Buying a home feels like surgery without anesthesia!

Buying a home today is no longer a walk in the park. Contained in this video is a little explanation and a few tips on how to make it just a little bit better!

Pre-approvals require commitment and documentation. It Matters!

I wanted to take a moment to address what it really means to get pre-approved. There are several thoughts out there and many may believe a little differently than I do. However, I am writing this to you the consumer. The times really have changed and the requirements to buy a home have come back in line with reality. Investors really want to make sure that you can AFFORD the home. This has lead to increased scrutiny of income and employment, time on the job, the line of work and overtime, bonus and commission paid.

1. Loans Officers still do pre-quals sort of and does that benefit you – The goal is to be able to buy a home. A pre-qual is nothing more than a conversation and some details being exchanged to determine whether or not you roughly fit in the box. There is limited analysis of items that are important to the overall ability to borrow. Many times the borrower says I make 5K a month. The Loan Officer fails to ask if this is W-2, 1099, this year only, consistent, paid hourly, bonus, commission, flex pay, cafe 125 accounts and many other items that could play a factor in the debt to income. They then send you on your way to look at homes and you get in contract only to find out of the 5K only 4K is acceptable. The bonus that you receive has only been this year and there is not a two year history. Now that house is history and the excitement has been lost.
2. Consumers must plan for a good experience – If you want to have the ultimate purchasing experience that is allowable in today’s market you must be ready. You would not go to Disneyland without reservations to a place to stay and an idea of what you were going to do on what day. Plans do change but a plan is in order. To get the best experience buying a home I suggest that you plan on doing the following: -Take time to put together exactly what the Loan officer request. The items should include but are not limited to: 2 years of Federal Taxes all pages and all schedules, two years w-2′s if applicable, current pay-stubs spanning 30 days, two months bank statements ALL PAGES, current statements for assets like stocks, IRAs, etc ALL PAGES!!!! - Answer a lot of questions without getting frustrated. The questions are asked to make sure that the package is presented to the source of funding appropriately. – Take time to speak with your Loan officer about all the options and get a worse case scenario for the cash you will be required to have available to make this happen.
3. Consider the Financing your solid Foundation – Without the money you wiull not be able to buy a house. A house cannot stand without a solid foundation. Assuming that you make plenty of money or are good will lead to heartache. There have been several situations that I have been called by Realtors on Transactions they are working on with Lenders. Those questions go something like this: “Matt, can I pick your brain for a minute. I have a client that is working with (XXXXXX) and the have a 780 fico score, make about 200K a year, have more than 20 % down and the bank is asking them to provide such and such. They cannot provide a full year as they did not keep this stuff on file. They have 8 months not a year worth. Is this going to kill a deal or is there a way around it?” I have seen the most qualified of buyers be put through the ringer. The underwriters want to make sure that if they sign on a loan with their name they have gotten every piece of paper that the investor may want. Falling out of escrow is everyone’s worst nightmare. Do yourself a favor by putting in the work upfront, take your time and then go look. You will not miss out on the home of your dreams if you take an extra day or two to do your due diligence.
4. Don’t worry about the past! – The past is that and it will not be re-written. Lose all ideas of how things were done in the past and do not listen to the opinions of those that bought in 2003-2007 because things are completely different and all that advice is out the window. Learn about what it takes to but in today’s market from industry professionals. We are here because we work hard at understanding our businesses. Don’t believe everything that you read on a blog and yes that includes mine. Some of it is opinion or it would not make a good story. Read and research and be a kid and ask LOTS OF QUESTIONS!!!!!!!!!

Summary – when it comes to getting pre-approved help us help you. Three tips:

1. Provide all the documentation
2. Take time to meet and ask questions either in person or on the phone
3. Do not rush as this will cause delays. Do not cut corners.

Thank you for reading. Until next time.

President’s Day Push

Ch Ch Ch Changes!!! This time for the better!

I feel that the word of the year or the anthem of the last 6 months has been change. With all the increased regulation and processing times I feel that the experience of home-ownership was starting to become a burden versus exciting. So I decided to make some changes that I know will help keep buying a home exciting and fun. Recently, I was able to throw a housewarming for a client, help another move and this is all because I made a change that got me out from behind the desk. Our job is in the field meeting, approving and working with our trusted partners and that was fading. The video below will describe five reasons I am excited to be a Loan Officer in 2010 and how I know this will help me help you!

Shopping should be done at the Mall. 5 reasons why shopping can cost you more money.

I love going to the mall. There are so many stores to choose from. I    get  the opportunity to check out all the stores looking for the greatest price. I am there for jeans and I do not have the need for the customer service team to assist me in trying them on. There is little value that staff at the retail stores can add other than an occasional explanation of the product. If I leave a store and then I decide to go back two hours later the price is still the same. Malls are great for a one stop shop and one size fits all type of product. My only question would be: Do you get your suits at the mall? If answer is yes then answer the follow up: Do you leave that day with the suit that you just bought?

Mortgages are an items that need to be tailored to your specific dimensions. They are not something that you can just pick a store and then check with another store and say the price tag was cheaper over here. Price Tags can be deceiving. In our industry they are called the “Good Faith Estimate.” Here are 5 reasons why shopping can cost you more money:

1. Rates are a moving target – In the mall you can go from store to store and then back to the original store and purchase the item that you found to be the most well priced. However, imagine if as soon as you left the store they had a price change for the worse. When you went back to buy the item that was initially $100 you found out it was $125. Had you committed ealrier in the day you would have paid $100. The flip side is you could come back and find the item to be $75 and feel like not only did you make the right choice but you got a deal. This is what is going on with rates. They change daily and in many cases multiple times a day. A Good Faith Estimate is exactly that an estimate. Some will give the the absolute best case scenario and others will price in the volatility of the market. The latter is done to prep you for the worse so that you avoid let down or shock late in the game.
2. Mortgages are Custom – There is not a one size fits all mortgage. They are custom tailored to meet the needs of the individual applying for the loan. When  you are looking at every store and comparing our GFE’s (small part of what we do) there will not be an extraordinary amount of work put into your file. Our job is to shop the best deal for you. This is what brokers do. See the definition of Broker brought to you here compliments of the free dictionary. In short we organize deals and negotiate contracts for a commission. The tailor is not going to begin cutting the suit before you buy it. You may get measured and fitted but the real action will not take place until you have committed. Common ways to show your committment are paying for the credit report and the appraisal for starters and providing all the documents to give you an accurate assessment.
3. Change in the Guidelines – While you are out looking at other stores to find the right deal for you other stores are changing what they offer. Imagine going back to the store and the item that you were looking to purchase says no longer in stock or discontinued. You may be able to find a used version online or from a store that you do not trust but you would have to weigh that risk on your own. Today’s climate has led to many changes in our guidelines. Many consumers missed the boat on Nehemiah. This was seller funded down payment assistance and it has been taken off the books. When you look so hard for the deal you may miss out on the opportunity of your life time. Don’t pick the fleck out the pepper!
4. Credit Scores – Each month just after the 3rd or so your active credit will report to the bureaus. If you have had new charges post to your debts or bought something new or inquired about a new car your score may suffer the consequences. If you were borderline 620 and your score drops below this mark your chances for an FHA have just taking you away from the Mall of options and sent you to one of two specialty stores. You know what that means right? Higher Prices. You are now going to pay more for your product through the specialty store and there is no guarantee that they will be able to stay in the market long. You have to protect your score and when you have it pulled by a Broker they have that score and can use it for up to 90 days before they would have to re-pull a new report.
5. Price is what you pay value is what you get – Often times as a consumer we are shopping for the best price. I can understand and respect this. I don’t want to pay more than I have to either. However, there are many more elements to the whole customer experience. You want to feel comfortable, informed, in the know, respected and Valued. Often times when you get a victory so to speak on the price you take a hit on the value. You will get the bare minimum but that is to be expected considering you paid the bare minimum. So I like to subscribe to the wise saying “Price is what you pay and value is what you get.” You cannot shop value in our market.

If you take nothing away from this at all please understand this: Shopping can cost you more than committing to the individual you feel most comfortable with. Shop for trust and information not for price. Ask someone to refer you to someone that you can be excited to work with. You will find by doing this you will get exactly what you are looking for. Malls are a moving target and are not a fair representation of our industry. We do not sell retail and therefore your rate and price may not be waiting for you when you come back. Leave the mall as something you do on the weekend with the family or friends. We are here to work with and for you not against. Businesses built by Referral receive nothing from charging you an unfair price for their product or service.

The Mall in Motion!