FHA Loans and FHA Mortgages

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 !!!!