Navigating the Mortgage Maze: Expert Advice from Clark Adkins

Buying a home is one of the biggest financial decisions you’ll ever make—and with rising prices, low inventory, and evolving mortgage options, it can feel more overwhelming than ever. Whether you’re a first-time homebuyer wondering about government loan programs, debating between pre-qualification and pre-approval, or exploring the pros and cons of refinancing, there’s no shortage of questions. That’s why we turned to Clark Adkins, Mortgage Loan Originator at CPM Federal Credit Union, to shed light on the most common concerns facing homebuyers today. In this Q&A, Clark offers practical, down-to-earth guidance to help you make smart, informed choices—no matter where you are in your homeownership journey.

Q: If you’re looking to purchase a home ASAP due to rising home prices and limited inventory, is it better to wait until you have a 20% down payment or move forward with a lower down payment and deal with PMI?

A: If you don’t have the 20%, I recommend you don’t wait. Accept the PMI, because you can refinance later. If home values continue to appreciate, you may be able to remove the PMI through the refinance process. You can also petition your lender to remove PMI if you believe the home’s value has increased.

Q: What sort of (government? private?) programs are there to help first-time home buyers? What are the advantages and disadvantages of those programs? Do they restrict the homes you can purchase?

A: There are some community and state programs (not through CPM) that offer down payment and closing cost assistance. We do offer government loans such as FHA, USDA, and VA, which can help with down payment options.

Q: What is the difference between getting pre-qualified and getting pre-approved?

A: Pre-qualification is based on the information provided in your application. We’ll run a credit report, but we don’t collect the full set of personal documents required for pre-approval. In other words, pre-qualification is based on unverified information, while pre-approval involves documentation and verification.

Q: Can you please talk a little about recasting vs. refinancing?

A: If you make a large payment toward your mortgage balance, some financial institutions may offer the option to recast your loan, providing a new payment amount based on the new lower balance. The cost to recast is much lower than refinancing. Refinancing, on the other hand, changes your interest rate and potentially the terms of your loan, whereas recasting does not

Q: How does a HELOC differ from refinancing for cash out for home improvement?

A: A HELOC is a line of credit based on your home’s equity. Equity is based on your appraised value. This becomes an additional mortgage against the property reducing your available equity. A cash-out refinance changes the rate and terms of your mortgage and becomes a new mortgage, typically at a higher balance, by converting some of your equity into cash.

Q: Do you finance duplexes, triplexes, and fourplexes?

A: Yes, as long as the borrower occupies one unit as their primary residence. We do not finance these property types if the title is being taken under an LLC or other legal entity. The loan must be made to an individual, not a business entity.

Q: What percentage of your take-home pay should go toward your mortgage payment—without feeling house poor?

A: Generally speaking, we can go up to 46% to 48% of your income, but if you want more financial flexibility, aiming for 30% to 35% is a good rule of thumb. We can go higher if needed, but it’s about what works best for your situation.

Q: Considering current home prices, are USDA loans a good option for first-time home buyers?

A: They can be. The property must qualify for USDA financing based on its geographic location. These homes can be harder to find, but USDA loans require 0% down. You can find eligible properties using the USDA Eligibility Map.

Q: How can I get more information on construction loans?

A: Contact Clark Adkins at: cadkins@cpmfed.com

Q: What are the average closing costs on a $240K refinance?

A: While it varies, closing costs could be up to 3% of the loan amount.

Q: Can you speak briefly about refinancing?

A: A general rule of thumb is to consider refinancing if current rates are at least 2% lower than your original rate. That’s when you’re more likely to break even sooner on the cost of the refinance.

Q: A 2% interest rate is great—better than the 13% or more back in the ’70s. The overall average is around 7%, right?

A: That’s correct.

Q: What do you think about buying down an interest rate?

A: It can be costly. In many cases, it may make more sense to stick with the payment as is and keep the option open to refinance later if rates improve.

Q: I’ve purchased a fixer-upper but already have a primary residence. What’s your opinion on flipping the home vs. renting in today’s market?

A: That really depends on your specific situation and goals. This would be a great conversation to have with a tax or financial advisor.

Q: Do you handle VA loans so I don’t have to put any money down?

A: Yes, we do offer VA loans. Contact Clark Adkins at: cadkins@cpmfed.com.