The real estate industry is full of documents and people helping you with your documents. It's a hassle, no fun, but a necessary evil. Here are some Ali Safavi real estate tips for what to look out for.
Loan Officers Watch out for loan officers who start peppering you with options before listening to your story. Different types of loans make sense for different types of borrowers. Give the lender your financial picture and have the loan officer explain a breakdown of what options are available and how they would meet or not meet your needs.
Mortgage Programs There are tons of mortgage programs for buyers. Not every mortgage option is going to be suitable for your specific financial situation. There are a number of important questions to ask. Should you opt for an FHA loan? Does a conventional mortgage make the most sense? For veterans, maybe a VA loan will be your best option? Buyers often ask if they should go with an FHA loan or a conventional mortgage. At Ali Safavi real estate we believe an exceptional mortgage broker should go over in detail which loan programs make the most sense for you and why. Getting the best mortgage terms for your needs will come down to asking the lender the right questions. The mortgage officer should then have the ability to plug in the best package for you. Buyers who rush into getting a loan can find themselves stuck with bad financing terms.
Find Someone Who Approves House Loans Lenders are a dime a dozen, some with more capabilities than others. The loan officer is the person you interact with, but others will be involved, like the mortgage underwriter, who will determine if you get the loan. A company that approves loans in-house will be better equipped to adapt to potential hurdles in your mortgage. For example, if there is a problem in your credit report, an in-house underwriter could discuss it with the loan officer and get it ironed out. An out-of-house underwriter might deny the loan and move on with the next application.
The standard 20% down payment is still desired by lenders, but that does not mean it is required to get a mortgage. In fact, far from it. The need for a twenty percent down payment is a myth that’s traveled far and wide for years. Some lenders will work with you even if you have as little as 3% down. There are, in fact, three percent down conventional mortgagesnow available. And with specific specialized loan programs like FHA or VA loans, you can also get a loan with zero to 3.5% down. Whatever the circumstances, you need to know the requirements for getting the loan before moving forward. Keep in mind that if you have twenty percent to put down, it might be wise to do so. By having a twenty percent down payment, you will avoid paying private mortgage insurance, which can be costly. Those who put less than twenty percent down will see how much of a burden the PMI payments can be. They will end up researching how to stop paying private mortgage insuranceas soon as they are able.
Special Programs Good news! There are approximately 2500 specialized programs around the country that help buyers get a home. That’s a lot of options, and most of them probably won’t apply to you. But maybe one or more of them do apply to you. An outstanding lender will have the knowledge necessary to guide you to programs that fit your situation. If the one you are talking to has no information or seems to have little interest in helping you in this area, find another lender. Like any other business, there are going to be good and bad eggs. If the mortgage officer is more concerned about “closing a deal,” then you know, you’re in the wrong place. Lender Fees Bad news, lender fees are unavoidable. They will attempt to make money where they can above, and beyond the interest you pay on your loan. But that does not mean every lender charges the same fees. You should compare lender fees across several different providers and weigh those fees along with other factors before you choose who to go with. An important question to ask the lender upfront is how quickly they can put a loan estimate together for you.This used to be called the Good Faith Estimate. The GFE was created to encourage buyers to shop and compare fees before deciding on a lender. The original purpose was to educate consumers on what services to bargain for so they get the best interest rate, closing costs, and other terms. The Good Faith Estimate would list all the costs associated with obtaining the mortgage. Lenders are supposed to get the GFE to borrowers within three days of completing a loan application. The GFE is now called the loan estimate.
How Does Your Rate Lock Policy Work? When we are uncertain about interest rates, the rate lock can become a vital decision point in the loan. Many borrowers will want to have the comfort of locking their interest rate. These are the questions you should be asking regarding rate locks:
Do you charge a fee to lock in my interest rate, and if so, what will it be?
How long will the rate lock be for?
Will there be a cost to extend the rate lock? How much will it be?
Will you give me the loan lock in writing?