A qualified loan officer can set you up for success
By Justin Hunter
There is what feels like a million things running
through your head when you are applying for a mortgage
to finance a home, especially
if you are a first time buyer. It seems that your everyday
chores with the family and work become much heavier,
not to mention you have to qualify for a loan in a comfortable
price range that will allow you to buy the dream home
you really need.
You obviously know that you have some homework to do,
checking out the latest rates and loan
programs, but you still need the help of a professional
to smooth out the complicating process for you so you
and your family can move and settle in with as little
distractions and stress as possible.
Henry Savage’s article, “First Step in Home
Buying Process: Pay a Visit to a Qualified Loan Officer”
published October 25, 2006 on Realty Times, explains
how the home buying process can be a lot less stressful
and worrisome with the help of an honest professional.
“I receive many phone calls with the same request:
‘How much do I qualify for?’ I have been
qualifying folks for nearly 20 years and if I've learned
one lesson, it's this: Qualify buyers based upon their
individual comfort level, financial
position and spending habits. Do not qualify a borrower
based on how much any particular lender is willing to
lend.”
While the traditional guidelines stipulate that 33 percent
of a household income be spent on the monthly mortgage
payment, this does not apply to everyone. You have to
analyze their spending habits and needs.
“One buyer may be supporting her elderly mother
and cannot afford to have one-third of her income apply
towards a house payment. Another buyer may be debt free
and naturally frugal, easily able to make a mortgage
payment that exceeds 33 percent of her income. There
are good loan programs available for both.”
A good, qualified loan officer will be able to determine
which mortgage
loan program and price range is best for his or her
client depending on the financial situation and spending
habits.
Now, if you are a potential mortgage borrower, you need
to know that you cannot determine what type of loan
you want solely based on the current running interest
rate. A good loan officer will have to speak with you
to determine what you want from the mortgage.
There are a few obvious factors to consider: “The
purchase
price range will affect her ultimate interest rate.
Loan amounts that exceed the conforming loan limit of
$417,000 fall into the "jumbo" category, increasing
the rate by as much as a 1/2 percent.”
The down payment is a critical factor when determining
the rate. Borrowers who expect 100 percent financing
will have to pay a much higher rate than if they comply
with a 20 percent down payment.
“The expected hold period of the house can greatly
affect a homeowner's borrowing costs. If the home buyer
is planning on selling the property within five years,
for example, he might take out a 5/1 ARM, which carries
a fixed rate for the first five years before a rate
adjustment. Such a program will carry a lower rate than
a 30-year fixed program.”
There are also several different “nontraditional”
mortgage options that allow the borrower to have a low
monthly payment for the first few years of the loan,
only to have it adjust to a much higher payment after
a predetermined date.
A qualified loan officer will have you, the client in
his or her best interest because there are thousands
of loan officers you could choose from, but only one
should be able to trust.
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