Top WV Bank Mortgage Lenders
Find current West Virginia mortgage rates from local West Virginia bank mortgage lenders. Finding the best mortgage involves contacting multiple mortgage lenders to compare the best mortgage rates and terms.
Regardless of the mortgage loan request, whether it is for a new home purchase in West Virginia or to refinance an existing West Virginia mortgage loan, it is important to have the right information about mortgage lenders and mortgage rates before filling out a new home loan application
Shop and compare today’s current West Virginia mortgage interest rates with the top bank mortgage lenders in West Virginia. Bank mortgage lenders listed based on total assets.
West Virginia borrowers that are buying, building, refinancing or looking for a vacation home can use these bank mortgage lenders to help find a competitive fixed rate mortgage, adjustable rate mortgage, FHA loan and more.
The top ten bank mortgage lenders in West Virginia include:
WesBanco Bank is the largest bank based in WV. WesBanco is headquartered in Wheeling, West Virginia and has over 110 bank branches in West Virginia, Ohio and Pennsylvania. WesBanco Bank can be reached at 800-328-3369.
United Bank, based in Parkersburg, WV is the second largest bank. United Bank retail customer service contact number is 800-327-9862.
City National Bank of West Virginia is the third largest bank. City National Bank of West Virginia has bank branch locations in West Virginia, Kentucky and Ohio. City National Bank can be reached at 800-896-0769.
The number four bank in WV is Summit Community Bank which has nine bank branch locations in WV and six bank branches in VA. Summit Community Bank contact number is 877-776-9722.
Centra Bank is the fifth largest bank mortgage lender in WV. Centra Bank can be contacted at 877-901-2368
Putnam County Bank is the sixth largest WV bank mortgage lender. Putnam County Bank has three bank branches and one bank lending center. The loan center can be reached at 304-562-5055.
First Sentry Bank is the seventh largest bank and has four bank branches in the WV. First Sentry Bank is available at 304-522-6400.
Huntington Federal Savings Bank is the eighth biggest bank mortgage lender in WV. Huntington Federal Savings Bank is based in Huntington, WV and has five bank branches in the state. A Huntington Federal Savings Bank loan officer can be reached at 309-528-6230
First Century Bank is the ninth largest bank in WV. First Century Bank is based in downtown Bluefield, West Virginia and has ten bank branch locations in the state. First Century Bank can be reached at 877-214-9426.
Clear Mountain Bank is the number 10 bank. The bank mortgage department can be reached at 304-777-4663.
What Type of Mortgage is Best for You?
When buying or refinancing a home, choosing the right mortgage is essential. The type of mortgage that is chosen can help a home owner towards greater financial stability, provide flexibility for life’s unforeseen circumstances, or help to build net worth at a faster rate. The right mortgage can make owning a home much easier, as well as help improve a home owner’s financial situation, but don’t wait until the time of the loan application to decide which mortgage loan is best suited for your needs.
The number of mortgage loan products available has dwindled in recent years as many of the esoteric loan products, such as sub prime loans and stated income – state assets loans are no longer being marketed. There are, however, many mortgage choices available and choosing the right one can be overwhelming. Prospective home loan borrowers should assess their financial situation and the attributes found in each loan type before choosing a type of mortgage, to help determine which mortgage is right based for their financial position.
Mortgages currently available usually fall into just a few main categories. The main mortgage loan categories are either fixed rate mortgages, adjustable rate mortgages, or a balloon mortgage. There are also FHA mortgages and jumbo mortgages, but these are categories of mortgages which in turn will have fixed rate terms, adjustable rate terms and balloon terms.
Each of these mortgage loans have different features and benefits, making them work well for different financial situations. There are also many types of individual mortgages within these categories that may involve how the rate changes on an adjustable rate mortgage or the term of the mortgage whether it is fixed, adjustable or a balloon loan.
Fixed rate mortgages are the most common home loan products and become an even larger share of mortgage originations when mortgage rates are low. A fixed rate mortgage may be right for you if you are on a fixed salary and have a regular budget. A fixed rate mortgage allows the borrower the security of knowing what their monthly payment will be each month, and this payment does not change. Fixed rate mortgages can be obtained with a variety of different terms with the 15 year terms and 30 year term being the most common.
The 30 year fixed rate home loan is by far the most common loan among all mortgage loans. Borrowers that choose shorter terms on fixed rate loan will build equity faster in their home and generally get a slightly lower mortgage rate. While it is certainly nice to build equity faster, standard 30 year loans do not have prepayment penalties and the borrower can prepay their loan at anytime either with a little extra every month, with an extra payment annually or a lump sum payment as they see fit and build equity quickly at their own pace.
Adjustable rate mortgages have the disadvantage of having a mortgage rate that may change over time and the advantage of a lower initial mortgage rate. In a low rate environment many borrowers become concerned that interest rates over the long term have only one direction in which they may go, which is up. The prospect of higher mortgage rates drives more borrowers to fixed rate loans even if the initial rate is modestly higher on the fixed rate loan. Of course, should mortgage rates decline, an adjustable rate mortgage may also experience a reduction in rate while fixed rate loans will not.
Another consideration, often overlooked in comparing an adjustable rate mortgage and a fixed rate mortgage in low interest rate environments, is that the difference between a fixed rate home loan and adjustable rate loan is often quite small. If interest rates rise it is always advantageous to borrow money at a low fixed interest rate that is subsequently paid back with a monthly payment that has been eroded in value by an increasing rate of inflation. And when mortgage rates are already relatively low, there is little room for an adjustable rate mortgage to come down any further.
An adjustable rate mortgage may very well still be a choice for those just starting out, who may not be able to afford a big mortgage payment or for those borrowers who know they will be in the home for only a short period of time. An adjustable rate mortgage allows the borrower to lock in a lower interest rate and low monthly mortgage payment amount for the first year or even few years of the loan. When the initial low rate expires, the monthly payments and mortgage rate may go up. Theoretically, by that point the borrower will be able to afford the higher payments, if they are just starting in their careers or will have moved on if they intended to reside in the home for only a short period of time.
Balloon mortgages generally have level payments for a certain number of years and then the remaining balance on the loan is due before the scheduled payments pay the loan off in full. The initial payment period is based on a longer period of time than the time at which the full balance is due. For example, balloon mortgage payments are frequently based on a 30 year term even though the full balance will due at the end of shorter term such as 5 years. Once the level payment period ends and the balloon balance is due, the borrower can refinance, sell the property or otherwise pay off the loan. The benefit of the balloon loan is a lower mortgage rate. The difference in rate when mortgage rates are high may be substantial but the difference is often quite modest when rates are low.
Before committing to any type of mortgage, research your options carefully. The key to making a sound financial decision regarding the choice of a mortgage is to both identify and measure the risks associated with that mortgage and to then determine if the risks worth the reward and even if any risks associated with a bad outcome be tolerated. But, the borrower would fully understand the risks, rewards and the costs of the home loan before filing out a mortgage loan application.
Mortgage Rates in Ohio with Huntington Bank Mortgage
Huntington Bank mortgage offers a variety of banking products and services in Ohio including mortgage loans and competitive mortgage rates.
Huntington bank offers a wide range of mortgage loan programs and interest rates in Ohio for both purchases and existing home loan refinances. The mortgage loan refinance options include refinances to obtain additional cash out on a primary home or to take advantage of a lower mortgage rate or change the term or type of home loan such as 30 year loan to a 15 year or a fixed rate home loan to an adjustable rate mortgage.
Mortgage loans offered by the bank include a wide choice of fixed rate mortgage products ranging from 10 year to 30 year terms, adjustable rate loans, balloon loans, jumbo loans, construction loans, VA and FHA loans.
Current Ohio mortgage rates offered by Huntington Bank include the following terms and rates:
30 year fixed rate mortgage has an Ohio mortgage rate of 4.750% with 0.625 discount points and an APR of 5.069%.
A 15 year fixed rate mortgage has an Ohio mortgage rate of 4.125% with 0.375 discount points and an APR of 4.616%.
The Huntington Bank 3/1 adjustable rate mortgage has a mortgage rate of 4.000% with 0.0 discount points and an APR of 3.567%. The loan rate for this mortgage product is normally lower than fixed rates however the mortgage interest rates will change at predetermined intervals based upon an index.
The bank’s 7 year balloon loan has a mortgage rate in Ohio of 4.500% and 0.125 points and a 5.052% APR.
The balloon loans are often loans that are considered by borrowers who plan to live in their home for a shorter period of time and want the benefits of a fixed monthly payment. The balloon mortgage loan rate is generally lower than the rates found on either 30 year fixed rate loan or a 15 year fixed rate loan.
Huntington’s mortgage division offers several different mortgage products and mortgage rates in Ohio other than those listed. The FHA loans and the VA loans offered by the bank come with a wide range of mortgage loan options, including fixed rate mortgages and ARMs.
The Ohio mortgage rates and annual percentage rates (APRs) listed are based on a $120,000 loan amount on a single family owner occupied home, with a minimum 20% down payment, excellent credit a rate lock period of 30 days.
All mortgage loans in Ohio are subject to bank and credit approval. Ohio mortgage rates listed are current as of this publication but are subject to change at any time.
For individuals looking to buy or refinance a home in Ohio, current mortgage rates and additional home loan information can be obtain from Huntington Bank at 1-800-562-6871.
Mortgage Rates from Webster Bank February 15, 2010
Webster Bank is a Connecticut based bank that offers mortgages in all 50 states. Webster Bank not only offers a variety of mortgage loans with competitive mortgage rates but also provides traditional consumer banking, business banking, mortgage banking, insurance, financial planning, trust and investment services with a network of over 180 bank branch locations in four states.
Webster Bank offers a comprehensive selection of home loan products from FHA loans to new construction financing.
Webster Bank offers standard fixed rate mortgages on a variety of programs for both conventional and jumbo loans. The bank offers adjustable rate mortgages for borrowers who may be looking for a lower initial rate to help qualify for a larger loan. Webster Bank also offers competitive fixed and adjustable rates on jumbo home loans.
Government loan programs available through Webster Bank include FHA loans, VA loans and Connecticut Housing Finance Authority loans. Webster Bank FHA loans offers low interest rates combined with low down payment requirements.
The bank’s construction lending options provide one consolidated loan for land and new construction, so there is only one loan closing. Construction loans are available for stick-build, modular, or pre-fabricated homes. Mortgage loans for new construction are available with various interest rate options, including fixed rate and interest-only programs.
A sample of current mortgage rates offered by Webster Bank includes the following terms:
A 15 year fixed rate mortgage has a mortgage rate of 4.250% with no points and an APR of 4.363%.
A 30 year fixed rate mortgage has a mortgage rate of 4.875% with no pints and an APR of 4.942%.
A 5/1 adjustable rate mortgage has a rate of 4.000% with no pints and a 3.328% APR.
For shorter fixed period, the bank offers a 3/1 adjustable rate mortgage with a rate of 4.875% with no pints and a 3.152% APR.
Mortgage rates are subject to change. The mortgage rates posted are current as of February 15, 2010; actual rates may vary based on credit qualifications, loan amount, down payment, term and property location. All home loans are subject to credit approval and the bank approval process.
Mortgage loans are available in all states some restrictions may apply. For current mortgage rates or to speak with a Webster Bank mortgage loan representative about their home loan products, call 1.888.681.7788.
NY Mortgage Rates at Ridgewood Savings Bank
Ridgewood Savings Bank is headquartered in New York and has been offering banking products and services in New York since 1921. Among the many bank products and services offered by Ridgewood Savings Bank are a variety of consumer loans and home loans.
Ridgewood Savings Bank offers mortgage loans with fixed rates, adjustable rates and loans for mixed use properties. Home loans come with no application fee, there are options for no point mortgage originations and applicants can lock in a mortgage rate for up to 60 days with an option to float down to a lower mortgage rate should the mortgage market improve and the opportunity to lower the rate become available.
With a fixed rate mortgage from Ridgewood Savings Bank, a home loan borrower
knows the exact amount of the monthly principal and interest payments over the life the loan. Borrowers can choose terms ranging from 10 to 40 years. Current mortgage rates for fixed rate loans include:
Fixed rate mortgages offered by Ridgewood Savings Bank includes:
Conventional fixed rate mortgage with a 10 year term has a rate of 4.625% with 0 points and a 4.63% APR.
Conventional fixed rate mortgage with a 15 year term has a rate 4.625% with 0 points and a 4.63% APR.
Conventional fixed rate mortgage with a 20 year term has a rate 5.375% with 0 points and a 5.38% APR.
Conventional fixed rate mortgage with a 25 year term has a rate 5.50% with 0 points and a 5.50% APR.
Conventional fixed rate mortgage with a 30 year term has a rate 5.50% with 0 points and a 5.50% APR.
Ridgewood Savings Bank’s adjustable rate mortgages can offer an initial lower initial interest rate. With lower initial mortgage rate, the monthly payment will be lower in the early period of the loan. These loans also have interest rate caps at each adjustment period that limit the potential increase in mortgage payments. Current mortgage rates for adjustable rate mortgages include:
3/3 adjustable rate mortgage based on the LIBOR rate is 4.375% with o points and a 3.50% APR.
1/1 adjustable rate mortgage based on the one year Treasury bill is 4.875% with 0 points and a 3.27% APR.
3/1 adjustable rate mortgage based on the one year Treasury bill is 4.375% with 0 points and a 3.41% APR.
The annual rate cap on 1/1 through 5/1 adjustable rate mortgage products is 2%. The annual rate cap on 3/3 adjustable rate mortgage product is 2%. The lifetime cap on all adjustable rate mortgage products is 6% above the initial mortgage interest rate.
Ridgewood Savings Bank, rates displayed are available for owner occupied properties located in the five boroughs of New York, Nassau, Westchester, Suffolk, Putnam, Rockland and Fairfield Counties. Rates and terms are subject to change. Mortgage loans require bank approval and additional conditions will apply. For current mortgage rates and loan information, a bank representative can be reached at (866)-772-4111. Additional home loan products are available.
Mortgage Approvals and Compensating Factors
Mortgage loans are approved based on a fairly strict set of guidelines. Some of the guidelines are hard rules that can not be broken. An example of hard rule is the maximum loan to value ratios or down payment requirements. If a home loan for a particular 30 year fixed rate mortgage requires a 5% down payment or a loan to value of 95%, 4.75% down payment will not be accepted. On the other hand, some rules are general guidelines.
An example of a general guideline is the debt ratio requirement. Standard debt ratios are approximately 32% for the amount of the borrowers’ gross monthly income that can be used for the monthly mortgage payment and a 38% ratio representing the amount of the gross monthly income that can be allocated for the monthly mortgage payment and all other monthly debt obligations. These debt ratios are guidelines. A home loan applicant that has debt ratios of 33% and 40% may very well be approved for a mortgage loan.
In situations where a home loan borrower has debt ratios that exceed the guidelines or perhaps a credit history that is slightly below the requirements, a mortgage lender will look for compensating factors to justify making the home loan approval.
Compensating factors that may be used to justify approval of mortgage loans with ratios exceeding the benchmark guidelines are evaluated on a case by case scenario. Any compensating factor used to justify mortgage approval must be supported by documentation with the mortgage lender.
Common compensating factors that are reviewed to approve a home loan that is just marginally beneath the loan guidelines include:
The borrower has successfully demonstrated the ability to pay housing expenses equal to or greater than the proposed monthly housing expense for the new mortgage over the past 12-24 months.
The borrower makes a large down payment, one that is above the minimum established for the home loan program applied for, toward the purchase of the property.
The borrower has demonstrated an ability to accumulate savings and a conservative attitude toward the use of credit.
A previous credit history shows that the borrower has the ability to devote a greater portion of income to housing expenses.
The borrower receives documented compensation or income not reflected in effective income, but directly affecting the ability to pay the mortgage, including food stamps and similar public benefits.
There is only a minimal increase in the borrower’s housing expense.
The borrower has substantial documented cash reserves (at least 3 months worth) after closing. In determining if an asset can be included as cash reserves or cash to close, the mortgage lender must judge whether or not the asset is liquid or readily convertible to cash and can be done so, absent retirement or job termination.
Funds borrowed against these accounts may be used for home loan closing, but are not to be considered as cash reserves. “Assets” such as equity in other properties and the proceeds from a cash-out refinance are not to be considered as cash reserves. Similarly, funds from gifts from any source are not to be included as cash reserves.
The borrower has substantial non-taxable income (if no adjustment was made previously in the ratio computations)
The borrower has potential for increased earnings, as indicated by job training or education in the borrower’s profession
The home is being purchased as the result of relocation of the primary wage earner and the secondary wage earner has an established history of employment is expected to return to work, and reasonable prospects exist for securing employment in a similar occupation in the new area. The mortgage loan underwriter must document the availability of such possible employment.
Mortgage Rates in New York at Ulster Savings Bank
Ulster Savings Bank is a New York based bank that is a locally owned and operated in Ulster County, New York and has been in business since 1851.
Ulster Savings Bank offers a variety of standard bank services such as checking accounts, savings accounts, telephone banking, online banking services and consumer loans. The bank loan department handles residential mortgages, new construction loans, home equity loans as well as automobile loans, commercial mortgages, and business loans.
Ulster Savings Bank offers several mortgage options and services for buying or refinancing a home. The bank mortgage department provides a wide array of residential and construction loan products to fit a number of needs. Ulster Savings Bank home loans cover loans available for first time homebuyers looking for their first home to seniors interested in reverse mortgage options.
The bank provides solutions for a wide array of lending situations with mortgage products that fit most needs with very competitive mortgage rates. Home financing options from Ulster Savings Bank have many different options to choose from. Current mortgage rates and terms from the bank include:
30 year fixed rate mortgage at 4.750% with 2.50 points and an APR of 5.031%
30 year fixed rate mortgage at 5.250% with 0 points and an APR of 5.311%
20 year fixed rate mortgage at 5.250% with 0 points and an APR of 5.332%
15 year fixed rate mortgage at 4.625% with 0 points and an APR of 4.727%
FHA 30 year fixed rate mortgage at 5.250% with 0 points and an APR of 5.986%
3 year fixed / 1 year adjustable rate mortgage 4.875% with 0 points and an APR of 3.582% for 30-year term.
Mortgage rates subject to change and additional conditions will apply. Actual mortgage interest rates and APR’s may vary based on home loan applicant’s credit history. Current mortgage rates and loan information can be obtained by contacting the bank directly at 866-440-0391
Bank CD rates offered by Ulster Savings Bank can be found at selectCDrates.com.
A New Mortgage Loan, Is It Time To Buy a Home
If you’ve wavering between buying and renting, there is more than the pride of ownership to consider. Buying a home comes with additional costs, but it also has many more perks than renting. Even with the possible financial advantages of homeownership over renting, if you’re beginning to itch to buy your own home be sure you’re truly ready.
A home should be first viewed as a place to live, it can also be considered an asset for future plans, an investment in a community and possibly and financial asset as well. This unquestionably does not mean the house buying is one big bonanza.
Renting allows an individual or family the ability to be generally free of most maintenance responsibilities that would come with a home. By renting you do lose the chance to build equity, by property appreciation and mortgage balance reduction, take advantage of tax benefits, and protect yourself against the inconvenience of rent increases.
For first time home buyers, purchasing a new home can be overwhelming and comes with the uncomfortable process of obtaining financing or getting a home loan. Unfortunately, the home loan process is simply overly complicated because of the confusing expressions and rules in the mortgage lending industry. A few steps taken in advance to prepare for the home purchase can go a long way to facilitating the purchase and mortgage loan transaction.
Given the asset value, stability of payments, freedom, stability, and security of owning a home, potential new buyers have to consider whether they are prepared to make the leap into a new home and new home loan.
You Have the Down Payment
The first step to decide if you can buy a home is not the monthly costs. It is the initial costs of a home. If you can afford a true down payment on a home including closing costs and possible points, it most likely makes sense for you to buy. Home owners get serious tax breaks, but that tax break will be lost if you’re paying a penalty for not having an adequate down payment or are struggling with a subprime mortgage that is too much for your income to bear.
Save at least five percent of the home’s value before purchasing and push for up to 20 percent. In addition to having immediate home equity, you’ll also find that your mortgage loan options are much more attractive without trying to find loans which require low down payments that will also require higher credit scores and mortgage insurance. The exception would be loans for qualified veterans and FHA loans which are subsidized by the government.
Can You Afford It Long Term
A home is an excellent investment, but the bulk of homes are an investment that should be considered over the long-term. Despite television shows to the contrary, flipping a home or selling it after a few well chosen modifications, is often not a lucrative option in the majority of housing markets. Invest your money first is proper securities and market options.
With this sort of investment you are able to access your money quickly in case of emergency. By tying up all of your money in your home and a home loan, you will have to take out a new mortagge loan or sell your home, which can take months, to access funds should a financial crisis arise. And as recent markets have shown, home values can go down as well as up.
You must also consider your income in the long-term. If you’re stretching to meet your monthly mortgage payments, but know that you’ll need a new car in a year or less, buying a home may not be a wise use of your money. Either invest in a smaller, more affordable home, with a smaller mortgage loan or continue renting until your income rises to the level you need to afford the sort of home you’d prefer.
There is a tremendous array of mortgages available today, but all of the varieties fall into two main categories, fixed rate mortgage loans and adjustable rate mortgages - all carry quite long repayment terms.
You Have Done Your Homework
Arranging financing on a home is likely one of your first steps in buying. Begin working with a bank to arrange a prequalification or preapproval which is an estimated amount of financing before making any offers on a home. This will facilitate the sale and make the sale itself much cleaner and faster. To arrange mortgage loan financing, anticipate 6-8 weeks for the complete home loan underwriting process and closing. Home loan preapproval takes far less time, however.
Knowledge is the key to successful homeownership with regards to the dwelling as well the home loan used to secure the purchase. To become a first time homebuyer, it’s important to know where and how to begin the home buying process.
Evaluate whether you have a steady source of income to handle the monthly mortgage payment. Investigate your credit report to see that you have a good credit record and credit score. Look at your outstanding debts as wells, looking especially close at outstanding long-term debts, like car payments. Review your monthly budget to be prepared for the mortgage payment, mortgage loan costs, moving and ongoing expenses such as home maintenance and repair.
Consider Whether You Have Time
Another major consideration for homeownership is that you have the time to deal with the upkeep of that house itself. When will you mow the yard and repair any little problems that arise? Renting makes these little tasks other people’s problems. You can hire a cleaning or lawn service, but you still must be around enough to facilitate any workers in or around your home.
Examine Potential Homes Thoroughly
When it’s time to begin actively searching for a new home, look at all manners of homes within your price range. Travel the area where you’ll be moving and consider various locations and neighborhoods. As you view each house, try to minimize the emotional response, although that is important, and instead work through your checklist. In addition to the features you’ve listed, you should also be comparing each home on the basis of cost, convenience, condition, and capacity. When you compare homes on a logical basis, it will soon be evident which home is the best investment for you and your family.
You’re Staying Put
If you move constantly or have a career that takes you far from home on a regular basis, you may be better off renting a while longer. Owning a home means putting down roots in a particular community. You’ll be paying for the upkeep of the neighborhood as well as school taxes. You will be paying a monthly mortgage payment that requires timely payments. Your children will be friends with other kids nearby and you may enjoy getting to know your neighbors at backyard grills or such.
If you’re constantly moving around the country or even the globe, owning a home may be a commitment you’re not willing to endure. You’ll be responsible for the home’s upkeep even while traveling and selling a home after a short-term will likely cost you far more than you’ve made in equity.
Follow the boy scouts motto and be prepared before you decide the time is right to buy a new home and obtain a new mortgage.
Q. What is Private Mortgage Insurance and why do I need It?
A. PMI is an acronym for private mortgage insurance also referred to as simply mortgage insurance. PMI is a type of insurance that covers the lender on the event you default on the loan. It is generally required on loans that have high LTV’s or low down payments. Mortgage lenders will normally require private mortgage insurance on home loans that have a loan to value greater than 80%. The loan to value or LTV is measured by taking the loan amount divided by the property value or for a purchase it can also be measured by taking 100% minus the percentage of the down payment. For example a home loan purchase with 10% down payment has a loan to value of 90% or a home loan that is for $75,000.00 on a home that is appraised at $100,000.00 has a 75% loan to value.
The private mortgage insurance covers the mortgage lender but will have top be paid by the home loan borrower as part of their monthly mortgage payment. Private mortgage insurance was established to help home buyers that had less than 20% for down payment. The insurance company absorbs a portion of mortgage lenders losses in the case of default and foreclosure for those home loans with private mortgage insurance that have less than 20% down. Without the added insurance, the mortgage lender would not make the home loan unless the down payment was at 20% or greater.
The private mortgage insurance cost is a reflection of the mortgage loan amount, the type of mortgage loan and the loan to value. The higher the loan amount is relative to the home’s value or the LTV, the greater the private mortgage insurance cost will be. This may seem fairly obvious, the less equity in the home the more the risk to the mortgage lender and therefore the higher the insurance costs.
Higher private mortgage insurance costs due to larger loan amounts is not necessarily a measure of risk but simply a higher cost since private mortgage insurance is priced as a percentage of the mortgage loan amount.
The mortgage loan type can change the private mortgage insurance costs since some home loans have a slightly higher risk of default. The best example for this is adjustable rate mortgages. A higher loan to value, low down payment, adjustable rate mortgage is more risky than a 30 year fixed rate mortgage loan and therefore has a higher private mortgage insurance cost.
Two avoid private mortgage insurance you have to have a 20% equity in the property. Either 20% or more for a down payment on a purchase or for a refinance, the loan to value can not exceed 80%. Stated another way, the new home loan can not exceed 80% of the property value for either an existing mortgage refinance or home purchase.
Some mortgage lenders allow customers to put down less than 20% to avoid PMI by taking two mortgage loans. This is accomplished by obtaining a first mortgage for 80% of the property’s value and a second mortgage loan for 10% of the property’s value. This is commonly referred to as 80-10-10 loan since the first mortgage is for 80% loan to value, the second represents 10% loan to value and the third 10 represents 10% down payment from the borrower. At one point mortgage lenders also allowed 80/20’s in which the borrower obtained two mortgage loans that together were 100% of the value of the home. The 80/20 is pretty much extinct and the 80-10-10 is very difficult to find.
Mortgage insurance is usually set up as addition to the monthly mortgage payment. A standard monthly mortgage payment includes principal and interest as well as taxes and insurance. The insurance usually refers to the homeowners insurance. A loan with private mortgage insurance will have added insurance charge for the private mortgage insurance costs. A change in private mortgage pricing in the past five years set up to alleviate the tax differences between the tax deductible costs of private mortgage insurance and the interest on second mortgages is something called lender paid PMI.
In these situations the mortgage lender covers the cost of the private mortgage insurance and there is no added costs at the home loan closing or added to the monthly mortgage payment. However, the mortgage lender absorbs this added cost by raising the mortgage rate on the home loan to compensate their costs for the private mortgage insurance. This increase in the mortgage rate to cover additional costs is the same technique used in no point / no closing costs mortgage loans in which the mortgage lender raises the mortgage rate to absorb the mortgage loans’ closing costs.
Home Loans, Lot Size and Value
Many prospective home buyers question the value of large lots. Even with bigger house being built, new home lots are shrinking across the country. One way to keep new home prices down for builders has been to squeeze more lots into each development. As the older home owning population continues to age, there will be even more gravitation to small lots. More people in general are being drawn to these homes because they are valuing their free time, since they seem to have so much less of it these days. Some homeowners don’t want the lawn maintenance and water bills that often go with larger lots.
However, it is possible that existing homes may enjoy a competitive sales advantage against new homes because of their lot size. A question then arises on whether it is better to have a big lot, even if it means an older home? Or is best to stick to a new home on a small lot? How much is that lot worth? Big lots may be nice but when the price tag makes the mortgage payment and mortgage amount bubble over your monthly budget suddenly the smaller lot looks like the prudent buy.
Appraisal Value
Mortgages can be very complex debt instruments. Mortgage lenders use a number of tools to determine the mortgage qualifications for new home buyer. Mortgage lenders also use different ways to work out the size of mortgage they will give you including appraising the property and calculating the value of the property you want to buy. Part of the property’s overall value is the lot itself. Lot value is determined by size and location. In general, the larger the lot is compared to the surrounding area the greater the value will be and hence the greater the value of the home.
From an investment potential, a larger lot will generally contribute to the value of the property but will not necessarily lead to a better investment or rate of return. The lot maybe worth a great deal to someone with kids and pets, but there is little difference in overall home appreciation between a home on a large lot and one on a small lot. A large lot is different than acreage. Of course a ranch house on many acres will be valued more highly than a house on 3,000 square feet. But in a comparable neighborhood, a home on 3,000 square feet is appraised at the same rate as the home on 8,000 square feet.
Expansion Value
The value that may actually come from a house on a large lot is in the expansion. You can change the size of a home, but you can’t change the size of a lot. You can raise your property value tremendously by building a workshop or office on part of that land. Or put in a swimming pool which may not raise your property value much, but should make your property more enticing to buyers. If your home can be torn down and the lot subdivided, you can also double your property value simply by selling two separate homes. But remember, unless you have inside information about the property, the value of the subdivision of the property should be factored into the selling price. As far as your own expansion desires are concerned, a larger lot may have more value to you than to the average buyer and this is a factor in your purchase decision you should not ignore.
Aesthetic Value
If your lot offers great views and is well developed, it may aid in selling your home more quickly. A home with a terrific patio and garden may very well be more appealing to you than a small plot of green, especially if you enjoy spending time outdoors or hope to spend your mornings puttering in the garden. The larger lot and outdoor space should also add to better air circulation around the home and superior natural lighting. A larger lot will certainly offer more privacy designs with more outdoor living space in the rear of the property or the front and side property boundaries.
Sentimental Value
A large plot of land is also valuable for sentimental reasons. One of the classic values of many cultures is to own the land under your feet, and there is an emotional response to owning a great deal of land. Even if your land is subdivided with a privacy fence, it is still yours and you can dig it up, mulch it and mow it as you please. Although if you have a very large lot, you might have to invest in a riding lawnmower and other yard maintenance equipment to make the property management easier.
Making the Purchase and Obtaining the Mortgage Loan
Most all basic types of mortgages can be used to buy a home on small lot or a large lot. The lot size will certainly affect the home price and the amount of the home loan but home loans become a problem only when the house lot is in excess of five acres or represents the majority of the property value.
Try not to think about your house primarily as an investment. Think of it as your home. Find a neighborhood that fits your needs and a fixed rate mortgage you can afford and don’t pay as much attention to how a home with a larger lot is going to make you rich. The mortgage calculator will help you determine the monthly repayments for a given home loan amount on the home you want.