Why the Lowest Mortgage Rate Could Cost You Thousands

Why the Lowest Mortgage Rate Could Cost You Thousands

As a loan officer, many borrowers tell me they want the lowest possible interest rate. I listen carefully, and then I begin to ask questions.  Experience has shown me that the lowest possible interest rate could actually end up costing borrowers thousands of dollars!


JSRealty4U Mortgage Lowest Rate Real EstateMany borrowers will scour the internet for the lowest possible mortgage rates. Low rates will indeed pop up, but most often they won’t apply to most borrowers. The rates may assume a very high credit score, a large down payment, or even the cost of paying discount points to get the advertised rates. Many of the low rates that are advertised are also coming from mortgage brokers. Typically, mortgage brokers are third parties that have relationships with multiple investors. This means they can “shop around” for the lowest rates when it is time to lock in. Because the broker is a third party, they don’t control the processing and underwriting aspects of the loan. If something unusual is found during the loan process, many times the issue is not communicated immediately and causes loans to close late. Once a sale is postponed due to loan issues, the buyer can face the possibility of losing their earnest money deposit and can be sued for damages by the seller. This is why lower rates aren’t always the best way to go for a borrower.


JSRealty4U variable mortgage rates lowestGenerally, an adjustable rate mortgage (ARM) will offer lower rates than a 30 year fixed rate mortgage with the shortest term on the ARM offering the lowest rate. For example, a 5/1 ARM may have a rate of 3.375% while a 30 year fixed loan may be at 3.75%. The monthly payment for the ARM will be less than the 30 year fixed rate for the first 5 years. After five years, the rate will adjust based on the then current market. Since rates today are close to the lowest ever, it is likely that in five years the interest rate will soar – causing the monthly payment to skyrocket!


JSRealty4U lender man mortgage assumption lowest rateFHA loans also offer lower rates than a conventional loan. Currently, a conforming FHA loan may offer a rate of 3.375% with the corresponding conventional loan offering the same 3.75% as in the previous example. The difference is the FHA loan adds an additional 1.75% to the loan amount in what is referred to as an “Upfront Mortgage Insurance” premium. The FHA loan also has a monthly mortgage insurance premium that remains on the loan for as long as you own it. The rate for this monthly mortgage insurance payment is most often much higher than a corresponding monthly mortgage payment on a conventional loan. The result: a higher monthly payment on a loan with a lower interest rate.


JSRealty4U paper deposit real estate lowest mortgageAnother thing to factor in is Mortgage insurance. Mortgage insurance comes into play when a purchaser is putting less than 20% down on their desired home. There are a couple of ways in which the mortgage insurance can be paid. One way is to make monthly mortgage insurance payments. If making the minimum payment required each month by the lender, these mortgage insurance payments continue until the loan-to-value reaches 78%. In the case of a beginning loan-to-value of 95%, these payments may take as much as 9 years before reaching the 78% threshold where the payments stop.  The second method of dealing with mortgage insurance is to have the lender pay for the mortgage insurance premium. This results in a higher interest rate – but no mortgage insurance payment. The overall monthly payment will be lower on this option even though the rate may be up to .5% higher. Paying even $25 more each month for 9 years will cost the borrower $2,700!


JSRealty4U mortgage rate lowestIt is always important to let a lender help you determine the best possible loan solution. Some of the most important factors for the loan officer to know are:

  • Monthly Income
  • Monthly debt
  • Credit score
  • Credit history
  • Cash available for down payments and closing costs
  • Length of time you expect to own the loan

With this information, your loan officer should be able to provide multiple loan options. In addition, they should provide explanations as to why one would be preferred over another. And more often than not the loan with the higher interest rate becomes the best long term solution!

Thinking about buying or refinancing a home? Make sure you speak to a lender first! You can reach Keith Harris, Senior Loan Officer at Intercoastal Mortgage Company online or by calling 703.259.0788.

Keith Harris at Intercoastal Mortgage Company
NMLS ID # 838973
Company NMLS ID # 56323
Intercoastal Mortgage Company is an Equal Housing Lender.

Infographic: Loudoun County Real Estate Update

An Infographic about the 2016 Real Estate Market 

Our infographic shows how the Residential Real Estate market stayed strong through the end of 2016. And that carried over into the new year! Despite interest rates rising slightly during the 1st Quarter of 2017, the market stayed steady. Buyers competed against a low inventory of homes on the market through our unseasonably mild winter. As Spring arrived in full force more homes are being listed For Sale.

real estate jsrealty4u market update infographic

As you can see, 6,275 homes were sold in Loudoun County during 2016, which was up 5% over 2015. Single Family homes sold for an average of $609,994. Townhomes sold for an average of $408,173. Again, these were an increase over the previous year. And we expect this upward trend to continue as the market stays strong and steady.

As of April 25th of this year, there were 1,241 homes for sale in Loudoun County. Interest Rates are at the lowest they’ve been all year which makes now a great time to buy and sell Real Estate! Are you interested in getting pre-qualified for a home loan or refinancing a current loan? Contact our trusted friend and Lender, Keith Harris at Intercoastal Mortgage by clicking here or call (703) 259-0788.

The JS Realty Team @ Samson Properties is excited to offer sellers a $7,500* Rebate! Contact our Expert Agents today to learn how we can save you REAL CASH.

*Rebate based on $500,000 sale at 6% commission.

Keith Harris at Intercoastal Mortgage Company
NMLS ID # 838973
Company NMLS ID # 56323
Intercoastal Mortgage Company is an Equal Housing Lender.

Word of the Week: Blanket Mortgage

What is a Blanket Mortgage?

A Blanket Mortgage is a loan where the borrower offers up more than one parcel of real estate as security (collateral) for the debt.jsrealty4u blanket mortgage

This is a popular option for Builders and Developers who commonly buy large amounts of land. They will often divide the land up into multiple, individual lots and sell the lots off one by one. Instead of getting a new loan each time one of the lots is sold, the borrower will use the Blanket Mortgage loan to buy them all at once. A Blanket Mortgage will usually contain a “release clause” as well. This means when an individual lot is sold, that portion of the mortgage is released (paid back to the lender). The loan is then adjusted and continues on in this manner until all of the lots are sold and the entire mortgage has been repaid.

With access to multiple lenders and extensive experience in Residential and Commercial Real Estate, our Team of Real Estate Professionals is available to lead you to great Real Estate solutions! Contact us today so we can help you realize your Real Estate goals.

Word of the Week: Assumption

This Week We Define Assumption and How it Works

So what exactly is Assumption? It’s the act of transferring a loan from one borrower to another. So assuming a loan means taking over the seller’s mortgage and continuing to make the payments on it. An assumption generally requires the lender’s approval consistent with the agreement (assumption clause). JS Realty lender man mortgage assumption

For example, some lenders may agree to transfer the seller’s old loan to the buyer, which could benefit the buyer where the existing mortgage has an interest rate below current interest rates. When a buyer assumes a mortgage, they assume personal liability for full payment of the debt. And if the loan is not paid and a foreclosure sale does not satisfy the debt, the new buyer who assumed the loan could be personally liable to pay the outstanding balance. Such payments are court-ordered through a deficiency judgment. In most cases, however, the lender will hold the seller and the buyer jointly and severally liable. That means that the lender may pursue either or both parties to repay the debt. In effect, the buyer becomes a co-guarantor with the original note maker.jsrealty4u assumption handshake

In today’s market we don’t see a lot of loans assumed because rates are at historic lows. Loans tend to be assumed when rates rise dramatically and the current owners rates are more attractive than what is being currently offered. Another key point is that most loans can’t be assumed. Typically they are only available as an option on FHA and VA loans.

If you have additional questions on assumption, different types of loans, or Real Estate questions in general, feel free to contact us!

Word of the Week: Amoritzation

Defining Mortgage Amortization and Options

Simply put, amortization is a loan that is paid off with a fixed repayment schedule in regular installments over a period of time. Payments may be Fully or Partially Amortized.jsrealty4u amortization

Full Amortization

Full amortization is an organized method of repaying a loan by making regular, equal payments. With this method, the loan – or principal – and all of the interest on the loan, is reduced to zero by the loan’s maturity. Traditionally, the payments are made on a monthly basis. And while each payment remains the same, the amount of interest and principal paid each month fluctuates.jsrealty4u loan mortgage amortization

Partial Amortization

jsrealty4u mortgage loans amortization balloonPartially amortized loans are a series of amortized payments followed by a “balloon payment” (or lump sum) at the loan’s maturity. The balloon payment is the entire remaining balance. A partially amortized mortgage provides much lower monthly repayments, however a massive final payment is due at the end of the contract. Under a partially amortized mortgage, the final payment is larger than any previous payment as it “balloons” on the last installment. This type of payment is often found in commercial lending arrangements. The lower monthly payments can be helpful while the commercial project grows and, the developer hopes, appreciates.

Full or Partial – Which is best for You?

JS Realty jsrealty4u loans amortizationNot sure which type of amortization is right for you? Contact our good friend and Lender, Keith Harris (NMLS ID #: 838973). Keith is committed to spending the necessary time to understanding his clients needs and will tailor a loan best suited for YOU. From mortgage rates to refinancing, Keith and his team at Intercoastal Mortgage can find the best solution for you and your family.

House Hunting – Why a Lender Should Be Your First Call

Top 6 Reasons to Contact a Lender BEFORE House Hunting

Searching for a new home can be an exciting time. The right location, the right neighborhood, the right features – these are all at the top of a potential homeowners list. But the last thing you want is to find your dream home and then discover it’s well out of your price range. So we asked our Lender buddy Keith Harris to break down why it’s so important to speak to a Lender (and get pre-approvedbefore you start house hunting.

Know Your Price Range

JS Realty Refinance Monney Calculator Bills House HuntingYou can get an idea of what you can afford based on monthly income and monthly debt. Most loans have a maximum debt-to-income ratio for qualification purposes. The mortgage industry uses a borrower’s GROSS monthly income as a basis for this ratio. Most borrowers don’t know their monthly debts and usually think it is higher than what the industry may calculate. For example, if a borrower has 3 credit cards with a total outstanding balance of $900, what is their monthly debt? Many consumers might think their monthly debt is $900. In reality, it would be the total of the monthly minimum payment for all three cards and could be as little as $25 per card – or $75.

Know Your Credit Issues

JS Realty credit score house huntingOnce a credit report is run, a number of potential issues may surface. You may have a score that is preventing you from qualifying for certain loans due to a creditor reporting inaccurate information on your credit report. You may have a high balance on a credit card that is impacting your credit score. If you need time to remedy these issues, you can address them early on so that a purchase settlement is not delayed.

Loan Programs

Lender loan jsrealty4uThere are potentially many loan programs available to you as a borrower. A sample list may include Conventional, High-Balance, VA, FHA, VHDA, USDA, Jumbo, primary residence, investment properties, etc. Some of these require little or no money down, whereas some may require a minimum down payment of 20% or more. It is not fair to assume that your Realtor will know all of the requirements for loan qualification. Perhaps you had a short sale 3 years ago – if that’s the case, you may only qualify for an FHA loan based on that information.

Have a Competitive Edge

JS Realty approved credit house huntingYou may have a competitive advantage over other buyers if there are multiple offers on a property. If you have filled out a loan application and your lender has run your credit report, you can obtain a conditional loan approval letter from your lender. If you are interested in a sought after property, you may be able to submit an offer with a closing date weeks earlier than if you had not spoken to a lender. The approval letter can also be strong enough to convince the seller that your offer is the best and safest of all the competing offers.

Be More Efficient

Your lender can tell you all of the information that may be needed to process and approve your loan. You can begin gathering this information ahead of time so that the loan process can be as efficient as possible.

Less Stress!

jsrealty4u loans lender house huntingIf you need to liquidate funds for closing, obtain a gift from a family member or provide documentation that is not readily available, you can be made aware of these needs well in advance. We all have enough stress in our daily lives to not have to have added pressure of trying to get qualified for a loan in a short period of time.

If you’re thinking about house hunting and would like to know more about prequalifying for a loan, contact Keith Harris  at 703-259-0788 or apply online here.

Keith Harris at Intercoastal Mortgage Company
NMLS ID # 838973
Company NMLS ID # 56323
Intercoastal Mortgage Company is an Equal Housing Lender.

Brexit and US Mortgage Rates

The Effect of Brexit on Mortgage Rates in the United States

JS Realty Interest Rates brexitOn June 24, 2016, England voted to leave the European Union. This historic decision, referred to as “Brexit”, has caused a ripple effect here in the United States. It has driven interest rates down to their lowest mark in three years. Mortgage interest rates will fluctuate most directly due to the cost of mortgage backed securities. When mortgage bond prices go up, interest rate tend to fall and when mortgage bond prices drop, mortgage rates will rise. In addition to this correlation, the overall US economy will also influence mortgage rates.

GJS Realty Opposite directions brexitenerally speaking, when the economic indicators such as the stock market, inflation, and unemployment are positive, mortgage interest rates will rise. When the economic indicators suggest our economy is not prospering, rates will drop.

In December of last year, the Federal Reserve projected that it would raise interest rates up to four times in 2016. On June 15, 2016, Federal Reserve Chairperson, Janet Yellen decided NOT to raise rates. This was due to a very weak employment report in May.

Brexit has caused severe volatility in the global stock markets and has had a negative impact on the stock market here in the United States. No one knows what the long term impact of Brexit will be, but it is safe to say that the immediate impact of England’s decision to leave the European Union has directly led to lower interest rates.brexit

If you are considering buying a home, or if you currently have a mortgage and are considering a refinance, right now is a perfect time to get a mortgage loan evaluation from a licensed mortgage professional.

Not sure where to start? Click here to contact Senior Loan Officer Keith Harris or to get pre-qualified.

Keith Harris at Intercoastal Mortgage Company
NMLS ID # 838973
Company NMLS ID # 56323
Intercoastal Mortgage Company is an Equal Housing Lender.

Documents Needed for a Mortgage

What documents are needed for a mortgage loan approval?

Years ago there was actually a no documents loan process for certain types of loans. Those are not applicable in today’s world of mortgage lending. Today we’re providing you with a list of documents that are needed for final loan approval. Some documents are required whether the loan is for a purchase or a refinance; others are pertinent to a specific type of loan.JS Realty documents sign pen woman

Documents needed for either a purchase or refinance are as follows:

  1. Most recent pay stubs, showing a 30-day period
  2. Past two years W-2 forms and/or 1099’s (if self-employed)
  3. Signed Federal Personal Tax Returns for past two years
  4. Signed Federal Business Tax returns if applicable
  5. Asset statements for a 2 month period, or most recent quarterly statement. This should include any and all of the following and must include ALL pages.
    • Checking
    • Savings
    • Stocks
    • Bonds
    • Mutual funds
    • Money Market
    • 401 K’s
    • IRA’s
  6. If the property is or will be held in a Trust, provide Trust documentation
  7. For Investment properties:
    • Lease agreement for rental properties
    • Mortgage statement
    • Property tax bill
    • Homeowner’s Insurance Policy
    • HOA or Condo fees, if applicable
  8. Hazard Insurance (homeowner’s insurance) Policy
  9. Complete Divorce/Separation Agreement /Property Settlement agreements, if applicable
  10. School Transcripts and Diploma if you are a recent graduate
  11. Contact name and phone number for Verification of Employment

For VA loans, the following is required:

  1. VA Certificate of Eligibility
  2. Original statement of service or DD-214

For Purchases only, we need the following:

  1. Ratified Sales contract
  2. Copy of Earnest Money Deposit AND bank statement showing the check has cleared your account
  3. Name, address and phone number of landlords for past 2 years if currently renting
  4. Sales Contract for existing home if selling and vacating to purchase new home
  5. Settlement Statement from the sale of current residence if vacating to purchase new home

For Refinances only

  1. Copy of most recent mortgage statement
  2. Copy of Owner’s Title Policy or settlement statement indicating that you have owner’s title insurance
  3. Copy of existing Homeowner’s Insurance Policy

Whether you’re purchasing or refinancing a property, you can download a copy of this List of Documents to help aid in your search for a loan. This list will be helpful to both you and your Lender as you work through the processing of your loan.

FREE Money for a Down Payment!

No Money Down Home Loans are Back!

The VHDA just announced that they plan to roll out a program that offers down payment grants for qualified first time buyers on Monday, March 14. That’s basically free money!Virginia Dollar Sign JS Realty

These non-repayable grants are for 3% (Conventional) or 3.5% (FHA) of the purchase price. When combined with a mortgage credit certificate (tax credit) this is a great way to purchase a home with no money down.

This program is designed to help first time home buyers (or buyers that have not owned a home in the past 3 years) realize the American dream of home ownership. Now, there are income and sales price limits, so this is not for everyone. However, this will enable home buyers who need help with the down payment to purchase a home.JS Realty New Home Buyer RulesHere are some of the parameters of this grant that buyers must follow:
-Intend to live in the home
-May not use home for trade or business
-Lot size limited to 2 acres (unless a waiver is obtained, which will allow up to 5 acres)
-Demonstrate creditworthiness
-Demonstrate stable income
-Take and complete VHDA’s Homeownership Education class

You can view the specific income and sales price limits to qualify for this grant here.  The income and sales price limits also vary depending on where in Virginia you live. This creates an opportunity for home ownership where it may not have been possible otherwise.

We want to help you make your dream of home ownership come true!

Take advantage of this amazing program! Contact Scott Koval and Sarah Taylor at the JS Realty Team for a personalized consultation.

Incentives for Van Metre Homes

Current incentives for buying a new Van Metre home in Brambleton

incentivesBuying a new home is exciting! Picking out kitchen cabinets, flooring, and other design options to make the space your own is a lot of fun. It can also often come with a hefty price tag.

Since 1955, Van Metre Homes has matched more than 16,000 Northern Virginia families with their dream home. They not only create custom, quality, luxury homes – they’re affordable, too! And right now, if you take advantage of the incentives they have available, you can build the home of your dreams in Brambleton without breaking the bank.

jsrealty4u van metre homes incentivesCurrent Van Metre Brambleton incentives include:

-Closing cost discounts of up to $10,000 when using Intercoastal Mortgage Company for your loan and Walker Title for settlement

-Receive a $10,000 Design Studio Credit through February 29th!

What this means for you:

-Saving the $10,000 at closing costs could lower mortgage insurance costs, and in turn, lower monthly mortgage payment
jsrealty4u van metre incentives award-The savings could also be used for upgrades or options such as a walk-way, deck, porch or finished basement
-A new home from an award winning builder
-No concerns about maintenance and upgrades
-Location, location, location! Loudoun County is one of the fastest growing and affluent counties in the USA

Interest rates are still hovering around historic lows. While fixed rates seem to be trending up, adjustable rate mortgages with initial fixed periods are still near all-time lows. If you’re ready to move into a new home, Van Metre has several quick delivery options available, and some can still be customized. It’s a great time to lock in low rates on a quick delivery home and take advantage of the current incentives!

JS Realty Calculating Money Finance incentivesWe’d love to help you build the home of your dreams! If you’d like more information about obtaining a loan through Intercoastal Mortgage, contact our preferred Lender, Keith Harris.