Guild Mortgage has introduced Payment Advantage, a new conventional loan program to help homebuyers save on their payments as rates continue to rise. The program allows homebuyers to lock in a conventional mortgage, and Guild will pay 1% of the borrower’s interest rate for one year with a lender-paid temporary buydown. After the first year, the borrower will have a predictable payment increase and may be eligible to refinance with Guild through programs such as the Payment Protection program, which has no lender fees.
Conventional financing options, available for first-time and repeat buyers, include primary purchase transactions with as little as 3% down and credit scores as low as 620. The program is available for locks until March 31, 2023.
Mary Ann McGarry, Guild’s CEO, says new programs are needed because of the current trends in interest rates. The Mortgage Bankers Association (MBA) reported that the national median mortgage payment reached $2,012 in October, up $629 in the first 10 months of the year, a 45.5% increase.
“Freddie Mac reported that the average commitment interest rate for a 30-year, conventional, fixed-rate mortgage was 6.90% in October, more than double the rate of 2.96% across all of 2021,” states McGarry. “With the rising costs of loans in today’s increasingly competitive housing market, we want to continue to find creative ways to help prospective buyers achieve homeownership and start building family wealth. Introducing Guild’s Payment Advantage will help our clients save on their loan payments now, as well as offer the ability to refinance without lender fees through December 2025 with our Payment Protection program.”
Guild offers four Homebuyer Protection programs to give homebuyers the confidence they need to know their purchase is protected. Credit Approval Protection (CAP) is designed to stand behind our credit approvals to protect our borrower’s earnest money, Homebuyer Express (HBE) is Guild’s 17-day closing guarantee, Lock and Shop allows buyers to lock in their rates while they shop for a home, and Guild’s Payment Protection Program provides a rate and term refinance with no lender fees.
With Payment Protection, Guild allows for a rate and term refinance with no lender fees to qualified applicants. A rate and term refinance allows a borrower to replace their current home loan with a new one, changing their mortgage term or interest rate to help them pay less for their loan over time, pay off their loan faster, or lower their monthly payments. The borrower must close their purchase loan on or before July 31, 2023 with a non-bond, FHA, VA, USDA or conventional confirming or high balance loan to be eligible for the program. Additionally, the refinance must be a first lien rate and term refinance for the same property and must be paying off a loan originally financed by Guild Mortgage and must close by December 31, 2025.