Williamsport Home Mortgage FAQ

It is natural to have questions when buying a home. We checked with Williamsport mortgage broker D. Shane Whitteker to ask him some of the most common mortgage questions.  

Mortgage Question: I don't have much saved for a down payment. What are my mortgage options? 
 
Some lenders might be wary about financing a loan with a low down payment. However, you have some options with government-backed loans. Instead of seeking out a conventional mortgage, ask about FHA, USDA or VA loans. These funds come with a government guarantee. This translates into a safe loan for the lender in the event of a default. Most lenders are happy to fund these loans if you're willing to commit to the monthly payments. 
 
Mortgage Question: What are some low, down-payment options for prospective homebuyers? For your long-term financial future, why is it often better to buy a home sooner than later?  
 
Low, down-payment options include the FHA loan along with VA and USDA financing where applicable. Ideally, purchase a home as soon as it's feasible for your personal finances. Even with a low down payment, the property will gain equity as you pay the monthly amounts towards principle and interest. Building wealth with real estate is one of the best ways to secure your family's financial future. 
 
Mortgage Question: Why is it better to go with a local mortgage broker?  

D. Shane Whitteker is the owner and chief broker at Williamsport mortgage broker Principle Home Mortgage. He recommends local mortgage brokers for their knowledge and options.  

“A local mortgage broker will typically be more connected in his or her market and will have more than one option to choose from for your mortgage needs,” Whitteker says. “Brokers typically have better rates as well. In my opinion brokers are typically more able to help clients in difficult situations and often times have more experience than their retail competition.” 
 
Local brokers understand both the financial side and property features of a specific area. They can find unique solutions to funding your homeownership dream based on local resources. A broker who's unfamiliar with your region may not find the best deals that apply to your situation. Mortgages are major investments that demand precision expertise from a local individual. 
 
Mortgage Question: How can I avoid buying more home than I can manage? 
 
Work with your mortgage broker to narrow down a price range on prospective homes. Consider your monthly budget, and what's allocated to rent right now. If you're comfortable with the budget now, look for a mortgage payment that's around the rental cost. Use this amount to guide your home purchase. Remember there will be extra costs with homeownership, such as property taxes and maintenance, that will impact your budget too. The broker can give you a rough estimate on these costs to further guide your decision. 
 
Mortgage Question: Can I get a lower mortgage interest rate by improving my credit score? What's the number one thing I can do to improve my credit score? 
 
Interest rates will always drop in price as your credit score rises. Your score, however, doesn't hinge on just one factor. There are several changes that can be made to improve it. Pay down debt, avoid opening new credit accounts and cleaning up your credit history are just a few of the best ways to improve the score. In reality, it takes time for a score to truly rise as you pay off other loans and keep up with monthly payments on good debt, such as student loans. 

According to Whitteker, paying your bills is paramount in building up your credit score.  

“Yes, you can get better interest rates with a higher credit score. The number one thing to do here is to make sure you don’t pay your bills over 30 days late and that you don’t get any collections,” Whitteker says. “The next step is to make sure you have enough credit reporting and that you manage said credit properly. To manage your credit, you need to keep an eye on your revolving (credit card) account balances in relation to their credit limits. The lower the balance is compared to the credit limit the more of a positive impact this account will have on your credit.” 
 
Mortgage Question: What's the biggest mistake first-time homebuyers make? 
 
The biggest mistake made by first-time homebuyers is overlooking the costs aside from the mortgage's principal and interest. The final loan will have closing costs, which might equal several thousand dollars. These costs are above and beyond what you put down for the down payment. Property taxes, maintenance and possible HOA or homeowner's association dues might be part of your financial responsibilities too. Discuss these final costs with your broker before signing any documents. 
 
Mortgage Question: What's the biggest mistake you can make when refinancing a mortgage? 
 
The biggest mistake depends on your immediate and future plans. Refinancing a home requires more closing costs and essentially restarting the loan. If you plan on selling the home in the next 5 years, the refinance won't save you money. Turn to refinancing only when you plan on staying in the home for 10 years or longer. The costs are worth it then. 
 
Mortgage Question: How can I avoid having my mortgage rate change before I buy my new home? 
 
Ask your broker to "lock in" the mortgage rate when you go under contract to purchase a home.  Lenders can typically lock and interest rate from 30 to 90 days.   

“If you are under contract to purchase a home your mortgage broker can have the bank lock your interest rate for you,” Whitteker says. “This is a limited protection based on time frame.  Most banks will allow for an extension of the rate lock but this is not guaranteed. It is important to work with your lender or broker to make sure things are moving along according to the specified timelines in your contract.” 
 
Mortgage Question: Are all mortgages the same? How can I navigate all the options? 
 
There are a handful of different mortgages. The term length might differ between 15 and 30 years, for example. Interest rates might be adjustable or fixed. Be sure to ask your broker about every option and their details. Fixed mortgages will have steady payments over the years, but the interest rate might be slightly higher than an adjustable rate. Keep in mind that adjustable mortgages will change with the prevailing interest rates quoted by the federal government. Weigh all your options before picking out the best mortgage for you. 
 
Mortgage Question: Is it okay to ask my local mortgage broker questions about the process? 

According to Whitteker, questions are not only encouraged – they're paramount to getting a great mortgage.  

“Absolutely, I encourage my clients to ask me questions in relation to the process,” Whitteker says. “This is an important part of making sure the client is not going to be uncomfortable with the process of purchasing a home.” 
 
Your local mortgage broker is the best resource for homeownership questions. Ask as many questions as possible because they're there to guide you toward a successful purchase. There are truly no bad questions to ask as you learn about the financing process. The more that you know equates to a stellar experience with the lender and confidence in the final mortgage amount. 

To learn more about any mortgage questions you may have, contact the Williamsport mortgage experts at Principle Home Mortgage at (814) 308-0959.