Creative Mortgages That Fight Rising Rates

Here’s an interesting stat – as of this writing, the current average 30-year mortgage rate in the US is 6.94%. One year ago, it was only 3.09%. In early November, the Fed meets again to consider another interest rate hike, possibly bumping mortgage rates even higher. If you’re in the market for a home loan, don’t despair. With new creative financing options, the home of your dreams is still within easy reach, especially at Harbor Club.

Our favorite, vetted lenders wisely encourage you to “Marry the house, date the rate.” It’s smart advice. You don’t have to miss out on buying a house you love. Interest rates will go down again. In the meantime, here are some unique mortgage options that help buyers fight rising loan rates.

Gary Welch, Capital City Home Loans

Gary Welch has over 28 years of experience as a mortgage consultant. He specializes in financing options for several Harbor Club homes, especially in The Enclave at Heron Ridge. Quality-built by Southvine Homes, each of The Enclave’s craftsman-style ranch houses features the best in one-level living without sacrificing luxury.

Gary shared that home buyers are gravitating toward their mid-range ARM (adjustable rate mortgage) products. This option allows buyers to lock in an interest rate for 10, 7, or 5 years and then transition to an adjustable rate for the remaining 20 years. The program has no prepayment penalty and has a 30-year amortization. Gary states that the ARM “…is about as versatile as a Swiss army knife” and that it genuinely helps buyers to maximize their purchasing power. In addition, he says, “The mid-range ARM for primary residences has a significantly lower rate which is a great alternative option for the rate-conscious, payment-sensitive buyer.” Gary shared that Capital City’s 10/6 ARM has been very well-received by the homebuyer market, as it backfills a gap needed with the recent rise in interest rates.

Go to Gary’s website to learn more about the 10/6 ARM or any other Capital City Home Loans (including conventional, FHA, VA, jumbo loans, bridge loans, lot loans, and bank statement loans) or contact him via email at gwelch@cchl.com or call him at 770.314.0873.

Hunter Lack, Ameris Bank

Hunter Lack at Ameris Bank has savvy financing options that make sense no matter what kind of home you’re interested in purchasing. With 25 years of experience in the mortgage industry under his belt, Hunter has some compelling loan options. These include:

2-1 Buydown

This program lowers your initial monthly mortgage payment with a temporary buydown. It works by using builder contributions to buy down the interest rate by 2% during the first year of the loan and 1% during the second year of the loan. After the second year, the interest rate reverts to the original locked-in rate. Anyone who qualifies for a standard loan is eligible for this unique program.

3, 5, and 7-year ARMs

An adjustable-rate mortgage features lower initial rates than a traditional fixed-rate mortgage. Those rates adjust at regular intervals over time. Therefore, it’s an excellent option for those that plan to sell their home within the first five to ten years of owning it. The goal is to lock in on the lower rate now and refinance later once interest rates go down. 

Extended Rate Lock

An Extended Rate Lock is an excellent option for those interested in building a new home. It allows buyers to lock in an interest rate for up to 12 months, which is the typical amount of time it takes to build a new house. This loan also comes with a float-down option, which allows you to reduce your locked rate if market rates decline. The cost is 1% of the loan, but that amount is credited back toward closing costs as long as the loan closes within the original lock-term period.

To learn more about any of these or other Ameris Bank financing options, go to Hunter’s website or contact him via email at hunter.lack@amerisbank.com or call him at 478.957.7606.

Richard Staley, Angel Oak Home Loans

Richard Staley of Angel Oak Home Loans has over 25 years of experience in the home lending industry. His impressive mission statement is to “serve others before self,” which is simple yet imperative, considering today’s financing challenges. As such, Richard offers a distinctive buydown option for today’s home buyers. 

2-1 Buydown

The Angel Oak 2-1 is a 30-year fixed-rate loan where seller-paid contributions subsidize the first two years of interest. It easily allows homebuyers to purchase a new home with lower, more affordable mortgage payments for the first two years of ownership. After that, they either ease into the full payment based on the note rate amount or have the option to refinance using the Angel Advantage Program*. Angel Oak’s 2-1 Buydown is available on conventional, VA, FHA, and USDA financing. And, for those interested in building a new home, an extended rate cap is available for new construction with a float-down option within the last 30 days prior to closing. 

*What makes Angel Oak’s 2-1 Buydown program most compelling is its Angel Advantage Program. This program eliminates refinancing fees by 90%. To be eligible, simply refinance with Angel Oak within three years from the note date.

Angel Oak also gives back to community heroes via its HERO program. This program helps teachers, police, first responders, military, medical personnel, firefighters, and others who serve our country by offering up to $500 credit for appraisal or closing costs.

To learn more about any of these or other Angel Oak financing options, go to Richard’s website or contact him via email at Richard.Staley@angeloakhomeloans.com or call 770.351.7553. Richard also has an excellent Mortgage Rate Watch newsletter that provides highly insightful information. Email him to get on the list. 

Considering today’s rising mortgage rates, buying and financing a new home can be challenging – but it doesn’t have to be. Our seasoned Real Estate expert at Harbor Club, Kathy Phillips, makes home-buying easy and stress-free. Learn more about what to expect when buying a Harbor Club home, and feel free to reach out if you have any questions. We’re happy to help and look forward to talking to you soon.