Author: Priority Lending

Do VA Loans Require Mortgage Insurance?

Priority Lending LLC, the most trustworthy mortgage lenders in Tucson, AZ, offers reliable loans for anyone looking to buy a house. If you’re a former or active military member, you can also apply for a VA loan.

VA loans are similar to traditional ones but have a few critical differences that are vital to know before applying. Many first-time applicants have questions like, “Do VA loans require mortgage insurance?” and, “Are there credit score requirements for VA loans?” We’ll answer all of those and more in the sections below. 

VA Loan Requirements

The VA has stricter eligibility requirements than conventional loans, but mortgage insurance isn’t one of them. The VA bans its loan lenders from collecting private mortgage insurance from their borrowers. Even though you can skip enrolling with a private mortgage company, you will have to meet several unique criteria before receiving a VA loan.

For starters, the VA requires their loan recipients to either be active military members or military veterans who fulfilled their duties and received an honorable discharge. On top of that, you need at least 90 days of uninterrupted military service during wartime or 181 consecutive service days during peacetime in your active military days.

You are also eligible for a VA loan if you put at least six years of service into the National Guard. You might also qualify if you had a military spouse who passed away during active duty. 

How the VA Replaces Mortgage Payments

So, do VA loans require mortgage insurance? Not technically, but just because VA loan programs don’t accept official mortgage payments doesn’t mean their loans aren’t insured.

The VA covers insurance costs, not through mortgage payments, but with a funding fee. Most providers issue funding fees at closing, and the average rate is 2% to 3% of your original loan balance. However, funding fees aren’t concrete, and yours might be higher or lower depending on your credit score.

The VA does waive funding fees for some qualifying borrowers. For example, a borrower whose military spouse died in active service or those entitled to disability compensation can receive loans without funding fees. People with high credit scores over 700 also receive occasional $0 funding fee loans, but those instances are uncommon.

Non-Service Requirements for VA Loans

Credit Score

While the VA doesn’t require an official credit score minimum, most lenders won’t approve anyone with a FICO credit score below 620. In addition, lenders will likely reject your application if you have any outstanding debts.

Income 

Beyond good credit, lenders want you to prove that you have the necessary revenue to receive a loan. Many will ask for years worth of tax documents and pay stubs when you apply, and some require that you make a down payment worth 20% of the loan.

Apply For a Mortgage Loan Today

Hopefully, we answered the question, “Do VA loans require mortgage insurance?” and prepared you to take the next step in your home-buying journey. 

If you’re ready to apply for a loan or learn about the kinds of home loans available, call Priority Lending LLC today at (520) 231-1413.

2022’s Mortgage Rate Trends to Look Out For

The outbreak of Covid-19 in 2020 led to all-time lows in mortgage rates. Since then, the steady rise of inflation, fluctuating stock market, war in Ukraine, and other factors have pushed rates in the opposite direction. According to Bankrate Data, the average 30-year mortgage rate has gone from 3.14 percent to 5.22 percent in the past year.

While that increase may not seem significant, every fraction of a percentage point can represent thousands of dollars during the life of the loan. Those added costs may be daunting to potential home buyers.

Priority Lending LLC wants to assist you in confidently locking in a mortgage rate. As one of Tucson’s leading mortgage lending services, we know the ins and outs of mortgage rate fluctuation. Read on to better understand the mortgage rate trends to look out for in 2022. 

Mortgage Rates Will Continue to Rise

Although mortgage rates are higher than in the past four decades, waiting for a decline could prove unwise. Experts do not expect the more than 2 percent rise in rates over the past year to let up anytime soon and instead project a continued incline in mortgage rates. This continued rise means that the best way to lock in a lower mortgage rate is to act as soon as possible.

High Mortgage Rates May Lower Housing Demand

The current historic highs for mortgage rates are causing a bit of a collective doubt among potential home buyers. As the rates continue to rise, there may be a steady decrease in the amount of demand for housing. 

If housing demand does decline, then there could be a drop, or at least a flattening out, of mortgage rates. Experts predict that this will not occur until midway through the year but  likely closer to the final months of 2022. 

How to Weigh Your Mortgage Options

With the uncertainty around mortgage rate trends and the housing market, figuring out the best time to purchase a home is difficult. Finding the right mortgage lender, earning discount points, and choosing the right loan type make the decision much more complex. 

For those with good credit scores and plans to remain in a home for the duration of a fixed-rate period, the continued rise of mortgage rates suggests buying a home as soon as possible. If you have the means to cover the closing costs without worrying about how you’ll pay off the loan, right now may be as good a time as ever. 

On the other hand, those in a less secure financial situation may want to look to alternative options. Spending some time building credit or opting for an adjustable-rate mortgage may be wiser decisions than rushing to purchase a home. 

Professional Mortgage Lending Services in Tucson

Contact your professional mortgage lending service company in Tucson for more advice on home buying and a guide to mortgage rates for the rest of the year. At Priority Lending LLC, we want to ensure you make the best decision for your future. Call Priority Lending LLC at (520) 231-1413 to learn more about mortgage rate trends today!

What Happens if I Get Turned Down for a Mortgage: Steps to Take

A mortgage lender turning down your application for a home loan is disappointing. However, it’s not the end of your homeownership dreams.

To answer the question, “what happens if I get turned down for a mortgage?” we’ll cover the steps to take below.

Find Out the Reason for the Rejection

The lender will communicate the reasons for rejecting your mortgage loan application. Some common reasons include:

  • Recent changes in your employment situation. Changing jobs or leaving paid employment puts a question mark on your financial stability.
  • Credit-related problems. A low credit score marks you as a high-risk customer.
  • Excess debt. Your debt-to-income ratio will work against you if you  have too much debt.
  • Suspicious income. A sudden influx of cash to your account just before your application may leave the lender worried about the deposit source.

Once you find out the reason for the rejection, you can find ways to resolve it.

Improve Your Income

Where possible, you should consider additional ways to earn more money. Increasing your monthly income will assure lenders that you can keep up with your financial obligations each month.

Increase the Down Payment

When looking for answers to “what happens if I get turned down for a mortgage,” many people don’t consider the down payment.

Putting up a higher down payment on the house is a good way to lower the lender’s risk. If you can’t afford to do so now, give yourself a timeline and save up towards it.

Find a Co-Signer

A co-signer with a strong financial record will repay the mortgage debt if you can’t. Your loan applications may receive more favorable attention if you find a good candidate willing to take on the risk.

Shop Around

All mortgage lenders have their set template for reviewing loan applications. If one lender turns you down, the other might consider you a good candidate for a loan.

You can also look beyond banks and consider a lending company like Priority Lending LLC. We offer Tucson’s best mortgage rates.

Remember  to read the fine print when choosing other lenders after a rejection. The lenders will see the reasons for your earlier rejection and arrive at a similar conclusion. However, if they are going to process your loan, there may be a catch like higher interest rates

Wait a Few Years and Try Again

During the wait time, be sure to intentionally work on some of the reasons for your rejection.

Do you have too much debt? Work towards paying it down or seek debt help where possible.

Is your job situation fluid? Try to stay longer in a job for a few years.

While you wait, you should work toward improving your credit score. You can boost your score by:

  • Checking the reports for errors.
  • Paying down all your debt.
  • Avoid missing payment windows.
  • Use credit-building tools like a secured card.

Get Help with Your Mortgage

Now you know the answer to “what happens if I get turned down for a mortgage?”

Are you ready to apply? Learn whether to get a home loan from a bank or lender.

Call Priority Lending LLC today at (520) 231-1413 to discuss your mortgage needs in Tucson, AZ.

How To Get A Bigger Mortgage: Top Tips

At Priority Lending LLC, we help you get the money you need to find the house you want. Contact us today at 520-231-1413 to begin the process.

If you are in the market for a house, the size of the mortgage that you get impacts the kind of home that you can afford. To find the right home for your needs, we can help you get the best mortgage rates in Tucson from Priority Lending. Our skilled, experienced, and personable loan officers will be with you at every step of your journey and show you how to get a bigger mortgage.

Don’t Settle for a Single Quote

A good way to access the best mortgage quote possible is to get several of them simultaneously. Much like shopping around for a new car, going to more than one mortgage provider can provide you with a range of offers. You can enlist the help of your loan officer to pick the largest mortgage quote and the one that yields the best overall terms.

If you get several quotes, you can also use them as bargaining chips. In some cases, providers who offered you smaller amounts may change their tunes when they realize that you’ve been pre-approved for larger amounts. This approach may also result in a lower final interest rate.

Scale Up the Size of Your Down Payment

Borrowers wondering how to get a bigger mortgage can also consider increasing the size of their down payment. While it is possible to find lenders who will allow you to put down as little as 3.5%, if you’re able to put at least 20% down, you can often get a better rate. At the end of the day, this can result in a considerably larger loan.

Boost Your Credit Score

Your debt to income ratio (DTI) has a big effect on the size of the loan you can get. By improving your credit report, you can build your DTI, get larger loans, and receive better terms. This works especially well if you have a FICO score of 669 or lower.

You should always get copies of your credit reports before getting a mortgage. In some cases, reporting agencies make thousands of dollars’ worth of errors on your report, and you can raise your score by disputing these mistakes. Other ways to boost your credit score include:

  • Pay past-due credit card bills
  • Stop using the cards that you have
  • Avoid applying for new credit cards

Enlist the Help of a Cosigner

If you’re unable to boost your credit score significantly, getting someone with a high score to cosign is an effective strategy. Your lender will take the total income of you and your cosigner into account when underwriting your application. If your cosigner has good credit, this can result in a much larger mortgage offer.Here at Priority Lending LLC, we have a proven record of showing our clients how to get a bigger mortgage and how to succeed with residential and commercial real estate lending. Call us now at 520-231-1413 for immediate assistance.

mortgage questions to ask

5 Important Mortgage Questions to Ask a Lender

For most people, their home is the largest purchase they’ll ever make, and their mortgage is the largest loan they’ll ever take out. With that in mind, it pays to learn as much as possible about the lending process.

At Priority Lending LLC, we’re here to help aspiring homeowners on their way to finding the home of their dreams. We’re Tucson’s trusted mortgage lenders, and we understand the value of making informed decisions while securing a mortgage loan.

In this blog, we talk about five essential mortgage questions to ask when beginning your loan application. To get personalized answers to your mortgage loan questions, reach out to our staff today.

#1: What Down Payment Will I Need?

One of the most critical parts of the home buying process is the down payment. Ideally, lenders look for a down payment of 20% from most buyers. However, qualified buyers may be able to negotiate lower down payments, depending on their credit report, income, and other factors.

#2: What Will My Interest Rate Be?

Interest rates impact the overall sum of money you will pay for any property. For this reason, you must understand what your interest rate is and how it will affect the final price you pay for your home.

If you’re hoping for an adjustable-rate mortgage, make sure to ask how often the interest rate will be adjusted, what the maximum adjustment amount is, and other details before you agree to anything.

#3: Is Down Payment Assistance Available?

One of the most overlooked mortgage questions to ask during the lending process is about assistance. Buying a home is a significant investment that requires considerable resources, and help exists for those in need. Be sure to ask your mortgage lender about any down payment assistance programs in your area.

#4: What Will My Monthly Payment Be?

To help you prepare for life as a homeowner, make sure to ask your mortgage lender what your final monthly payment will be, the number of payments you will make, and other relevant questions.

Some lenders have specific policies regarding late payments, so ask about those factors before signing. Be sure to ask about early payment guidelines, too, as some lenders have restrictions on early loan repayment.

#5: What Other Closings Costs Will I Pay?

Finally, you should ask your mortgage lender about any additional costs you will pay at closing. Since down payments for buying a house can be hefty, it’s best to know how additional charges will impact your initial investment before proceeding with a loan application.

Some common additional closings costs include:

  • Property taxes
  • Loan origination fees
  • Discount points
  • Appraisal fees
  • Title searches
  • Surveys
  • Deed recording fees
  • And more

Get Expert Mortgage Guidance Today

Not all loan applications are created equal. Some home loan programs have regulations that dictate minimum and maximum interest rates, income-based eligibility, and more. Those seeking VA loans or other specialized home loans should coordinate closely with that organization during the application process. To learn what mortgage is best for you and other mortgage questions to ask during the lending process, reach out to our team at Priority Lending LLC today.

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