Labor Day has passed, the Marlins are way out of contention, and there’s a bit of a nip in the air (only a high of 87 as we write this). It’s time for football season!
Football is among our favorite sports at Reach Home Loans, because no other sport demonstrates how a collection of different talents come together to make a true team. It’s easy to think of home loans as one straightforward task, but the truth is that there is a great deal of variety between the different products we offer. Our team will work with you to figure out what play is most likely to get you into the “end zone,” a new home, with the best rate.
To demonstrate how different these products are, here are just five products we offer, and five members of the Miami Dolphins that they relate to.
Frank Gore, RB = Fixed Rate Mortgage
A fixed-rate, conventional mortgage is the most straightforward way to finance a home. Just like Frank Gore’s style of running—just grabbing the ball and smashing forward for the score—a conventional mortgage allows you to lock in a rate for anywhere between 15 and 40 years. You don’t need to think about it anymore after that; just sit back and make the same payment for years to come.
Kenyan Drake, RB = Adjustable Rate Mortgage
The classic style of Fixed Rate Mortgages/Frank Gore will always be appreciated, but there are different ways to approach a conventional mortgage. Adjustable Rate Mortgages are a valuable option for many homebuyers.
These mortgages open with a period where the interest rate is fixed, normally at a rate lower than those available for fixed rate loans. At the end of that period, the interest rate will adjust based on the market index for the remainder of the loan’s life. There are multiple strategies where an ARM can save you money. It’s a great plan for people who anticipate selling the home before the fixed period ends, leaving the rate low. Another option is to take the money you save during the fixed period of your ARM, and pay it toward the principle of the loan. This will result in lower interest payments for years to come! ARMs give you options…just like Kenyan Drake, a RB skilled at running or receiving.
Ryan Tannehill, QB = FHA Loans
Think about all of the talented wide receivers in the NFL. Almost none of them would be able to get into the endzone without the help of a quarterback. Getting into that new-home-endzone is the same way; even the most responsible of spenders sometimes require a little help to make that dream come true.
The FHA is a great “QB” for those in lower or middle-income households. The most common benefit they present is lower required down payments in order to get you into a home. Non-bank lenders are often more comfortable and quicker working within the FHA “goal posts” than bigger banks.
Jordan Phillips, DT = Jumbo Loans
What makes the loans mentioned above “conventional”? Loans serviced by Fannie Mae or Freddie Mac must be under a limit of $453,100 (as of 2018). In order to borrow money above this threshold, you must pursue a Jumbo Loan. Reach Home Loans can offer Jumbo Loans of up to $3 million. The underwriting process for these loans is more involved, but they are often “cheaper” in relative terms, based on interest rates.
We’re not going to overthink this comparison: Defensive Tackle Jordan Phillips is a big dude, 6’6” and 341 lbs. Don’t default on his patience.
Danny Amendola, WR = Refinancing
Maybe you’ve spent a decade or two with one of the mortgage options above, and you’re wondering if there’s a better payment plan out there. You may want to consider refinancing your home. There are several good reasons to change up your mortgage; maybe you want to pay it off quicker, or maybe you can get a better rate. Refinancing can also help you tap into equity for remodeling or another big purchase.
Danny Amendola obviously had a good thing going with New England, but he realized that he could “refinance” his career and win even more Super Bowls in Miami…right? RIGHT?