A new program called “Lock It, List It” allows real estate agents to secure a mortgage rate for a buyer before the property even hits the market.
Chicago-based Guaranteed Rate launched the product just weeks after mortgage rates surpassed the dire 8% threshold.
This has pushed housing affordability to the brink, while also turning off prospective home buyers and making it harder to sell a home.
A below-market interest rate that is guaranteed could boost demand, and make it easier for a seller to unload their property.
It’d be a win-win for all parties involved, including the buyer, seller, listing agent, and loan officer.
How Lock It, List It Works
As the name suggests, a mortgage rate is locked in before the property is listed on the market.
Known as a mortgage pre-lock in industry jargon, the interest rate is secured before a buyer is found for the property.
This is a rather novel approach, as pre-locks are typically for home buyers who lock in a rate for themselves then search for a property.
In this scenario, the home seller is essentially locking in a rate on the home buyer’s behalf ahead of time.
But it only works if the buyer agrees to use Guaranteed Rate to obtain their mortgage.
Once a buyer makes an offer on the property, they would need to get approved for a mortgage with GR to take advantage of the offer.
The deal would be structured by the listing agent and a Guaranteed Rate loan officer via a fee that pays for the locked-in discounted rate for a buyer.
In other words, the cost might come out of the seller’s proceeds and/or the listing agent’s commission.
It’s unclear how much below market the mortgage rate might be, but if would need to be compelling enough to draw in a buyer (and have them use their preferred lender).
This unique benefit would also allow the listing agent to market this discounted mortgage rate to prospective home buyers in their listing.
Guaranteed Rate believes this could help the home to stand out from the crowd and give it a better likelihood of selling.
It would also allow the real estate agent to virtually guarantee a certain interest rate to a prospective home buyer, which would be helpful if rates continue to rise.
Taking a Page Out of the Home Builder’s Playbook
What Guaranteed Rate is doing with Lock It, List It is what home builders have been doing for a while with their creative financing specials.
Despite mortgage rates more than doubling in the past 18 months, home builders have continued to offer below-market mortgage rates to their customers.
Known as a mortgage buydown, money is paid upfront to lower the interest rate for the life of the loan.
Home builders have been offering both permanent and temporary mortgage rate buydowns to lure in buyers lately. Some have even offered both on the same loan.
For example, one builder offered a temporary down to 2.99% via 3-2-1 buydown. And bought down the rate for years 4-30 to 5.99%.
Deals like these have made captive builder lenders, such as Lennar Mortgage and Inspire Home Loans, essentially impossible to beat.
This program gives existing home sellers a leg up on their builder competition, assuming the discounted rate is low enough.
Is This a Good Deal for Home Buyers?
The program sounds like a good idea on paper, but it’s really dependent on the direction of mortgage rates. And how much the rate is bought down.
This is the same of any pre-lock option. When you lock in a mortgage rate ahead of time, you do so expecting mortgage rates to move higher.
You’re essentially locking in today’s low price because you’re concerned rates could worsen, which would make home buying more expensive.
Or even out of reach depending on how much worse they get between application and closing.
But if rates move lower, it doesn’t provide much if any benefit.
For example, if this program was around in early 2022 when the 30-year fixed was still priced around 3%, it would have been a huge deal.
It could have allowed a home buyer to snag a 3% rate as rates surged to 5% and beyond.
But we may be at a point where mortgage rates have peaked, and could in fact fall from here.
It Depends Where Mortgage Rates Go Next
In just the past couple weeks, mortgage rates surpassed 8% but then fell precipitously to around 7.25%. Those who pay discount points are now seeing rates in the mid-6s again.
If this continues, home buyers may not want to rush into a mortgage rate lock if there’s the expectation things get even better.
Of course, it depends how low the Lock It, List It mortgage rate is. If it’s significantly below market, it could still be a great selling point.
So the success of this program will really depend on where mortgage rates go next.
Note that you must use Guaranteed Rate as your mortgage lender if you wish to take advantage of the offer.
As always, it can pay to shop around with different banks, lenders, mortgage brokers, and so on to see what else is out there.
Even without a special bought-down rate, you might find a better combination of rate and fees from a different company.
Lock It, List It is available on both conforming loans and high balance loans that exceed the baseline conforming loan limit.
Guaranteed Rate was the nation’s 11th largest mortgage lender in 2022, and serves home buyers in all 50 states along with Washington, D.C.
Gone are the days of the zero-down mortgage. At least for the typical home buyer.
Instead, the 2023 Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) revealed that down payments haven’t been higher in decades.
This, despite the widespread availability of low-down and zero-down home loan options.
As for why, it could be because inventory remains low, which has kept competition lively in spite of much higher mortgage rates.
Another reason might be those high interest rates themselves, which make it less attractive to take out a large loan.
Median Down Payments Highest Since 1997 for First-Time Home Buyers
Per the NAR report, the typical down payment for a first-time home buyer was 8%, which might not sound like a lot.
But it is the highest figure since 1997, when it stood at 9%. If you look at the chart above, you’ll notice it dipped pretty close to zero in those bad years back in 2005-2006.
At that time, creative financing and lax underwriting (aka no underwriting at all) allowed home buyers to purchase a property with nothing down.
While that may have been risky on its own, they could also use stated income to qualify for the loan.
And they could choose a super toxic loan type, such as the now forgotten option ARM, or qualify via an interest-only payment.
That may explain why we experienced the worst mortgage crisis in recent history, followed by the nastiest housing market crash in generations.
So certainly some good news there, with down payments on the rise despite unaffordable conditions.
To that end, home buyers could be opting to put more down to get a more favorable mortgage rate, and/or to avoid mortgage insurance (PMI) and unnecessary pricing adjustments.
Back when mortgage rates were hovering around 3%, it made sense to put down as little as possible and enjoy the low fixed-rate financing for the next 30 years. Not so much today.
Another reason home buyers might be putting more money down is due to competition. While the housing market has certainly cooled this year, there is still a dearth of supply.
This means if and when something decent pops up on the market, there may still be multiple bids.
And those who are able to muster a larger down payment will generally be favored by the seller.
The one worrisome thing was how first-time buyers were securing their down payments recently.
They’ve had to increase “reliance on financial assets this year,” including the sale of stocks or bonds (11%), a 401k or pension (9%), an IRA (2%) or the sale of cryptocurrency (2%).
Always a bit questionable if selling retirement assets to purchase a home.
Typical Down Payment for Repeat Home Buyers Up to 19%
Meanwhile, the typical repeat buyer came in with a 19% down payment, which is the highest number since 2005 when it was 21%.
Down payments for repeat buyers also tanked prior to the early 2000s housing crisis because underwriting was so loose at the time.
There was really no reason to come in with a large down payment at the time given the wide availability of flexible loan products, and the notion that home prices would just keep on rising.
This explains why homeowners at the time also favored negative amortization and interest only home loans.
They all assumed (or were told) that the home would simply appreciate 10% in a year or two and they could refinance over and over again to better terms.
Today, it’s more in line with levels prior to that fast and loose era, and appears to be steadily climbing.
This could also have to do with a large number of all-cash home buyers, such as Boomers who are eschewing the 7% mortgage rates on offer.
But it is somewhat interesting that the median number was 19% and not higher.
After all, a 20% down payment on a home comes with the most perks, like lower mortgage rates and no private mortgage insurance requirement. But I digress.
Note that all the figures from the survey only apply to buyers of primary residences, and do not include investment properties or vacation homes.
How Much Do You Need to Put Down on a Home These Days?
As noted, low and no-down mortgages still exist, though they are typically reserved for select applicants, such as VA loans for veterans and USDA loans for rural home buyers.
However, you can still get a 3% down mortgage via Fannie Mae or Freddie Mac, which virtually every lender offers.
There are also FHA loans, which require a slightly higher 3.5% down payment, but lower credit score requirements.
On top of this, there are countless homebuyer assistance programs, including silent second mortgages that can cover the down payment and closing costs.
In other words, there is no shortage of affordable loan options today.
But there is an advantage to putting more down, such as eliminating the need for mortgage insurance and having a smaller outstanding loan balance.
With mortgage rates so high at the moment, the less you finance the better.
This could also make it easier to apply for a rate and term refinance if and when rates do fall, thanks to a lower LTV ratio.
Regardless, it’s good to see down payments rising as home prices become more expensive.
This contrasts the bubble years back in 2004-2006 when homeowners put less and less down as property values increased. It didn’t turn out well.
It’s time to check out “Inspire Home Loans,” which is the lending partner of home builder Century Communities.
They pride themselves on knowing how their parent company’s construction timelines work so your home (and) loan remain on schedule.
In addition, they offer special financing deals that are reserved only for the buyers of properties in their communities.
This means you might be able to get your hands on a low mortgage rate that outside lenders just can’t beat.
Read on to learn more about them to determine if they could be a good fit for your mortgage needs.
Inspire Home Loans Fast Facts
Direct-to-consumer mortgage lender
Offers home purchase loans
Founded in 2016, headquartered in Newport Beach, CA
A wholly owned subsidiary of Century Communities
Parent company is publicly traded (NYSE: CCS)
Licensed to lend in 18 states across the nation
Funded about $2 billion in home loans in 2022
Most active in California, Colorado, Georgia, and Texas
Also operates a title company and insurance agency
Known for offering big mortgage rate buydowns
Inspire Home Loans is a wholly owned subsidiary of Century Communities, which offers to-be-built and quick move-in homes in a handful of states nationwide.
Their parent company consider themselves a top-10 home builder nationally, and is publicly traded under the NYSE symbol CCS.
The lending division has been around since 2016 and is headquartered in Newport Beach, CA.
Their primary focus is providing home purchase loans to buyers of newly-built homes in the many communities they operate throughout the country.
They are licensed in 18 states, including Alabama, Arizona, California, Colorado, Florida, Georgia, Indiana, Louisiana, Kentucky, Michigan, Nevada, North Carolina, Ohio, South Carolina, Tennessee, Texas, Utah, and Washington.
Per HMDA data, they are most active in the states of California, Colorado, Georgia, Nevada, and Texas.
They’ve currently got 63 sponsored mortgage loan originators (MLOs) on their staff per the NMLS.
Similar to other builder-affiliated lenders, Inspire Home Loans also operates a title insurance and settlement company called Parkway Title, and an insurance agency called IHL Home Insurance Agency.
This means you can do one-stop shopping for all your home loan needs, though it’s always prudent to shop around for these third-party services as well.
How to Get Started
You can either visit a Century Communities new home sales office to get paired up with a loan officer, or simply go online.
If you go to their website, you can click on “Pre-qualify Today” to access a loan officer directory that lists the many communities operated by their parent company.
After selecting a state, you’ll be able to select a community to see which loan officers serve that particular development.
From there, you’ll see contact info and you’ll have the ability to get pre-qualified for a mortgage or log in if you’ve already applied.
Their digital loan application is powered by fintech company nCino. It allows you to eSign disclosures, link financial accounts, and complete the app from any device.
Once you’ve applied and been approved, you can satisfy conditions electronically by uploading necessary documents 24/7.
You’ll receive automatic status updates as your loan makes it from underwriting to closing.
You can also lean on your dedicated, human loan team that is available to assist and provide answers whenever you have questions.
They appear to offer a good balance of both tech and human touch to get you to the finish line.
And because they are affiliated with the builder, they’ll be able to communicate freely and keep your loan on track based on construction status.
Loan Programs Offered
Conforming loans backed by Fannie Mae and Freddie Mac
Jumbo loans
FHA loans
VA loans
USDA loans
Fixed-rate and adjustable options available
Down Payment Assistance
Municipal Bond Programs
As noted, Inspire Home Loans exists to serve buyers of Century Communities properties.
Since that’s all they focus on, they should have a good handle on the process.
In terms of loan choice, they’ve got all the major loan programs a home buyer could need, including conforming loans, jumbo loans, and the full array of government-backed loans.
This includes FHA loans, VA loans, and even USDA loans if purchasing a property in a rural location.
Both fixed-rate and adjustable-rate mortgage options are available, including the 15-year fixed, 5/6 ARM, and 7/6 ARM.
Additionally, they’ve got access to numerous homebuyer assistance programs, including down payment assistance and municipal bond programs.
These can come in handy if you’re short on down payment funds and/or need help with closing costs.
The Ascent Club
Inspire Home Loans also offers free access to a program called “The Ascent Club.”
It provides financial insights and recommendations to help prospective customers reach their homeownership goals.
This could include learning how to save for a down payment, how to build asset reserves, how to boost credit scores, and even improve your DTI ratio.
The goal is put homeownership within reach if there are certain fixable barriers that are holding you back.
And whether you’re a first-time home buyer or seasoned pro, they conduct free webinars to answer any mortgage questions you may have.
Inspire Home Loans Rates and Fees
They don’t list their mortgage rates or lender fees online, which isn’t atypical. But I do give lenders kudos when they do. It’s a plus from a transparency standpoint.
So we don’t know how competitive they are relative to other lenders, nor do we know if they charge a loan origination fee, underwriting and processing fees, application fee, and so on.
Be sure to inquire about any and all fees when you first discuss loan pricing with a mortgage loan officer.
Once you get a rate quote, that along with the lender fees makes up your mortgage APR, which is a more effective way to compare loan costs from lender to lender.
Despite the lack of information, they do advertise mortgage rate buydowns on their home builder website.
And from what I saw, they were some of the biggest permanent and temporary mortgage rate buydowns around.
One example offered a 2/1 buydown to 3.5% for the first year, 4.5% in year two, and 5.5% fixed for the remaining 28 years.
That’s pretty tough to beat when mortgage rates are close to 7.5 today%
But as always, take the time to shop your rate with other lenders, credit unions, mortgage brokers, and so on.
Inspire Home Loans Reviews
Over at experience.com, Inspire Home Loans has an excellent 4.89/5-star rating from over 1,500 customer reviews.
However, they have a 1.8/5 on Yelp from about 30 reviews, though the sample size is obviously quite small. At Redfin they have a better 4.4/5 from 7 reviews, which again is a small sample.
You can also search their individual offices throughout the country on Google to see reviews by location. This could be more helpful if you work with a particular regional office.
Their parent company has an ‘A+’ rating on the Better Business Bureau (BBB) website and has been accredited since 2015.
Despite the solid letter grade rating, they’ve got a poor 1.05/5-star rating based on over 100 customer reviews. This could have to do with their numerous complaints filed over the years.
Be sure to take the time to read through some of them to see how many pertain to their lending division versus their new home building unit.
Of course, chances are if you’re using Inspire Home Loans to get a mortgage, you’re also buying a Century Communities property.
To sum things up, Inspire Home Loans has the latest tech, a good array of loan programs, and may offer pricing specials that outside lenders can’t compete with.
They have some mixed reviews, but mostly positive ones, though your mileage may vary depending on who you work with.
But even if the process has hiccups, the savings from a big mortgage rate buydown could be worth it.
Still, take the time to shop third-party lenders, brokers, banks, etc. With other offers in hand, you can negotiate and potentially land an even better deal.
Inspire Home Loans Pros and Cons
The Good
Digital mortgage application (can apply for a home loan online)
Mostly paperless loan process powered by nCino
Lots of loan programs to choose from including homebuyer assistance
Mortgage rate specials for buyers of Century Communities homes
Do you want to learn how to make money with a drone? Drones have become more and more popular recently. People use them not just for fun but also for jobs that need pictures and videos from up high. This means there’s a growing opportunity for people to start small businesses to make money with…
Do you want to learn how to make money with a drone?
Drones have become more and more popular recently. People use them not just for fun but also for jobs that need pictures and videos from up high. This means there’s a growing opportunity for people to start small businesses to make money with their drones.
I have had a drone for several years now, and it is so great to be able to take pictures from a different perspective with it. We’ve also used our drone for many purposes – such as inspecting a roof, looking at the top of our mast on our boat (at 68 feet tall, it’s nice to have a drone to check things!), for family pictures, and more.
Whether you fly drones for fun or as a pro, earning money with them can be straightforward. If you have the right knowledge and tools, you can make your hobby pay off and make income.
Below, I will be talking about how to make money with a drone, how to get started, the best drone to make money with, and more.
How To Make Money With A Drone
What is a drone?
A drone, also called an unmanned aerial vehicle (UAV), is a flying machine operated from a distance by a pilot (like you or me) with a remote control (such as your cell phone). Whereas before, helicopters were needed for pictures from high up in the air, drones have made it much easier for the average person to take photos and videos.
Drones are used for many things, like taking amazing pictures from the sky, delivering packages, and inspecting the top of buildings that are high off the ground.
Some popular drone brands like DJI have really good cameras and special features that make them easy to use too.
How much money can you make flying drones?
How much you can earn as a drone pilot depends on how much experience you have, what kind of services you sell, and how much demand there is for those services where you live.
According to Glassdoor, a drone pilot can make around $65,000 a year, with some making well over $100,000 each year.
Recommended reading: 18 Ways You Can Get Paid To Take Pictures
13 Ways To Make Money With A Drone
Below are 13 ways to make money with a drone. Whether you want to learn how to make money with drone videos or drone pictures, there are many ideas that you could try.
1. Stock photos
One great way to get started making money with your drone is by selling your drone photos on stock photo sites.
You can make passive income with a drone by taking aerial photos (such as of cities, the outdoors, and so much more) and selling them on stock photo websites such as Shutterstock, Getty Images, and DepositPhotos.
Customers buy stock photos for many different uses, such as on websites, in TV shows, in books, on social media, and in other places.
I buy stock photos all the time for my website and so do millions of other people. They are so nice and helpful to have!
You simply take drone photos, upload them onto a stock photo website (making sure to add relevant keywords), and then the stock photo site does the rest of the work to sell them to customers.
2. Real estate photos
As a drone pilot, you can sell real estate photography services to real estate agents which helps them show the properties that they are trying to sell.
By taking a picture of the property from different angles and heights, real estate agents can show a different view of the real estate that traditional photography can’t provide.
By selling property photography services with your drone, you’re selling a helpful service to real estate companies looking to stand out in a competitive housing market.
More and more homes are being sold with drone photos, and it makes sense – it can really show how great the surrounding area is around a home! Plus, a possible home buyer can see the whole home and property with a drone picture to get a better idea of what the home includes.
3. Building inspection services
Building and roof inspection services are always in high demand, as homeowners and building owners need to look for possible damages or maintenance issues.
Drone operators can inspect roofs and tall buildings safely and quickly with a drone. I personally know a few roof and building inspectors who regularly use drones to help them with their work. Instead of spending a ton of time climbing onto a roof (or going on one that may be dangerous to begin with), they can simply turn on their drone and take pictures in order to get a better idea of what is going on.
After all, drones can go where humans can’t, or at least where it’s risky, time-consuming, or expensive for humans to go.
This is what makes a drone so helpful when it comes to inspecting a building. Drones are so easy to use, and they can take a picture of a hard-to-reach location in just minutes.
Drones are used by others for inspection purposes as well, such as to inspect solar panels by solar installation companies, inspect bridges and wind turbines, as well as inspecting farmlands. A service related to this is that many times utility companies will use drones to inspect their power lines too!
4. Aerial photography and videography
Aerial photography and videography are popular for many different events, such as sports and concerts.
Sporting events and concerts typically pay for drone photos because it helps give them more images of the full picture of the event they are hosting as well as a different perspective. This can help them to sell more tickets in the future and gain more publicity.
5. Instagram
I follow quite a few Instagram accounts that mainly post amazing drone photos from around the world. These content creators are able to make money by building a following and partnering with companies for advertising.
6. YouTube videos
Starting a YouTube channel that shares your drone footage can also earn you income. As you gain subscribers and views, you can earn advertising income and sponsorship deals or paid collaborations.
On your YouTube channel, you may publish videos that include drone videos such as from your travels. Or, you may be teaching others how to use their drone. There are many different avenues you could try.
Recommended reading: How Much Do Twitch Streamers Make?
7. Aerial mapping and surveying
Drones can be used for mapping and surveying tasks, such as creating topographic maps, assessing land for development, and for agricultural inspections.
This is because with a drone you can map out large areas extremely quickly.
I did a quick Google search for the job “aerial mapping drone pilot” and found a lot of different openings too!
8. Drone delivery services
Drone delivery services are a pretty new market, with companies such as Amazon starting to use drones for package delivery.
Sounds pretty crazy, but it is a real thing!
While regulations are still constantly changing, drone delivery services may have some big openings for drone pilots who want to be some of the first.
9. Filmmaking
Drones have completely changed the filmmaking industry by allowing for unique camera angles and movements that were once impossible to achieve (or could only be done before with a helicopter).
Drone pilots can sell services in filmmaking and work on movie sets, TV commercials, and music videos.
10. Hotel photos and ads
Drone photos of hotels and Airbnbs can help to sell more rooms better because customers can see the surrounding area and what the whole building looks like.
This may help a person to see that there is a beach or a mountain nearby, or perhaps that it is close to the center of a city.
11. Wedding photography
More and more couples are wanting drone photography of their wedding. You can sell wedding photography services with your drone, which allows couples to capture their wedding day from different angles.
This could be an add-on if you are already a wedding photographer, or perhaps you can reach out to wedding photographers in your area and sell your services to them as an add-on.
12. Freelance jobs
Drone photographers can use freelance platforms such as Upwork, Fiverr, Droners.io, and PrecisionHawk to sell drone services to clients. By promoting your drone photography portfolio on these sites through creating a profile, you can find freelance jobs and make money.
I did a quick search and you can see examples of drone photographers selling their services on Upwork here to get an idea.
13. Renting drones
If you own multiple drones, you can possibly start renting them out to other drone pilots or people who simply want to take some drone photos.
There are many ways you can rent out your drone, such as to recreational users who want to try out flying a drone, content creators, photographers, researchers, for search and rescue operations, disaster relief, and so many more.
Getting Started With A Drone Business
Starting a drone business can be a great way to make money, especially if you enjoy playing around with drones.
As you read above, drones have been so helpful in many different areas, from real estate to movies, farming, and more.
Starting a drone business is probably simpler than you would think too.
What drone should you buy?
If you want to learn how to make money with a drone, then getting the right drone is helpful. Before buying a drone, think about your budget, the drone’s flight time (how long the drone can fly in the air on a battery charge), your skill level, and the type of services you want to sell.
Some of the best drones to make money with include:
Do you need a license for a drone business?
Yes, if you plan to operate a drone for commercial purposes, you should have a Remote Pilot Certificate from the Federal Aviation Administration (FAA). To get this certificate, you must:
Be at least 16 years old
Be able to read, speak, write, and understand English
Pass an aeronautical knowledge test
Be physically and mentally fit to operate a drone
Complete the FAA’s online application
Once you get your Remote Pilot Certificate, you are required to register your drone with the FAA and you will then get a unique identification number.
You can learn more about how to become a drone pilot on the FAA’s website here.
Do you need insurance to run a drone business?
Having insurance isn’t required by the law, but it’s a good idea to get it for your drone business.
Insurance helps protect you and your clients in case something goes wrong, such as if there is an accident or problems with the drone. Drones can be expensive, so insuring them can help to pay for them in case something happens (for example, you could crash them into a building or lose them in the water).
I have personally lost a drone in the water, and insurance gave me a new one right away, which was very nice.
How much does it cost to start a drone business?
The costs for starting a drone business include:
Drone – $300 to $10,000+
Laptop to edit your photos – $500 to $2,000+
Remote pilot certificate – $175
Drone insurance – $1,000 per year
Other expenses that you may have include a business license, advertising costs, office space, and more.
The amount that you spend to start your drone business will be higher or lower depending on your budget, what kind of drone business you plan on running, and more.
How To Improve Your Drone Skills And Training
Below is how you can become a better drone pilot and get good pictures and videos. Whether you’re a beginner or if you’ve been flying drones for years, the below can help you to improve your business.
Become a skilled pilot
To get really good at flying drones, you need to spend time learning and practicing. Flying a drone is not as simple as it looks – I know because I have had a drone for years, and I have a lot to learn yet. And, I still get nervous when flying it!
If you want to start a drone business, then I recommend taking a drone training course that will teach you everything from basics to advanced skills. There are a lot of features on a drone and it can be overwhelming to learn. A course can speed things up for you.
Also, practicing as much as you can is very helpful, which will help you get better at controlling it. Finding an open space can help you get more comfortable with flying it as well because you won’t be as worried about hitting something with your drone.
This will then help you with the next step – taking photos and videos with your drone.
Video and photography training
Once you’ve learned how to use your drone, the next step is to get better and better at taking pictures and videos with your drone.
You will want to learn as much as you can about your drone’s camera and the different settings that come with it. You should learn how to set up good shots, how to figure out what kind of lighting you need, how to frame pictures and videos, and more.
Here are some tips to improve your video and photography skills with your drone:
Take a course – Sign up for a photography or videography course to improve your knowledge of drone camera settings as well as framing and editing techniques. You can easily find a drone photography course online, such as on Udemy.
Practice regularly – The more you take videos and photographs with your drone, the better you will be.
Learn from others – I recommend joining online forums or drone pilot Facebook groups to talk with other drone photographers. This can help you to learn new tips that you may not have thought of.
If you get better at flying and taking good pictures or videos with your drone, you can start earning money. Of course, it will take time and lots of practice, though!
Frequently Asked Questions About How To Make Money With A Drone
Below are answers to common questions about how to make money with a drone.
Can I sell my drone photos?
Yes, you can sell your drone photos either part-time or even full-time. Many drone photographers earn money by selling their drone photos to people such as real estate agents, advertising companies, and more.
Are drone pilots in demand?
Drone pilots are in demand as drone technology has become easier to use and more affordable. Industries such as agriculture, construction, marketing, and even emergency response use drones for many different purposes.
Can you make good money with a drone? Is a drone business profitable?
Yes, you can make good money with a drone! You can make up to $200 an hour, and the average pay is around $65,000 per year. Profitability depends on factors such as your target customer and the services you sell.
What are the best drone pilot jobs for earning money?
Some of the best drone pilot jobs for making money include aerial footage, real estate photography, mapping and surveying, building inspection, and selling drone photos as a content creator (such as Instagram).
What freelance opportunities are available for drone pilots?
Some freelance jobs for drone pilots include aerial photography, land surveying, and inspecting buildings. You can sell your services through your website, social media, and online job marketplaces such as Upwork, Zeitview (formally known as DroneBase), and FlyGuys.
Is obtaining a Part 107 drone license necessary to earn with a drone? Can you make money with a drone without a license?
If you want to use your drone for a job in the United States, you’ll need a Part 107 license (this is informally known as the commercial drone license). It shows you know how to use your drone safely and follow the rules. Plus, some clients might ask you to have this license before they hire you too. If you are caught selling drone photography without a license, then you could face a fine of $1,100 from the FAA.
What DJI drones are recommended for making money?
Some DJI drones to look into include DJI Air 2S, DJI Mavic 3 Pro, and the DJI Mini 3.
What are the opportunities in drone training and consultation?
As more people use drones, there will be more need for drone training and advice. If you know a lot about drones, you can teach others or help businesses use drones in their work. This can be a good way to make money as well.
How To Make Money With A Drone – Summary
I hope you enjoyed this article on how to make money with a drone.
As you can see, there are many different ways to make money with a drone, such as:
Stock photos
Real estate photos
Building inspection services
Aerial photography
Instagram content
YouTube videos
Aerial mapping and surveying
Drone delivery services
Filmmaking
Hotel photos and ads
Wedding photography
Freelance jobs
Renting drones
Do you want to learn how to make money with a drone?
Is there such a thing as a 1 percent down mortgage? In other words, can you really make a 1-percent down payment when you buy a home? Well, you may be able to if you have a modest income and a 620 credit score.
But such mortgages are in their infancy. And only three lenders currently offer them. However, if they prove a success, others will likely join in and some of those may have easier eligibility rules. Already, one innovator is offering such a loan free of mortgage insurance.
Verify your home buying eligibility. Start here
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What is a 1 percent down mortgage?
The clue’s in the name. With one of these, you really do have to make only a 1 percent down payment when you buy a home.
The first 1 percent down mortgage was introduced as recently as April 2023. So, you can expect them to evolve quite quickly.
Undoubtedly, many mortgage lenders are watching how this innovation works out for the pioneers and their borrowers. If they like what they see, 1 percent down mortgages could become widely available mortgage programs.
Check your home buying options. Start here
How does one of these mortgages work?
The mechanics couldn’t be more straightforward. As long as you’re eligible, you bring 1% of the home’s purchase price to the closing. And the lender brings the other 2% as a gift. That’s a no-strings grant, which never has to be repaid.
Check your home buying options. Start here
In fact, it’s even better than that. Because, if you have a 3% down payment, the lender may still give you the 2% grant, taking your down payment to 5%. Just note that 5% seems to be the maximum under these programs.
Another thing to bear in mind is that a lender might have a cap on the grant it will provide. For example, UWM says it won’t chip in more than $4,000 in total.
Finally, be sure to study your mortgage quote (loan estimate) carefully. Because 1 percent down mortgages are still so rare, we haven’t been able to assess how competitive their interest rates and closing costs are compared with other home loans. So, it’s down to you to make sure you get a great deal.
Qualifying for a 1 percent down mortgage
There are two main qualifying hurdles for you to clear in order to be eligible for one of these loans. The first is straightforward: You need a FICO credit score of 620 or higher.
The second is a bit more complicated. It concerns something we mentioned earlier: a modest income.
But what does that even mean? Well, luckily, there’s a definition for these loans. It states that your income must be at or below 80% of the area median income (AMI) where you’re planning to buy.
Still unclear? You’re not alone. You can use a lookup tool on Fannie Mae’s website to check that AMI for your area. Multiply that by 80% (or .8 on a calculator). If your income is the same or lower, you can go ahead and apply. But, if it’s higher, you’re out of luck. Check out the other low down payment mortgages we mention below.
Rocket Mortgage gives an example of AMI in action: “You can’t qualify if you make higher than 80% of the median income in the area in which you’re looking to buy. For example, if you live in Macomb County, Michigan, the area median income is $90,800. You can’t use [earn] more than $72,640 to qualify for this ($90,800 ×.8 = $72,640).
UWM says its other qualifying criteria are the same as those for Freddie Mac’s Home Possible® or Fannie Mae’s HomeReady® loans. And we shouldn’t be surprised if other lenders have the same requirements. You may also find lenders restricting these mortgages to single-unit family homes for owner occupation.
Pros and cons of a 1 percent down mortgage
The 1 percent down mortgages can offer an enticing path to homeownership with minimal upfront costs, but they also have their pros and cons to consider.
Check your home buying options. Start here
The pros of these mortgages are apparent:
The lender gifts you 2% of the purchase price
First-time homebuyers can achieve their homeownership dreams more quickly than if they had to save up a 3% or 3.5% down payment
Your savings can be used for what you want: closing costs, furniture, and other financial goals.
The cons are:
Not everyone is eligible for this loan product
You need to be sure you’re getting a competitive deal overall
Your risk of spending some time with your home “underwater” (when your home’s value is less than your mortgage balance) is higher
It’s worth expanding on that last point. Having an underwater mortgage loan can trap you in your home. You can’t easily sell or refinance because you can’t “redeem” (fully pay back) your existing mortgage loan.
This doesn’t usually matter if you want to stay put anyway. In the past, average home values have typically recovered (and then some) fairly quickly. But, if you absolutely need to move during that underwater time, you can feel trapped. One escape route may be to rent out the home.
Lenders that offer a 1 percent down mortgage
At the time of writing this article, only three lenders offered these mortgages. Those are:
Check your home buying options. Start here
Rocket Mortgage
The Rocket Mortgage 1 percent down product is called ONE+ loan. And it is the one that charges no mortgage insurance. On a $250,000 mortgage, Rocket reckons that could save you $245 every month for an average of seven years. That’s more than $20,000 in total.
Rocket doesn’t specify a cap on its down payment grant but quotes an example of $6,000. So it’s more generous than UWM’s $4,000 cap.
Rocket Mortgage used to be called Quicken Loans and says it is America’s largest mortgage lender. It came top in the 2022 J.D. Power U.S. Mortgage Origination Satisfaction Study.
United Wholesale Mortgage (UWM)
Like Rocket, UWM says it’s “the #1 overall mortgage lender and purchase lender in the nation.” While they can’t both be No. 1, there are probably different data sources and ways of interpreting the numbers.
Borrowers can’t approach UWM directly. It operates through its partners, which are mortgage brokers, correspondents and financial institutions. So, you should ask brokers whether they can help get you a UWM Conventional 1% Down loan.
Zillow
The latest lender to offer 1 percent down mortgages is Zillow Home Loans, which launched its program in August 2023. At that point, its offering was available only in Arizona. But it said it planned to expand to other states.
In its launch press release, it is light on the details of its eligibility criteria for these mortgage loans and we are assuming that its income and credit score requirements are the same as the others.
Zillow expands on one of the benefits of its new home loans: “… by reducing the down payment loan amount to 1% of the purchase price, a home buyer looking to purchase a $275,000 home in Phoenix, Arizona, who makes 80% of their area’s median income and saves 5% of their income would need only 11 months to save for the down payment. By comparison, the same buyer who needed to save 3% of the purchase price would require two and half years (31 months) to save that amount.”
With Zillow offering 1 percent down mortgages now, it will be interesting to see how other lenders respond.
Other low down payment mortgage options
A few lucky people can qualify for a 0% down mortgage. And they might not be inclined to make even a 1% down payment.
Verify your home buying eligibility. Start here
Those are the people who are eligible for:
VA loans — You must be a veteran or service member or someone in a tightly defined and closely associated group. Surviving spouses are one example
USDA loans — You must adhere to income limits and be buying in a place designated as rural by the U.S. Department of Agriculture
If you can’t get one of those, you may be able to get a loan with a 3% down payment. Choose between Freddie Mac’s Home Possible® or Fannie Mae’s HomeReady® loans. But you’ll need a 620 credit score to qualify.
If your score is between 580 and 619, you could apply for an FHA loan. These come with a 3.5% down payment. However, if you have time, there are mortgage insurance advantages if you drive your score up to 620 and go for a Fannie or Freddie loan.
The bottom line
A 1 percent down mortgage could provide an exciting opportunity for those on modest incomes who wish to become homeowners. Your lender gifts you 2% of the home’s purchase price so that your total down payment on closing is 3%.
Providing you qualify in other ways puts you in line for a conforming loan, which meets Fannie Mae or Freddie Mac’s rules. And that provides real advantages for your mortgage insurance costs over an FHA loan.
Indeed, Rocket Mortgage says it won’t charge any mortgage insurance on its 1 percent down mortgage, which might save you $20,000+ compared to a standard Fannie or Freddie loan.
So, for those who can get them, these new mortgages can be great. Just be sure to check that your overall deal is competitive.
Time to make a move? Let us find the right mortgage for you
1 percent down mortgage FAQ
Can you put down 1% on a house?
Yes, if your income, credit score, and other circumstances meet the qualifying criteria for a 1 percent down mortgage. You could also do so if you’re eligible for a 0% down loan and choose to make a down payment, which might earn you a lower mortgage rate.
How does a 1 percent down mortgage work?
You put down 1% and your lender gives you a 2% grant, making a 3% down payment. That’s the minimum for a conforming loan from Fannie or Freddie and those typically offer attractive deals.
How do you get a 1% down mortgage?
If you think you’re eligible, apply on Rocket’s website, contact Zillow (Arizona only at the time of writing), or ask mortgage brokers about UWM’s product. Other lenders may begin offering these products soon so watch out for those.
Did you know that for the median sale price in Spokane on a 30-year fixed-rate loan will cost buyers more than one million dollars?
SPOKANE, Wash. — Interest rates, home prices, and a lack of inventory are some of the reasons lenders said are why fewer people are applying for home loans in the last year. This means, for the median sale price in Spokane on a 30-year fixed-rate loan will cost buyers more than one million dollars.
A new snapshot report from the Spokane Association of Realtors shows inventory of homes on the market was up 2% in the month of September, despite the small increase, there is still not enough supply.
“There’s not enough homes on the market right now, to be able to drive down the prices,” said Troy Clute, Senior Vice President of Numerica’s Home Loan Center.
Clute said climbing interest rates are causing a trickle down effect, potential sellers who don’t want to let go of their low rates and buyers waiting for more options to open up.
“So a lot of people are on the sidelines, and they’re just going to wait until rates start to come down before they put their house on the market. So that continues to keep inventory at a low,” Clute said.
If interest rates are causing sellers and buyers to holdout, the question is, are rates today really out of the ordinary? Rocket Mortgage has tracked interest rates since the early 70’s.
You may be surprised to learn rates in the past have been much higher.
In the early 80’s interest rates nearly reached 13%, then through the early 2000’s interest rates actually hovered between 8-9%.
It wasn’t until the 2010’s when interest rates drop to 5% and then to, as low as 3% in the early 2020’s.
We have a whole generation now of people that that’s all they know, because it’s been a couple of decades. And these people entering the market right now are not conditioned to, to those types of rates. And neither is the market,” said Jennifer Hentges, SNAP Housing Counseling Program Manager.
It’s this shock, Hentges hears from people coming into SNAP for help buying a home.
“We have a lot of people coming in to the home buyer education courses, and they’re all enthusiastic. And when they start learning what it’s going to take, they get discouraged.”
The U.S. Census Bureau reports the average household income in Spokane is about $64,000.
For those looking to buy a home with that income Hentges said people will not be approved for the median home price.
“That income will buy you probably somewhere between 250 and maybe not even $300,000 house,” Hentges said.
This is the challenge for home buyers, the Spokane Association of Realtors report the median home price as of September was $409,000.
“The house payment for that amount at today’s rates is about $3,335, which is a huge payment,” Hentges said.
Hentges said this means a household needs to make about $115,000 to afford a home. However, it’s not just the monthly payment, over the life of the loan people will pay a lot more in interest.
The median home price in Spokane in September of 2020 was $315,000. The interest rate then was 2.93% for a 30-year fixed-rate loan.
This means over the life of the loan someone would pay about $474,000 with a monthly payment of about $1,300.
Today the median home price in Spokane is about $410,000. The interest rate is about 8.6% for a 30-year fixed-rate loan. A large portion is interest and the monthly payment more than doubled from 3 years ago, now more than $3,000 per month.
This is the number that may surprise you, at today’s interest rates you’ll pay more than one million dollars over the life of the loan.
“That’s not to say they can’t refinance. But it does make a very big difference in what they can expect to pay over the life of the loan,” Hentges said.
Lenders say you shouldn’t bank on it, and expect to pay the rate you receive for a while. The good news, homes in this market continue to appreciate in value.
“So I think getting in right now and buying a home. Even with a higher interest rate, you have the option of refinancing later,” Clute suggested.
SNAP offers home buyer education courses to help people navigate the process and connect them to down payment assistance programs.
“It’s amazing to watch people get a home when they didn’t think they were going to have a home, save their home from foreclosure when they thought there was no hope,” Hentges said.
Lenders said the days of 3% interest are behind us, it could be a while before we see rates like that again, if ever.
Their best advice to home buyers, ask for help from a loan counselor and make the move when the numbers make sense for your budget.
Watch the full interview with Troy Clute, Senior VP of Numerica Home Loan Center
Amged Baker, a 40-year-old software developer, wanted to move to a bigger home as the Florida native transitioned into a new role at work that allowed him to be permanently remote. He also wanted more space for his two kids.
But Baker, who works for a real-estate platform, knew that it wasn’t that simple to trade up. Mortgage rates had doubled and home prices continued to rise. In his hometown of Palm Beach County, Fla., home prices soared by nearly 60% over the last five years.
He sold his previous home for $600,000, which had a 30-year mortgage rate of 2.8%. However, he was prepared to give up that rate if he could avoid paying a rate of 7%.
Baker was intrigued byassumable loans. Having refinanced his current home during the pandemic, he was keenly aware of the value of his ultra-low mortgage. He knew his monthly payments would be a lot more affordable with an assumable mortgage — and so his search began.
He’s not alone. It appears to be the housing market’s latest obsession — homeowners, buyers, and real-estate agents are all talking about assumable mortgages.
Across real-estate brokerage sites, listings boast that the home comes with an “assumable mortgage,” described in glowing terms as a “rare find,” “game-changer,” or as one buyer said on social media, “white whale.”
What are assumable mortgages?
With assumable mortgages, the loan — and, importantly, its interest rate — is passed from the seller to the buyer when a house changes hands.
With the U.S. housing market frozen by high rates and low inventory, it’s clear why people have turned their attention to assumable loans. They’re particularly appealing now because they offer homeowners a way to potentially capitalize on their pandemic-era ultra-low mortgage rate by passing it on.
Here’s the catch: Only certain types of loans can be assumable mortgages. The seller must have a government-backed home loan, which is insured by the Federal Housing Administration, Veterans Affairs, or certain loans by the U.S. Department of Agriculture.
“‘Folks don’t want to give up those assumable mortgages because they’re just as attractive to them as they are to you.’”
— Andy Walden, vice president of enterprise research strategy at ICE
These government agencies allow homeowners to transfer ownership of the mortgage to a new home buyer under certain conditions such as the new buyer having good credit, an acceptable debt-to-income ratio, and more.
For the typical home buyer today who is facing a 30-year mortgage with a rate over 7%, assuming an existing mortgage with an interest rate as low as 1.75% is an enticing proposition. It offers an alternative to buying points — fees a borrower pays the lender to cut the mortgage rate on their home loan — or taking out an adjustable-rate mortgage, which comes with its own risks.
For the seller, an assumable mortgage presents another feature to play up when listing their home. There is also, perhaps, some comfort in knowing that their ultra-low interest rate will be inherited by the buyer.
Assumable mortgages were popular in the 1980s
“For the last 40 years, rates have been falling, so nobody cared about assumability,” said Tod Tozer, former president and CEO of Ginnie Mae. “So we’re basically back to the future — we’re back to 40 years ago when 30-year mortgages were close to 13%, 14% back in 1981. And they’ve been falling ever since.”
Ginnie Mae securitizes all FHA, VA, and USDA mortgages for the secondary market. Tozer has also written about assumable mortgages being a “solution” to today’s frozen housing market, as the seller will be able to “receive top dollar for the sale of their home,” and move to another place.
Assumable mortgages were popular in the 1980s when mortgage rates were in the double digits. Back then, many conventional loans were assumable. “It was the standard of the industry,” Tozer said.
But assumable mortgages aren’t as common as a conventional loan, making them hard to come by.
Based on the market today, only 12 million mortgages are potentiallyassumable, which is less than a quarter of all mortgages in the U.S., according to loan-level data from ICE. Of these mortgages, which are primarily FHA, VA, and USDA loans, about 7.2 million or 14% have a mortgage rate of below 4%.
Assumable mortgages can be difficult to find, and it can also be difficult to get homeowners to part with their loan if the alternative is to buy a house with a much higher interest rate.
“Folks don’t want to give up those assumable mortgages because they’re just as attractive to them as they are to you,” said Andy Walden, vice president of enterprise research strategy at ICE, or Intercontinental Exchange, a data company.
Additionally, even after a buyer takes over the mortgage, they will still need to cover the difference between the outstanding balance and the sale price, Walden told MarketWatch.
How assumable mortgages work
So how do they work? Imagine an aspiring homeowner views a home valued at $375,000, and the home comes with an assumable mortgage of $225,000. The buyer in this situation will need to put down $150,000 in cash, or find other financing after they assume the mortgage.
If the buyer requires secondary financing, it will likely come at a higher interest rate, which will offset some of the savings from the assumable mortgage. Nonetheless, for homeowners who are keen on selling, if they have an assumable mortgage, their house will become more attractive to buyers.
“Veterans across the country are sitting on these ultra-low rates,” Chris Birk, vice president of mortgage insight at Veterans United Home Loans, told MarketWatch. “So they’ve got this incredible marketing opportunity.”
“‘Veterans across the country are sitting on these ultra-low rates. So they’ve got this incredible marketing opportunity.’”
— Chris Birk, Veterans United Home Loans
And yet of the 69,000 VA purchase loans that his company processed in 2022, only about two dozen were assumptions.
There’s a lack of awareness about assumable loans, Jason Mitchell, chief executive of Jason Mitchell Group, a Scottsdale, Ariz.-based real-estate brokerage, told MarketWatch.
The first question real-estate agents should ask homeowners who are listing their homes is whether their mortgage is assumable. “If you can mark it as an assumable mortgage at 3.5%, you’re gonna get a better price on your house,” he added.
What happens if the new buyer defaults on the assumable mortgage?
The person who assumes the mortgage also becomes responsible for paying the loan on time. If the new buyer stops making their mortgage payments and goes into default, that does not mean the original owner will be required to pay up.
With FHA loans, “once the assumption is complete, it is a full release of liability for the previous borrower, which means the new borrower (the borrower that has assumed the mortgage) has full responsibility for all aspects of the mortgage,” a HUD spokesperson told MarketWatch.
Similarly, with VA loans, when another buyer assumes the mortgage, there is a release of liability, Birk added. The veteran who owned the home previously isn’t financially responsible if the new owner defaults.
One man’s search for an assumable mortgage
During his search, Baker, the software developer, contacted Chris Tapia, a 41-year-old real-estate broker with Compass Florida. Tapia had met Baker three years ago when the homeowner bought his first home in Palm Beach, and the pair had become good friends.
Tapia had recently introduced the idea of assumable mortgages to Baker. The agent believed that it was one key way for home buyers to take back the purchasing power they lost as homeownership became more expensive.
“Everything is so phenomenally expensive that no one can really afford anything right now,” Tapia told marketWatch.
In his quest for assumable loans, Baker specifically looked for homes that were financed with a mortgage from the Federal Housing Administration, Veterans Affairs, or the U.S. Department of Agriculture.
He then searched home listings from various online brokerages to identify those that were financed with an FHA or a VA mortgage. He also looked at services such as FHA Pros, a site that provides real-time data for FHA and VA condominium approvals.
But homeowners can also look for listings with assumable loans via Google with the following search term: site:compass.com “assumable.”
MarketWatch found several new and old listings advertising assumable mortgages in the home’s description.
Finding an assumable rate of 3.05%
Baker and Tapia attended 20 open houses in Palm Beach County.
They made four offers and ultimately closed on a four-bedroom single-family home in Palm Beach County for $620,000. Baker took over the seller’s 30-year fixed-rate mortgage, under the assumption rules.It has a 3.05% rate.
He currently holds a Federal Housing Administration loan with an outstanding balance of $324,000. As a result, he put down $269,000 in cash.
The seller had only paid off about 3 years on their 30-year loan,so Baker took it over with a monthly payment of about $1,500. He estimated that buying the home with a conventional mortgage at the prevailing rate would cost closer to $2,300 a month.
Baker closed on the home in June 2023, and because he assumed the seller’s loan he did not have to pay thousands of dollars in closing costs.
“You will be hearing about assumable loans more often,” Tapia, the broker, said.
Baker agreed. “To be honest with you, it was always a good deal — it was always better than going the conventional route,” he said.
You’ve made the big decision: You’re ready to buy a home! What’s next? A great first step is to receive a Pennymac BuyerReady Certification. With this certification in hand, you’ll know precisely how much you’re qualified to borrow. It’s about as close to obtaining your mortgage as possible without actually finalizing it.
Let’s explore what a BuyerReady Certification is and how it can give you peace of mind as you begin your home buying journey.
What Is a BuyerReady Certification?
The BuyerReady Certification process is Pennymac’s unique loan certification process that confirms precisely how much of a mortgage you are likely to qualify for.
Here’s how it works:
Talk to a Pennymac Loan Expert and complete a mortgage application.
Submit documents that will provide an overview of your finances. Documents typically include:
Recent pay stubs
W-2 Forms and 1099 statements
Bank statements
Statements for other assets, such as stocks, bonds, IRAs and 401ks
Additional documents related to income, like child or spousal support, rental property income or gift funds
Our underwriters will review your documents, credit history, income and debt-to-income (DTI) ratio. We’ll also consider the type of property you’re planning to purchase.
You’ll receive BuyerReady Certification confirming you are likely to be approved to borrow a designated amount, as long as certain conditions and the home meet requirements. While it’s not a loan finalization, it is a significant move in that direction. Keep in mind that a BuyerReady Certification is valid for 120 days. (If you do not find a home within that period, you can apply for a new Certification with your most current financial information.)
Begin your house hunting with confidence! You’ll know exactly which homes fit your budget and be ready to put in your offer.
How Is a BuyerReady Certification Different Than a Pre-Qualification?
As you embark on the path to homeownership, you may hear about mortgage pre-qualification. How does a BuyerReady Certification differ from mortgage pre-qualification?
While a pre-qualification also involves working with your lender to determine how much of a mortgage you can afford, BuyerReady Certification takes it further.
A BuyerReady Certification is used to provide proof of your financial ability to secure a home loan for a specific amount, given there are no materially adverse changes to your situation or to the loan requirements, and the property you want to buy is determined as eligible. It can also be seen as a conditional approval — meaning, you are likely to be approved for the loan as long as you and the property meet all of Pennymac’s conditions.
Mortgage pre-qualification is a more informal process than BuyerReady Certification. It doesn’t require any official documentation, and is therefore considered more of a ballpark estimate than a precise confirmation of the specific amount you may be able to borrow to buy a home.
The Benefits of Receiving a BuyerReady Certification from Pennymac
Obtaining BuyerReady Certification has many benefits that can help facilitate the homebuying process and make it a more positive experience.
Enjoy peace of mind as you shop for a home
BuyerReady Certification shows the maximum loan amount you would likely qualify for, so you can limit your search for homes that fit your budget. You can avoid looking and falling in love with homes out of your price range. And remember, just because you have a BuyerReady Certification for a certain dollar amount, that doesn’t mean you have to borrow the entire sum . You’ll also want to consider other expenses that come with homeownership, such as taxes, association dues and new home furnishings, so leaving some wiggle room in your monthly budget could be very useful.
Get ahead of competing buyers
Many sellers prioritize accepting offers from potential buyers who have been BuyerReady Certified over those who are only pre-qualified. It shows that you’re a serious, credible home buyer who can secure adequate funding to proceed with the purchase.
Move faster on your offer
Found a perfect home? Since you already know what you can afford, you can make an offer immediately — a big plus in a competitive market.
Expedite loan processing
Since you’ve already submitted the majority of the documentation and information you’ll need for the mortgage, your loan process can be smoother and faster.
Qualifies you for rate lock
BuyerReady Certified homebuyers qualify for Pennymac’s Lock & Shop program, which allows you to lock in a rate before locating a property. Protect yourself from future rate increases and potentially save thousands of dollars in the lifetime cost of your mortgage.*
For an estimate of how much money you may be able to borrow, check out our Pennymac mortgage calculator. And if you’re ready to start home shopping, talk to a Pennymac Loan Expert and get BuyerReady Certified today!
*Lock & Shop Program allows consumers who have a Pennymac BuyerReady Certification for a purchase loan with Pennymac to lock a rate prior to locating a property. The program requires a non-refundable fee of $595 due at the time of the rate lock. Consumers with a Pennymac BuyerReady Certification for a purchase loan with Pennymac must meet appropriate underwriting conditions to obtain a mortgage loan. Consumers may choose between a 60-day, 75-day or 90-day lock period. Consumers must initiate a mortgage loan application for a specific property and be under purchase contract for the property at least 30 days prior to lock expiration in order to extend the locked rate. All rate lock extensions are subject to Pennymac’s standard rate lock extension fees. After the rate lock and subject to favorable market conditions, consumers may be eligible for a one-time reduction in rate once the loan application for a specific property has been initiated (0.50 % maximum reduction in interest rate allowed). Eligible loan products are Conventional Fixed, Conventional ARM, FHA Fixed and VA Fixed. Program excludes Jumbo, refinance, third-party and in-process loans. Program subject to termination in Pennymac’s sole discretion and without notice.
In order to make homeownership more accessible, loanDepot has launched a new program called “accessZERO.”
As the name suggests, it allows prospective home buyers to purchase a property without a down payment.
It comes at a time when affordability has rarely been worse, thanks to a combination of significantly higher mortgage rates and record high home prices.
At last glance, the popular 30-year fixed was approaching 8%, up from around 3% in early 2022.
And home prices continue to climb higher in most parts of the country, thanks to an ongoing lack of inventory.
How loanDepot accessZERO Works
To combat eroding affordability, SoCal-based direct lender loanDepot has unveiled accessZERO.
It combines a regular 3.5% down FHA loan with a repayable second mortgage that covers up to 5% of the purchase price.
This 5% can be used for both the down payment and for closing costs, allowing a home buyer to come to the table with nothing out of pocket.
The second mortgage is a 10-year, fully-amortized mortgage that is repaid like a normal mortgage.
As such, the borrower has two mortgage payments to make each month, but nothing is required upfront at closing.
For example, a buyer purchasing a $400,000 home could get a first mortgage for $386,000 and a $20,000 second mortgage to cover down payment and closing costs.
The resulting payments could be something like $2,700 on the first mortgage, assuming a 7.5% mortgage rate, and a somewhat nominal amount on the second because of its small size.
Depending on interest rate, it might add a couple hundred dollars to the overall payment.
The borrower would still need to qualify for both loans and they’d be factored into the maximum debt-to-income ratio.
Additionally, there is a minimum credit score required, which appears to be as low as a 600 FICO.
Both first-time home buyers and repeat home buyers are eligible for this program, which seems to be available nationwide.
The down payment assistance is offered by Tule River Finance Authority, according to an ad promoting the product by the company.
And homebuyer education may be required for first-time buyers taking advantage of the program.
However, unlike other near or zero-down mortgages, there do not appear to be any area median income (AMI) restrictions.
So it should be open to all those who would typically qualify for an FHA loan.
Is Down Payment Still a Hurdle? Or Is It the Monthly Payment?
While loanDepot’s new accessZERO program tackles the down payment head-on, it still makes you wonder about monthly payment.
Over the years, down payment has often proved to be a hurdle to homeownership, but lately it might be mortgage payment.
After all, mortgage rates have surged in the past 20 months or so, rising from 3% to nearly 8%.
Requiring homeowners to make two monthly mortgage payments instead of just one could more strain on the borrower’s DTI ratio.
So while they won’t necessarily need the down payment, qualifying for both mortgages could prove to be more difficult.
But for someone uninterested or unable to come up with down payment funds, it could be a workable solution if the income is there.
Just note that mortgage rates are often higher the less you put down, so that too could bump up total housing costs.
Earlier this year, Movement Mortgage launched a zero down FHA loan as well, which seems to be structured quite similarly.
Known as Movement Boost, it combines a 3.5% down FHA loan with a repayable 10-year second mortgage for up to 5% of the purchase price.
And the interest rate on the second loan is set at 2% above the rate on the first mortgage.
Lately, a handful of lenders have also launched 1% down mortgages, though many of these have area income restrictions.
Some examples include the U.S. Bank Access Home Loan, the Rocket Mortgage One+, and Conventional 1% Down from wholesale lender UWM.
Meanwhile, Frost Bank launched a zero down home loan known as the Progress Mortgage.
So it’s clear affordability continues to be an issue for many of today’s prospective home buyers, with no letup in sight.
loanDepot accessZERO Highlights
A zero-down FHA loan
Combines a 3.5% down first mortgage with a second mortgage
Second mortgage covers up to 5% in downpayment assistance
Can be used for both the down payment and closing costs
First-time and repeat home buyers permitted
There do not appear to be area income restrictions
If you’ve got your eye on a Taylor Morrison home, you may have come across their affiliated lender “Taylor Morrison Home Funding.”
As with many other home builders, they’ve got their own in-house mortgage lender to streamline the home buying process.
This affords them better control, ideally boosting customer service, and gives them the ability to offer special pricing incentives.
With fewer parties involved, they should be able to get you from application to closing quicker than the other guys.
And if they can throw in a big mortgage rate buydown as well, it might be a win-win. Read on to learn more about the company.
Taylor Morrison Home Funding Fast Facts
Affiliated lender for home builder Taylor Morrison
Offers home purchase financing to new home buyers
Founded in 1982, headquartered in Maitland, Florida
Has 84 licensed mortgage loan officers
Parent company is publicly traded (NYSE: TMHC)
Licensed to lend in 11 states nationwide
Funded over $3 billion in home loans in 2022
Most active in Texas, Florida, Arizona, and California
Taylor Morrison is one the largest home builders in the United States, serving home buyers and renters in 19 markets across 11 states.
Only a handful of builders are larger, including D.R. Horton, Lennar, Pulte, NVR, and Toll Brothers.
The company was formed in 2007 after Taylor Woodrow Inc. and Morrison Homes Inc. merged. Dispute this recent development, their building operations date back to the early 1900s.
They are now headquartered in Scottsdale, Arizona and build new homes in 11 states, including Arizona, California, Colorado, Florida, Georgia, Nevada, North Carolina, Oregon, South Carolina, Texas, and Washington.
These are also the states where they are licensed to lend, as their primary focus is extending financing to the buyers of their new homes.
Taylor Morrison Home Funding is most active in the state of Texas, which accounts for about 25% of total loan production.
At last glance, there were 84 licensed mortgage loan officers working for the company throughout the country, per the NMLS.
They also own Inspired Title Services, which is a full-service title insurance and real estate settlement provider operating in the states of Arizona, Colorado, Florida, Nevada, and Texas.
How to Apply
To get started, you can either visit a new home sales office and get connected to a sales rep, or simply navigate to their website.
If you go online, they have the option to pre-apply via “Dorothy,” which is their “state-of-the-art mortgage technology that can take you home with just a few clicks.”
A play on the Wizard of Oz, Dorothy works alongside a human Taylor Morrison Home Funding team to get you to the finish line quicker and easier.
The process includes a digital loan application with automated verifications to reduce the need for paperwork and documentation, powered by fintech company Blend.
Applicants can eSign disclosures and take advantage of secure document uploading to ease the burden.
Once complete, you will be presented with tailored mortgage solutions based on the information you provide.
And a licensed loan officer will then provide solutions and “market-competitive rates” with your goals and budget in mind.
Those who prefer more guidance can simply click on “Contact a Loan Consultant,” where they’ll find contact information for loan officers near their market.
After your loan is submitted, you’ll be able to check loan status via the online portal, satisfy outstanding conditions, and get in touch with your lending team if and when you have questions.
Able Ready Own (ARO)
Those who need help qualifying for a home purchase can take advantage of their complimentary program called Able Ready Own (ARO).
In a nutshell, ARO Consultants work with prospective home buyers to strengthen their credit profiles and boost their chances of getting approved for a home loan.
The goal is to educate consumers about the home buying and mortgage process, and create tailored plans that produce better qualified home buying candidates.
If successful, they might be able to boost your credit scores and fine tune other areas that are key for mortgage qualification.
In the end, these changes could put you in a stronger position when it comes to buying and financing a home.
If they’re able to increase your credit scores, you may also qualify for a lower mortgage rate.
Available Loan Programs
Home purchase loans
Conforming loans backed by Fannie Mae and Freddie Mac
Jumbo loans
FHA loans
VA loans
Fixed-rate and adjustable-rate options
Temporary buydowns including 3-2-1
Permanent buydowns for life of loan
Taylor Morrison Home Funding has a limited menu of loan programs, but still all the main stuff to satisfy the needs of most home buyers.
They are fully focused on providing home purchase loans to their customers, meaning no mortgage refinances here.
In terms of loan choice, you can get a conforming loan backed by Fannie Mae or Freddie Mac, or a jumbo loan if purchasing an expensive new home.
Government-backed loans are also available, including FHA loans and VA loans.
They don’t appear to offer USDA loans or second mortgages, including any sort of home equity loans or lines.
However, you can get both a fixed-rate mortgage, such as a 30-year fixed or 15-year fixed, or an adjustable-rate mortgage, such as a 5/6 ARM or 7/6 ARM.
Additionally, buydowns might be offered, including temporary and permanent buydowns, to help reduce payments for the first couple years or for the life of the loan.
Taylor Morrison Home Funding Rates and Fees
While they don’t have a page dedicated to their mortgage rates and lender fees, my guess is they provide special financing if you use them to buy a Taylor Morrison home.
This is a common setup for home builders with their own financing departments. They’re able to structure deals that include big mortgage rate buydowns.
Not only does this help the home buyer qualify, it also allows them to avoid price reductions if affordability is strained.
If you visit the Taylor Morrison Homes website, you’ll be able to see special offers by clicking on a particular market they serve.
I came across some pretty spectacular deals, including a combination of a temporary and permanent buydown where the interest rate started as low as 2.75%.
Just pay attention to closing costs and the mortgage APR, which factors in the lender fees and the interest rate.
And always take the time to gather outside mortgage rate quotes so you can negotiate with the builder’s lender.
Taylor Morrison Home Funding Reviews
There don’t seem to be a ton of reviews online for Taylor Morrison Home Funding, though I was able to track down a handful.
Their Irvine, CA location currently has a poor 1.0/5-star rating on Yelp from 32 reviews. Poor communication seems to be the main gripe.
You might also be able to find individual loan officer reviews on Zillow and other websites.
Or you can search their many home builder locations and check out their Google reviews. Granted, those might combine the home builder and lender experience.
Over at the Better Business Bureau (BBB) website, the company has an ‘A-‘ rating based on customer complaint history. There don’t appear to be any complaints on file at the moment.
Their parent company has an ‘A+’ BBB rating, but over 200 complaints filed over the last three years. And over 100 in the past 12 months.
But the high letter grade should indicate that they handle those complaints in a timely and professional manner.
At the same time, the customer reviews for the parent company on the BBB website aren’t great, with a 1.15/5 rating at last glance.
So be sure to take a gander to determine what customers are complaining about, and how you can avoid those same issues.
To sum things up, Taylor Morrison Home Funding could be a good option if you’re buying a Taylor Morrison property.
The biggest incentive being the special mortgage rate offers that are hard to beat, especially from an outside lender.
However, you should still take the time to comparison shop as you would any other lender.
While they might make things easier, and have better communication between builder and lender, their mixed reviews indicate some hiccups too.
Taylor Morrison Home Funding Pros and Cons
The Good Stuff
Can apply online via a digital mortgage application
Mostly paperless process with the latest technology
Plenty of loan programs to choose from including ARMs
Offer temporary and permanent buydowns
Can get a long mortgage rate lock
Big mortgage rate incentives on Taylor Morrison properties
Complimentary ARO service
Free mortgage calculator and mortgage glossary online
The Perhaps Not
Only offers home purchase loans
No refinance loans, USDA loans, or second mortgages