When embarking on the exciting journey of purchasing a new home, financing is one of the most critical aspects to consider. The process of finding and securing the right financial support can significantly impact your home-buying experience. At Murphy Homes, we understand the importance of financing and are proud to offer a Preferred Lenders program designed with your best interests in mind. We believe in empowering you with the freedom to select the lender that aligns perfectly with your needs and preferences. In this blog post, we'll explore the benefits of this choice, delve into the diverse financing options available through our preferred lenders, and shed light on how these opportunities can lead you to your dream home stress-free.
There are a lot of builders in the area who have in-house financing teams; Murphy Homes has instead elected to give you the option of selecting the lender that you choose to do business with. Giving you the option to choose your lender opens the door for you to get the best rate, the best program, and the best experience for your financing journey. We know that selecting the right lender is extremely important. That is why our team takes the time every 6 months to comb through our current preferred lenders, make sure that they are serving us and our customers as best as possible, and take a look at adding new lenders. By keeping this list fresh and updated, we know that they are giving you the best service possible.
Our lenders offer a variety of builder-funded programs to best suit you and your needs. Here are a couple of the most popular options.
Buying Down Your Rate: If you are risk averse, a simple rate buy-down would be best for you! You won't be able to get down as many points as a 2-1 Rate Buy-Down, but you will secure that rate for the life of the loan. For example, if the current interest rates are at 7%, you could buy down your rate to 6-6.25% for the life of the loan. Due to the price of this option, you won't achieve as low of an interest rate as you would with our other options. However, it will be a better option than what current rates offer for used homes.
2-1 Interest Rate Buy Down:Our builder-funded interest rate buy-down allows you to achieve a lower interest rate than what is currently offered in the resale market. For example, if interest rates are at 7% when you close on your home, a 2-1 Buy-Down will lower that to a 5% interest rate for the first year, a 6% interest rate for the second year, and back to a 7% interest rate for the remaining life of your loan. The lower initial interest rate allows you the option to pay more money towards your principal, lowering the life of your loan. Additionally, as your salary grows, the increasing mortgage payments will be easier to manage in the long run. The best part of our builder-funded interest rate buy-down is that if, during the two years that the buy-down is active, you can refinance, and whatever money is not used gets put towards your refinance. We also have a lender who is offering you a free refinance within 5 years if the interest rates drop below the original rate amount. For example, if the interest rates are currently at 7% and within 5 years, they drop below that 7%, they will work with their team to determine when a great time would be to refinance and secure you a lower interest rate for free. While this option has risk associated with it, in the end, if interest rates are above 7% as used in the example above, then you have still secured a lower rate!
Adjustable Rate Mortgages: This program drops your rate by a certain number of points for a certain amount of time, then is adjustable for the remainder of the loan. Therefore, this is the riskiest option. You can have 3, 5, and 10-year Adjustable Rate Mortgages. For example, a 3-1 Adjustable Rate Mortgage would drop your rate from 7% to 5% for 3 years, and then in year four, your rate begins adjusting. From this point on, your rate will not be consistent year after year. If the interest rates are at 7% in year four, your rate would jump up to 6%. It will never jump more than a full point from year to year, however, if you have 3 years of high rates, by year 6, your rate could be as high as 8%. On the other hand, it can get low. If in year 4 rates are below 6%, your rate can drop up to a percentage point below the 7% starting point. Most buyers will go for this option to buy down their rate in the short term and then refinance once interest rates are lower as a whole. The difference between the 2-1 Buy-Down and the ARM program is that the 2-1 Buy-Down, after your 2 years, your rate is back up to the original loan amount for the rest of the life of the loan. For an ARM, it will adjust every year after the three, five-year, or 10 years your rate is lowered.
In the world of resale, you very rarely get these options, or if you do, you have to pay for them out of pocket. By choosing a builder in new home construction, we will pay for those expenses out of our pockets to get you into your dream home now! Have any questions? Feel free to message us through our website or give Morgan a text at 256-573-3281. We'd be more than happy to connect you to our preferred lenders and get you started on the journey to find your new dream home.