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A complete guide to ease the burden of homebuying

Decreasing mortgage rates continue to be reported nationwide, which enables people of all financial backgrounds to take advantage and become new homeowners. However, it's predicted that rates will increase as the market continues to improve. So, now is time to begin taking advantage of all the Cheltenham market has to offer. Earnest is dedicated to providing the resources that you need in order to make the most out of your home loan and mortgage process.

Your next home awaits you in Cheltenham

Purchasing your new home couldn't be easier

Cheltenham has homes available for people from all walks of life. Homes are extremely affordable and mortgage rates are in great ranges. There are many factors that influence the mortgage rate that you can qualify for, such as credit score, your down payment percentage, and many other factors. Overall though, Cheltenham has great rates available. Bankrate reports that mortgage rates are currently as low as 4 percent and that's with only a 20 percent down payment. Earnest can work with you and help you get the best rate that you qualify for, so you can become a homeowner in Cheltenham today!

Identifying the home loan you've been looking for

Buying a home in Cheltenham shouldn't be a stressful process

Homebuying can be a difficult and stressful path. You must determine not only what you want in a home, but you also must take your budget into consideration. With so many options to consider when buying a home you may need some guidance in order to make the right decision. The team here at Earnest is prepared to step in during your homebuying process to help you navigate the process without unnecessary stress. We guide you through selecting a location, checking your background to ensure you have a strong credit score, and we help you secure a loan with affordable mortgage rates. Refinancing can be just as stressful as applying for your initial loan. However, refinancing helps support other large purchases by freeing up additional money. Earnest will work with you to determine the best refinancing option for you and your family.

Common Questions About Cheltenham Mortgage Rates

All The Answers You Need to Settle Down Sooner

Should I choose a fixed or adjustable rate?

It depends how long you expect to stay in the home. Adjustable rates are good for people who may not be in the home long, whereas fixed rates are ideal for people who are confident of settling in.

Do I need a home appraisal?

Probably—in most cases, the homebuyer must use an appraiser to evaluate the value of the home. Appraisal costs vary depending on the value of the property, as well as the state the house is in. Buyers cannot choose their own appraiser—the bank makes the decision.

What is PMI?

Private mortgage insurance (PMI) is required when a homebuyer makes a down payment of less than 20%, or when a borrower refinances with less than 20% equity in the home. PMI fees vary according to your down payment and credit score, and adds a premium to your monthly mortgage payment. Please note, PMI is tax-deductible in 2015 and 2016 for certain income brackets.

What does Loan-to-Value mean?

Loan-to-Value (LTV) is the percentage of your home’s value that your loan represents. When refinancing, the calculation is simply the loan amount divided by the appraised value. When buying a home, the LTV is found by dividing by either the purchase price or appraised amount, whichever is lower. When the LTV is less than 80%, the lender generally requires PMI.

For example:

Purchase price: $100,000
Down payment: $15,000
Loan amount: $85,000
Appraised value: $110,000
LTV: $85,000/$100,000 = 85%

What are closing costs?

Closing costs are standard fees associated with a real estate transaction. You will typically pay about 2-5% of the purchase price in closing costs—the exact amount depends on where you are buying (or refinancing), as well as number of extra fees involved in your particular transaction. Earnest charges no lender fees, so the borrower is only responsible for 3rd-party fees.

What should I consider before refinancing my mortgage?

Refinancing your home loan is an attractive option when rates are low. A simple rate and term refinance can help you lower your monthly payment and potentially eliminate your PMI premium, as long as you have built up enough equity in the home. You might also use a cash-out refinance to access some of the equity you’ve built up in the home (which may result in a higher monthly payment on your new loan).

However, keep in mind that refinancing a mortgage does involve several fees (closing costs). Before refinancing, you should calculate the ‘break-even’ point at which your refinanced loan makes up for the closing costs. If you plan to leave your home before this time, it’s better to stay with your current mortgage.

Knowledge Is (Buying) Power

Further Resources from the Earnest Blog

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The intelligent home loan

When it comes to finding the right home loan, Earnest works hard to ensure that the process pain-free. We use an industry-leading and intuitive online-only application (meaning most times no scanner or fax machine required), a 5-star client service team, and a unique rolling pre-approval that stays current while you track down that perfect home. At Earnest, the home loan process is like no other.