on looking for homes that are within your budget. 

If you wanted to purchase a home for $100,000, with a 30-year mortgage at 7%, your monthly payments would be approximately $665, not including taxes and insurance.  You can use our Mortgage Calculator to determine what your monthly payments would be at a specific loan amount, term and interest rate.

Apply for a loan with Apex Lending Services today!

You do not have to wait until you find a home to apply for a loan.  By applying before you find a home, at no cost or obligation, Apex will be able to pre-qualify you and give you a better understanding of what type of loan is best for you.

 

The Home Buying process is made easy with Apex

Find a home

Finding a home can be an exciting adventure.  There are many ways you can find the home of your dreams:  Search the internet, drive around, look in the local papers, seek the services of a real-estate professional, etc.  When looking for a home, ensure that you are looking in an established area that has the ability to appreciate over time.  Do not settle.  Be patient and find the home of your dreams.

 

Make an Offer

Now that you have determined how much you can afford, been pre-qualified, and found the home of your dreams, it is time to make an offer.  When negotiating with the seller, take into consideration the following:

• Seller’s motivation to sell:  If the seller needs to sell quickly, they may be willing to accept a lower offer.
• Condition of home.  If repairs are needed, you may negotiate the estimated costs of those repairs and negotiate a lower price for the home.
• Current market.  The present market conditions can dictate if it is a seller’s market or buyer’s market.  Use this to your advantage when looking for a home in a particular location.
• Seller’s equity in home.  If the seller does not have much equity in their home, they may be less willing to negotiate a lower price.

Close

Now that you have negotiated a price, and the seller is willing to sign the offer contract, contact your Apex representative to arrange for the closing of the loan.  On closing day, you will execute the closing documents necessary for the house to be legally transferred. 

Average closing costs are typically from 3% to 6% of the sale price of the home.  Closing costs typically include:

• Origination Fees
• Points
• Underwriting Fees
• Processing Fees
• Title Search and Insurance
• Flood Certification Fees
• Recording Fees
• Tax Service Fee
• Tax Adjustments
• Agent Commissions
• Credit Report Fees
• Prepaid Homeowner’s Insurance Premiums
• Private Mortgage Insurance Premiums.

Important Mortgage Information

Lower Your Interest Rates

Even a slightly lower interest rate can yield a substantial monthly savings. 

Example:  If you have a $100,000, 30 year mortgage, and are currently paying 8%, you are paying approximately $730 per month before taxes and insurance.  By lowering your interest rate to 7%, you will be paying approximately $665 per month.  This would yield a savings of approximately $23,000 over the life of the loan.

Change Your Terms

If you were to refinance your mortgage with a shorter term, you will be able to significantly lower your interest costs because you are paying off the loan sooner.  By doing this, you will build up equity in your home faster and have a substantial savings over the life of the loan.  With interest rates as low as they are today, you may be able to shorten the term on your mortgage and your monthly payments may not increase, depending on your initial interest rate.

Consolidate Your Debts

Are you tired of paying higher interest rates on your credit card debt?  Use the equity in your home to consolidate your credit cards at a lower interest rate.  By refinancing and consolidating your credit card debt into your mortgage, you will then be able to deduct the interest on your credit card debt.  This method of consolidation may save you a substantial amount in monthly payments.

Get Cash

By using the equity in your home, you may refinance your current mortgage and receive cash.

Convert from a Fixed Rate Mortgage to an Adjustable Rate Mortgage

If you are planning to sell your home within the next few years, this option could be ideal in saving you a substantial amount in monthly payments.  Typically, the interest rates on an Adjustable Rate Mortgages are lower than Fixed Rate Mortgages.  An Adjustable Rate Mortgage could be beneficial if interest rates rise and you have an interest rate cap.  In addition, if interest rates remain steady or decrease, the Adjustable Rate Mortgage will be less expensive than a Fixed Rate Mortgage over the life of the loan.

Convert from an Adjustable Rate Mortgage to a Fixed Rate Mortgage

If you are planning to stay in your home for a long period of time, and are unsure about the fluctuations in interest rates, this option could be ideal for you.  If interest rates are low, you can lock in a great rate and know that you will have steady monthly payments over the life of the mortgage.  So, if you are planning to stay in your home for a long period of time, and rates are favorable, you can refinance your home with a Fixed Rate Mortgage over a 15, 20 or 30 year term, and essentially save a substantial amount of money over the life of the mortgage.

Eliminate Private Mortgage Insurance

Typically, if you pay less than 20% down on the purchase of your home, you are paying Private Mortgage Insurance.  If you presently have more than 20% in equity on your home, you may be entitled to eliminate your Private Mortgage Insurance.

Refinance Costs

When you refinance your mortgage, essentially you are paying off your original loan and obtaining a new one.  You will more than likely use the new loan to pay most of your closing costs.  These costs may include:

 

• Origination Fees
• Underwriting Fees
• Processing Fees
• Discount Points
• Title Search and Insurance
• Flood Certification Fees
• Recording Fees
• Tax Service Fee
• Tax Adjustments
• Credit Report Fees
• Prepaid Homeowner’s Insurance Premiums

 

Depending on your original mortgage, you may be required to pay a pre-payment penalty. Prepayment penalties typically are an amount roughly equal to six months' interest.  This amount would more than likely be included in the new loan.

 Top of page