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Should You Choose a Fixed or Adjustable Mortgage Rate During COVID-19?

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Should You Choose a Fixed or Adjustable Mortgage Rate During COVID-19?

Whether you are looking to purchase a home or you are thinking about refinancing an existing mortgage, you have a great opportunity right now during the COVID-19 outbreak to lock in a low mortgage rate.

CNBC stated on May 15th, “The average rate on the popular 30-year fixed mortgage just fell to 3.09%, a record low, according to Mortgage News Daily.”

Nobody knows how long mortgage rates will remain this low. So, it is in your best interest to act fast to take advantage of these rates while you have the chance. But should you choose a fixed or adjustable rate mortgage?

Considerations for Choosing an Adjustable Rate Mortgage (ARM)

First, let’s talk about adjustable rate mortgages. With this type of home loan, you usually can lock in an initial introductory rate which may be lower than what you can find with many fixed rate mortgages.

After a few years on that introductory rate, the introductory period expires. Once that happens, the lender can adjust the rate based on market conditions. That means that theoretically, it could go up or down.

An adjustable rate mortgage may seem extra appealing right now if you are struggling financially because of coronavirus. You might be out of work, whether on a furlough or until you can find a new job. Should you be tempted by a low introductory rate?

While it does make sense to want to save as much money as possible over the short-term, you should always think about the long-term.

The main question you should be asking yourself is the same one that you would during ordinary times. The question is, “How long do you plan to stay in your current home?”

If the answer is, “A few years,” an adjustable rate mortgage probably does make sense at this juncture. It will probably allow you to save the most money over the duration of time you will be in your home.

But if you believe you will be in your home for a longer period of time, you should probably think about choosing a fixed rate mortgage instead.

Considerations for Choosing a Fixed Rate Mortgage

If you refinance today to a fixed rate mortgage, you will likely start saving a significant amount of money each month because rates are so low right now.

So, even though you may save a bit less than you would with an adjustable rate mortgage with an introductory period, your savings should still go a long way toward helping you stay afloat during this challenging time.

Plus, think several years down the road. By that time, who knows where mortgage rates will be? We have never lived during a less predictable time.

With a fixed rate mortgage, you will not have any questions about what you can expect from the future with regards to your mortgage rates. Even if rates rise precipitously, you will still be paying the same low rate that you locked in today.

Not only can a fixed rate mortgage improve your financial stability, but it might also reduce some of your stress about the future, giving you some much-needed peace of mind at this time.

Need Help Figuring Out Which Type of Mortgage Rate is Right For You?

At Stonebriar Mortgage, we have helped homebuyers and homeowners throughout Dallas and beyond to choose the mortgage rate format which is the most suitable fit for their needs.

During your consultation, we can discuss your financial scenario and your goals for the future. Together, we can figure out whether a fixed or adjustable rate would be ideal for you. To get started, please call (214) 669-3307.

6 Considerations When Refinancing in Texas

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6 Considerations When Refinancing in Texas

In a recent post, we discussed the benefits and costs of refinancing your home loan in Dallas or elsewhere in Texas.

Following are some questions to ask yourself and some factors to consider if you decide to move forward with a refinance.

1. How is your credit score?

One of your first considerations should be your current credit score as well as other financial metrics such as your debt-to-income (DTI) ratio.

If these have improved since you took out your original home loan or stayed the same, you may qualify for a refinance. The higher your credit score and the lower your DTI ratio, the more competitive the refinancing products you may qualify for.

So, if possible, try to you raise your credit score before you apply for a refinance. If you need recommendations on how to do this swiftly, we can advise you during your consultation.

2. How long do you want to stay in your home?

Refinancing is not just a matter of switching to a mortgage with a lower interest rate. It also entails making decisions about the nature of the lending product altogether.

This is a time to ask yourself if you are requirements have changed since you took out your original home loan.

One of the questions which you should ask yourself is how many years you plan to remain in your home.

If you only plan to spend a few more years in your home and you currently have a fixed rate mortgage, you might want to refinance to an adjustable rate mortgage with a low introductory rate.

But if you originally took out a mortgage with an adjustable rate and now believe that you will spend many years in your home, it may be wise to lock in today’s low fixed mortgage rates so that your rates remain predictable for the lifetime of your loan.

3. Has your income increased or decreased?

The next important question to ask yourself is whether your income has gone up or down and what you expect it to do in the future.

If you can afford to pay more on your mortgage now than you could in the past and you expect that to be the case over the years ahead, reducing your mortgage term when you refinance can help you pay off your loan faster without prepayment penalties.

Has your income dropped? If you expect to continue to struggle to pay all your bills over the years ahead, consider refinancing to a mortgage with a longer term instead to decrease your monthly payments.

4. Are you ready for the costs of a refinance?

Refinancing a mortgage requires that you pay closing costs either upfront or bundled into the new loan.

Calculate these costs against your potential savings to ensure that refinancing is financially worthwhile.

If possible, pay your closing costs upfront to reduce your interest rate over the coming years.

Also consider the option of paying points to further reduce your mortgage rate when you refinance.

5. Do you have debts to consolidate?

If you have other debts with high interest rates, now might be your time to make them less of a burden.

Find out whether it is possible for you to consolidate those high interest debts into your new mortgage.

6. Do you want to cash out?

Another consideration when you apply for a refinance is whether cashing out might be worthwhile.

In general, if you do not need to cash out, it is usually best not to, as it will take you longer to pay off the larger mortgage, and you will have less equity in your home.

But if you do need that extra money for an important expense, it can be an affordable option compared to other types of loans.

Try Our Refinance Tool

If you are wondering how much you could save by refinancing your mortgage now, look under “Resources” in the menu above and click on “Refinance Analysis” to try out our refinance tool. Using our refinance tool is a fast and easy way to preview some of the possible benefits.

Refinance Your TX Home Loan Today

If you want a more precise, in-depth analysis of how much you could save with a refinance and what other ways a refinance could benefit you, we would be glad to go over the possibilities with you during your refinance consultation. To get started now, please give us a call today at (214) 669-3307.

Should You Refinance Your Mortgage in Dallas?

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Should You Refinance Your Mortgage in Dallas?

As a Dallas area resident, you are hopefully paying competitive mortgage rates. But depending on when you took out your mortgage and what your borrower profile looked like at the time, you might be paying a lot more than your neighbors are right now.

If so, you might be wondering whether it is worth it to refinance in Dallas. Could doing so be your key to unlocking a lower mortgage rate?

Refinancing a mortgage has advantages and disadvantages. To figure out whether refinancing makes sense in your situation, you will need to determine whether the potential pros outweigh the potential cons.

Refinancing Carries a Cost

When you refinance your mortgage, there are closing costs. Typically, closing costs for a refinance range between 2% and 5% of your mortgage principal.

So, the question is whether the savings from refinancing will outpace that cost or not.

Refinancing in TX Can Offer Many Potential Benefits

Here are some of the ways in which refinancing your mortgage in Dallas or elsewhere in Texas could save you money:

  • You may qualify for a lower interest rate on your mortgage if rates have dropped since you took out your loan or if your borrower profile has improved.
  • If you pay for mortgage insurance now and qualify for a loan without a mortgage insurance requirement through refinancing, you could save money every month.
  • Has your adjustable mortgage rate been ballooning? Refinancing to a fixed mortgage rate could reduce your payments and keep them low in the future.
  • If it is possible to pay off your loan early, refinancing to get rid of prepayment penalties could end up saving you money, especially when you take into account the lower amount of interest you will end up paying in total.
  • If you have a number of high interest debts, you might be able to consolidate them into a lower interest mortgage.
  • Struggling to pay your other monthly bills and keep up with your mortgage? Refinancing to a longer mortgage term could be what you need to do in order to stay afloat each month and avoid high interest debt.

Try Our Refinance Analysis Tool

In our Resources section, you will find our Refinance Analysis tool.

With this tool, you can enter your zip code and answer a few questions to find out what your new low mortgage rate and payment amount could be if you qualify for a refinance today.

Call Stonebriar Mortgage Find Out How Much Refinancing Could Save You on Your Dallas Mortgage Now

Another way to find out whether you could benefit from a refinance is to come in for a consultation. Our mortgage experts can run the numbers for you and let you know exactly how much you could save over your loan term with a home loan refinance in Dallas or elsewhere in Texas.

If you are ready to start saving, please call us now at (214) 669-3307 to schedule your consultation.

Your Questions About Bank Statement Loans Answered

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Your Questions About Bank Statement Loans Answered

If you are unable to complete the traditional full documentation loan process or you are looking for a streamlined alternative, you may be interested in our bank statement loan program.

With a bank statement loan, you do not need to prove your income using a W-2 or pay stubs. You furnish bank statements instead to demonstrate that you are financially viable.

Have questions about bank statement loans? Below, you can read through a brief bank statement loan FAQ for answers.

Q: Who can use a bank statement loan?

A: Anyone who is unable to apply for a loan with the traditional income paperwork is welcome to apply for a bank statement loan. That could include business owners, entrepreneurs, freelancers, and self-employed persons.

Investors of all stripes can also apply for bank statement loans. Doing so may be particularly useful if you invest in real estate, as you not only can get around the traditional paperwork, but also close more rapidly through the streamlined process.

Q: What do I need for a bank statement loan?

A: When applying for a bank statement loan, you do not need W-2 forms or pay stubs.

What you do need is a bank statement. Usually, this should cover 12-24 months. This becomes your proof of income.

Along with the bank statement, you need to provide verification of your identity. So, bring your social security card, driver’s license, or other identification card.

Something else you may want to bring is proof of any assets you own which could improve your borrower profile.

Finally, your credit score will be considered alongside your income and DTI ratio. So, make sure that your score is polished before you apply.

Q: Does it take longer to apply for a bank statement loan?

A: No. Actually, oftentimes, the reverse is true. It can take less time to apply for a bank statement loan since there is less paperwork to process.

Q: Is a bank statement loan different from a stated income loan?

A: A “stated income loan” typically refers to a bank statement loan. Lenders always are going to want to see some kind of proof of income, even if it isn’t with the traditional paperwork.

Q: Are bank statement loans safe and responsible?

A: Nowadays, bank statement loans are very safe. Again, the days of lenders not looking at proof of income at all are behind us. So long as a lender checks your income and you also carefully evaluate whether you can afford a mortgage, you should be good to go.

Apply for a Bank Statement Loan in Dallas Now

You probably have additional questions about bank statement loans which we may not have answered here. If that is the case, we would love to give you detailed answers during your bank statement loan consultation.

To get started, please give us a call now at (214) 669-3307. We look forward to meeting you during your consultation and walking you through the bank statement loan process.

What to Look for in a Mortgage Company in Dallas

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What to Look for in a Mortgage Company in Dallas

Looking for a home loan in Dallas or elsewhere in Texas? To find the perfect mortgage, you will need to choose a mortgage company that is as dedicated to connecting you with it as you are to finding it.

Below, you can read some recommendations to help you choose a company to work with on your Dallas home loan.

1. A full spectrum of loan options.

There are many different types of mortgages out there to choose from, and each of them is ideally suited to a different situation.

If you work with a lender that features a limited selection of mortgage products, you may not find the home loan which is most affordable and convenient for you.

If, on the other hand, you choose a mortgage company with a diverse range of lending products, you stand a much better chance of being connected to the one which is going to be ideal for your needs.

2. A flexible application process.

Did you know that the traditional loan application process that requires a W-2 is no longer the only way that you can apply for a home loan?

That traditional process is still a great fit for many loan applicants, but with an increasingly large self-employed workforce, quite a few applicants are looking for a different way to apply for a mortgage.

Mortgage companies which offer a bank statement loan program (also called a stated income loan program) can help you qualify for a mortgage without providing traditional income documentation.

Investors shopping for Dallas properties with the goal of closing rapidly also may avail themselves of an alternative application process like this in order to save time.

3. Experience in the Dallas real estate market.

When choosing a mortgage company to work with, one of the questions you should ask is, “How much experience do you have in this market?”

A local Dallas mortgage broker can typically offer more than a nationwide big box lender in terms of local knowledge, resources and connections.

A larger network of lenders with more established relationships can translate to more loan products available and easier approval.

4. Convenience and speed.

Whether this is your first time shopping for a home or you simply have had a difficult time in the past working with another mortgage company, you might believe that applying for a home loan is necessarily inconvenient and stressful.

But with the right home loan company in Texas on your side, it can be fast, easy, and convenient to get matched with your ideal mortgage.

Features such as useful online tools, different channels of communication being offered, and great customer service (see below) can all speed up the process and make it a pleasant one.

5. Amazing customer service.

There is arguably nothing more important to look for in a mortgage company in Texas than outstanding customer service.

When you are making a huge financial decision such as selecting a mortgage, you want experts on your side that are dedicated to protecting your financial interests now and in the future.

Work with a broker that makes it clear through their actions that they are here first and foremost to make sure that your needs are met.

Consult Now With Stonebriar Mortgage

Stonebriar Mortgage is a Texas-based mortgage company with two decades of experience.

We are well-networked, offer many different types of loans, provide flexible, easy qualification, and can tackle scenarios such as self-employment with speed and efficacy.

We have helped so many homebuyers in the Dallas metropolitan area and throughout TX to move into the homes of their dreams with affordable home loans.

If you are ready to move into your Texas home, please give us a call now at (214) 669-3307 to schedule your consultation. We can’t wait to meet you and get you pre-approved for a home loan.