How many times do we use the phrase, "I am so busy, there is not enough time in a day". As a professional mortgage banker, helping people with FHA loans and Conventional loans, I have been very busy the last few months. And there are times, no matter what month or time of day, I am beyond busy. At times, I will admit, I will ask someone if I can call them back in a few minutes, maybe an hour later, or that night. Sometimes, I will just ask them if I can speak to them tomorrow. I have always believed in setting my clients expectations to a certain level, no matter how good or bad the news is.

But are you the other type of person that is not organized, who always says you are extremely busy, but you aren't doing much? Or you just get to people after you are done lounging at work? A huge pet peeve of mine is when a consumer tells me that they spoke to a loan officer who never gave them a good faith estimate. I tell them to call that person up and ask for it. That loan officers response is that they will send it out soon. 3 days later, nothing. The consumer's answer?  "ah, they must be busy".  No, no, and triple no. You are never that busy. I can't stress this enough to all consumers out there. There is busy and there is poor execution.

As always, there are many kinds of busy. But what do you put up with?  If you don't know any better, do you just sit back and wait?  Do you call back that same day?  The next day? Yes, I think so many of us demand service now, same day service, and sometimes will let the other party know this.  But does this force others to give you answers quickly, that might be incorrect, because you expect things in "now mode"?  Does this result in poor service?  Do you respect someone that gives you an answer that you don't want to hear?  Which may result in costing you more money in the long run, because you went to a "yes sir" type of person? 

Overall, when it comes to mortgages and real estate, if you are speaking to a professional, they will be upfront with you.  If you are the type of person that can't except that answer and seek help elsewhere, remember, it might come back to haunt you. Yes, we all want your business, but at what price to you, the consumer.  Keep in mind, some of these red flags also. It may save you thousands of dollars. Consumers need to be aware of these Red Flags !!!

The one million dollar question.  Should you talk to a realtor first and find out what houses you could buy or should you speak to a loan officer first to get your financing options in place? 

   --   Speak to a loan officer first.  Time again, I get consumers coming to me after they found a house and need to settle on it prior to being qualified for a mortgage.  Don't you want to know what your payment is?  What it might cost you at settlement?  Never assume.....

Just a FYI :  FHA loans might even be your easier way into a home nowadays. I still have some loans officers that tell me differently or the consumer differently.  There are now even penalties if you have a credit score below 720. Yes, 720.  If your lender is not FHA approved, how do you know that you are getting the nest possible mortgage? Besides, FHA loans are another way to get into the home with little or no money out of pocket.

Overall, you need to have a slight understanding of what types of mortgages are out there as you speak to a loan officer. So, now onto the top 10 questions that should be asked when being pre-qualified for a mortgage.

PS....   Top 10 lists or in this case, the top 6 list, usually start with the higher number first and work their way backwards. But I wanted to emphasize what was truly important.

 1. What kind of mortgage payment would you be comfortable with monthly, to include your taxes and homeowners insurance.  (In my 15 year opinion, this is and should be the most important question.) Don't get hung up with interest rate. An order taker, your basic loan officer, makes you focus on this instead, because anyone can give you a rate.

 2. What are your goals for purchasing this home or for refinancing?  Do you plan on being in the house for 5 years?  10 years?  Have kids in school?  Have kids going to college?  Will you be retiring soon?  Financial planners ask these questions and so should a mortgage loan officer. Why?  A certain mortgage program might be better suited for you. Paying points vs not paying them could be important.  The Myths behind ZERO point mortgages instead of paying points upfront...... 

 3. Good Faith Estimates  :  My biggest pet peeve in the business. If a loan officer takes the time to pre-qualify you by asking you questions and pulling your credit, and they end up giving you a rate, payment, and how much you need to close, they should be able to supply you a good faith estimate within that next hour.  Why can I say this?  Because in order for them to give you rate, payment, and your total costs, they would have had to plug this into their system.  If it takes them more than 24 hours, this is a major red flag. (it's at their finger tips and most people have e-mail or fax machines)

 4. Asking the consumer basic questions such as :  your income, assets (cash on hand - how much you want to use and what you would have left over), if you rent or own, etc, etc

 5. Asking you if you have ever had any bankruptcies & foreclosures, because they always don't show up on credit, but would show up on title.

 6. Asking if you pay or owe child support.  Or if you receive payments for alimony or child support.

      Conclusion :  Keep in mind, any time that you speak to a loan officer, they should ask you these questions. Otherwise, that what and or fees that were quoted, usually won't mean a thing. It only takes about 15 to 20 minutes, which if done properly, will make your transaction much smother.  Print these questions out to follow along when speaking to your loan officer. Don't hesitate to ask them why they didn't ask you any of these questions, but were able to quote you rates and programs. And here is a must read : Consumers need to be aware of these Red Flags !!!!

FHA loans are now acting slightly based on previous foreclosures and first payment defaults. Yes, there is some risk in any loan. HUD/FHA has been around since 1934 and even though they truly pride themselves on helping first time homebuyers and those with challenged credit, they are now raising certain requirements. Nobody ever is in business to take a loss on anything.

I delayed in writing about this, as so many others have been publishing this new change and the chart, because it was never official. So many loan officers fail to realize that anything that is agreed upon with HUD, is not official until they send out their mortgagee letter. Hud released this mortgagee letter 08-16 on June 11^th, 2008. So it's now official. Any and all FHA loans that are registered with a FHA case number on or after that July 14th, 2008 will be affected by this change.

This new change is either positive or negative, depending on what side of the fence that you sit on. It will reward those with higher credit scores and in some cases, if you have 5% or more down. This chart is for both those that are purchasing or refinancing. The new change is for calculating both the Up Front Mortgage Insurance Policy (UFMIP) and Monthly Mortgage Insurance (MMI).

 

FHA Single Family Mortgage Insurance Upfront and Annual Mortgage Insurance Premiums  (Loan Terms > 15 years) Effective as of July 14, 2008
All premiums are specified in basis points (0.01%)
Decision Credit Score  (FICO)
LTV	850-680	679-640	639-600	599-560	559-500	499-300	NON-TRADITIONAL
≤ 90.00	125/50	125/50	125/50	150/50	175/50	175/50	150/50
90.01-95.00	125/50	125/50	150/50	175/50	200/50	n/a	175/50
> 95	125/55	150/55	175/55	200/55	225a/55	n/a	200/55
A first-time homebuyer, with HUD-approved counseling, will pay only 200 basis pts for the upfront mortgage insurance premiums.

** This chart was copied from the HUD mortgagee letter  :  mortgagee letter 08-16 **

Overall, some will think that this is negative or discriminating. But FHA still makes this very affordable for most homebuyers or those refinancing. In order to make sure that you understand this chart and how FHA loans can work for you, you need to speak to a mortgage professional. Not everyone that says that they can do FHA mortgages, will be able to help you effectively. The chart is very self explanatory, but if you have any questions, please don't hesitate to e-mail me or call me.  jbelonger@ihmci.com