"Financing Advice for Home Buyers"
Financing Advice for Home Buyers Are you’re thinking about buying a new home, but aren’t sure how to go about financing it without getting stuck with high interest rates and insurance fees? If that sounds familiar, real estate expert Monte Mohr is here to offer you some industry advice. Below are some really pertinent questions asked by people in Middle Tennessee: Jim from Franklin wrote in and asked… “We’re going to be buying a home this year and have got our credit rating over 650 now. When choosing a lender is it better to go with a small local lender or is it better to go with one of the big banks? What should we watch out for besides interest rates?” I really appreciate that question and to be honest it doesn’t really matter what size lender a person uses because all lenders are subject to the same rules as enforced by our government. In all sincerity, the most important thing when it comes to financing is the individual person that will be representing you in the process. I truly believe there is no question about it – that’s what’s most important. A good lending processor or mortgage person is going to be with a good lender; that’s a given. But what is most important, is that when you turn over those documents they are good hands. The only way to find that person is to ask for referrals. That’s what I did a few years ago when I decided to switch lenders. I talked to closing attorneys and other agents who do it all the time. I highly recommend that anybody thinking about financing or getting a mortgage doesn’t just open up the phone book and start dialing. It is very important for you to do your research and get references. Christie from Ashland City asked… “We want to buy a home this year but do not have enough money saved to avoid PMI insurance. Are there any financing programs out there that would help us get into a home with 10% down and avoid paying mortgage insurance?” Well first of all, for those who don’t know what PMI is, it stands for Private Mortgage Insurance. Anytime you have a conventional loan and your loan-to-value is greater than 80%, in other words you put less than 20% down, you are subject to that PMI insurance unless you go another route. And that route would be to put 10% down, take an 80% first mortgage and a 10% second mortgage; that’s one way to avoid paying PMI. However FHA does not provide that financing option. FHA has the same situation as PMI only it’s called MIP, or Mortgage Insurance Premium. Regardless of how much you put down with an FHA loan, you’ll still have that insurance. Before we look at today’s final question on financing, I wanted to point out some new homes on the market in Williamson County TN. Ben and Sara from Goodlettsville want to know… “We’ve been researching mortgage companies online. Do you have a particular website that you recommend we check out for a good lender?” I do not; and again I’m going to emphasize that I do NOT recommend going online to find a mortgage company for your financing needs. The problem in that scenario is there is no local level of accountability. If I personally make a recommendation to a mortgage company, not only do they try to adhere to a relationship with that individual, but to me as well. If they drop the ball, they’ve dropped the ball with me as well and they don’t want to do that. NEVER go online to get financing with a mortgage company because you’re just a file with no face and no accountability or effort. I have encountered so many problems with online lenders so do NOT go that route! Let’s check out the Happy Customers of the week… Thomas and Candice are a great couple. Candice’s mom found out about my “We Sell Homes For Free” program and they were able to save $3,500. They did things a little bit differently because they bought their home first and then had me sell theirs, but it was a great savings for them. If you have questions about financing or you need help with buying or selling your home, please contact Monte directly by visiting Nashville Real Estate Adviser or by calling (615) 300-8393.