Getting the best Financing
Finding the right home for you is your primary goal, but enjoying it with a lower payment and better mortgage terms is a very important secondary goal. I’ve researched and worked with many mortgage brokers and lenders in the Bermuda Run real estate markets, and I’ll help you to contact those that are the best fit for you and your financial picture.
The normal mortgage for working families – Just because there’s nothing special about your income stream, and you’re getting a paycheck every week, that doesn’t mean that there won’t be differences in mortgages and lenders for your needs. Every mortgage broker and most lenders tend to work within their own requirements and procedures, and these may or may not be the friendliest terms for a salaried or hourly wage earner. I know which are going to treat you right and give you the best terms, and I’ll guide you to them.
The self–employed borrower – Since the mortgage and housing crisis that began in 2007, it’s become a grueling process for a business owner or self–employed person to get a mortgage. Documentation of income and expenses is much more detailed, and I'm up–to–date on all of it. I’ll steer you toward multiple sources for great mortgages for the self–employed.
Less than stellar credit – All types of lenders have become tougher in our new financial environment, and it’s easy to get a ding or two on your credit these days. It doesn’t even take a mistake or late payment, as credit scores are reduced for the amount and ratio of debt, as well as types of debt. Millions of people pay their bills on time and still don’t have those high end credit scores. I know the lenders in the Bermuda Run, Bethania, Boonville, Clemmons, Cooleemee, Danbury, Dobson, East Bend, King, Lewisville, Madison, Mayodan, Mocksville, Mount Airy, Rural Hall, Stoneville, Tobaccoville, Walkertown, Walnut Cove, Yadkinville, Winston Salem, Alamance, Asheboro, Biscoe, Burlington, Green Level, Denton, Elon, Franklinville, Gibsonville, Graham, Haw River, High Point, Archdale, Jamestown, Kernersville, Eden, Lexington, Liberty, Mebane, Milton, Mount Gilead, Oak Ridge, Pleasant Garden, Ramseur, Randleman, Midway, Reidsville, Seagrove, Sedalia, Staley, Star, Stokesdale, Summerfield, Thomasville, Trinity, Troy, Wallburg, Welcome, Wentworth, Whitsett, Yanceyville, Greensboro, Elkin, and Jonesville real estate markets ready to provide good mortgages for less than high end credit scores, and I’ll tell you who they are.
ARMs and When They're Appropriate – Though most residential home buyers are buying a home they intend to occupy for a number of years, on average around the country at least eight, this isn't always the case. Also, investors may be looking at a shorter ownership time frame. ARMs, Adjustable Rate Mortgages, are appropriate if the plan is to own a home seven or fewer years, particularly five or fewer. Because the lender is tying up their money for a shorter defined time period, they loan at lower interest rates. ARMs can result in hundreds of dollars a month in lower payments in some cases. They can also allow a buyer to qualify for a larger home. However, this isn't generally a great practice, as once the ARMs fixed rate interest period is over, rates can escalate more than expected.
Financial Disclosure and Deal-To-Closing Considerations – Especially after the mortgage and housing problems that began in 2007, lenders and their underwriters are scrutinizing financial, income and expense information much more closely than ever before. Be prepared to dig out a lot of documentation, and it’s best to be forthcoming with any financial information that impacts your ability to pay the mortgage payment. Even if it’s not asked for early in the process, be prepared for questions and requests for documents throughout the process. Also, it’s highly recommended that you not add any credit card or other debt between the purchase contract and the closing. Just before closing, most lenders will do another credit check and a check for any liens or encumbrances.
Watch the Fees and Question Them – There are a number of fees associated with getting a mortgage, and the total of origination and other fees is usually the highest closing cost aggregate item in the deal. Never hesitate to ask about all fees, why they’re charged and why they’re a certain amount and how they’re calculated. It’s your money, and you’re the customer.
Here are 10 tips for getting the best mortgage deal:
Compare apples to apples. When you get quotes from companies, don’t look at just the interest rate. Look at the rate and all the fees, including points, origination fees and any other fees charged by the lender. A “no-fee” loan just means the fees are included in the rates.
Ask to see the Good Faith Estimate worksheet, not just the GFE. Many people consider the current Good Faith Estimate, required by law, to be confusing, and it is being replaced August 1 with what consumer advocates hope will be a more useful document. Until then, ask for the complete worksheet, and make sure it itemizes all the fees.
Interview the actual person who will handle your loan. That could be a mortgage broker, a bank employee or a loan officer. Ask about experience and qualifications. Is the person licensed (required for brokers but not bank employees)? Does he or she belong to the National Association of Mortgage Professionals or your state’s mortgage professional association? Ask for references and look at reviews online. “The company does not matter as much as the originator,” Fleming says. “Even good companies hire really bad people.”
Plan for costs that are not charged by the lender. Additional costs include title insurance, real estate transfer taxes and required escrows for property taxes and homeowner insurance. In some states, shopping for closing agents can save several thousand dollars, while escrow or closing costs are minimal in other states.
Make sure the lender offers the program that is best for you. Not all lenders offer FHA, VA or USDA Rural Development loans. Down payment requirements, loan-to-value ratios and credit requirements also vary by lender.
Get your free credit report before you start. This will not allow you to put your feet up on the desk and demand the best terms, as one commercial suggests, but it will let you know where you stand. “Just because you have a 700 credit score doesn’t put the ball in your court,” says Donald Frommeyer, chief executive officer of the National Association of Mortgage Professionals and a loan originator at American Midwest Bank in Indianapolis.
Give the loan officer all details about your situation when asking for quotes. People who are self-employed, have suffered a foreclosure or recently changed careers especially need a good loan officer. “One of the toughest things for me is to tell a customer, ‘Hey, I really can’t help you,’ but I always have a potential solution,” Frommeyer says. “I don’t like to pull credit on somebody until I talk to them about what I can do.”
Do you want to pay more upfront or get a lower interest rate? If you’re planning to keep the loan for 30 years, it may make sense for you to pay more upfront to get a lower rate. If you plan to sell or are going to refinance in a few years, it may not.
Ask about what documents will be required. All mortgages require significantly more documentation these days. Find out what’s required, and be prepared to provide it.
Know who you’re dealing with when you fill out an online form asking for rates. Will you get phone calls from mortgage brokers trying to gain your business? Will you get quotes online or via email? Most online forms require you to provide significant personal information before giving you quotes (and no one can provide an accurate quote without knowing your credit store). Will the service pull your credit once you fill in the form or wait until after you have talked to someone?