How To Prepare to Become a Homeowner

START. No matter what your timeline for when you plan to become a Homeowner. START. Put “all your ducks in a row” as it were.
START. Now. Why? Too many Homebuyers wait until they’re actively looking for homes. Then it becomes overwhelming because of the lack of preparation.   

Think about it. You’re out on a Sunday afternoon visiting three open houses you saw advertised on Zillow. The first house is a wreck, and a bank foreclosure to boot (and that wasn’t in the advertisement!). But the second house, painted in a lovely yellow tone with the perfect fieldstone finish around the foundation, in great condition, and priced right…now this is a house worth considering!

So you want to put in an Offer. But you are not yet Prequalified for mortgage financing. (Preapproved? Prequalified? Same thing, no matter what the real estate agents tell you!). Oh, and you don’t even have an Attorney selected. Home Inspector? Who? What? WAIT…whoa…WOW…this is overwhelming!!!

START. Find a great Licensed Mortgage Loan Originator with a reputable Direct Lender. If you follow the “get pre-approved” link on Zillow, you’ll be referred to an excellent and local mortgage professional. But don’t stop there. For that mortgage professional, or any mortgage professional you come across in your research, do a little background checking…you know, like a “Private Detective!” You can verify the license of your mortgage professional at National Mortgage Licensing System Consumer Access HERE. When you’re on the site, click on “Self-reported Employment History.” If the mortgage person was managing a pizza restaurant three years ago, well, I’ll let you draw your own conclusions. Remember, longevity in this business is hard to accomplish and in the doing, the mortgage pro gets better and better and…yes, experience counts!

START. Get referrals to two very important members of your home-buying team: a great Attorney who specializes ONLY in real estate and a Certified Home Inspector. Interview them; review the cost; determine if you like these pros. Put them on notice you’re not yet ready to buy, but you’ll want them at a moment’s notice once you’re out there shopping for a home.

START. Credit: let the mortgage professional tell you if your credit is sufficient for mortgage financing. I meet lots and lots of consumers who—while checking their own credit reports—decide ON THEIR OWN that their credit isn’t sufficient. Except…wait for it…you don’t work for the bank! Let the bank tell you if your credit is acceptable, or not. You’ll most likely be surprised.

START. Income: here’s the basics for qualifying for a mortgage loan. 2 years consistent employment history. We’ll use your current salary to qualify (not what you were paid before you got that big raise three months ago). Unless you get lots of overtime, or bonuses are a regular occurrence, or if you are Self-Employed, we don’t need to average your income; we’ll use the current salary. For those other income situations, your mortgage pro will do the math for you based on the different loan program guidelines (FHA has different requirements from FannieMae and different from FreddieMac). If you recently graduated college with a degree, we can use the education history (in most cases) towards the two year requirement.

START. CASH!!! Here’s the thing, even if you’re buying in New York, where the closing costs are the highest anywhere, you really can buy a home with minimal down payment. Because many loan programs allow the Seller to pay your closing costs through a “Sellers’ concession.” You’ll negotiate this into your purchase price when you make an Offer.

START. Put your team together. Review your Credit, your income, your cash. Rely on a trusted mortgage professional to tell you exactly where you stand today for a mortgage loan. Focus on monthly payment. Even if you’re not going out looking for homes until next summer, preparing for that experience is one of the smartest things you can do today in your endeavor to become a Homeowner!

Do you have questions?  Click on ASK TREVOR and I’ll respond to any and all inquiries, even if you’re not buying a home in New York State.

Check out my Trulia profile HERE

Check out my Zillow profile HERE

Find me on TWITTER: @tcurranmortgage

Happy House Hunting!

The Floaters: Please Step This Way For Your New Career

To all you mortgage losers who got in during the boom and (almost but not quite) got out when it went bust: Please Step This Way For Your New Career!

They’re still out there, floating on the fringes of the mortgage business, behaving almost as badly as they did “back in the day.” These are the losers who got into the mortgage business immediately before and during the fantasy boom which ultimately led to the mortgage meltdown of 2007. They ignored the fundamentals of mortgage underwriting and joined the feeding frenzy of taking homeowners and homebuyers on the Sub-Prime ride to hell.

These idiots are still hanging on for dear life, attempting to find a foothold and stay in the game.

Newsflash:the game is over. Thank goodness.

When I say they’re still trying to hold on, what I mean is, they’re either still representing themselves as “being in the business” or they’re answering employment ads for Loan Officers. The fact is they have a day job and maybe they have some odd part-time status at a mortgage company. These fools are not working full time originating mortgage loans and keeping up to date with the rapidly changing market conditions to approve and close mortgage loans.

As to the first group of losers, well, I’ve spoken about them already. They still call themselves mortgage professionals even though they’re really and truly out of the business and working a day job at the local Big Box store. They interfere with the normal commerce of mortgage business when they try to sink their teeth into a potential mortgage application, claiming to the poor unwitting consumer how they have “special programs” available to help the consumer get a mortgage loan. Interference it is, truly, because these idiots are still making promises that can’t be kept: offering to provide “Stated Income” loans when no such program exists. Or offering to qualify someone with $40,000 income for a $500,000 mortgage when there isn’t a calculator on the Planet Earth that will do such math.

The second group of morons answer our company’s ads seeking Loan Officers. These yo-yo’s come into our office claiming to be experienced when they can neither spell nor define terms such as FHA or LTV. Then they lay claim to be capable of becoming the top producer in our shop in no time in the toughest real estate market in history. Then the kicker: they want a signing bonus, a salary plus commission and all kinds of employment benefits.

Look, LOSER, I started in the business 19 years ago and was offered straight commission. That’s what I still get paid. That’s what most every mortgage company pays! And in this market, why on earth would a mortgage company offer a salary or signing bonus? Companies are struggling to survive, they’re not in a position to hand out money just because you feel you deserve it!

So, I say this: Stop it! PUHLEEEEZE! You’re embarrassing yourself in ways too incredible to describe! We actually stopped laughing at you lot some time ago because you’re all so pathetic! Now we just cut the interview short and send you packing.

Truly, we’re considering collecting employment opportunity listings from the Big Box Stores, Fast Food Joints and even local convenience stores just so we can point you all in the right direction: to your new career as cashier, stock clerk or janitor.

Do us—mortgage pro and consumer alike—ALL a favor and get OUT of the mortgage business once and for all! You came in and thought you were gonna party like it’s 1999 when instead you destroyed people’s lives and wrecked an industry.

So, to all you mortgage losers who got in during the boom and (almost but not quite) got out when it went bust: Please Step This Way For Your New Career!

Last Night’s Save: Another Buyer Rescued

I did it again last night: I wrote a loan application to save a purchase where the Buyers had gone to two other mortgage companies. Those companies couldn’t find a way to approve their loan request.

The mortgage biz ain’t rocket science. Why is it so difficult for mortgage people to get their act together?

I met a couple last night who are purchasing their first home. They have good credit, they work hard and they are receiving a gift of $40,000 from her Mom to buy the home. Her aunt attended our meeting too because she is cosigning on the loan with them.

When this situation was first presented to me by the Realtor the day before, I kept thinking there must be something I’m missing or something really bad about this loan application that the other companies can’t get it done.

I knew the fundamentals for mortgage prequalification were in place. I had spoken briefly to one of the clients on the phone; the rest of the information had been provided by the Realtor. I saw a potential “save” of this loan application using an FHA Insured mortgage. FHA is known as “the story loan” and, if you know your guidelines, you can help a lot of folks achieve their dreams of homeownership.

I came to our meeting at the real estate office warily and with an exit strategy so I wouldn’t look too foolish. I had told the Realtor the night before that all looked good and that I could find a loan approval. Now my reputation was on the line, and I hadn’t even met the clients yet.

I continued my wary thoughts last night. I grilled the clients with lots of extra underwriting-type questions just to get to the root of the problem. After two hours of this and a call to my Ops Manager (the smartest man I’ve ever worked with in the mortgage biz), I had the clients sign the loan applications and we were on our way to obtaining a loan approval and a closing.

The issue at hand was the husband’s employment history. At first blush it seemed awfully spotty. But, when the time was taken to sit there with a blank sheet of paper and note the dates and the continuity of same, well, then the puzzle was solved. The rest of the qualifications were fairly straightforward.

I’m still scratching my head wondering why the other mortgage “professionals” couldn’t get this done. But, then, a lot of the people remaining in the biz grew up during the fantasy boom when all you had to do was take someone’s pulse to approve a mortgage loan. A loan officer didn’t have to actually “think.”

I must confess, too, that as I wrapped up the paperwork, photocopied the ID’s and asked the clients for referrals, I had a nagging suspicion that I was missing something. In the end, I realized my experience of having sat through thousands of interviews like this had served me well. The “detective work” was rigorous, leading me to solve the problem; the rest was automatic.

I guess experience really does count for something. That and a thorough knowledge of FHA underwriting guidelines got me through to a successful conclusion.