• Pay less interest over the life of your loan
• Gain equity faster

What Are the Cons of a 15-Year Mortgage?

• Significantly larger monthly payments
• Can negatively affect your financial future

With interest rates dropping, we have been fielding more questions about refinancing. What rate could I qualify for? Should I refinance? Would it make sense to refinance to a 15-year mortgage? While all of these are important questions to ask, we thought we’d dedicate this blog to discussing the pros and cons of refinancing from a 30-year loan to a 15-year one. 

While each person’s financial situation is unique, we’ve found that refinancing to a 15-year loan often makes sense for people with stable finances who are planning to live in their home beyond the life of their loan. Conversely, 15-year loans often aren’t an ideal choice for those who don’t have a lot of disposable income.

You Might Also Like: Refinancing 101

Pros

One of the biggest benefits of a 15-year mortgage is that you will pay much less in interest over the life of your loan. This is mostly due to the fact that you’ll be paying interest for half as many years. For example, for a $250,000 loan at 3.5%, you could expect to pay approximately the following amounts in interest over the life of the loan.

• 15-Year: $72,000
• 30-Year: $154,000

The other big benefit is that with a 15-year loan, you gain equity in your home much quicker. In fact, you get to own your home outright much quicker. And trust us, getting to a time when you won’t have mortgage payments as soon as possible is a big selling point.

Cons

After reading the pros of 15-year loans, it’s hard to imagine why anyone would choose anything else. But, the biggest hurdle to getting a shorter-term loan is the monthly payments. Remember that example we used of a $250,000 loan at 3.5%? Below is approximately what you’d be paying for principal and interest each month (taxes and insurance would still need to be added onto the amounts listed).

• 15-Year: $1,800
• 30-Year: $1,100

When we advise our clients on their loan options, we like to focus on your financial future as a whole. While you may be able to afford the higher monthly payment, it’s important to ask yourself a few important questions before deciding. Will this stress my finances? Will this prevent me from making investments for the future? Would I be able to afford this payment if my financial situation were to change? Will this hinder my ability to contribute to investment or retirement accounts?

You Might Also Like: Mortgage Pre-Approval: Monthly Payments

This blog has been updated from its original publication date of September 10, 2020.

At Mortgage Specialists, we believe your lender should know more than the minimum. That’s why we’ve made it a core part of who we are.

Credentials That Go Far Beyond the Basics

Brent Rasmussen, the owner of Mortgage Specialists, and Ben Stoysich, a Loan Officer at Mortgage Specialists, hold a collection of certifications that puts them in a distinct category within the mortgage industry. Their credentials include:

• AMP – Accredited Mortgage Professional
• CMC – Certified Mortgage Consultant
• CRMS – Certified Residential Mortgage Specialist
• CDLP – Certified Divorce Lending Professional
• CVLS – Certified Veterans Lending Specialist (Both Ben and Brent!)
• CMA – Certified Mortgage Advisor
• CCS – Certified Credit Specialist (Both Ben and Brent!)

Each one of these isn’t just a set of initials. Each certification represents hundreds of hours of coursework, testing, and real-world application.

Why It Matters

Think about what these certifications represent in practice. The CDLP designation means Brent has specialized training in one of the most financially complicated life transitions a person can go through — divorce. The CVLS means Ben and Brent have deep knowledge of VA loan benefits and how to maximize them for veterans and active-duty service members. The CCS means they understand credit at a level that allows them to help clients who might otherwise be told “not yet” find a real path forward.

This isn’t about credentials for the sake of credentials. It’s about being genuinely equipped to handle whatever your situation brings to the table.

What Sets a Local Specialist Apart

Big banks have loan officers. Mortgage Specialists has experts. When you work with us, you’re not getting transferred to a call center or handed off to someone who’s never met you. You’re working directly with someone who has invested heavily in their own education because they believe their clients deserve that level of knowledge and care.

Our commitment to education isn’t a one-time achievement, it’s an ongoing standard. The mortgage industry changes constantly, and staying ahead of those changes is part of how we protect our clients.

Ready to Work with Someone Who Knows the Process Inside and Out?

Whether you’re a first-time homebuyer, a veteran, looking to refinance, navigating a complex life situation, or more, you deserve a lender who has done the work to understand your needs before you even walk through the door! That’s Mortgage Specialists.

Realizing you want to buy a home

The first step in the home buying process is pretty obvious – you have to know that you want to buy a house to begin.

You Might Also Like: Are You Ready To Buy Your First Home?

Getting pre-approved

Now that you’ve decided homeownership is in your immediate future, it’s time to reach out to a lender to get pre-approved. For us, that means you’ll fill out the application and provide us with the necessary documentation. Then, we’ll reach out to you and schedule a time to meet either over the phone or in person. 

We know this part doesn’t sound very fun, but getting pre-approved by a reliable lender is an important step. It gives you an idea of exactly how much house you can afford.

You Might Also Like: How Long Is A Mortgage Pre-Approval Good For?

House hunting

Here’s the fun part! You and your realtor will tour various homes to discover your likes and dislikes. Some of our clients find their dream home in the first few tries, while others visit upwards of 20 homes before finding the one.

Making an offer

Once you’ve found your dream home, it’s time to put an offer in on the home. Your realtor will help you decide the finer details like what price you’ll offer to pay and whether or not you’ll ask for closing costs to be paid by the seller.

You Might Also Like: Five Most Common Questions First-Time Homebuyers Have

Completing the mortgage application

Congrats, your offer was accepted! Now it’s time to finalize that mortgage application you filled out in the pre-approval process. You may need to provide updated documentation, depending on how much time has passed. After that, we’ll review all of your information to ensure it’s all correct. 

Then, we’ll provide you with a loan estimate, a document that lays out the expected costs of your loan.

Waiting for your loan to be processed and approved by the underwriter

Now the waiting game begins. The underwriter is a third-party that reviews all of the information and determines whether you’re eligible for the loan. We tell our clients to relax in this stage of the home buying process because there isn’t much they can do. It isn’t uncommon for the underwriter to request additional documentation, but we work to be thorough from the beginning to keep the requests to a minimum. 

You Might Also Like: Why Does Getting A Mortgage Take So Long?

Lining up homeowners insurance

While your loan is in underwriting, you can begin shopping for homeowners insurance. You’ll need a policy in place for the day of closing.

Reviewing the closing disclosure

You will receive the closing disclosure at least 3 days before closing. Prior to the meeting, it’s important to review it to ensure everything is correct.

You Might Also Like: Six Common Issues That Can Delay a Closing

Taking a final walk through

Every buyer has the option to complete a final walk through the day before closing and we recommend you take advantage of it. It’s a good time to make sure the home is in the same condition as the last time you saw it.

Closing on your home

Closing day is the big day. You can expect to sign your name upwards of 50 times and then you’ll receive the keys to your new home. That’s when you become the proud owner of your dream home!

We hope this overview has given you an idea of what the home buying process is like. If you have additional questions that weren’t covered or would like to discuss your individual situation, feel free to give us a call at 402-991-5153. We’d love to answer your questions!

Ready to start the mortgage process? Our online application takes anywhere from 5-20 minutes to complete and we can have you pre-approved for a loan in just a few hours.

Mortgage Specialists strives to make the mortgage process simple and stress-free for our neighbors. Navigating property transfers involves complex legal and financial details, but you do not have to do it alone! Here are five effective ways to transfer your Nebraska home to your child:

1. Gifting the Property

You can legally give your property to your child as a direct gift. This is a very generous route, but it comes with strict IRS rules. You can gift up to a specific dollar amount each year without facing tax penalties. If your home’s value exceeds that annual limit, you must file a gift tax return.

Keep in mind that gifting a home means your child inherits your original tax basis. If they decide to sell the property later, they could face significant capital gains taxes. Consulting with a local tax professional is crucial before signing over the deed.

2. Selling the Home

You might choose to simply sell your home to your child. Selling allows you to access the equity you have built over the years. If you sell the home for less than its fair market value, the IRS considers the discount a gift, which may trigger gift tax rules.

If your child needs financing to buy the home, that is exactly where we come in! We’re a small team that’s committed to treating our clients to outstanding customer service and competitive interest rates. We will help them secure the right loan to keep the home in the family.

3. Creating a Trust

Placing your property into a trust is a reliable way to manage your family’s assets. You can use a revocable or irrevocable living trust to dictate exactly how and when your child receives the property.

A major benefit of a trust is that it helps your family avoid the lengthy and public probate process. We highly recommend working with an estate planning attorney to structure the trust correctly for your specific needs.

4. Using a Transfer-on-Death Deed

Nebraska law allows homeowners to use a Transfer-on-Death (TOD) deed. This simple, straightforward document automatically transfers the property to your child when you pass away.

The biggest advantage is that you retain full control of your home during your lifetime. You can still sell the property or refinance your current home if your financial needs change. A TOD deed keeps things incredibly simple while keeping the property out of probate.

5. Leaving Property Through Inheritance

Leaving the home to your child in your will is the most traditional method. When your child inherits the property after you pass away, they receive a massive tax benefit known as a “step-up in basis.”

This means the home’s tax value adjusts to its current market value at the time of your passing. If they sell the home shortly after, they will pay little to no capital gains tax. An attorney can help you draft a clear will to ensure your wishes are honored.

Moving Forward with Confidence

No matter which path you choose, transferring your home to your child is a significant financial decision that deserves thoughtful guidance. Each option comes with its own benefits, tax implications, and long-term considerations, so having the right team in your corner makes all the difference! At Mortgage Specialists, we are here to help you and your family navigate the process with clarity and confidence, ensuring your legacy is passed on in the way that best supports your future goals.

But before we delve into the issues that can delay your closing, we’d like to provide a little tidbit of advice. The number one thing that can make the mortgage process seamless and stress-free is communicating with your lender. If you’re ever unsure about a step in the process, it’s best to reach out to your lender and discuss it. Doing so will minimize both delays and confusion. 

Now, onto the issues to avoid if you don’t want to delay your closing.

Common Issues That Can Delay a Closing

Errors in documents

The mortgage process requires many documents to be filled out and they must be pristine when turned into the appropriate party. Small errors such as a misspelled last name or use of a nickname instead of legal name can delay the process.

Money issues

Money issues can refer to any number of issues: problems obtaining the mortgage, bank problems on the day of closing, unexpected closing costs, etc. One thing many buyers don’t realize is that a mortgage isn’t locked down until the papers are signed. Even having a pre-approval from the lender doesn’t guarantee you will receive your money.

No, lenders are not trying to leave you high and dry, there are just many things that can change your financial eligibility. For example, sometimes a person’s credit score may lower from the time they are pre-approved to the time the loan is being underwritten. This shift may cause the lender to have to change the terms of the loan, or deny it altogether. A good loan officer will instruct you to refrain from making major credit purchases during the application process.

Missing loan documents

As mentioned above, there are many documents in the mortgage process. It isn’t uncommon for the papers to be misplaced or never turned in. These missing documents will delay the process until the buyer can provide another copy.

Similarly, there are regulations in place that require the buyer to have certain documentation in hand three days prior to the closing. If the buyer does not receive the documents at least three days before, the closing must be delayed.

Title liens

It is extremely important to do a title search prior to closing. Many sellers are unaware of previous liens on their property, making it impossible for them to disclose that information to potential buyers. If there is an active lien, it could mean delaying the closing for weeks or even months while the issue is sorted out.

Last-minute requests

Last-minute requests often come from either the lender or the buyer. In the lender’s case, they may need additional paperwork to finish processing the mortgage. If the lender plans ahead accordingly, like we do here at Mortgage Specialists, there should never be a need for last-minute requests. The buyer may have final requests for the seller to complete before the purchase of the home is final.

Issues during final walkthrough

The final walkthrough is one of the last steps in the mortgage process. It is the last time buyers see the home they are about to purchase, meaning they are on the lookout for anything unfavorable. Sometimes, small damage is found or the utilities are not functioning correctly, meaning the closing is delayed until the buyer and seller can come to an agreement of how the issue will be handled.

As you can see, there are many issues that can delay a closing. Just being aware of the issues and working with a qualified mortgage professional can help to avoid delays in the closing process.

Which Loan Is Right For Me?

Fixed-Rate Loans

Fixed-rate loans are exactly what they sound like – the rate is fixed, meaning it will not change for the entire life of your loan. The rate is agreed upon when the loan is originated, and cannot be changed. These types of loans are very common and are especially advantageous if you plan to stay in the home for many years to come. The biggest advantage to these loans is that you know the interest rate you will be paying for the entire duration of the loan.

Adjustable-Rate Loans

Adjustable-rate loans are also exactly as they sound – the rate of the loan will not remain the same. Most adjustable-rate loans start with a lower rate than fixed-rate loans, and the rate may remain unchanged for a number of months or years. After that period, the interest rate will most likely increase.

Adjustable-rate loans are most attractive to first-time home buyers. A common mistake buyers make when choosing an adjustable-rate loan is assuming they will be able to refinance before the rate changes. It is never safe to assume your financial situation will stay the same, or even improve. Those changes in your financial situation could lead to different loan options, whether good or bad, being available to you in the future.

As you can see, there are obvious advantages and disadvantages to both types of loans. Different mortgages are made to benefit different people, which is why you should never rely on a friend’s recommendation, as their situation may be vastly different from yours. 

The team here at Mortgage Specialists would love to help you navigate the home-buying process. We can have you pre-approved for a loan in just a few hours!

At Mortgage Specialists, the team goes above and beyond to ensure that clients don’t have to bear the burden of figuring out refinancing timing on their own. Instead, they take a proactive approach, monitoring market trends, analyzing client-specific situations, and reaching out when they identify opportunities to save money and optimize your mortgage.

Here’s how Mortgage Specialists stands out by staying one step ahead for their clients.

Staying Ahead of Refinancing Market Trends

One of the hallmarks of Mortgage Specialists is their diligence when it comes to keeping an eye on the market. Interest rates and lending conditions can change quickly, which is why their team actively tracks trends day in and day out.

This level of market awareness isn’t just a benefit for the team itself; it directly benefits their clients. When interest rates drop or lending terms improve, Mortgage Specialists doesn’t wait for clients to come to them. They proactively reach out to share insights about how refinancing could benefit their specific situation.

This foresight saves clients time and ensures they never miss an opportunity to restructure their mortgage into a more favorable deal.

Personalized Service Tailored to You

What makes Mortgage Specialists’ approach even more impactful is that it’s never a one-size-fits-all strategy. Every client’s needs, goals, and financial circumstances are different, and the team knows how to customize their advice accordingly.

They take the time to get to know each client, understanding their financial plans, future goals, and even potential challenges. Whether you want to lower your monthly payments, access equity for home improvements, or shorten your loan term, their experts can help. They tailor recommendations to match your goals.

Mortgage Specialists get to know their clients well. This helps them spot the right time to refinance. It’s not only about market changes. It’s also about what’s happening in your life.

Taking the Refinancing Burden Off Your Shoulders

Many homeowners don’t realize the potential benefits of refinancing simply because tracking interest rates and lender options feels like too much work. Mortgage Specialists changes the game by doing all the heavy lifting for you.

Here’s what their proactive refinancing approach looks like in action:

• Constant Monitoring: The team continually reviews your mortgage situation alongside current market conditions.
• Timely Communication: When an opportunity arises, they contact you directly, explain the benefits, and outline the next steps.
• Comprehensive Support: From evaluating if refinancing aligns with your goals to managing the paperwork, Mortgage Specialists handles the entire process with care and precision.

This approach not only saves time but also eases stress. With their team on your side, you can feel confident knowing your mortgage is in expert hands.

Always Acting in the Best Interest of Clients

When you work with Mortgage Specialists, it’s clear that their priority is your long-term financial success. This commitment goes beyond reactive solutions. Instead of waiting for clients to initiate discussions about refinancing, the team remains proactive, looking out for ways to benefit your finances without you even needing to ask.

This proactive mindset reflects their genuine care for clients. It reinforces the trust that Mortgage Specialists has cultivated over years of helping individuals and families achieve their homeownership goals.

When Refinancing Makes the Most Sense

The decision to refinance isn’t just about grabbing the lowest interest rate; it’s about timing it with your unique goals and situation. Mortgage Specialists pays close attention to key triggers, such as:

• Notable interest rate drops compared to your current rate
• A change in your financial situation, such as increased income or new expenses
• A rise in your home’s equity, which can be tapped into strategically
• Opportunities to switch from an adjustable-rate to a fixed-rate loan for more stability

By tracking these factors, the team ensures no opportunity is missed to help you save money, reduce debt, or achieve greater financial flexibility.

Why Proactive Service Makes All the Difference

Refinancing a mortgage can sometimes be time-sensitive. Acting too late could mean missing rate windows or losing out on potential savings. That’s why the foresight provided by Mortgage Specialists is so valuable. Clients can rest easy knowing there’s always an expert looking out for their best interests, ready to act at the perfect moment.

By combining market expertise, personalized service, and proactive communication, Mortgage Specialists is redefining the refinancing experience.

Get the Refinancing Advantage with Mortgage Specialists

More than just mortgage experts, the team at Mortgage Specialists is a trusted ally in helping you make the smartest financial decisions for your future. Their proactive approach to refinancing means they’re always working to ensure you’re positioned to take advantage of market opportunities.

If you’ve been considering refinancing—or simply want to know you’ll be informed when the time is right—Mortgage Specialists is the partner you can rely on. Connect with their team today and experience firsthand how a proactive approach can make all the difference.

By working with Mortgage Specialists, you don’t just get a mortgage experience. You get a strategic partner for long-term financial well-being.

First-Time Homebuyer: What Does It Mean?

The term “first-time homebuyer” can be a bit misleading. It doesn’t always mean you’ve never owned a home before. In many cases, the definition applies to anyone who has not owned a primary residence in the past three years. This is a key detail for recently divorced individuals.

If you owned a home with your ex-spouse but have since moved out and have not been on the title for the last three years, you may regain your first-time homebuyer status. This rule is designed to help people re-enter the housing market after significant life events. Our team can help you review your specific situation to see if you meet this important three-year requirement.

Special Considerations for Divorced Individuals

Additionally, there’s another important exception that could help you qualify even sooner! Many programs, including those from the Nebraska Investment Finance Authority (NIFA), recognize a “displaced homemaker.” A displaced homemaker is someone who previously only owned a home with a spouse. If you fall into this category, you may be able to qualify for first-time homebuyer benefits without waiting the full three years. This provision is a huge advantage for those looking to establish their own home quickly.

How NIFA Can Help Nebraskans

For Nebraskans, NIFA offers fantastic programs specifically designed to make homeownership more accessible. As a qualifying first-time homebuyer, you could gain access to loans with competitive interest rates and down payment assistance. These benefits can significantly reduce the upfront financial burden of purchasing a home; therefore, this is especially helpful when you are managing your finances independently. We have the expertise to guide you through the NIFA application process, ensuring you can leverage every available resource.

Steps to Take on Your New Path

• Assess Your Finances: Start by getting a clear picture of your new financial situation. Review your income, savings, and any alimony or child support you receive. Understanding your budget is the first step toward confident homeownership!
• Check Your Credit: Your credit score is a major factor in qualifying for a mortgage. Obtain a copy of your credit report to check for any errors or joint accounts that need to be addressed post-divorce.
• Explore Your Loan Options: From Conventional loans to NIFA programs, there are many paths to financing your home! We’ll walk you through each option, making the process simple and straightforward.

Starting over can feel challenging, but you don’t have to do it alone! Mortgage Specialists is here to provide the support and expertise you need to confidently step into your new beginning as a homeowner.

Advantages of Buying a Home in Winter

Less Competition: One of the biggest perks of winter home buying is the reduced competition. Fewer buyers are house hunting during this season. This can increase your chances of getting the home you love without entering into a bidding war. This means you’ll likely have more time to make thoughtful decisions, negotiate, and secure a deal on your terms.

Motivated Sellers: Sellers with homes on the market in winter often have compelling reasons for listing during this season. Whether it’s a job relocation or year-end financial goals, sellers may be more willing to negotiate on price. They may also include extra incentives like closing cost assistance. This can make winter one of the best times to snag seasonal home deals.

Faster Processes: With a smaller pool of buyers, realtors, inspectors, and mortgage lenders generally have more availability in the winter, which can speed up the home buying process. Tasks like appraisals, inspections, and closing meetings are more likely to be completed without delay.

Personalized Mortgage Services to Simplify the Process

No matter the season, navigating the mortgage process can feel daunting, but that’s where Mortgage Specialists steps in to make all the difference. For almost 20 years, our experienced team has been guiding Omaha buyers through FHA, VA, and conventional loans with ease and expertise.

By choosing Mortgage Specialists, you’ll receive personalized mortgage service tailored to meet your specific needs. They’ll work with you during winter, when time and expertise are crucial. They’ll help you explore the best loan options, clarify any uncertainties, and ensure you’re equipped to make confident decisions.

Start Your Winter Home Buying Journey in Omaha

Don’t overlook the benefits of purchasing a home this season. Winter home buying in Omaha offers less competition, motivated sellers, and a smoother process—all while giving you access to the city’s vibrant communities and growing economic opportunities.

With Mortgage Specialists by your side, you’ll have a dedicated partner to guide you through every step, ensuring your winter home buying experience is seamless and successful.

Contact Mortgage Specialists today to explore personalized mortgage solutions and take advantage of the seasonal home deals waiting for you in Omaha, Nebraska. The home of your dreams might just be closer than you think—so why wait?

What Is an Interest Rate Lock?

An interest rate lock (or rate lock) is a guarantee from a lender to honor a specific interest rate for a set period, typically between 30 and 60 days. This means that if interest rates rise while your loan is being processed, your rate won’t change. A rate lock protects you from market fluctuations and provides certainty about your future mortgage payment.

Securing your rate is a crucial step toward finalizing your home loan. The Mortgage Specialists team is here to guide you through the process and help you choose what best fits your financial goals.

Factors That Influence Your Decision

Deciding when to lock your rate involves balancing several factors. There isn’t a single right answer for everyone, but understanding these key elements will help you determine the best time:

1. Market Conditions

Interest rates can change daily, so watching market trends can help you make an informed decision. If rates are on an upward trend, it may be wise to lock in your rate sooner rather than later. Alternatively, if rates appear to be falling, you might consider waiting. However, trying to “time the market” perfectly is risky, as trends can reverse unexpectedly. We can provide you with up-to-date market insights to help guide your timing.

2. Your Homebuying Stage

You can typically lock in your interest rate once you have a signed purchase agreement for a specific property. Some lenders may offer the option to lock a rate earlier, but it’s most common after your offer on a home has been accepted. Your loan must close before the rate lock expires, so it’s important to align the lock period with your anticipated closing date. 

3. Personal Risk Tolerance

Your comfort level with financial risk plays a big role! If the thought of your interest rate increasing causes you stress, locking it in early can be worth it to provide peace of mind. This allows you to budget with certainty and focus on the other aspects of your home purchase. If you are more comfortable with a little uncertainty for the potential of securing a lower rate, you might choose to “float” your rate for a short time, which means it is not locked and can move up or down with the market.

Making the Right Choice for You

Ultimately, the best time to lock in your interest rate is when you have found a rate and monthly payment that you are comfortable with. Don’t let the fear of missing out on a slightly lower rate prevent you from securing a good one that fits your budget!

Mortgage Specialists is here to help you navigate this decision with confidence. Our team has the experience and expertise to explain your options clearly and help you find the right loan for your needs!