All Posts By

Jamie Cohen

Talk the Talk, Walk the Walk

By | Uncategorized

Amortization. Equity. Escrow. ARMs. If just reading these words makes your eyes glaze over, brain go fuzzy, and head begin to spin, you’re not alone! Whether you’re a first time homebuyer or have been through the mortgage process before, nothing can take the wind out of your sails and the fun out of buying like a bunch of confusing financial jargon. But fret not! Here at Delmar Financial, we compiled a list of some of the most common mortgage terms and their definitions so it’s nothing but smooth sailing into your new home!

Adjustable Rate Mortgage – A home loan in which the interest rate changes periodically based on a standard financial index. Most ARMs have caps on how much an interest rate may increase.

Annual Percentage Rate – The rate of interest that will be paid back to the mortgage lender. The rate can either be a fixed rate or adjustable rate.

Amortization – Amortization is a schedule for how the loan is to be repaid. For example, a typical amortization schedule for a 15-year loan will include the amount borrowed, interest rate paid and term. The result will be a month breakdown of how much interest you pay and how much is paid on the amount borrowed.

Appraisal – A professional appraiser will look at a property and give an estimated value based on physical inspection and comparable houses that have been sold in recent times.

Collateral — Property pledged as security to a debt. If the borrower fails to repay the loan, the lender may gain ownership of the collateral and sell it to recover the money.

Closing Costs – Costs the buyer must pay during the mortgage process.

Down Payment – The amount of the purchase price the buyer is paying. Generally, lenders require a specific down payment in order to qualify for the mortgage.

Equity – The difference between the value of the home and the mortgage loan. Over time, as the value of the home increases and the amount of the loan decreases, the equity of the home increases.

Escrow – At the closing of the mortgage, borrowers are generally required to set aside a percentage of yearly taxes and home insurance to be held by the lender called an escrow account. On a monthly basis, the lender will also collect an equal amount as part of the monthly mortgage payment to be used to pay taxes and home insurance when the billing is due. The lender maintains this escrow account.

Fixed Rate Mortgage – A mortgage where the interest rate and the term of the loan is negotiated and set for the life of the loan.

Closing Disclosure– Discloses APR and the final details about the mortgage loan you have selected. It includes loan terms, projected monthly payments, and closing costs.

Homeowners Insurance – An insurance policy that includes hazard coverage, covering loss or damage to property, as well as coverage for personal liability and theft.

Debt to Income Ratio (DTI) – Calculated by dividing total recurring monthly debt by gross monthly income, expressed as a percentage.

Loan to Value Ratio (LTV) – Calculated as the amount of the mortgage lien divided by the appraised value of the property, expressed as a percentage.

Principal – The term used to describe the amount of money that is borrowed for the mortgage. The principal amount owed goes down as borrowers make payments.

Still have questions or ready to take the next step? Contact one of our mortgage loan experts today at (314) 434-7000 or get the ball rolling with this free secure online application!

Adjustable Rate Mortgages- Are They Right for You?

By | Uncategorized

Congratulations! There are fewer exciting times in life then deciding to take the plunge into homeownership. However, before the champagne is popped and your milestone toasted, you’ll need to spend some time navigating the confusing waters of home financing and determine the mortgage loan that’s right for you.

Since the type of loan you choose will influence your interest rate, it’s important to have a thorough understanding of your options. While fixed rate mortgages (FRMs) have been the go-to for many Americans over the years, adjustable rate mortgages (ARMs) are rising in popularity and could offer a better option for your personal financial situation.

We’ve put together this short guide covering the basics of fixed rate and adjustable rate mortgages to help get your feet wet when it comes to home financing. Let’s break it down.

Fixed Rate vs. Adjustable Rate Mortgages: The Basics

Fixed rate mortgages and adjustable rate mortgages are the two most popular lending options, each offering their own advantages and disadvantages. Before financing your home, it’s important to have a firm grasp on both to secure the best loan option for your given financial situation.

Fixed Rate Mortgage Loans

Fixed rate mortgages offer a great option for individuals to which long-term stability and predictability are paramount. Aptly named, FRMs have an interest rate that remains the same for the duration of the loan term whether the term be for ten, fifteen or even thirty years. This remains true regardless of economic fluctuations and possible rising lending rates. FRMs are a great option for those ready to lay down roots and stay in one home long term since your locked in mortgage rate will never vary. However, while a great option for those more risk-averse, fixed rate home loans generally come with higher interest rates than adjustable rate mortgages.

Bottom line? If you have a stable career, growing family and are ready to lay down long-term roots, a fixed rate mortgage will avoid you the anxiety of variable interest rates.

Adjustable Rate Mortgages

Contrary to FRMs, as the name suggests, adjustable rate mortgages begin with a fixed interest rate for a specified amount of time, then annually “adjust” in relation to an index. Initial fixed rate periods can vary between three and ten years with your adjustable rate taking over thereafter. While lenders generally charge lower initial interest rates for ARMs then FRMs for the same loan amount, your adjustable rate can fluctuate greatly later in the loan term. This makes an ARM a great option for young buyers and those who value mobility or keeping long-term options open. Additionally, due to a lower initial interest rate and monthly payment, ARMs can qualify buyers for a larger loan amount and lend greater purchasing power when deciding on a home. This is a great solution for people who know they will be receiving raises or bonuses in the near future. For those who can’t afford a particular home at a higher fixed rate, but can with an ARM, they will be able to afford the higher payment once the fixed rate period ends.

Your interest rate on an ARM will be comprised of two parts: the index and the margin. The index is a projected measure of interest rates over time (typically, the LIBOR or Wall Street Journal Index), while the margin is the additional amount or percentage points a lender adds above the index, generally 2.25%. It remains constant throughout the life of your loan.

Concerned about the possibility of infinitely rising interest rates or monthly payments? Don’t fret! The majority of all ARM loans have caps limiting the amount your interest rate can increase during an adjustment period or over the life of the loan. These interest rate caps are known as periodic or annual adjustment caps and lifetime caps, respectively. By law, essentially all ARMs are required to have a lifetime cap. Your annual adjustment cap will typically be limited to a 2% increase or decrease, while your lifetime cap will usually be limited to 5%. For example, if your initial interest rate is 3%, your maximum rate cannot exceed 8%.

Bottom line? If you value relocation flexibility or plan on owning your home for a shorter amount of time then the introductory period of your loan, an adjustable rate mortgage is the right choice. You’ll benefit from a lower initial rate without the financial vulnerability of the adjustable rate period of your loan term. Our rule of thumb? If you’re planning to stay in your home less than ten years, an ARM is the loan for you.

A more in depth look at adjustable rate mortgages and the different types available can be found here.

Still have questions? Contact one of our mortgage loan experts today at (314) 434-7000 or get the ball rolling with this free secure online application!

How Low Can You Go? Refinancing Your Home.

By | Uncategorized

How Low Can You Go?

As mortgage rates creep towards all-time lows, potential savings beacon to homebuyers and refinancers alike. Homebuyers are presented with the opportunity to lock in lower than ever long-term loan rates, while those with existing loans have the opportunity to refinance to record-low rates.

Buyers and Sellers

Whether you are a potential first time homebuyer or a homeowner looking to sell, rates this low are certainly worth your attention. Even just a .5 percent cut in mortgage rates could be great news for your wallet.

When looking at what mortgage rates can mean for you long-term, a drop in rate from 4 to 3.5 percent will save you money on both principal and investment. How much money you save is dependent on the amount of your loan. For example, say you are looking at a mortgage of $200,000 with a 20 percent down payment and 30-year loan term. Your monthly payment drops from $984.83 at 4 percent to $898.09 at 3.5 percent. You can calculate your projected monthly payment online with this mortgage amortization calculator.

In addition to saving money over the long term, these rates mean an initial lower qualifying income to secure a loan. For example, say you were looking at the same $200,000 mortgage with a 20 percent down payment and loan term of 30 years at a rate of 4 percent. However, your application was denied due to income requirements by the lender. At a 3.5 percent rate, your qualifying income drops by $2,431. You can calculate your own required income for a mortgage online here.

These kinds of savings are not only important to first time homebuyers, but to sellers as previously locked-out purchasers enter the marketplace.


Many factors come into play when deciding whether or not to refinance your home, and it’s important to measure upfront cost against long-term savings. This will vary based on interest rate, loan term, closing costs, and how long you expect to stay in your home.

Typically, refinancing makes sense when interest rates fall by at least .75-1 percent. However, even those with smaller margins between their current interest rate and those offered now might consider refinancing. If you plan to remain in your current home long-term, even modest monthly savings can accumulate to warrant the expenses of refinancing your loan. Moreover, at Delmar Financial, we often cover the closing costs of refinancing. Thus, even refinancing savings as low as .125% become worthwhile. Online calculators such as this one are extremely helpful in determining whether or not refinancing is appropriate in your given financial situation.

Additionally, record low rates make the current climate ideal for those looking to switch to a different type of mortgage. For example, lower rates enable those wanting to payoff their home faster to move from a 30-year loan term to a 15-year term with less financial burden.

The Big Question

We can all agree that falling mortgage rates are great for first-time homebuyers, sellers and refinancers alike. But for how long will mortgage rates stay at or near current levels? Unfortunately, no one has the answer.  According to BrankRate’s Rate Trend Index, just 11 percent of experts surveyed believe rates will increase over the coming weeks, 56 percent believe rates will fall and the remaining 33 percent believe rates will remain unchanged.

What the future holds for mortgage interest is anyone’s guess. So if refinancing is enticing to you now, playing the waiting game could save you a little more green. However, it’s equally possible for your advantageous opportunity to vanish into thin air.

So evaluate your current situation and ask yourself some basic questions such as: What percent rate decrease justifies refinancing? How long will it take for monthly savings to counterbalance transaction cost? And, does my income qualify me to purchase the home I want?

Contact one of our expert loan officers at Delmar Financial today to get the answers to all these questions and more: (314) 434-7000.

Ready to take the next step? Visit us online to fill out a mortgage application today!


Selecting a Mortgage Company

By | Uncategorized

From waving goodbye to troublesome landlords, to endless decorating possibilities, the transition from renting to homeownership is an exhilarating one. However, many first-time homebuyers find the path to homeownership trickier to navigate than initially expected. Once you’ve purchased a home you’re in it for the long haul so before making any decisions, it’s important to choose a mortgage company that best meets your needs. After all, you’re entering into a financial relationship you could be committed to for the next fifteen, twenty or even thirty years.

That’s why, at Delmar Financial, we’ve compiled a short guide to help you sidestep some of the common mistakes homebuyers make when selecting a mortgage company.

Preparing for Your Search

Your financial status is of critical importance when applying for a mortgage loan. The more information you are able to provide a lender with, the easier it will be to navigate the complicated mortgage application process. Putting together a financial portfolio containing a summary of your current financial status for potential lenders can be an enormous help in getting the ball rolling. Your portfolio should include:

  • 2 years of tax returns
  • 2 years of W2s
  • 2 recent monthly bank statements
  • 2 recent paystubs

Once you have gathered your financial data and are familiar with your financial status, it is important to have a basic understanding of your mortgage options and which options make the most sense for your situation. Ask yourself questions such as:

  • How long do I anticipate owning my home?
  • Am I interested in a single family home or a condo?
  • How much money do I have for a down payment?
  • Where do I want to live?
  • How much do I want to spend and what is my time frame for purchasing?

Have an idea of how much annual property taxes and homeowners insurance are in the locations you are interested in, as well as a basic understanding of terms such as lender fees and “Good Faith” estimates.

Shopping Around

You have a seemingly unlimited number of options when it comes to selecting your mortgage lender, which is why it’s important to do your due diligence. Ask friends, family and your real estate agent for recommendations of reputable lenders, and check out lender reviews online. Additionally, the National Mortgage Licensing System & Registry maintains a website offering consumers a free way to confirm administrative and licensing information for state regulated mortgage lenders in all 50 states.

Compile a list of questions to ask your prospective mortgage lenders, such as what their interest rates are, the loan durations for the types of mortgages you are considering, and request “Good Faith” estimates— written explanations of the estimated charges, costs and fees the lender requires at closing. Additionally, confirm with your lender they are able to meet commitments and closing date deadlines and ask if they require any upfront fees. Be sure you understand and receive an explanation of all necessary terms and jargon in order to make an informed decision.

When narrowing down your choices of lenders, compare the offered interest rates and fee structures for the types of mortgages you are considering, and have a thorough understanding of each loan type being offered. It is, generally, in your best interest to select the most reputable lender that offers you the most inexpensive combination of interest rates and fees.

At the end of the day, you’re running the show. And with so much at stake, feeling 100% comfortable with your choice of mortgage lender is of the utmost importance. With 50 years of experience under our belts, at Delmar Financial, it’s our mission to work with you to develop a comprehensive mortgage strategy that best enables you to achieve your goals and dreams in homeownership.

You can get the answers to any lingering questions you might have and more by contacting one of our mortgage loan experts today at (314) 434-7000. Together we can turn your mortgage loan goals into a reality!

Ready to take the plunge? Get started online today with Delmar Financial!

Simple tips for getting a loan

By | Uncategorized

Simple tips for getting a loan

ARM. APR. PMI. FHA. These are just some of the mystifying acronyms first time homebuyers will come across when navigating the ever-changing housing market. And before the fun of paint samples and fabric swatches can begin, securing the right mortgage loan should be your top priority.

At Delmar Financial, we understand that buying a home for the first time can be a daunting task, so we’ve complied some handy tips to help demystify the process and get you on your way to homeownership.

Do Your Research

When buying a home for the first time, you need ask yourself, what kind of loan will work best for me? Am I looking for a FHA, VA, Fixed Rate or Adjustable Rate loan? And how will my interest rates be determined? It’s important to explore your options thoroughly and understand the benefits and drawbacks of each alternative.

Thankfully, we’ve done a lot of the legwork for you! You can find the answer to these common questions and more by calling one of our mortgage loan experts at (314) 434-7000.

Ask Questions

Once you’ve decided on a loan package, make an appointment with your bank to discuss the requirements for loan eligibility, the approval process, and the necessary materials and documents, as well as a projected timeline for approval.  Since these requirements will differ based on your financial institution, it’s important to find out this information upfront in order to be prepared.

Know Your Credit and Your Limitations

When it comes to getting approved for a home loan, your debt vs. your income has the largest impact on the amount you can get approved for. This means that your income needs to be high enough to pay all of your debt, plus the payments for the loan. You will only be approved for a loan amount that falls within the limitations of your income vs. debt.

The health of your credit score is another important factor to take into consideration, as this impacts your eligibility for certain loan products, as well as your interest rate. While a low credit score suggests you’re a risky borrower, a high credit score can make a significant impact on the mortgage terms you are offered by a lender.

Since the range your credit score falls within significantly impacts your chances of securing manageable loan terms, it’s important to be aware of your credit score heading into the process. Most lenders consider a credit score of 740 or higher to be in the ‘perfect’ range for mortgages, while a score below 700 puts you at ‘fair.’  However, in theory, it is possible to qualify for a mortgage loan with a credit score as low as 580.

Prior to your application you should already be aware of your credit history and current score. Make sure you review your credit history for accuracy, as well as give yourself time to correct any errors in your history report. Further, be sure to consider your financial limitations and apply for the loan based on your financial ability to make repayments you can afford.

Ready to take the plunge? Fill out this free secure online application to get started!