Mortgage rates change all the time – sometimes daily. Economic or political climate, supply and demand of property, and other events can make rates fluctuate. Your credit score, income, available cash for down payment, or your debt-to-income ratio can play a role in getting the best possible interest rate for your home loan. But mortgage lenders have some degree of flexibility in loan approval. Attorney Mortgage offers a loan package that optimizes your individual circumstances.
Portfolio Loans vs. Ginnie Mae Loans
“Bank liquidity is not what it once was,” says Robert Hastings, Mortgage Loan Originator at UMB Bank. Bank liquidity is the amount of available cash reserves that a bank has in case of emergency, to pay bills, and to manage customer withdrawals. “Programs that are specifically designed for attorneys are what we call portfolio loans. These are loans that are not insured by Fanny Mae or Freddie Mac, or what they call Ginnie Mae. Ginnie Mae houses FHA, VA, and USDA loans.”
Ginnie Mae is the Government National Mortgage Association, a corporation owned by the government within the Department of Housing and Urban Development (HUD). Ginnie Mae’s purpose is to guarantee housing loans, and lower costs for those loans. It guarantees investors securities called MBS in case the homeowner defaults on the mortgage and the property is foreclosed. Unlike Fannie Mae and Freddie Mac, both of which are government sponsored, Ginnie Mae is government-owned. Ginnie Mae only backs homes that are single family or multi-family homes that are insured by FHA, VA, the Department of Agriculture’s Office of Public and Indian Housing, and other government agencies.
“Loans that are specifically designed for attorneys have to come straight from the bank – meaning the bank is the one providing the money, and they are the ones getting paid back,” says Hastings. In the case of government-owned or government subsidized loans, the bank is a third-party lender, selling the loan to the government in order to insure it. “However, that bank can continue to service the loan. The client continues to make payments to the bank.”
But in a portfolio loan, says Hastings, there is no third-party insurer. “It is straight from the bank’s books. So when times get tough for banks, that money starts to dry up. Lately, a lot of lending institutions have pulled out of specialized lawyer loans.”
Attorney Mortgage Offers Portfolio Loans for Attorneys
The good news is that the program is still available, and Attorney Mortgage can help. Newly-degreed attorneys have lower salaries early on in their careers, and some might have student debt. But typically, attorneys have higher earning potential as they continue in their careers. Attorney Mortgage can offer loan options that take income changes into consideration.
“Generally, new attorneys don’t have a lot of money to put down on a mortgage loan. We are unique in that we have a solution. A new attorney can not only get a loan without a large down payment, but the interest rate is very acceptable,” says Hastings. “And they are not required to pay private mortgage insurance. We can sometimes take someone right out of college and accepted in their first job, and we can close on a home within 90 days of the start of that job.”
On Your Way to Your New Home
Many potential buyers allow the federal interest rate to control their buying decisions. But Hastings advises looking at the potential price increase of the home in question. “Paying a half percent more on the interest rate pales in comparison to waiting to buy the home when interest rates go down. If you wait six months and the house increases 10,000 dollars, you have to weigh the benefits of saving a half percent on interest. If you need to buy a home now, there will always be opportunities to refinance our loan,” says Hastings. “So why not buy it now, take the higher interest rate, then refinance when the interest rates go down and lower your payment.”
Creating good financial habits will help you maintain a good credit score and open more lending opportunities to you when you are ready to buy that first home. Mortgage lenders will view you as a low-risk borrower who has a solid plan for repayment.
Purchasing a home for the first time can be challenging but rewarding. If you are a newly degreed attorney, an established attorney looking for a home, or if you are ready to re-finance your home, Attorney Mortgage is here to help you navigate the loan process. Contact us or call (816) 379-6264.
Ready to find out more?
If you are a newly degreed attorney, an established attorney looking for a first home, or if you are ready to re-finance your home, Attorney Mortgage can help you navigate the loan process. Contact us or call (816) 860-1686.