Category Archives: Lending

What is a Jumbo Loan & Would I Qualify


It’s over halfway through 2015 and the luxury housing market is booming. According to the Washington Post, soaring prices and sales in the luxury market are factors due to the rapid growth of “jumbo loans” in the Washington area and around the nation. Nearly 1 in 4 mortgages originated in 2014 around the country were jumbo loans, spurred also by lenders’ efforts to make the mortgages more attractive to buyers. 

What is a Jumbo Loan?

A Jumbo Loan is a conventional mortgage with a loan amount that is higher than $417,000 in most areas of the United States, exceeding conforming loan limits imposed by Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac, the large financial agencies that purchase the bulk of US residential mortgages from banks and other lenders, allow for institutions to free up money to lend more mortgages to those looking to purchase homes. Jumbo loans happen when Fannie Mae and Freddie Mac do not cover the full amount of the loan, which normally occurs when homebuyers are looking to buy larger, more luxurious homes, which come with a higher price tag.

Difference between Jumbo Loan and Conventional Loan

 In the past, jumbo loans have required higher interest rates from buyers, but according to the WSJ, low interest rates triggered a refinance flurry in the first few months of 2015 and the volume of jumbo mortgages—those above $417,000 in most places and $625,500 in some high-price areas—reached an estimated $160 billion in the first six months of 2015, up about 36% from a year ago at the same time, says Guy Cecala, publisher of Inside Mortgage Finance, which covers the industry. Since these normally higher interest rates have stayed relatively low, the main difference between a Jumbo Loan and a Conventional Loan is just the higher monetary amount and monthly payments that the loan is for.


So how do you know if you as a borrower qualify for a jumbo loan? To secure a jumbo loan, you must start by having a high credit score (greater than 700), and low debt-to-income ratio (no more than 45%)  . As a lender, there are some risks associated with providing jumbo loans since they are worth more money (and come with the potential to lose more). In order to secure a jumbo mortgage, you will have to put down a higher down payment than with a conventional loan. Along with a higher down payment (typically around 20% of the price of the home), the monthly payments and interest rates will also be higher- although in recent years interest rates for jumbo loans have been reduced. The Washington Post reports that today, the interest rates and down payment requirements are more aligned with conforming loans, making them more appealing for borrowers. Jumbo loan borrowers still typically need to prove they have cash reserves in the bank, a high credit score, a solid employment history and a low debt-to-income ratio in order to be approved.

Remember- jumbo mortgages are great solutions for those looking to buy higher-priced homes, and it is critical to do your research when trying to secure the best value. In the very near future, interest rates for jumbo loans are expected to rise especially if the Federal Reserve raises its interest rate benchmark (expected in September), so for the best rate, don’t wait! Need more assistance? We can help. Contact Alpha Mortgage today and make the first step in securing your jumbo loan.

Should I choose a 15-Year Mortgage or a 30-Year Mortgage


So you’ve found your dream house, and have decided to start the lending process so that you can own the keys and start making it a home. Congratulations! Once you’re sure that you can afford the home, and have found an informed and transparent loan officer, the next thing as a buyer that you need to consider is whether you should choose to secure 15 year fixed mortgage, or a 30 year fixed mortgage. When determining which loan option is best for you, it is important to weigh out the differences in affordability, your degree of job security, as well as your saving habits.

The main difference between a 15 and 30-year loan is that fifteen-year loans typically have higher monthly payments with less interest, and thirty-year loans usually have lower monthly payments in which you end up spending more interest over time. The first step in determining which term to choose is using a mortgage calculator and crunching the numbers to figure out your specific individual options and the difference in monthly payments and total amount spent. Then, ask yourself what you can honestly afford. If you can comfortably make the 15-year fixed mortgage rates, do so. If not, the 30-year option is probably best for you. Remember that making extra payments when possible is always an option (although according to the FDIC, 97.3% of people do not consistently pay extra on their mortgages).

It is also essential to evaluate your job security and emergency funds when determining which loan to choose. Are you in a position/job with a paycheck steady enough to make those payments every month? It is important to remember that once you sign the loan, you will be required to make the same payment each month, and if you choose to go with a higher monthly payment (15-year loan) it is a good idea to have an emergency fund in place just in case something happens. If you don’t have adequate savings in place, or lack an emergency fund, it is a safe bet to go with a 30-year option.

Financial saving habits are also important to consider when determining whether to go with a 15-year or 30-year loan. Before choosing which term you want to have your loan on, evaluate your spending habits. According to USA Today, many people may lack the discipline needed to save long-term, especially in amounts that would offset what they would save by switching (from a 30-year) to a 15-year mortgage. A lot of times people need that extra money for something else, so they choose to keep their money in a 30-year mortgage with lower individual monthly payments. It is important to realize that you can always pay more of your mortgage off monthly, however, many people lack the discipline to send in the extra money every month when it isn’t required by the bank. If you are confident in your financial personal discipline, and do not tap into your savings (or will need to in order to afford a shorter term), a 15-year loan might be a good option to consider.

Be sure to consider your age and professional plan for the next 15-30 years when deciding whether you want to choose a 15 or 30 year loan. Are you planning on retiring? Do you plan on having children? What about other expenses that you will have (car, student loans, etc.)? Once again, it is important to answer these questions as honestly as possible, and to go over your options with your loan officer, who will be able to give his/her honest opinion based on individual circumstances and plans and which term will be best in your scenario.

Remember – in the end, your individual financial situation, goals, and comfort levels will determine which mortgage term you should choose, and what may be right for someone else doesn’t necessarily mean it will be right for you. However, a good rule of thumb remains: if you’re comfortable making higher payments (and have an adequate emergency fund), can meet other important financial milestones such as retirement and large expenses like cars and student loans, and have strong personal discipline when it comes to finances, a 15-year mortgage is a great option to own your home in half the time you would otherwise. If any of these conditions make you uncomfortable, it is better to go with the 30-year fixed loan and add in extra payments if you can. Let Alpha Mortgage help you make the right decision when it comes to choosing your loan term.

How to Apply for a VA Loan in North Carolina


A VA loan, formally known as a Veteran Affairs loan, is a mortgage loan in the United States guaranteed by the US Department of Veteran Affairs that is designed to offer long-term financing to eligible American Veterans in order to help secure housing. VA loans are available for the primary residences of Veterans, active duty members, certain surviving spouses, certain Reservists, and National Guard members, and provide excellent benefits for those who are approved. Benefits of getting a VA loan include equal opportunity, little to no down payment, no monthly PMI, home appraisal and reasonable value calculated, negotiable interest rate, reasonable closing costs, assistance to borrowers, and the ability to finance the VA funding fee.

The US Department of Veteran Affairs doesn’t directly fund the loans through the program, but instead backs them from private lenders such as banks and mortgage companies,  which is why Alpha Mortgage can provide VA Loans to those who qualify in North Carolina with more favorable loan terms than they may normally receive.

In order to apply for a VA loan in NC, there are a few preliminary steps one must take in order to reach the application process. The first thing you will need is a Certificate of Eligibility that one obtains from the VA. A Certificate of Eligibility (COE), provides lenders with the evidence that they need to determine if one is qualified to receive a VA loan. As stated on the official website, “The evidence you need depends on the nature of your eligibility.” They provide a table to reference during this process here.  It is important to make sure that all of the qualifications

After you figure out what specific evidence you need, and that evidence  has been collected, there are multiple ways to go about actually applying for the loan- including online, through your lender, or through mail. Once the loan is approved through the U.S. Department of Veterans Affairs, the rest of the process can be taken care of through your lender.

Whether you have been approved for a VA loan already, or need assistance in the process, remember that Alpha Mortgage is here to help with all of your VA loan needs! Contact us today!

Mortgage Market Update

Housing news dominates the headlines this week. The Commerce Department reported on Tuesday that sales of newly constructed homes rebounded in April, up from the dip in March, as the spring buying season got underway. New Home Sales rose by 6.8% to an annual rate of 517,000, which was above the 510,000 expected. Since April 2014, sales are up a whopping 26%. The median price for a newly constructed home in April was $297,300, up 8.3% from a year ago. The report comes after a contrast in Existing Homes, which makes up a bulk of the market, which fell 3.3% in April.
Data from the Case Shiller 20-city Index on a year over year basis revealed that home prices rose by 5% from March 2014 to March 2015. Home prices have now risen year-over-year for 35 consecutive months following the housing bubble bust in 2007 and 2008. The 5% gain was above the 4.6% expected, while matching the February annual gain. From February to March, prices were up 0.9%. “The pattern of consistent gains is national and seen across all 20 cities covered by the S&P/Case-Shiller Home Price Indices,” said David Blitzer, managing director and chairman of the index committee.
The last positive report today showed that May Consumer Confidence rose from April. The Index rose to 95.4 in May, above the 94 expected and up from April’s reading of 94.3. The report read that business conditions remained “good” last month, while the employment component said that those stating jobs are plentiful rose to 20.7% from 19%. The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch.

What Makes a Good Loan Officer?

Wilmington, NC Loans

With 2015 upon us and the economy looking up, many people are looking towards purchasing a new home this year. It is no secret that one of the most important steps in property purchase involves communication and collaboration with loan officers. Loan officers, or Mortgage Originators, evaluate, authorize, or recommend approval of loan applications for people and businesses. According to the Bureau of Labor Statistics, they are normally responsible for contacting companies inquiring about loan needs, meeting with loan applicants to gather personal information, obtaining and verifying financial information, explaining loan terms and types, analyzing and evaluating applicant’s finances, and eventually approving or denying loan applications. So what should you look for in a loan officer to make your home-buying experience as seamless and stress-free as possible?

A good loan officer holds many great qualities including time-management skills, problem-solving skills, and responsiveness, but 5 traits that an outstanding Loan Officer must have are listed below:
• They are transparent with customers- a great loan officer is always in line with all national loan regulations, but arguably even more importantly, they are open and forthcoming with customers and realtors about important information that can make or break a loan in a timely matter. They never over-promise or under-deliver.
• They are passionate about what they do- one thing that sets apart excellent loan officers from average is their love for what they do. It is apparent when a loan officer hates what they are doing, but through positive energy and attentiveness to customer needs, passion from a loan officer shines.
• They measure all of their data and information- great loan officers understand that nothing can be improved if it is not first measured. Best performers know exact numbers of leads, credit report pulls, contracts, and closings they have had in specific time periods because they understand how imperative numbers are both to potential borrowers and to their own success.
• They are accountable- They work for companies that hold employees to high work standards and ethical standards because they want to push themselves to their highest potential as a loan officer. They appreciate accountability because it shows borrowers and real estate agents that they can be relied on for closings.
• They are connected- The best loan officers not only know basic real estate principles, but they have rich professional connections with local real estate agents. Great loan officers have a deep base of knowledge they use to inform real estate agents about the closing process for clients, and maintain a positive communication process between the parties.
Looking for a Loan Officer on the North Carolina Coast? Alpha Mortgage has their own in-house team of specially trained Loan Officers that meet all of these qualifications! Check them out and contact one today to get the ball rolling on the purchase of your dream home!

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Mortgage Market Update 12-16-14

Home builder sentiment across the nation edged lower in December, but still remains robust as 2014 comes to an end. The National Association of Home Builders Housing Market Index fell to 57 this month, which was just below the 58 expected and down from the 58 recorded in November. Any number above 50 indicates that more builders view conditions as good rather than poor. Within the report it showed that current sales conditions and expectations for future sales declined, while the traffic gauge of prospective buyers held steady.

In another sign that the U.S. economy has improved from the depths of the Great Recession, the Federal Reserve reported on Monday that factory production rose by 1.1% in November from October. Output at factories has risen 4.8% over the past year, which is above levels seen before December 2007. Despite a global slowdown, the U.S. has continued to recover, led by a boost in auto sales, food, wood, plastics and rubber products.

Today is the busiest day of the shipping season for the U.S. Post Office and FedEx with just 10 days until Christmas. The nation’s largest shipper, the Post Office, says it will process 640 million pieces of mail on Monday, up 33 million from last year. The Post Office further reported that between Thanksgiving and Christmas, it expects to deliver 12.7 billion cards, letters and packages. FedEx reports that it will ship 22.6 million packages on Monday while it will deliver 290 million packages during the same period, up 9% from 2013.

Mortgage Market Guide 12-01-14

The National Federation of Retailers (NRF) reported today that Black Friday weekend sales didn’t sizzle, which could be attributed to deals that began before Thanksgiving. The NRF said that sales from Thanksgiving through Sunday is estimated to hit $50.9 billion, down from the $57.4 billion in 2013, an 11% decline. The NRF went on to say that during the four-day period, 2014 online sales will be flat from last year. Another reason for the ease in sales could be that shoppers are holding out until later in the holiday shopping season to see if they can get better deals.

In a move that could potentially make it possible for hundreds of thousands of additional consumers to get mortgages, Fannie Mae and Freddie Mac have relaxed lending standards beginning today, December 1st. The new measures stem from an agreement in October where lenders had blamed the lack of clarity on when they would be penalized for making mistakes on mortgages they sell to Fannie and Freddie. The new standards should include faster turnaround times for mortgage applications to be processed. In addition, lenders be able to consider reduced credit scores and look past one time events when consumers suffered a hit on credit scores.

Fannie Mae released its Economic and Housing Outlook report for November late last week revealing that “economic growth in the U.S. is slowing from the strong mid-2014 numbers to a more moderate pace heading into next year.” Fannie Mae said that full economic growth is expected to be around a modest 2.5% in 2015. Fannie went on to say their view of housing starts, home sales, and home price trends will be largely unchanged next year and that “mortgage activity in 2015 will be very similar to 2014.”