Home Equity Lines of Credit are based on the amount of equity in my home. While it is true that HELOCs put a lien on your property, you do not qualify just by having equity. As with any mortgage, your income, credit, and financial strength is evaluated in underwriting.
Mortgage Insurance is required if I don’t put 20% down. Based on the facts about FHA loans, there are many ways to avoid mortgage insurance. VA loan does not have monthly mortgage insurance. Portfolio lenders offer programs without mortgage insurance. And, some conventional programs can couple a 1st and 2nd mortgage to avoid mortgage insurance by keeping the 1st mortgage at or below 80%.
Mortgage Rates are set by the Fed. As with most myths, this is based on some truth. The Fed funds rate is influential on interest rates in general; they do not directly dictate mortgage rates. For instance, a .25% drop in the Fed Funds Rate does not mean 30 year fixed rates drop that exact amount. Other economic factors like the stock market, bond rates, and other trends can also affect mortgage rates.
“Buyer Beware,” or in this case, “Borrower Beware.” Often clients are steered into a particular company based on advertising that makes them seem unique. One lender advertises a feature like “lock your rate while you shop for your loan,” making it seem like it is unique to their company. In truth, many banks and lenders offer similar programs. Shopping for a loan is a good idea. While assuming a particular lender is your only choice is not. For instance, even when buying from a new home builder, requesting competitive quotes from other lenders will either give you confidence in your choice or you may find that the free appliances are not “free” over the long run.
All lenders are pretty much the same. Actually, many Lenders are similar, offering FHA, VA, Conventional, and USDA loans. However, some lenders have portfolio products which can differ quite a bit from conventional lenders. Comparing apples, oranges, and peaches are better than simply comparing apples. Disclaimer, Washington Federal Bank (where the author works) is a portfolio lender.