I get this a lot – and it’s a great question. One of the well-known facts in the industry are that there are special programs for first time buyers to encourage home buying. This is really one of my specialty areas – I have always done a lot with first time buyers and I consider myself an expert in the programs offered and the extra time and detail needed to properly explain EVERYTHING there is to know about buying a home. To answer the question – yes – there are many first time buyer programs available and Leader Bank has a great variety to offer.

PMI is short for Private mortgage insurance. Private mortgage insurance is an insurance the bank requires some buyers to pay as a penalty for not putting 20% down payment. Essentially the bank takes on more risk when the buyer doesn’t have enough “skin in the game” for which 20% happens to be the fine line. When you put down 0, 3%, 5%, 10% or even 15% the bank wants added protection that you won’t default on the loan. This is accomplished by having a 3rd party insure the loan so that the bank won’t suffer the loss of the loan.

Why doesn’t everybody get the same rate? Fair question. Rates are based on risk, and there are many different factors that go into how the bank assesses risk. Below is a list of items that can have an impact on your rate:

Many customers I talk to have already heard of points and want to know if I’m quoting any points with my rates. Points typically have a negative connotation and rightfully so – they are probably the most commonly abused vehicle for predatory lending. Points are commonly referred to by lenders as “discount points” and sometimes “origination fee” which is confusing because the application fee is also referred to as origination fee sometimes but they are completely different.

This is one of the most important topics to discuss with new buyers. I am always surprised when I talk to clients who have spoken to other mortgage lenders and have no knowledge that they will need money at closing outside of the down payment money. It is very important that a buyer understand the total costs upfront right from the beginning.

So you found a brand new or newly renovated condo and you are excited to be the first person to ever scratch the brand new hardwood floors. Congrats! Aside from trying not to get any fingerprints on the newly painted surfaces there are a few items you will want to know about regarding new conversions/construction condos.

Refinance is a common term you might hear and there are a few reasons why people refinance.

Refinance just means you are going to get a whole new loan and payoff your current loan replacing it with the new one. You might refinance for any of these reasons:

Adding a 2nd mortgage to your current mortgage can be a great option for many reasons. It gives you the ability to tap the equity in your home without touching the first mortgage – which might be a very low rate. Normally when doing a cash-out refinance you have to overwrite the first mortgage and potentially lose a lower rate. With 2nd mortgages however, you are able to avoid doing this and still tap into the equity of the home. There are two 2nd mortgages available and each has pros and cons.

Many buyers are lucky enough to receive money from family or friends when they are buying a home. This is referred to as “gifts” and it’s very common and typically easy to document. It is important to let the loan officer know upfront if you will be receiving money because documenting assets must be done a certain way and there are certain requirements. In most cases we will need a copy of the check from the donor and your bank statement showing that check clearing along with a “gift letter” which is a bank form we will send to you for the gift donor to fill out and sign.

A common question I get when somebody is looking at the final figures is – Why do I pay so much for taxes and or insurance upfront? Aren’t I double-paying? People always ask me if they are double-paying for these items because essentially they are. The reason is because of when the taxes and insurance are due. City taxes are due quarterly in Massachusetts (4x per year) and home insurance is always paid for a full year in advance.