Today’s Mortgage Lesson: The Three R’s. Rumors, Reminder, and ‘Rithmetic

Los Angeles Mortgage Advice, Buying a Los Angeles HomeAs usual, Gene Mundt, a Chicago mortgage lender offers excellent advice which Los Angeles home buyers can take advantage of.

Today, I want to address 3 things that seem to crop-up frequently when working with home buyers … and that’s …

Rumors, Reminders,
& ‘Rithmetic!

Rumors first, as I believe misconceptions and untruths can scare potential home buyers from searching out the facts.
The rumor I hear most often concerns the need for down payment.  So many potential home buyers (especially first-time buyers) believe that you must have 20% down to buy a home.  That’s just not true!

There are multiple programs that allow for smaller down payments.  Some are:
  • USDA Rural Development -  Properties in qualified counties and specific villages are eligible for these loans with NO MONEY DOWN … and credit scores as low as 620.  (First-time buyers only)
  • IHDA Loans -  $1,000 down with GRANT money used for remainder of down payment.  (First-time buyers only)
  • FHA -  Down payments can be as little as 3.5% … and this is for ALL buyers.  First-timers and step-up too.
  • VA -  Veterans can buy or refinance at 100% with NO MONEYDOWN.
Locally-offered down payment assistance programs may also exist that would prove financially beneficial to prospective home buyers.  Don’t let RUMORS keep you from investigating the possibilities that exist. Talk to a professional mortgage lender.  Seek the facts as they pertain to you personally!

A Reminder is next!  And I can’t over-emphasize the importance of this. Should you actively be thinking of buying a home, or actually in the process of buying a home …

DO NOT APPLY FOR NEW CREDIT

DO NOT GO ON A SHOPPING SPREE

Until you have talked to your mortgage lender and received their “okay” to do so, don’t do a thing. I recently had a client that ran out and bought a house full of appliances and furniture because he “just couldn’t pass-up the holidays sales”!  We had talked about this multiple times, but he still pursued the purchases.

I remind you that the new credit you seek, that new car, those new appliances, the new furniture you envision in your new home … can literally stop your home purchase dead-in-the-water.  At minimum, it can gum-up the mortgage processing and cause delays.  If you’d talk to my client now, he’d tell you the same thing.

Prior to making any financial move (and that includes moving your bank accounts and monies) talk to your mortgage lender.  Actions as simple as these can create problems for you.  Avoid the headache or heartache that can come as a result of untimely or mishandled credit/finances.  Check with your mortgage lender first.  It IS that important!

Finally, there’s ‘Rithmetic.  With all the mortgage programs, down payment assistance programs, underwriting requirements, and quickly-changing regulations in today’s mortgage lending industry … being able to “cipher” and perform the new mortgage ‘Rithmetic has never been more important.

To put it simply, only an experienced, educated professional mortgage lender that deals with the changes on a daily basis can possibly know and determine if YOU are capable of buying a home at the present time, or when that possibility will exist for you in the future.

I wholly support efforts to educate oneself via the internet.  Using the many calculators, websites, seminars, webinar features that are available makes good sense.  They can supply a very useful stream of information and provide great tips in a myriad of ways.
But when it comes down to gathering facts, to the nitty-gritty of pre-qualifying yourself for a loan, making a final determination on whether you can or wish to proceed with homebuying?  Do yourself a favor.  Contact a professional lender. I don’t want to beat the topic into the ground, but the mortgage business has gotten increasingly detailed.  It’s quickly changing, tricky to navigate.  Anyone that tries to “cipher” whether they are truly mortgage “approvable” on their own … runs the risk of eliminating themselves from buying a home needlessly or prematurely.

Find a professional mortgage lender.  Let them do your ‘Rithmetic.  It’s the only way you’ll know the true facts about your present personal financial scenario.  And if you find you can’t buy immediately?  You’ll learn how to proceed so you improve your credit as quickly as possible.  You’ll maximize your financial efforts through their guidance.

Typically, most mortgage lenders perform these services for free.  Why not take advantage of free services and guidance?
Working with an  experienced professional mortgage lender will help to dispel Rumors.  Your lender will provide timely Reminders do the ‘Rithmetic that will help guide you through the home buying process, from initial credit inquiry through to closing your loan.
Rumors.  Reminders.  ‘Rithmetic. Know them.  Live them.  Successfully close on your new home …
.
Originally published at: http://www.genemundt.com/blog/2011/06/01/Todays-Mortgage-Lesson-The-Three-Rs-Rumors-Reminders-Rithmetic.aspx

Gene Mundt

I am a 30+ year veteran of the mortgage/banking industry, with extensive knowledge and experience in mortgage and credit services, management, and real estate appraising. I am also an IL Certified Financial Planner. This unique combination of education, experience, and expertise affords me more complete and in-depth resources from which to service my clients and their needs.

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Comments

  1. We sometimes take for granted that customers know the rules for keepings their credit in good shape, but it’s not always true.

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