2017 Conforming Loan Limits Have Increased!

For the first time since 2006, the conforming loan limits have increased. In 2017, the baseline loan limit for most counties across the U.S. will be $424,100, a slight increase over 2016. More expensive markets, such as New York City and San Francisco, have conforming loan limits as high as $636,150. Anything above these maximum amounts is considered a “jumbo” mortgage.

Download Conforming Loan Limits for 2017 (All Counties)

PDF document

Excel Spreadsheet

The PDF and Excel files above were obtained from FHFA.gov.  You can download them to your computer, in either format, and refer to them as needed.

Update: Conforming Loan Limits Increased for 2017

On November 23, the Federal Housing Finance Agency (FHFA) announced that it would raise the baseline conforming loan limit for 2017. They are also increasing the limits for certain “higher-cost areas” that are above the baseline. This is in response to significant home-price gains that occurred during 2016.

In most counties across the country, the 2017 maximum conforming loan limit for a single-family home will be $424,100. That’s an increase of $7,100 from the 2016 baseline limit of $417,000. This is the first time federal housing officials have raised the baseline since 2006.

But again, this is just the baseline conforming loan limit used for most parts of the country. In higher-cost real estate markets, like San Francisco and New York City, the limit for a single-family home loan can be as high as $636,150.

Anything above these caps is considered a jumbo mortgage.

What Is a Conforming Loan?

A conforming home loan is one that meets, or “conforms” to, certain guidelines set forth by Freddie Mac and Fannie Mae.

Freddie and Fannie are the two government-sponsored enterprises (GSEs) that purchase mortgages, bundle and securitize them, and then sell them to investors through Wall Street and other channels.

When a loan meets the purchasing criteria used by the GSEs, it is said to be a conforming loan.

There are various criteria used to define a “conforming” mortgage product. But the size of the loan is one of the most important criteria, from a borrower’s perspective.

Freddie Mac and Fannie Mae will only purchase loans up to a certain amount. These maximum amounts, or limits, vary by county and are updated every year.

‘Jumbo’ Mortgages Are Still Widely Available

Borrowers who wish to obtain a mortgage loan in an amount that exceeds the 2017 conforming limits still have options. When a home loan exceeds the caps set by the Federal Housing Finance Agency, it is referred to as a “jumbo” mortgage product, and it cannot be sold to Fannie Mae or Freddie Mac.

Jumbo loans are still widely available in the U.S., but the qualification criteria are generally stricter for these products due to the higher level of risk involved.

Jumbo mortgage products do not meet the underwriting guidelines set forth by FHFA, so they are not eligible for purchase by Fannie Mae and Freddie Mac. As a result, eligibility requirements are often more stringent with these larger “non-conforming” loans. Lenders often require higher credit scores and larger down payments for jumbo loans, though the specific criteria vary from one lender to the next.

To find the 2017 conforming loan limits for your county, just download the PDF document or Excel spreadsheet above.

If you are in the market for a new home, the first step is to contact one of our highly skilled Mortgage Bankers to see what you qualify for. Our team is standing by, ready to work with you to help you transition into the perfect home for your needs. Contact us today at 215-469-1000.


This article was retrieved from Loanlimits.org. 

What Is the Average Price per Square Foot for a Home—and Why Does It Matter?

Picture thanks to Realtor.com

Picture thanks to Realtor.com

If you’re hoping to buy a house, the very first dollar figure you’ll want to know is the home’s price, of course. But a close second is its price per square foot—and the average price per square foot for a home in that neighborhood (or the median price, which is actually a better representative of the middle ground).  Here’s what you should know about these numbers, and how to use them to your advantage as you shop for a home.

How to calculate the price per square foot for a home

Typically, a home’s price per square foot is prominently featured on the listing—both online as well as in those property information sheets you get at an open house.

But a home’s price per square foot doesn’t tell you much on its own. This number is best understood in comparison with similar homes nearby. So your next step should be to type in the city, neighborhood, or ZIP code of interest into a site like realtor.com/local. This will give you the median price per square foot for homes in that area (as well as median asking price, closing price, and number of homes for sale—all useful info during a house hunt).

What’s the average price per square foot for a home?

According to the latest estimates, the median price per square foot for a home in the United States is $123. But that can vary widely based on where you live and other factors. For instance, on the low end, you’ll pay $24 per square foot in Detroit; on the high end, in San Francisco, $810.

Why such a wide range? Well, it’s no secret that certain neighborhoods are considered more desirable than others, and fetch a higher price as a result.

“The hotter the neighborhood, the higher the price per square foot,” says Anthony Stellini, a Realtor® with RSR, a division of the real estate firm Nourmand & Associates. But odds are you knew that already. What you may not know is how this info can help you get a better deal on a house. More on that next!

How price per square foot can help you negotiate

When you run your comparison of a home’s price per square foot with the neighborhood median, you’ll be able to suss out whether a place is a bargain or overpriced.

Let’s say you see a home you love priced at $150 per square foot, but then you find that the median price per square foot for the neighborhood is $135. This suggests the home you’re looking at could be priced too high—which spells an opportunity for you to negotiate for a lower purchase price. Just point out to the sellers that homes of similar size in the area are going for much less. Or, conversely, if the median price per square foot is $135 but this home is only $120, you may have a bargain in your crosshairs that you should snap right up!

Need Help Determining if You are Getting a Good Value?

Contact one of our highly skilled Mortgage Bankers to help you determine if your dream home is priced fairly or if you have room to negotiate. When you need expert advice, let our experts help you in determining if you are getting a good value for your offer. Call us at 215-469-1000 for a no-obligation consultation or request one here!



This article was written by Margaret Heidenry, October 21, 2016, Pictures and original article from Realtor.com. To see the original version, click here. 

Preparing Your Home for Autumn: Maintenance Tips for the End of Summer

It’s time. Sigh. Summer has drawn to a close, like it or not, and Fall has arrived!

Before the leaves fall and the wind turns chilly, it’s a good idea to do some seasonal maintenance on your home. Here are some things to add to your fall “honey-do” list.

Have your furnace inspected. It’s smart to have your heating system serviced before you actually need to use it. Experts say that as much as 75 percent of the calls they receive about homeowners without heat are a result of not having the furnace serviced and cleaned. It will also keep your heating costs down and help keep the air in your home healthy.

Inspect your roof. You’ll want to check for shingles that are cracked, buckling, or missing. Check for caulking that needs to be replaced, or moss or lichen, which could indicate deterioration underneath. If you don’t trust your own assessment, work with a certified inspector.

Check for mold. The humidity of summer can cause mold to flourish. Check locations such as around leaky pipes, basements, or areas that don’t get good ventilation. You will want to remove the mold as soon as possible. It’s wise to have this done by a professional.

Replace weatherstripping on doors. There could be gaps that you can’t see and that can jack up your energy costs. It’s a simple fix that can be done with items found at your local hardware store.

Check the airflow. Focus on areas like vents, the hood over your stove, dryer vents, baseboard heaters and room fans. Not only is a buildup of dust a fire hazard, but you also want to keep the air flowing and the allergens at bay.

Get control of gutters and downspouts. Clogs in gutters and downspouts can cause the roof to leak, which can lead to a host of other problems. It’s a slippery slope from clogged gutters to water damage in your home!

Look over your siding. You’ll want to look for any areas on vinyl siding that are buckled or warped. If you have wood siding, look for curling, splitting or cracking. Should you find an issue, you’ll definitely want it taken care of before the weather gets cold!

Inspect your insulation. The most important area to check is your attic. You should have the highest concentration of insulation here. See if there are any gaps that need to be filled. You don’t need to check the insulation in your walls unless you notice heating issues.

Make sure your detectors are working. Ensure both smoke and carbon monoxide detectors have fresh batteries. It’s smart to test them, also. Both are especially important once your furnace is in use.

Each season brings its own challenges and wear-and-tear on your home. With summer ending and autumn on the way, you can go into the new season secure that your home is in tip-top shape!


Article written by Anita Alvarez, originally published on RISMedia’s blog, Housecall. 

Is Paying Off Your Mortgage Early Something You Should Do?

Even if you can easily afford your mortgage every month, the idea of living debt free after paying off your home loan early can be pretty tempting. If you do decide to pay off your home loan early, you’ll save money from skipping out on the interest tacked on your mortgage payments.   

While saving money on interest rates is great, there are many benefits to steadily paying off your mortgage as well. Consider the following before deciding to pay off your home loan early– you just may save more money in the long run.

Tax breaks.

Many homeowners get a decent tax break based on the interest they’re paying on their home loan. During the years you pay off your mortgage, you get a federal and state tax deduction on mortgage and home equity loan interest for loans that are up to 1 million dollars.  Before deciding to pay off your mortgage, consider your future tax strategy to assess whether or not it’s in your best interest to do so.

Retirement and savings.

If you’re planning to develop a retirement fund or other savings accounts over the upcoming years, perhaps putting so much of your money into paying off your mortgage early isn’t the best idea.  Down the road when you begin to rely more on your 401(K), you’ll be happy you didn’t spend too much of it on a mortgage.  It’s also hard to know of any future expenses that may fall into your lap (like medical bills, natural disasters, school, etc.), and it would be nice to have a little money set aside for you to use when you have nowhere else to turn.

Other financial responsibilities.

Borrowing money for a house isn’t as expensive as some other loans like high interest credit card debt, or student loan debt.  Because paying off a mortgage can be easily managed, it may be wise to use any of your extra income on more pressing payments.  If you use more of your money to pay off a home loan early, you’ll end up paying more money in interest rates on more expensive debt in the long run.

Whether or not you decide to pay off your mortgage early, be sure to take the time to go through your current and potential future finances to ensure it’s in your best interest to do so. 

If you’d like an extra opinion on the matter, consult with one of our highly qualified Mortgage Professionals to help you come up with the most beneficial options for you. Call us at 215-469-1000 and schedule your free consultation today!

Adapted from http://dreamcasa.org To see original article, click here.

Survey: 5 in 10 Millennials Still Consider Down Payment a Barrier

91% Millennials Want to Own a Home

Most renters would like to take the next step toward homeownership. They just don’t think they can - yet.

In fact, 91 percent of Millennials stated in a recent survey that they want to own a home.

This group, roughly age 25-34, represent the majority of potential first-time home buyers, according to Ellie Mae, the loan software company that conducted the survey.

The problem -- or perceived problem -- for many potential homebuyers is the down payment.

Inability to raise the necessary down payment was stated as a common barrier to owning a home, cited by 45 percent of respondents.

The other major challenge, according to twenty-nine percent of survey takers, is the inability to qualify for the mortgage.

But in today’s market, buyers can achieve homeownership with little or no down payment, and sometimes without a credit score.

Knowing about these loan products and down payment options will fast-track your homeownership goals, even if perceived barriers have kept you from trying.

Down payment: Will It Take Eleven Years to Save Up?

A common home buying myth is that it takes a 20 percent down payment to buy a home.

For a $300,000 home, that’s sixty thousand dollars.

Fortunately, this myth doesn’t hold water. Most would-be buyers are around 30 years old. Not many of these Millennials have that type of cash stashed in savings. They will someday, but not yet. Not with student loan debt obligations still in play.

Of course, if you want to save that 20 percent down payment you can. Just save $12 every day and you’ll have your down payment banked sometime around 2027.

That’s way too long. Home prices will likely outrun efforts to save up 20 percent of your future home’s purchase price.

Knowing your flexible mortgage loan options is your first move. From there you are just a series of small actionable steps away from making homeownership happen.

What Are My Home Loan Options?

There is no universal mortgage guideline that all applicants must adhere to. Mortgages come in a variety of formats to meet a wider population of home buyers.

From low down payment requirements to credit score leniency, there’s a loan type for most home buyers today.

1. FHA loans

The popular FHA home mortgage program requires just a 3.5% down payment. This financing type is also more flexible for those lacking an extended employment history -- like fresh college grads -- and those who have experienced a credit hiccup.

Speaking of credit, these loans also allow a borrower to have no credit score at all. Many young people have never had so much as a credit card. According to written FHA rules, lenders are not allowed to deny a loan application based on lack of credit history.

Rather, the FHA lender should help the applicant establish a credit score and history via utility payments, cell phone bills, car insurance, and rent history.

2. VA home loans

VA mortgages require no down payment or mortgage insurance. Credit guidelines are lenient, and, like FHA, accept non-traditional credit history.

Active military personnel need only 90 days of service to be eligible for the VA home loan program. If you are a veteran or qualified serviceman you should explore this option first, as it comes with unmatched advantages.

3. Conventional loans

Conventional loans make up around 60 percent of the market. Most assume conventional loans – those backed by Fannie Mae and Freddie Mac – are ultra-conservative and reserved for only the best applicants.

Yet conventional loans now offer three-percent-down (97% LTV) financing through the Conventional 97 program as well as HomeReadyTM, the latter accepting non-borrower household income to qualify.

The HomeReadyTM mortgage is perfect for multi-generational households, home buyers with a history of living with roommates, and non-married individuals buying a home together.

4. USDA Rural Development loan

The United States Department of Agriculture (USDA) offers this loan to home buyers in suburban and rural areas to promote economic development in these regions.

USDA loans require no down payment and a credit score minimum of just 640.

They are available from most lenders in the U.S., rather than directly from a government agency. Furthermore, these mortgages come with very low mortgage rates, which lowers the monthly payment, and further increases chances of qualifying for new buyers.

Creative Ways To Raise A Down payment

Sometimes, buyers choose to make a down payment, even if it's a small one.

The cash doesn’t always have to come from a bank account into which you have made years of deposits. The following are ways to come up with a down payment -- ways that new home buyers don't often consider.

1. Your 401(k)

The IRS allows 401(k) home buyers to borrow as much as $50,000 from the vested portion of their accounts.

Many times the payments are deducted from your employment pay check every month. The interest rates are usually favorable too.

2. IRA funds

The IRS allows for a maximum one-time, penalty-free distribution per person of $10,000 for a first-time home purchase or for building a home.

The IRS exemption guidelines for a traditional IRA and a Roth IRA are a bit different though. Consult with an accountant about tax implications.

4. Down payment gifts from family

Your immediate family members and even more distant relatives or godparents can contribute to an FHA loan down payment.

Be prepared to document the gift funds thoroughly, including proof of donor’s ability to give, which generally requires the gift giver to provide a bank statement.

5. Saving automation

Deposit your tax refund directly to a down payment fund or redirect a small portion of your paycheck there. Some banks will even round up to the nearest dollar with every purchase, depositing the difference into your savings account.

Minimize your temptation to tap that fund by refusing checks and debit cards for the account.

6. Bridal registry

Would you prefer a kitchen gadgets or down payment money for your first home? FHA allows for a bridal registry to be used toward your down payment.

Consult your loan officer on how to document it and you could be well on your way to a solid down payment by the time you get home from the honeymoon.

Down payment Assistance Programs

More than 2,300 homebuyer programs are available nationwide and nearly 80 percent of first-time buyers could qualify for a program of some sort.

Who offers these programs?

  • Housing finance agencies in various states
  • Nonprofit agencies
  • City and local development authorities
  • Employers

Homebuyers should investigate these down payment assistance options upfront. They add time to the mortgage loan process so getting started on this path early is strongly advised.

What Are Today’s Rates?

Mortgage rates are low and it’s a perfect time to apply to purchase a home. Traditional challenges to homeownership should not stop today’s home buyer from applying.

Written by:  SHASHANK SHEKHAR, themortgagereports.com

If you have been on the fence wondering whether you can qualify for a mortgage and move into your dream home, contact one of our highly skilled mortgage bankers to set up a no-obligation free consultation so we can review your current situation and get you on the path to home ownership.  

Millennials: Rent Levels and Demographics vs. Credit Scores and Tight Inventory

Doug T. writes, “There's a strange new trend in the office: people are putting names on food in the company fridge to keep them cold. Today I had a sandwich named Kevin.” There are some real estate markets that are anything but cold, but what is a “hot” housing market? The West Coast has seen an ebbing of all-cash Asian buyers, but markets are still good.  Pro Teck Valuation Services (a national provider of residential real estate valuations) came up with its definition, and variety of factors, to determine a "hot" housing market.

Back in April Millennials surpassed Baby Boomers as the nation's largest living generation, according to population estimates by the U.S. Census Bureau. "Millennials, whom we define as those ages 18-34 in 2015, now number 75.4 million, surpassing the 74.9 million Baby Boomers (ages 51-69)." That means that rascally generation is now 19-35. Let's just stick with the Census Bureau's definition.

Every time I mention Millennials to my cat Myrtle she gives me a look as if to ask, "How long will everyone take to realize that Millennials are in no hurry to marry, have kids, or save up enough money and then finance a house? It will happen eventually - why are lenders and real estate agents pushing them? Still it doesn't stop the fascination with their every move but the ones that I talk to aren't too excited about constantly being under the microscope." Yes, that was all conveyed by Myrtle's look.

The CPI report indicates apartment rents climbed 0.4% in May to a record high, marking the 67th consecutive month of increases. As of the end of 2015 about 37% of households were renters, the highest level since the 1960s.

Sure enough, the latest analysis by Pew finds that the most common living arrangements for Millennials are: living with parents (32%), married or cohabitating (32%), living alone or with roommates (14%) and other living arrangement (22%). The percentage of those living at home is the highest on record.

More millennials are living with their parents than they are with a partner or significant other, for the first time in the modern era. This is probably a reflection of a lot of things - from the weak economy to people getting married later in life. However, it does represent pent-up demand for housing. And eventually Pampers, right? CNBC echoed that more young adults aged 18-34 live at home with Mom and Dad than in any other arrangement. 

Zillow's Chief Economist writes, "With home prices and rents rising as fast as they are, it's a common assumption that young adults in many cases cannot afford to live alone. Though that may be true in some markets, there's still a large number of amazing places across the U.S. that are prime for millennials to thrive independently." Those in Richmond and Pittsburgh are bucking the trend according to data from Zillow. Its data found that 8.9 per cent of millennials live alone but in Richmond it's 15 per cent and in Pittsburgh 14.3 per cent.  Millennials are also more likely than average to live alone in Buffalo, NY; Columbus, OH; Virginia Beach, VA; Cleveland; New Orleans; Austin, TX; Kansas City, MO; and Oklahoma City.

Let's track them every month through "Big Data!" The recent Ellie Mae Millennial Tracker, which shows that among primary millennial borrowers that are women, more than 60 percent are single while only 38 percent are married. This is a striking difference from male primary borrowers, where just 41 percent are single. Women were listed as the primary borrower on nearly one-third (32 percent) of closed loans. What are the top MSAs by percentage of millennial loans closed? Columbia, Mo., Jonesboro, Ark. and Sioux Falls, S.D. Ellie Mae perused its database and found that FHA loans continued to be popular among millennials, making up 37 percent of their closed loans (which is significantly higher than the 23% FHA loans for the general population). But check this out: in its database Ellie Mae found that the average FICO score (how about credit score?) was 722 for all closed Millennial loans in May.

Speaking of Millennials, the high student loan debt is causing lower credit scores. The average credit score for the 18-34 age cohort is 625, compared to the national average of 667. Almost a third of that age cohort have sub-600 scores. Good luck getting a loan with that. Finally, all of the new post-2008 regulations have added anywhere form 50k-100k to the cost of building a starter home, making it difficult for builders to make homes that are affordable for the first-time homebuyer. 

If they can purchase, what kind of houses are they buying? A tight supply of starter homes is pushing prices up 9% per year in that segment, more than double the price appreciation at the high end. This is a combination of lower foreign demand for luxury homes and increasing demand by Millennials who want to buy. 

Mark Fowler with The Futures Company, writes, "2016 is the year that Millennials said goodbye to their teenaged years-the cohort is now 20-37 years old and runs the gamut of graduating college to buying a home to starting a family. In short, it's no longer acceptable to think of Millennials as kids or youth. That title goes to the Centennials, the generation made up 78 million consumers aged 0-19.

"It's no secret that Millennials are a demographically-diverse group, but their diversity among life stages makes them an even more complex cohort. At The Futures Company, we often divide Millennials into two segments; Emerging Millennials (20-28) and Adult Millennials (29-37). Younger Emerging Millennials are just beginning to form their worldviews, while Adult Millennials have a much more concrete vision of their future.

"Adult Millennials are right in the midst of life stage transitions that make them an incredibly attractive marketing target: they're buying homes (in many instances, their first); they're getting married; they're having children; they're settling into career paths and building wealth.

"Financially, Emerging Millennials are still struggling to find a foothold, build their savings and contribute to the economy, with a Median Household Income of $47.7K.  Adult Millennials with a Median Household Income of $72.6K are fueling the economic engine while juggling expenses for houses, spouses, kids and careers.  Specific to Mortgage, 17% of Emerging Millennials have a mortgage where 37% of Adult Millennials have a mortgage.

"However, both groups of Millennials they still face rather grim economic realities. 58% of the Millennials feel they are living paycheck to paycheck. Nearly 1/3 of Millennials are experience severe or high levels of economic anxiety. 40% of Emerging Millennials are worried about paying their monthly bills and 60% are worried about paying off their student loans."

Some companies are certainly paying attention to the trends. A recent press release noted that millennials currently account for one in three home purchases, and this rate is expected to increase in the coming years. By some estimates, Millennials will spend up to $2 trillion in real estate purchases over the next five years.


Article written by Rob Chrisman, adapted from Mortgage News Daily. To read the full article, click here.

Mortgage Terminology 101

Mortgage Terminology 101

Navigating the home-buying process can be a challenge, for first-timers and seasoned buyers alike. In addition to looking for the perfect home, prospective buyers need to be knowledgeable about the ins and outs associated with choosing a mortgage, beginning with having a general understanding of the terminology involved in mortgage papers.
While many borrowers simply seek rates and terms that appear reasonable, it’s important that they understand the type of lender they’re dealing with. 
Following are some of the most common terms you’ll come across when going through the process of choosing a lender. 
Mortgage Lenders. Lenders are the ones who make the loan and provide the money you’ll use to buy your home. When meeting with lenders, you’ll have to provide a lot of financial background information. The lender will then set the mortgage interest rates and other loan terms accordingly.
Mortgage Brokers. Brokers work with multiple lenders to find the loan that’ll offer you the best rate and terms, so when you take out the loan, you’re really borrowing from a lender, not a broker. This is often one of the most confusing parts of the mortgage process for prospective buyers.
Mortgage Bankers. Most mortgage lenders are mortgage bankers, which means they don’t lend their own money, but borrow funds at short-term rates from warehouse lenders. Larger mortgage bankers will originate their own loans, which they’ll then sell directly to Fannie Mae, Freddie Mac, or investors.
Portfolio Mortgage Lenders. These lenders originate and fund their own loans, offering more flexibility in loan products because they don’t need to adhere to the guidelines of secondary market buyers. Once these loans are serviced and paid for on time for at least a year, they’re considered “seasoned” and can be sold on the secondary market more easily. 
Hard Money Lenders. If you’re having trouble getting a mortgage and working with a portfolio mortgage lender, a hard money lender may be your last resort. These lenders are private individuals with money to lend, though interest rates are often much higher.
Wholesale Lenders. Wholesale lenders cater to mortgage brokers for loan origination but offer loans to brokers at a lower cost than their retail branches offer them to the general public. The result for the borrower? The loan costs about the same as if it were obtained directly from a retail branch of the wholesale lender.
Correspondent Mortgage Lenders. These lenders have agreements in place with one or more wholesale lenders to act as their retail representative so they lend directly to buyers and use wholesaler guidelines to approve and close loans with their own money. They also agree to buy back any loans they close that deviate from wholesaler guidelines. 
Direct Mortgage Lenders. A direct mortgage lender is simply a bank or lender that works directly with a homeowner, with no need for a middleman or broker.

By Keith Loria, RISMedia, 2016

Now that you know the different types of Lenders, you want to find one that will fit your individual needs. Centennial Lending Group is a Mortgage Lender. We work directly with you and your personal needs to find the best mortgage and rates for you. If you have any questions or would like a free consultation to see what options are available to you when purchasing or refinancing your home, contact us today by calling 215-469-1000 or go here to send us an email! 

The Worst Mortgage Advice Home Buyers Actually Believe


The most popular WORST Mortgage advice and why you should not listen!



Getting a mortgage can be a daunting prospect, which explains why so many people seem eager to pat your hand and say, “Let me give you a little advice.” Sure, those pearls of wisdom may come from an ocean of good intentions, but the suggestions might not necessarily be right for you. In fact, they could be dead wrong.

So before you take some friendly outside counsel as gospel, be sure to check it against our list of the worst mortgage advice people often give.

‘Don’t bother getting pre-approved for a mortgage’

Why you might hear this: Hey, you’ve barely begun shopping for a home! There’s no need to get all serious about mortgages just yet. And besides, a mortgage pre-approval isn’t real anyway your application isn’t reviewed by an underwriter, so it’s no guarantee you’ll get approved for a mortgage later. So why bother?

Why it’s bad advice: While a pre-approval might not be “official,” it will help you avoid major problems down the road.

“Getting pre-approved by a bank is one way to avoid the heartbreak that comes from falling in love with a house you can never buy,” says Maryalene LaPonsie of MoneyTalks. “It may also give you an edge if there are multiple offers for the same property. A seller will feel more confident selecting a bid from someone with a mortgage pre-approval rather than a person who hasn’t even begun the process.”

‘Get your mortgage from the bank where you already have an account’

Why you might hear this: When it comes to convenience, you just can’t beat the bank you’re already using. Plus, since you have an existing relationship with it, it’ll give you the best rates, right?

Why it’s bad advice: You already know to shop around for a home. You need to do the same with your loan.

“Even though the big bank where I keep my checking and savings accounts claims they’ll give me better service and an easier application process, that may not always be true,” says Albert Tumpson, a banking and real estate attorney who owns several properties and refinances them every couple of years. “I’ve found more favorable terms with other venues. Always go with the most favorable terms.”

‘Don’t bother reading the fine print’

Why you might hear this: Because actually perusing all that mortgage paperwork will drive you insane! And besides, this is the standard contract that everyone gets. Just sign here, here, and here—and you’ll save yourself a ton of headaches.

Why it’s bad advice: Because that fine print contains some clauses that could cost you serious money!

“Take your time and go over every last word with a fine-toothed comb,” says Jamie, a homeowner who purchased her second home two years ago. She was astounded when her lender asked her to sign a mortgage contract involving hundreds of thousands of dollars without “bothering” to read the details. Jamie ended up taking several hours to go over the contract and found several items to dispute. So what if the process took a little longer? It was well worth the wait.


‘Always go with the lowest interest rate’

Why you might hear this: A lower interest rate means lower monthly payments. Duh.

Why it’s bad advice: Lower interest rates can have all sorts of strings attached—often in the form of an adjustable-rate mortgage.

ARMs are not always a bad thing, but just be on the alert when someone suggests an interest-only ARM, says Shant Khatchadourian, president of SKR Capital Group. “Interest-only ARMs can result in significant payment shock, especially if rates increase down the line and amortization kicks in.”

In the past, as interest rates were dropping and home values were rising rapidly, interest-only ARMs worked well for some people—especially those who didn’t plan to stay in the home beyond the length of the loan’s first term. But although interest rates are low, they’re likely to rise soon, so beware.


‘Borrow as much as you’re approved for, even if you don’t need it’

Why you might hear this: Who doesn’t want a bigger and better house? Besides, a bank wouldn’t approve you for all that money unless you could afford to pay it back, right? Right?

Why it’s bad advice: It’s always wise to live slightly below your means, since you never know when life might pitch you a financial curveball, such as a layoff or medical problem.

“You can qualify for monthly payments up to 50% of your income these days,” says Khatchadourian. “But half of your gross income seems like quite a bit for most people, especially when they factor in taxes and insurance.”

So be sure to make a budget, decide what monthly payment you’re comfortable with, and stick to it.

Article by: Lisa Johnson Mandell, Realtor.com

Bottom Line: There is so much advice out there when it comes to getting your mortgage. While we hope wouldn't go to the grocery store if you needed medical attention, the same logic goes for your mortgage. Trust it with the Experts. Everyone has different needs, and the best way to find out what is the most beneficial for your situation is to sit down with one of our highly qualified Mortgage Bankers. At Centennial Lending Group, we take pride in catering to every individual providing exceptional customer service, while helping you secure the absolute best mortgage for you. We are here to guide and support you through the whole process.

Call us today to schedule an appointment at 215-469-1000.