May 10, 2022

This paid piece is sponsored by Central Bank.

As this spring has shown, you can add increasing interest rates to the challenges facing homebuyers.

But with the right banking relationship and lending approach, you still can find ways to save once you find your next home.

“Central Bank has been really receptive to the dynamic market we find ourselves in,” said Keith Portner, senior vice president of Central Bank.

In the rise of rates, experienced lenders know how to find solutions. Portner and the mortgage team at Central Bank increasingly are guiding clients through mortgage lending options that can help them navigate the changing market.

“We’re getting two primary questions: What are rates going to do, and what is the cost of construction going to do?” said Peter Jenkins, mortgage loan officer. “I wish I could answer both, but with so many variables, it’s hard to guess. The best thing to do is to work closely with your lender – to position yourself for the current conditions and your personal goals.”

Here are three ways Central Bank is offering homeowners a chance to lower lending costs despite the changing market.

 12-month rate lock

Unclear what mortgage rates will look like year from now? So is most everyone else. But when your home loan is with Central Bank, you can lock in a rate for up to 12 months as soon as you settle on your next home.

“This is a great fit for someone building a new home,” Jenkins said.

“As soon as you identify a property, you can lock in the rate for up to 12 months.”

What about if rates go down? You’ll still come out ahead.

“This product has a float down, so you will receive the lower rate – whether it’s what you locked in or a lower rate that exists approximately 60 days before you close,” Jenkins said. “We’ve done a lot of these loans already, and our customers are finding a lot of value in them.” 

ARM loans with low rates

Think the days of a mortgage rate of less than 4 percent or 5 percent are gone? Not with this product Central recently began offering.

“We’ve always offered adjustable rate mortgages (ARMs) but recently got very aggressive on rates,” Jenkins said. “This is an extremely competitive approach on these loans.”

Central has ARMs with fixed rate periods ranging from three, five, seven and 10 years, all of which have starting rates well below today’s 30-year fixed rate.

“This approach is not for everyone, so it’s important to have a conversation with our lenders, but for the right homeowner this can be a very smart loan,” Jenkins said. “For instance, if you’re confident you won’t be in your home for a period much longer than the length of the fixed period of your ARM or if you anticipate paying off the mortgage early, this could be an excellent product for you. When you do the math, you could save a substantial amount.”

One-time close: Construction to permanent financing

If you’re building a home, this option could be a perfect fit for you.

Typically, new construction requires two loans: a loan at the start of construction and a loan for permanent financing after construction is complete.

With this option from Central Bank, “the construction loan automatically converts to a permanent mortgage after the first 12 months, and you don’t have to close again,” Jenkins said.

In today’s increasingly volatile world, it’s also a nice approach for peace of mind.

“Obviously, we don’t like to see this happen. But let’s say you start construction and have a life event occur – maybe a job loss – which happened during the pandemic,” Jenkins said. “With this loan, you have a permanent product in place, you don’t need to panic, and you can work through your life transition knowing your loan is there for you.”

To learn more

Not all these products are right for all buyers, Jenkins emphasized.

“You need lenders who understand them and can make you aware of any risks involved,” he said. “To have someone guide you through and find solutions is critical – because in many cases those solutions can and do still exist despite increasing rates.”

Central Bank’s experienced, solution-minded mortgage lending team is ready to help you finance your next home today. To get connected, call or text Peter Jenkins, NMLS ID No. 1136071, at 605-254-4760, or visit mycentral.bank.

Central Bank, NMLS ID No. 447201

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