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Monday, 12 December 2016 23:51

KKOB on December 13

At Indigo Mortgage, we've had veterans ask us about the legitimacy of unbelievably low rates they've seen advertised. Ben Lucero weighs in on what to be on the look out for when shopping for a VA Loan.

Published in Radio

Recently, at Indigo Mortgage, we’ve had veterans contact us and inquire about emails and post cards they have received advertising VA loans with interest rates below 3%. Are these legitimate? The short answer is no. Here’s why.

Any rate below 3% on a VA mortgage is most likely an adjustable rate mortgage (ARM). Deceptive lenders fail to disclose however, that these unbelievably low rates are for 3/1 or 5/1 ARM’s, meaning that the loan begins with a fixed rate for 3 or 5 years in this example. Following the introductory period, however, the interest rate adjusts once a year every year thereafter. We encourage veterans to ask as many questions as possible in order to make sure that you don’t get stuck with an adjustable rate mortgage if that’s not what you’re looking for. In many instances, veterans end up paying thousands of dollars in discount points to buy their interest rate down below 3%.

We often find that these VA lenders are deceitful and do not care about their borrowers, they just want to make money by exploiting veterans. The Consumer Financial Protection Bureau has recently fined several of these companies for presenting themselves as VA endorsed lenders, when in fact the VA has never sanctioned them.

Veterans would be better served by working with a trusted local mortgage lender like Indigo Mortgage. We are always happy to educate borrowers and help them assess their options. It’s important to ask your lender if the rates they’re advertising are fixed or adjustable, and ask what the origination and discounts point charges are for any rate.

As always, shop around for the best loan, and contact Indigo Mortgage for help!

Published in Blog
Friday, 09 September 2016 19:52

Beware of Low Interest Mail and Web Offers

Many of our clients have mentioned receiving quoted mortgage rates that are extremely low in the mail or online. When we get calls like these, we like to talk to our clients and ask a few simple questions to establish what type of mortgage loan is being quoted.

It is important to take into account what kind of mortgage program is being quoted, as FHA and VA loans have much lower rates than a conventional loan and may not apply to most mortgage programs. What will it cost to achieve these low rates? Are there origination or discount fees required to obtain this rate? Is the rate being offered as an adjustable rate mortgage, or a 10-15 year mortgage? Mortgages with shorter time spans usually have lower interest rates than that of a 30-year mortgage.

One thing to always keep in mind when receiving offers of this sort is that when rates are quoted without seeing a credit score, they are assuming a score of 740 or better. If the actual credit score is less than 740, then the rate will be higher.

The best way to ensure that you are getting the best rate is to shop around your mortgage. If you have any mortgage related questions or have received mortgage offers, come and talk to an expert at Indigo Mortgage.

Published in Blog
Thursday, 01 September 2016 15:05

KKOB on August 30

It's important to understand a few things when seeing extremely low mortgage rates online, in the mail or on the radio.

There are a few questions you can ask that will help you sort through these offers and make an educated decision when choosing your mortgage lender.

Come to Indigo Mortgage and we can help walk you through these questions to ensure you don't get stuck in a mortgage with unknown costs or an adjustable rate without explanation.

Published in Radio
Wednesday, 09 March 2016 20:58

KKOB on March 8th

Crazy VA Rate Mailers

Published in Radio
Tuesday, 29 October 2013 21:34

KKOB on October 29

Adjustable rates have made a comeback recently; mainly because borrowers can see the light at the end of the tunnel as far as the value of their home.

Published in Radio

More and more we are seeing requests for Adjustable Rate Mortgages (ARM), particularly the 5/1 ARM. Adjustable rates have made a comeback recently; mainly because borrowers can see the light at the end of the tunnel as far as the value of their home.

Many people wanting to move out of their home found that they lost too much value since the crash and it was not feasible for them to sell. But with the market turning around homeowners are feeling more confident that they will be able to sell within the next 5 year’s.

The 5/1 ARM offers homeowners a rate that is about 1% below that of the standard 30 year fixed rate so borrowers can save hundreds of dollars by refinancing into a 5/1 ARM.

The biggest drawback is that if a homeowner does not sell that house within the next few years they are up against the rate rising after year five and another rise every year thereafter. The rate cap is usually 5% over the start rate so potentially the rate can get in the 8% range.

I myself am not a great advocate for the ARMs, as interest rates are still at historical lows and offer some great opportunities for home owners on a true fixed rate mortgage. Life can always change and if someone is in an ARM and for some reason cannot get out of it in an increasing rate environment, they could be stuck making some high payments in the future.

I encourage all homeowners and borrowers to take a serious look at what the potential payments might look like with an adjustable rate and see if a true fixed rate will work for them instead. 

Published in Blog

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