FHA Loans and FHA Mortgages

First Time Homebuyers & what to look for in a Mortgage Lender before you apply or make application; may it be buying, or refinancing. (Also, info for people refinancing or that arent first time homebuyers.)

Trying to find the right home loan can be difficult. Finding the right company to help you get your loan can be even more confusing. With literally thousands of lenders to choose from, borrowers can easily become overwhelmed.

The problem in todays industry is the fact that many lenders want to get you into the door and will sometimes do anything to make this happen. They will make promises that they sometimes cant keep or give you a lower rate than whats on the market. Is this right? Ethical? Not at all.

The reasons why shopping might seem easy is because the individual that you speak to will promise you the best rate. Its human nature to go with the lowest person, even if they put it on paper. And you would think because this is one of the biggest investments in your life, which you are talking to a true professional, that it would be handled in the same manor. The scary part is that many of these loan officers, depending on the state that they work in, dont need an education, nor certification, or need to take classes.

When shopping for a mortgage you want to compare three major areas. You definitely want a Good Faith Estimate from the person that is giving you the quote.

1. Rate and term: You need to compare apples to apples. There are so many new programs out there now. There are even 50-year terms or the Interest Only loans, which can lower your payment than the traditional 30-year fixed loan. On a personal experience, I lost a loan because the client had a lower payment. But it was an adjustable, when my client specifically wanted a 30-year fixed. They didnt find this out until settlement.

2. Total costs: which would be on the Good Faith Estimate. Again, you need to compare apples to apples though. Just because you are comparing total costs, doesnt mean that the lowest costs are the best deal. There are some items that are called third party charges. And us as loan officers can only give you an estimate of what this might be. These would be to include: A. Title insurance B. Recording fees C. Homeowners insurance D. Escrowing taxes & insurance

3. The APR: which is found on the Truth and Lending Disclosure, is the annual percentage rate. This determines the cost of of your credit that you are applying for. But again, this might not always be accurate, because some lenders leave certain costs out of the equation.

Here are some other things to look for when shopping. These would be key phrases, words, or other types of red flags when speaking with the loan officer / lender that you have chosen.

1. When you are first talking to the loan officer on the phone or even in person, you want to pay attention to key words and phrases that would be a red flag. These phrases or words would be: ˜I can guarantee ˜I promise ˜I am the lowest ˜I have no cost loans / programs (there is a price for everything and nothing is free) ˜I have to be honest with you and tell you¦. ˜to be honest (why wouldnt they be honest the first time?)

2. You are now trying to contact the loan officer to get a status, or that you have a question. The receptionist tells you that they arent in the office. You keep leaving messages. If this goes on for more than 24, this could be a read flag. Sure, things happen to us, we are are human. Sometimes personal matters can interupct our business. Or that we are just very busy. But I make it a point to call everyone back within 24 hours or at least e-mail them. I would call and ask for the person that is processing the loan. If he or she cant give you a straight answer, then ask for the manager. Keep going up the ladder until you get someone that can give you an answer, good or bad.

3. When you do ask for a Good Faith Estimate, they should be able to send one to you within 24 hours. With todays technology, I e-mail my Good Faith Estimates (GFE) to my clients. And if they dont offer to send you a copy, this is sometimes not a good sign.

Overall, there are some very good and professional people in this business. If you have had a bad or unpleasant experience in the past, dont hold this against others that you will be looking to for help in financing. I always recommend asking friends, family, and co-workers for a referral. Now, do I want to be telling you this? I want your business also. And they also say, dont do business with family or friends. Some of this is true. There are so many ways to look at this.

The best advice I can offer when shopping is: Call 5 to 6 lenders. If 4 to 6 of them are the same and you have one that seems a lot cheaper, both in price and rate, what does that tell you. Usually, its too good to be true. One thing to know is that for the most part, we all get the same rates from the same places when its all said and done. These programs are usually securitized on Wall Street.

I can be reached at : jbelonger@nationalfuturemortgage.com

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