The mortgage industry is always evolving. At Transparent Mortgage, we keep up with the latest trends, ideas and products to best serve our customers throughout San Diego and all of Southern California. We’ll help you review all your options and find the right mortgage solutions for your homeownership situation.

The Stearns Smart Start program is an innovative new mortgage solution, brought to us by one of our lending partners, Stearns Lending, LLC. This is a lender-paid buydown program that has many attractive features. It essentially allows the borrower to have a fixed-rate mortgage, while being able to keep the payments lower over the first 24 months of the loan. In a way, it combines some of the best long-term qualities of a traditional 30-year-fixed mortgage with the short-term advantages of an adjustable-rate mortgage (ARM).

Transparent Mortgage is offering the Stearns Smart Start program in conjunction with their HomeReady and Home Possible Loans. Let’s take a closer look at some of the key benefits of this exciting new loan program:

Fixed-Rate Loan

Even though the early payments are less, this is still a fixed-rate loan. Once you qualify at the note rate, that sets the basis for your principal and interest payments over the life of loan.

First-Year Rate Reduction of 1.5%

For the first year of the mortgage, your interest rate will be 1.5% less than the fixed note rate. This allows more freedom for move-in, repair and other costs as you settle into your new home.

Second-Year Rate Reduction of 0.5%

During the second year of the loan, the interest rate will go up compared to the first year. However, it will still be lower than the rate for the remainder of the loan. Again, this gives you more financial flexibility during your second year of homeownership.

After 24 Months

After the first two years of reduced rates, you will start paying a monthly amount based on the full note rate.

Building Equity

Despite the lower payments, you will still be paying both principal and interest from day one of the mortgage loan. The amount of the interest portion of the payment is reduced with the Smart Start program, not the principal payment. This allows you to start building equity immediately.

Note Rate Qualification

In order to be approved for the Smart Start program, you will need to qualify at the fixed note rate amount.

This program is not for everyone, but it is a great option to consider for first-time buyers who need a little help at the beginning of the loan. For more information about the Stearns Smart Start program and all other loan programs that may be available to you, call Transparent Mortgage today at (619) 929-0199 to get started on your pre-approval.

Beau Hodson

Beau Hodson

About the Author Since 2003, Beau has been a mortgage professional and is a leading mortgage broker and lender in San Diego. As Founder and Senior Mortgage Advisor at Transparent Mortgage, he is truly committed to serving the needs of his clients and raising industry standards for integrity and transparency.