Why Choose a Local Mortgage Banker? They Make the Lending Process Easy.

By: Kendall Tayman, Team Tayman

Finding the best lender to finance your home is one of the most important decisions you can make throughout the homebuying process. Since this will be one of the bigger purchases you make in life, deciding who should help finance your home shouldn’t be taken lightly. It’s important to choose a mortgage lender who is trustworthy, experienced and has a team of seasoned mortgage loan officers. Unlike any online lender, a mortgage banker is a live person prepared to personally manage your loan and look out for your best interest, something a computer cannot do.

 

So why might someone choose a local mortgage banker over an online lender? The answer is simple: they offer a personalized service with the goal of customer ease and care.

1.      Personalized Service

A locally owned and operated mortgage lender with a team of experienced mortgage banker, appraisers, and underwriters is the best possible scenario when trusting someone to help you finance your home. Providing personal financial documents to someone outside of the family may seem like a daunting, invasive task, but with a local mortgage banker, you can rest assured that your personal information is safe in the hands of trusted experts in the mortgage field. When working with a local mortgage banker, all your financial documentation remains in-house during the processing of your loan. The advantage of in-house processing is the streamlined, efficient system in place that retains full control over all aspects of your loan.

2.      Extensive Knowledge of the Local Market

When questions arise - as the loan process can often be tricky - a local mortgage banker and his/her team are able to quickly and efficiently answer any questions you may have. Local loan officers strive to build a trusting relationship between themselves and their client. Local mortgage bankers are your next-door neighbors; they have unrivaled experience in the area and would go the extra mile to help you land in the home of your dreams.

3.      Copious Experience in the Mortgage Field

Would you rather have processors and loan officers based in different locations or a well-oiled team who work with each other, in-house, every day? Or how about an online, impersonal mortgage banking team focused on the number of loans closed, versus a team with each member having over 10 years of experience in the mortgage industry who cares about quality, not just quantity. Experience and control are key aspects in the loan process for the transaction to occur smoothly. You can even take this experience a step further by finding a loan officer with a CMPS (Certified Mortgage Planning Specialist) certificate. A loan officer with the CMPS designation has the knowledge and experience building a mortgage that fits within their borrower’s short term and long term financial goals. This is the kind of lender you can trust with your personal financial documents and trust to resolve any problems that may arise throughout the process. CMPS certification is held by less than 1% of mortgage pros in the industry. In all aspects of life, experience is valued.

4.      Advantages of Independence

The advantage of an independent lender is that loans can be sourced with multiple investors and not be restricted to the pricing of any one institution. This allows for clients to achieve the best possible rate on the market, while still getting the care and promptness of a local mortgage banker.

When you choose a local, independent mortgage banker, you truly can have it all: the right relationship, while receiving fair market rates and fees. Over the course of their life, the average person buys, sells, and potentially refinances their mortgage several times. Therefore, choosing the right lender to finance your home is incredibly important, as the relationship between a lender and borrower is long term. True mortgage management is a commitment by the lender to monitor the loan throughout the complete term and alert you when there are any opportunities to change based on your financial goals.

If you’d like more information about the mortgage lending process please request a copy of our homebuyer’s guide or apply online to get started with one of our mortgage bankers.

3 Things to Consider Before Buying a Home

By: Glen Lazovick, SVP, Business Development

Whether you are a first time homebuyer, looking to trade up or down size your current home, the homebuying process can often be intimidating. Here’s 3 things to consider to help you plan for your homebuying quest. 

 1. Be a smart shopper. 
Begin your homebuying hunt by knowing how much you can afford. How do you determine what you can afford?

 • Prepare a budget.
Create a list of your monthly expenses. Be sure to include any current recurring debt, entertainment expense, commuting cost. Pro tip: This is a great time to ask yourself if there are any items you can cut out to reduce your monthly expenses. Take this time to review your cable and phone plan, check your insurance bill, find cost effective ways to doing the things you do regularly – like brewing your own coffee.

 • Meet with a Mortgage Loan Officer.
A Mortgage Loan officer can help you determine how much home you qualify for. While the Loan Officer can get you a loan for more than you thought you could afford, that does not mean it is what you would feel comfortable paying each month. This is where you could consider the budget you created. While your Loan Officer will review your income and credit statements he or she will not be able to account for your lifestyle expenses paid in cash, or credit cards that get paid off each month. 

2. Determine the best mortgage product for your needs.
Work with your Loan Officer to determine the best mortgage product for your unique situation. Your Loan Officer should ask you questions like how long you plan on being in your home and how much money you’re looking to put towards the down payment. The answers to these questions will help determine the best mortgage product for your needs.

 • Thinking about how long do you plan on staying in the home can help determine if an Adjustable Rate Mortgage (ARM) makes more sense than a fixed rate mortgage. Often times ARM’s provide a lower rate due to the shorter mortgage terms.

 • A down payment is an important consideration when considering a home loan. Your Loan Officer will be able to talk you through different products based on what you feel comfortable having for a down payment.

 3. Location, Location, Location. Check out and target a neighborhood.

• Visit your targeted neighborhood on several occasions at different times and days of the week. A neighborhood that is quiet Tuesday at 2:00 pm maybe noisy and traffic filled on a Saturday at 11:00 am.

• Plan a practice weekday commute from your targeted neighborhood. Leave the targeted neighborhood the same time you leave your current home. Is the commute longer or shorter is it something you can live with? It might be short as far as distance but traffic patterns may double your commute time.

• How are the schools in the neighborhood? Even if you do not have school aged children, the schools that serve your neighborhood can affect the home’s resale value.

• What surrounds the immediate area of the house? There may be a nice tree lined border in the back yard during the spring and summer months but in fall you may find out that the house is behind an Industrial complex.

• What are the future plans for the surrounding area? Check with the City or County planning or zoning board. Will a major highway be planed to cut across your back yard? The more information you have on the location, the more informed decision you can make on your future home.

While the list of considerations above should help begin the conversation about your future move, I would highly recommend meeting with a Mortgage Loan Officer who can help you plan and put you in touch with the right industry professionals to make your move as smooth as possible. If any red flags come up through your consolation, you have the opportunity to plan accordingly before your move.

Want additional information about the homebuying process? Request a copy of our homebuyer’s guide or apply online. Happy house hunting!

Tips for a Successful FHA 203k Renovation Transaction

By Paul Pykosh, Director of Renovation Lending/Senior Mortgage Banker

The FHA 203k rehabilitation mortgage program has grown in popularity as the nation’s housing stock has aged.  It allows a homebuyer to roll in the repair costs into the loan up front.   The 203k loan is perfect for homes that require cosmetic or major rehabilitation in order to make them livable or more desirable. These steps will prepare you for a successful FHA 203k loan transaction: 

1. Get pre-approved with an experienced 203k lender.  First, make sure your loan originator is well-versed in the FHA 203k mortgage, can explain the process in detail to you, and has a history of closing FHA 203k loans.  It is also important to obtain a quality mortgage pre-approval that states the terms of the 203k loan (sale price, approximate rehab costs, approximate final loan amount, interest rate, etc.).   To originate and close a successful 203k loan, the lender needs to have experience with navigating the complexity of the additional paperwork and additional players involved.  If your lender slips and calls the program the 401k loan, you know you are dealing with inexperience from the beginning! 
2. Do some homework!  Take advantage of the HUD Approved 203k Consultants before making an offer on the home.  They offer a preliminary feasibility study that will allow for a rough estimate of the necessary and desired repairs and the costs of those repairs.  Using the consultant for this can help you weed out potential ‘money pit’ properties.   Once you know the scope and cost of the work involved, this can help you structure your initial offer price more favorably.
3. Create your equity through negotiation of the sales price!  The equity in the home is determined greatly by the original ratified contract sale price.  Be careful not to bid too high since the property has to appraise high enough to include the cost of repairs.  The items that can be included for rehabilitation are flexible, but the after-completed appraised value has to validate the repair costs being done.  I have seen buyers end up with less equity because they did not negotiate the sales price low enough.  While it’s easy to get caught up in the whim and appeal of fixer uppers, it’s important to take your emotions out of the deal and treat it as a business transaction. Visit the property a few times and at least once with your contractor and/or Consultant so you know where to start and end the negotiations.   Remember that with FHA, a borrower can negotiate a seller credit for closing costs and pre-paid items up to 6% of the purchase price.
4. Work hard in the beginning of the process to have a smooth closing.  The sooner the consultant, borrower, contractor, and lender get the Specification of Repairs (a list of the specific details of the work to be done and the cost for each part of the work) completed and agreed upon, the sooner the appraisal and the underwriting of the loan can occur.  Be pro-active and help facilitate the process by staying on top of the people involved.
5. Take time to hire a good licensed contractor.    Start with referrals of professionally licensed contractors that have done jobs recently.  Interview a few, get references, and use web sites like Angie’s List to find out about a contractors reputation.  A good contractor is important to the entire loan process, both in the beginning when proper documentation is required and after closing the loan when being on budget and on schedule is vital.  Studies have shown that the lowest priced contractor has the highest number of delays and cost overruns.  The cheapest contractor often leads to the lowest quality work.

These 5 tips should put you in great shape for a successful FHA 203k loan transaction. If you have any questions on the process or to get started on your loan give me a call at (240) 238-2402. You can also check out our mortgage calculators, request a copy of our homebuyers guide or apply online.

The Home Buying Process

By: Stewart Zemil, Chief Operating Officer

Home ownership has always been a major aspect of the American dream.  Regardless of your home buying experience, buying a home can be an overwhelming process. Understanding the steps of this process will help make the experience more manageable and enjoyable. With over 20 years in the industry, I’ve worked with many families to help achieve their homeownership goals and wanted to share the full process and some tips! Now is a great time to buy a home, here are the steps to get you into the home of your dreams:

1. Start savings towards your down payment
2. Set a personal budget
3. Get pre-qualified/pre-approved: Give me a call! We’ll set up an appointment to meet and review your employment/income/assets/debts and pull your credit report to determine the loan size you qualify for, and the type of loan program that meets your needs. Getting pre-approved not only helps you shop smarter because you know your finance options before shop, but it also strengthens your offer and lets the seller know you're serious. More to come on the importance of pre-approvals in a future blog!
4. Pick a Realtor: Your agent will represent you throughout the entire transaction beginning with determining the area in which you want to live and showing you homes in that area that fit your needs at your pre-approved price range, to writing and negotiating the best price for your purchase. They’ll even help manage all of the required vendors (home inspection, pest inspection, septic, handling the repairs, removing contract contingencies, scheduling a final walk through) until the date of your closing. If you currently don’t have a realtor, I’d be happy to recommend one to you.
5. Finalize your loan: Once you have a ratified sales contract, your next step would be to work with my team and I on the following:
1. We’ll prepare the loan application and disclosures with all current information as of the date we meet
2. Order title
3. Order the appraisal
4. Review the sales contract and disclosures to make sure you are in compliance with our lender’s guidelines
5. Order homeowner’s insurance
6. Process the loan application – obtain third party confirmations on all documents you provided to qualify for the loan in order to verify their accuracy
7. Submit the loan to our in-house underwriting department for loan approval
8. At this point, the underwriting department may request any additional documentation required
9. Once those documents are obtained, we’ll resubmit the loan to underwriting for a clear loan approval
10. We’ll send  the settlement company loan closing instructions and review the final HUD-1 settlement statement for accuracy
11. Review the settlement statement line by line to make sure you have no additional questions 
12. Wire closing funds to the settlement company
6. Go to closing: Our last step is to meet with all parties on the contract at the closing company to review and sign your closing papers. This is your chance to ask the seller any last minute questions about the home, and when you’ll receive the keys to your new home!

If you’re considering a move, I’ll be happy to walk through the home buying process with you one on one. For additional information, visit my website or feel free to review  this homebuyer’s handout I put together which further dives into the loan process.

Should You Finance The Sale Of Your Home By Yourself?

You've decided to put your home up for sale. Now, how are you going to make the most money selling it and get it sold the fastest? Perhaps you should consider providing owner financing, also known as seller financing. 

Why Isn't The Buyer Getting Bank Financing?

Usually a buyer gets bank financing when buying a home. If the buyer approaches you with a deal that involves you doing the financing, you'll want to ask why. 

It could be that they can't afford a big down payment, and can't be approved for a loan without it. Or, they may not be able to get financing at all, due to no credit or bad credit.

In that case, you'll want to evaluate if you can afford the risk. Can you make the monthly mortgage payment in the event they default?

If you determine that the deal isn't too risky, you can finance the home yourself for a greater profit. But, there are some instances when you won't be able to owner finance your home for sale.

When Can't I Owner Finance My Home?

You may not know that in order to finance your home yourself, you have to be able to pay off your current mortgage in full prior to making the sale. If you can't afford to make the full payment, you won't be able to owner finance the property.

If you already own the house outright, you'll be able to finance the property. You may decide to owner finance part of the sale price for a higher interest rate. 

This would be an ideal situation for a buyer who can qualify for a bank loan for most of the sale price, but is unable to be approved for a higher loan amount to get the rest.

After a year of making payments to the bank, the buyer may be able to finance the remaining amount, and then you'll receive a lump sum for that amount. 

What Else Do I Need to Know?

There are a lot of things to take into consideration before deciding if owner financing is right for you. Be sure to do your homework and understand the benefits and risks of owner financing. It is also wise to consult with a real estate lawyer and a professional real estate agent.

Thinking of listing your home for sale and offering owner financing? Let me help you determine if owner financing will benefit you. Call your trusted mortgage professional today.