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Mortgage News Matters

What are the Benefits of Paying with Mortgage Points?

graphic of a house and dollar signs

We’ve said it before and we’ll say it again, purchasing a home is one of the biggest financial decisions one can make in their lifetime. Those home buyers who could use help with financing may want to consider using mortgage points.

What are Mortgage Points?

Mortgage points, or discount points, are fees paid to the lender at closing to reduce the borrower’s interest rate. Completely optional for homebuyers, paying for discount points can lower the monthly mortgage payments and is often referred to as “buying down the rate.”

How do they work?

Homebuyers buy points from their lender and each point costs 1% of the mortgage amount. For example, one point of a $400,000 mortgage would be $4,000. Each point lowers the rate by 0.25% and homebuyers can buy more than one point or fractions of a point.

What are the Benefits of paying with Mortgage Points?

  • Lowers interest rate for the buyer
  • Lowers monthly mortgage payments

    Keep in mind your monthly savings depend on the interest rate, the amount borrowed, and the length of the loan’s term.

To learn more about mortgage points and determine whether they are right for you, contact a VanDyk Loan Originator today!

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Mortgage News Matters

What are the Benefits of Buying a Foreclosed Home?

Sold sign on a foreclosed home

Buying a foreclosed home can be beneficial to home buyers in a variety of ways. The main one being – it’s attractively low price. With most sold well below market value, foreclosed homes could be a great option for homebuyers on a budget!

What is a Foreclosed Home?

A foreclosed home is a property that has been repossessed by the bank or government after the homeowner stops making payments and defaults on their loan.

Types of foreclosures:

  • Pre-foreclosure
  • Short sale
  • Sheriff’s sale
  • Real estate owned

How to find a foreclosed home?

Potential homebuyers who are looking to purchase a foreclosed home can look to some government-backed websites or simply take a drive throughout different neighborhoods, as they would for any other home. Another option is speaking to a real estate agent who may be more knowledgeable of foreclosures in the buyer’s preferred neighborhood.

What are the benefits of purchasing a foreclosed home?

  • Lower than market value price
  • Lower down payments
  • Lower interest rates
  • Elimination of appraisal fees and some closing costs

A foreclosed home is typically set at a lower than market value price. This is a great option for those homebuyers who are looking to purchase but cannot afford many of the homes on the market. Along with this, foreclosed homes tend to have lower down payments and lower interest rates, making them even more affordable. Lastly, when purchasing a foreclosed home, buyers can eliminate appraisal fees and some closing costs, making the home buying process just that much simpler.

To learn more about foreclosures and the process of buying one, contact a VanDyk Loan Originator today!

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Mortgage News Matters

Is Delayed Financing Right for You?

woman looking at financial papers

What is Delayed Financing?

Delayed financing is when a buyer pays for their home upfront with cash, and then immediately obtains a mortgage after the home is purchased.

What are its advantages?

The biggest advantage of delayed financing is the power of paying cash. A cash offer provides buyers with a competitive edge and allows them to stand out in a seller’s market, much like the one we find ourselves in today.

This method allows the buyer to make an enticing all-cash offer, then immediately puts the money right back into their pockets with a cash-out refinance.

What are the restrictions?

  • The amount of the mortgage loan obtained cannot be greater than the amount of the purchase price, closing costs, prepaid fees, and points, combined.
  • Applicants must have proof of cash purchase.
  • Applicants must provide proof of the initial source of cash used for the purchase of the home.
  • Applicants cannot apply for delayed financing with a home they purchased from someone they have a personal relationship with.
  • If funds are provided from a third party, applicants must provide a gift letter.
  • If applicants were provided a gift fund for the purchase of the home, they cannot give the cash from the cash-out refinance back to the donor.
  • The property must be free from any liens.

To learn more about delayed financing and if it is right for you – contact a VanDyk Loan Originator today!

Categories
Mortgage News Matters

The Housing Market is Cooling Down – What Does This Mean for Homebuyers?

animated houses in a line

It’s no secret that the housing market has experienced drastic changes since the start of 2020. After mortgage rates dropped significantly and demand raised substantially, median home prices were at an all-time high by the end of the year.

However, this trend looks like it’s going to be changing – and very soon. Currently, the number of homes for sale is up 30%, since it’s lowest point this past spring.


Some industry experts agree that a combination of regular seasonal market changes and pushback from homebuyers to continue paying such high prices has contributed to the influx of homes on the market. However, another reason could be that sellers are finally ready to sell, as the pandemic seems to have become more manageable.

With this, it is important to note that even more inventory is expected to enter the market as the mortgage forbearance program – or CARES Act – that was passed in late March of 2020, will begin coming to an end on September 30th, 2021. This program, which has allowed millions of homeowners to pause mortgage payments, has been a lifeline for many. And its end means that those who will stop receiving support may have no other option than to sell.

With 1.7 borrowers enrolled in the program, we can be sure that we will see a significant increase in homes for sale – but not all at once, and not right away.

The program is set to end in phases over several months, with the majority of borrowers being dropped at the end of September and the start of October.

This change is expected to be drastic, as Zillow estimates that 25% of the 1.7 million borrowers that are still in forbearance will likely list their home for sale, which accounts for 211,700 homes to enter the market in the next 2 months.

It is important to note that this influx in homes for sale does not mean that we should expect a housing crash, rather it will continue to push the market forward paired with the continuation of low mortgage rates.

This is great news for buyers looking to purchase a home and have been living in a seller’s market for the past 18 months.

More inventory = more opportunity to buy.