Schedule a time with a Loan Officer
Apply Now

Mortgage Lenders in Raleigh NC

CALL US TODAY! (919) 238-4934

Raleigh Mortgages 101: Understanding What They Are and How They Work

by

Buying a home is a big decision, and for most people, it requires taking out a mortgage. However, if you’re not familiar with the world of mortgages, it can be confusing and overwhelming to understand what they are and how they work. In this article, Raleigh mortgage broker Logan Martini provides a comprehensive guide to mortgages, covering everything from the basics of what a mortgage is, to the application process, to tips for getting the best mortgage for your needs. Whether you’re a first-time homebuyer or looking to refinance your current mortgage, this informative article will give you the knowledge and tools to make informed decisions about your mortgage

What is a Mortgage?

A mortgage is a loan that you take out to buy a property. It is usually provided by a bank or a lender, and is secured by the property itself. This means that if you fail to repay the loan, the lender has the right to take possession of the property and sell it to recover their money.

Mortgages come in different types, but they all have the same basic features. They have an interest rate, which is the cost of borrowing the money, and a term, which is the length of time you have to repay the loan. Most mortgages are paid back in monthly installments, which include both the principal amount borrowed and the interest charged.

How Does a Mortgage Work?

To get a mortgage, you’ll need to apply to a lender and provide information about your income, expenses, credit score, and the property you want to buy. The lender will use this information to determine how much they are willing to lend you, and at what interest rate.

Once you have been approved for a mortgage, you will receive a loan agreement that outlines the terms of the loan. This will include the interest rate, the term of the loan, and any other fees or charges you will have to pay. You will also need to provide a down payment, which is a portion of the purchase price of the property that you pay upfront.

After you have signed the loan agreement, you will start making monthly payments to the lender. These payments will include both the principal amount borrowed and the interest charged. Over time, as you make your payments, you will gradually pay off the loan and build equity in the property.

Tip for Getting the Best Mortgage at with the Best Terms

Getting a mortgage can be a complicated process, but there is one thing you can do to make it easier and more affordable.

While it may seem that all lenders offer similar products and rates, there are still important reasons to shop around for a mortgage. By comparing offers from multiple lenders, you can find the best deal for your needs and potentially save thousands of dollars over the life of the loan.

However, it’s not just about finding the lowest rate. It’s also important to work with a lender who takes a fiduciary approach and prioritizes your best interests. This means ensuring that you are deploying the proper mortgage strategy for your unique financial situation and goals.

Furthermore, a frictionless process and strong mortgage management post-closing can make a significant difference in your overall experience as a borrower. By choosing a lender who offers excellent customer service and support, you can enjoy peace of mind knowing that you are in good hands throughout the entire mortgage process.

The Logan Martini Bottom Line

A mortgage is a type of loan that can help you buy a property. It comes with an interest rate and a term, and is secured by the property itself. To get the best mortgage strategy for your needs it’s important to work with a lender who takes a fiduciary approach and prioritizes your best interests – as a mortgage strategist with the Martini Mortgage Group, this is what I do.

Making an informed decision about your next move is crucial, whether you’re a first-time or repeat homebuyer. When it comes to homeownership, having certainty about your financing options is the proper first step, regardless of your level of experience. This way, you can confidently search for your dream home armed with price and cost clarity.

Let’s connect and discuss the proper mortgage strategy for you and your family. Whether you’re ready to take the leap into homeownership or simply want to explore your options, I’m here to help you make the best decision for your unique situation. Contact me today!

logan martini

Logan Martini

Senior Mortgage Strategist | NMLS 1591485

(919) 238-4934

    How the Fed Impacts Raleigh Mortgage Rates

    by 

    2.9 Trillion - is the amount of mortgage bonds the Fed has purchased since March 2020. The Fed plans to reduce its bond holdings in the coming months which could drive up mortgage rates.

    This is a Special Report by Raleigh mortgage lender and Certified Mortgage Advisor Kevin Martini on how the Federal Reserve impacts Raleigh mortgage rates.

    THE FED IMPACTS FIXED-RATE MORTGAGES BY BUYING AND SELLING MORTGAGE BONDS.

    Raleigh interest rates on fixed-rate mortgages change whenever the Fed buys or sells mortgage bonds, and whenever the Fed makes statements about buying and selling mortgage bonds. Since the pandemic hit the economy in March 2020, the Fed has purchased an eye-popping $2.9 TRILLION of mortgage bonds, making it the biggest buyer of bonds in the market. This purchase of mortgage bonds by the Fed is what caused caused Raleigh interest rates to go down to record levels.

    raleigh mortgage rates by kevin martini a raleigh mortgage broker

    However, as you can see from the chart above, mortgage bond prices fell off a cliff in Q1 2022 when the Fed announced it would be scaling back its massive bond-buying program. When mortgage bond prices go down, mortgage rates go up. The average interest rates on fixed-rate mortgages went up by 1% + so far this year according to Freddie Mac’s weekly survey of mortgage rates. 

    I expect more volatility in mortgage rates as the Fed continues to release more details about when and how it plans to roll back its bond-buying programs and reduce its bond holdings.

    Raleigh Mortgage Broker & Certified Mortgage Advisor, Kevin Martini

    THE FED IMPACTS HOME EQUITY LINES OF CREDIT BY CHANGING THE “FED FUNDS RATE” NOT MORTGAGE RATES.

    Raleigh interest rates on home equity lines of credit (a.k.a. HELOCs) change whenever the Fed lowers or increases the “Federal Funds Rate.” That’s because HELOCs are based on the Prime Rate and the Prime Rate is based on the Fed Funds rate. The Fed increased rates in March 2022 for the first time since 2018 and indicated more rate hikes are on the way. This means that rates on home equity lines of credit are likely to increase significantly by the end of 2022.

    WIth the projected increase in HELOCs cost, one should consider refinancing the balance into a new first fixed rate mortgage and lock in their housing costs.

    Raleigh Mortgage Broker & Certified Mortgage Advisor, Kevin Martini
    Credit cards, personal loans, student loans, auto loans and business loans are directly impacted when the Fed raises rates

    MARTINI MORTGAGE GROUP TOP 3 RISKS TO RALEIGH HOME LOAN RATES FOR THE BALANCE OF 2022

    Inflation

    The nemesis to a bond is inflation because inflation erodes the bonds return. Right now, bonds are trading at negative yields relative to inflation. For example, if a bond investor is earning 3% and the inflation rate is 7%, the investor is losing 4%. At some point, it seems likely that bond investors may demand higher yields in order to account for higher inflation. This could drive up Raleigh interest rates even higher.

    The Federal Reserve

    The Fed has injected an eye-popping $4.516 Trillion into the economy since March of 2020 by buying Treasury bonds and mortgage bonds.  2.9 Trillion of the 4.516 Trillion of stimulus was mortgage bonds.  This infusion caused Raleigh mortgage rates to go down to record levels. As the Fed unwinds the mortgage bond purchases, many economists are anticipating that Raleigh home loan rates will rise significantly. 

    Good News vs. Bad News

    As a primer, news impacts Raleigh mortgage rates. On the aggregate, when negative news about the economy hits the wires, investors flock to the bond market for safety, driving down interest rates. When positive news hits the wires, investors shift their bias toward stocks and away from bonds, causing interest rates to go up. Many economists are anticipating that the economy will remain strong in 2022 however with geopolitical events and unwinding of the 2.9 Trillion  of mortgage bonds, it is likely that Raleigh home loan rates may go up as a result.

    Let’s Chat About Raleigh Mortgage Rates and How You May Benefits from Buying a Home Or Refinancing Your Current Home.

    If you have question about this article, if you have questions about buying a home as a first-time homebuyer or as a repeat homebuyer, if you have questions about refinancing your current home loan, simply call the Martini Mortgage Group at PCL Financial by calling (919) 238.4934.