No Need To Fear, A Mortgage Professional Is Here!

When it comes time to purchase a property there can be serious in-trepidation when it comes to putting the financial profile together and what you can afford.  But trust me, no need to fear,  a great mortgage professional is here!  I asked good friend and Mortgage Professional, Jeremy Gould of Integrus Mortgage, to answer some frequently asked questions in order to help educate us all and ease our fears, especially of first time home buyers.

1.  What is the biggest misconception that buyers have about getting a home loan? 

 I think the biggest misconception is that homebuyers think they are limited in their options particularly when it comes to down payment.  For example, many buyers think they need at least 20% for a down payment to buy a home and/or to avoid Mortgage Insurance.  As a Mortgage Broker, I have access to a variety of loan programs where buyers can put as little as 5%, 3% or even up to 1% down and still avoid monthly Mortgage Insurance.

2. What things hurt your credit the most when needing to get a home loan? 

Applying for credit at any time during the loan process.  Avoid applying for credit and if it is an emergency always reach out to your Mortgage Professional so they can guide you as to what will be the least detrimental to your credit score & qualifying ratios. 

3. How does debt to income ratios affect your home loan or a refi? 

 This is a huge factor and 1 of the big 3 qualifying aspects in addition to assets/down payment and credit.  Keep in mind that over-extending with house expenses/auto loans/student loans/credit cards, these can all hinder a borrower’s purchasing power when it comes to high debt-to-income ratios.  As a general rule of thumb 45% debt-to-income ratio is the qualifying guideline in relation to these mentioned monthly payments and gross monthly income.

4.  What are the benefits of using a Mortgage Broker like yourself over a well known bank, such as Wells Fargo, Chase, Bank of America, etc? 

 Bottom line is that Mortgage Brokers have more options and in most cases more knowledge and experience than a loan officer will have at a Big Bank.  As a Mortgage Broker (with over 16 years’ experience), I can shop the loan scenario around to various lenders and investors to find the best programs, rate and customer care to get the transaction done in a timely manner.  On purchase transactions my typical close of escrow is under 21 days consistently.  With a Big Bank you can expect 30 or more days.  Mortgages are not the main focus of a bank as they offer many other services and types of accounts which is why they typically only offer “vanilla” loan programs.  Often times the Big Bank “best deal/rate” they can offer will have strings attached such as a requirement of having certain types of accounts with a minimum balance, direct deposit, etc.  Mortgage Brokers can simply offer their best deals without this hassle.

5. Explain what "paying points" means in the home borrowing process?  

This generally just means paying fees to buy down an interest rate or other fees such as origination, processing or underwriting.  Mortgage Brokers can typically get these fees covered and have an advantage with keeping fees to a minimum if any at all.

6.  Any other wisdom you could share with a first time home buyer or the seasoned investor?  

For a first time homebuyer, my best advice is to check all options out rather than just assuming FHA is your best loan program.  Always ask your Mortgage Professional if there are better options where you may be able to avoid Mortgage Insurance.  In most cases there is.  For a seasoned investor, I recommend that you are mindful of how many homes that you own and are financed.  Many loan programs have a limitation in the guidelines when you finance over 10 properties.

One additional word of wisdom for home buying when it comes to new construction:  Just because a builder has a preferred lender this does not mean that you’re obligated to use them or that this is your best option.  Often times they’ll offer a builder credit for using their preferred lender but then offer a higher rate or other high fees and it’s just smoke and mirrors.  Do your due diligence and compare it to YOUR preferred Mortgage Professional.  What do you have to lose?  (well, a lot of money if you use their preferred lender and pay higher rates and fees 😊)

Thanks Jeremy for taking time of your busy schedule to help us all out.  We appreciate it.  

It's just like with most "big projects" of life, you probably need to consult a professional.  If you have any questions that myself or Jeremy can help you with please give me a call and I'd love to help get you the answers you need.

Have a Blessed Day!

-Casey