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Even if you are remotely thinking about a mortgage……..you will want to read this free newsletter! You will find the right questions to ask……and that could possibly save you thousands of dollars.
Home ownership is one of the proven ways to grow your wealth. If you take any 100 people and follow them for 40 years through their working years until the age of retirement, the results will be: 1 in 4 will be really rich and economically protected; 5 will keep working because they must; 36 will have died; 54 will be flat broke and depend on Social Security, relatives, and friends. As you can see, only 5 % were lucrative.
So, what’s the connection to making a mortgage decision? The more you save and the faster you build equity, the more wealth you will accumulate.
Are You Aware of the Largest Errors Made When People Shop for a Mortgage?
You may not realize it, but there are a lot of little things that other lenders do not want you to know. There are many misnomers prevalent when people start talking about mortgage lending.
It is common knowledge that all banks can provide you with a home mortgage, but they also want all of your other business too. Normally a bank does not have a separate mortgage department that specializes in mortgages.
It is recommended that you talk to a mortgage officer who deals only with mortgages. They have dedicated themselves to mortgages and will have the knowledge to assist you in getting you the mortgage that will best fit your needs.
What Choices Do You Have?
It’s necessary that you know all of the choices so you can make prudent decisions about purchasing your new home and about making certain that you obtain the mortgage that meets your needs. If you are not aware of all your options, can you make the correct decision?
Times have changed and the considerations are many - kinds of mortgages available, choice of rates, origination fees, discount points, processing fees, underwriting fees and down payment required. If your banker does not specialize in mortgage lending, can you depend on their advice? The same is true of family and friends trying to help you.
Heard Phrases Like These Before?
Your parents – “Back when we purchased our house, we went to the bank and told them that we wanted a mortgage. About a month later, at the closing, we signed a mountain of papers.”
Co-worker – “When we purchased our house, we were so frustrated and on edge all of the time. We played the waiting game, you know, wait for the verifications, wait for the home evaluation, wait for the underwriting decision. We just about went berserk!”
Relative or Friend - “We were told which lender to call and we didn’t compare to see if we were getting the best loan for us with the most competitive costs. Later, after we had a chance to sit down and read our documents, we realized that we should have checked around.”
YOU WILL NOT BE SAYING THINGS LIKE THIS IF YOU KNOW AHEAD OF TIME WHAT PRICE YOU CAN PAY FOR A HOME!
MANY POTENTIAL BUYERS JUST DO NOT KNOW HOW TO GO ABOUT IT!
The methods we’ll be providing you are genuine and are effective for most potential homebuyers.
Many of these approaches are not publicized and many people are not familiar with them. Information is critical! When information is combined with action, it becomes power and things happen.
Take a look at some of the ideas we are referring to. These ideas are only a portion of what you can do. We want you to be familiar with the process of knowing how you can get the information you need.
INFORMATION SUCH AS:
- How you can be pre-approved for a mortgage prior to finding a house you like.
- Realizing that all mortgage lenders are NOT similar.
- There are many choices when it comes to financing your new home.
- Closing costs, origination fees, discounts and rates may be different for each lender.
- You might not be required to pay origination fees or discounts on certain loans.
- You may be able to purchase a home for little or no down payment, finance some of the closing costs and obtain funds from other sources.
- You do not have to let past credit troubles keep you from buying a home.
- By selecting the right mortgage program, you could save a lot of money.
THE MORTGAGE INDUSTRY HAS CHANGED AND BY LEARNING ABOUT THESE CHANGES YOU CAN MAKE IT WORK FOR YOU!
THESE ARE THE NEW IDEAS TO CONSIDER:
1. Pre-approval for your mortgage-
Are you aware that you can actually be credit approved for a mortgage—and not just pre-qualified for a loan?
The difference between being “pre-qualified” and being “Pre-Approved” is tremendous.
When you are Pre-Approved, your credit reputation and earnings are reviewed and your application is actually underwritten prior to looking at a house to buy. WITH OUR AUTOMATED UNDERWRITING SYSTEM, MOST PRE-APPROVALS CAN BE DONE WITHIN FIVE MINUTES AFTER ENTERING YOUR INFORMATION INTO THE SYSTEM.
You will then be in a position to know:
The maximum price you will be approved for;
The amount of money necessary to close;
If any of your debts need to be eliminated or consolidated;
The strength of your credit;
The mortgage program that best fits your needs. If you currently own a home you can be assured that you may sell your home and have a new home to move into.
Not all mortgage lenders offer you the opportunity to be Pre-Approved. Some lenders require you to pay a non-refundable application fee before they will process your loan. If your loan is denied, say “Good-bye” to your money.
2. Full range of products.
Make sure that the lender you deal with handles a full menu of mortgage products so you can be sure to find one that best fits your needs. Many banks only offer a couple types of mortgages and you are limited in your choices.
The various loan programs have different underwriting requirements and even if you do not qualify for one type of program, perhaps you can qualify for a different one.
3. Beware of banks and mortgage companies that will not lock in your rate!
Many banks and mortgage companies will not lock your rate until you have been fully approved. With many of our conventional programs, your rate can be locked once your credit report has been reviewed, and you have been preapproved.
4. One of our Government Loans might be just right for you.
There are several Government Loan programs available.
WHEDA- Wisconsin first time homebuyers program with as little as 3% down payment.
WISCONSIN VETERANS- Veterans who were Wisconsin residents when they enlisted or veterans who have been in Wisconsin the last year may be eligible. Five percent down payment.
GUARANTEED RURAL HOUSING- Program for buyers who do not currently own a home. No down payment required.
FEDERAL VA- For buyers who served in the Armed Forces. No down payment required.
5. Private Mortgage Insurance- allows you to purchase a home with a conventional or WHEDA mortgage with as little as 3% down payment.
6. How much money is required?
Unless you qualify for the Guaranteed Rural Housing program and either the seller agrees to pay the closing costs or you receive a gift from a relative, you will need some money for closing costs or a down payment.
You may obtain these funds from a number of sources. How much will you need?
By getting Pre-Approved, the lender will help you determine a very close estimate regarding the amount of money you will need and where you can get it from. Here are some examples of the sources you can use:
Savings bonds
Cash Value of Life Insurance Policies
Gifts from relatives
Borrowing against personal property (car, boat, etc.).
Borrowing against your 401K
Selling personal property
7. Don’t make the error of paying hard earned dollars in unnecessary closing costs and much more in interest over the life of the loan!
The interest rate is a critical factor. Different programs have different rate options available. Discuss your future plans with the Loan Officer to determine which program provides the best rate to meet your needs. For instance, there are 5 and 7 year balloon mortgages that allow you to pay a 30 year fixed rate payment, but you must either payoff the loan, convert to a fixed rate for the balance of 30 years or refinance at the end of either 5 or 7 years. These programs usually come with a lower rate than the traditional 30 Year Fixed Rate loan. If you know you will be moving in a few years, why pay extra interest?
Maybe you’re wondering about “discount points” and “closing costs". Do you have to pay them? Should you pay them?
Again, being Pre-Approved with your lender will give you time to think about your options without the stress and worry of a hasty decision.
ALWAYS, ALWAYS, ALWAYS match up closing costs if a lender is touting low rates. Even if a lender’s rates are a little higher, it does not necessarily mean it is a worse deal for you. Like every other business, lenders need to make a profit to stay in business. They need a certain margin to survive. There will be costs to offset a lower rate -- costs such as discount points or “junk fees” such as a “Processing Fee”, an exorbitant “Underwriting Fee” or other “Service” charges.
After reviewing your personal goals, in addition to helping you select the mortgage loan that best fits your needs, we can also help you structure your rate and closing costs to be most advantageous for your particular situation.
8. Financial counseling.
There may be a reason why you cannot get approved for a mortgage loan immediately. We will work with you and help you formulate a plan that will allow you to get approved in the near future.
There is no doubt you will save a considerable amount of time and possibly a lot money by being Pre-Approved before you start looking for a home.
When sellers know you have been Pre-Approved, they may take your offer even over a higher one because they know you’re financial and credit conditions have been checked out. Sellers do not like surprises either!
9. Real Estate Agents have their job to do -- find a home that fits your needs. They don’t need to be well versed when it comes to financing – but then again, that isn’t their profession and it shouldn’t be expected.
They most likely will make a few recommendations - but they are not in a position to help you decide which mortgage is best for you or what rate and price structure will work for you.
Because of this, they may not recommend the right lender either.
A number of things could happen:
You only have a minimum down payment and you contact a lender that doesn’t make low down payment loans.
Maybe the lender has a very strict credit policy -- and any late payments on your credit report could come back to haunt you.
Perhaps you were Pre-Qualified by another lender or on some website and this report already mentions the problems you can have if you are only Pre-Qualified, not Pre-approved.
So how do you avoid all of these problems?
BY BEING PRE-APPROVED AHEAD OF TIME.
10. “Buyer’s Agents” can also be extremely helpful.
In the normal transaction the real estate agent represents the seller and must look out for the seller’s best interest.
On the other hand, a “buyer’s agent” would represent you. They assist you in making the best offer and can negotiate on your behalf to obtain the best price and seller paid costs.
Because we deal with many Real Estate Agents, we can recommend one of our preferred agents to you after you have been Pre-Approved. Any agent we recommend will work on your behalf to save you the most money too.
What does all of this mean to you?
You can move forward knowing that you have made the best possible decision for your situation. You are able to shop with confidence because you are pre-approved for the mortgage that meets all of your needs, even before you find your dream home.
Your longing to be a home owner, together with our knowledge of the mortgage business, will help make your home ownership dreams come true.
There is a lot of information contained in this report and if we got you thinking about all of the possibilities – good and bad – then we’ve done our job. Undoubtedly you will have some questions – perhaps many of them.
Please call us with any questions or concerns. It’s only natural to be doubtful. By spending a few minutes gaining more knowledge, you will have peace of mind knowing that you made the correct choices, and you will probably save yourself a lot of time & money!
Eric Tostrud, Hudson (715)-381-7129
Julie Dodge, New Richmond (715)-243-6126
Brian Campbell, New Richmond (715)-243-6147
Ken Zaruba, New Richmond (715)-243-6133
We can send you a free Pre-Approval package today!
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