There are tons of first time homebuyers out there looking to buy a Santa Maria home for sale and negotiating for the first time in their lives the best deal they can on their new home, but they also have to get a new mortgage home loan to close the deal unless they are cash buyers which is usually unlikely for first time home buyers.
Most of them only know how to ask one question:
What’s the Rate?
I have been doing loans now for the past 15 years – and the only thing most people know to ask is – “What’s the Rate?” even though I have been doing loans for this long you would think that I would be over that question by now. But it still gets to me, its like me kids asking me when are we going to get there?
While that’s a good question, it’s kinda’ like going shopping for a ca and asking how much will a new car cost me? First of all …I thnk we can all agree on the fact that depending on what kind of car you plan on buying is going to change quite a bit depending on the car you want and what kind of features you want and are you putting down anything for that car or are you going to buy all in cash? Just shopping the rate is not necessarily going to get you the loan you may be looking for even actually getting you qualified to that loan.
And what is the best price anyway!?! Now at this time that I am putting this together the Dodd-Frank rules may or may not be into play but to save most of you the heartache of going into what it is. Its basically controlling how much a mortgage broker can make in doing a loan and it must be disclosed. Here is where it gets interesting because banks are not doing home loans for free they are making a profit and its no less than what a typical mortage broker is making on a loan the only difference is that banks do not have to disclose thier profit to the public. Which at first glance you may think that your mortgage broker is charging you too much but if you do compare the rates you may find that the rates the bank may have are not much dfferent. When you do qualify for a home loan your mortgage broker will give you what is called a Good Faith Estimate where he will disclose costs to you in getting your loan not just his costs but all costs, escrow, insurance, processing. If you are trying to get a home loan for your new home, choose someone that you can trust someone that has been in the business for awhile someone that has a good reputation, because then you are sure to get not only a good deal on your mortgage but get your loan as well.
So, tell me a little bit about what you’re trying to do.” Is usally what I ask after someone wants to know what is the rate? I want to know how I can help because depending on what they are trying to do and their situation will also tell me what I can do because home loans are not one size fits all and there is not a standard loan for everyone.
Most clients answer the question of what they are trying to do one of these ways…
- They want to buy or refinance but keep their payments at a certain amount
- They want to buy or refinance but they don’t have a ton of cash to work with
- They want to buy or refinance but they can’t verify all of their income
- They want to buy or refinance but they need it to happen in like 5 days
- They want to buy or refinance but they think they have some credit issues
Can you see how the different scenarios are going or can affect what the interest rate on a home can be someone that can only put down the bare minimum for a home loan is not going to get the same rate as someone that can put down 30% on a home.
Each of these items will help me or the loan officer determine which mortgage program like those different features when shopping for a car will work for you! T
Knowing what PROGRAM we can do for will then help us get to a mortgage interest rate… and knowing your credit score and how much money you want or have to pay for closing costs will determine your rate.
AT This Given Time I Do Have A Loan Program That ONLY Requires You To Put Down 1/2 % Down BIG Difference From Your FHA 3.5% ., but at this time of writting!!!
So let’s assume you figured out which program you are going to use to finance your home – YIPPEE! One less step in the process! Now you all you gotta do is just just call loan officers and ask for their rate on that program and those terms with your credit and compare – it’s not even that easy!
You want to be certain that you are working with an experienced loan officer. The largest fianancial transaction of your life is far too important to place into the hands of someone who is not capable of doing more than just quoting you a rate.
Once you believe that you are working with a seasoned loan officer, there are other points to consider… If you talk to 3 lenders who all tell you the rates are at 5.25% and you talk to another person who says they are at 5%… well, you’ve got to question what that lower priced lender is doing. For the most part, rates are rates. The cost of money is pretty close to even across the board – so, if it sounds too good to be true, it probably is. There could be extra fees, or they could be quoting a rate that is only good for the next 12 days. Grant some may actually have lower over head costs and can actually give a lower rate. With the new whole Dodd-Frank thing if it goes into effect loan officers for the most part will not be able to adjust their rates, they are what they are and they will not even be able to offset the costs of the loan which is something I have done so many times with past clients. I even credit them thier appraisal at closing. Things really are changing when getting a loan its not so easy as it was in the early 2000’s where almost anyone can get a loan and almost anyone could get you a loan. Many times someone may have been breaking concrete one day and the next day they were now doing loans? Go figure.
You get what you pay for! If you are looking for the cheapest deal out there, understand that you are placing a highly important process into the hands of the lowest bidder. (If you’ve ever had a cheap paint job on a car, cheap pair of shoes that KILLED your feet or fell apart – you know what I mean. But we are talking about the biggest investment you may be making your entire life, so if you feel the need to go cheap, then go cheap.
All too often, you don’t know it until it’s too late that the cheapest isn’t the BEST. Just somethign to keep in mind that if you the buyer miss a closing date and you still want that house can now mean a FINE to the buyer, meaning you could end up paying something like $100 a day till you close and if you are using one of those discount internet loan companies good luck on getting that money from the. Most “internet companies” do not operate in the State they work in then can licensing for a state and be somewhere else and good luck on suing them who do you think has more money to win in court and spend so again good luck on going cheap.
Understand that Interest Rates and Closing Costs go Hand in Hand. When someone asks me for a rate – I ask them which one they want. I’m not being sarcastic (well, okay maybe a little) but there are rates from 4% to 10%. It depends on the program and the amount of money you want to pay out of your pocket. So there are all kinds of rates it just depends on the scenario and the type of loan.
Many first time homebuyers want the smallest amount of closing costs (so they can buy all that new furniture for the house and repaint it or what ever it is they want to do!) and will therefore take a slightly higher interest rate – so that the lender pays the closing costs. A professional lender will be able to offer the bst advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.
So my advice is to be smart. Ask questions… but don’t just ask what the rate is! Also work with someone you can meet face to face its bit nicer when you go to thier office and ask them just what is going on with the loan. They will have more desire to close the loan on time and do a good job if they have to see you around town.. Also check their credentials GOOGLE them you can find out almost anything about anyone by just putting their name on the internet find out if they have good things said about them or not. Good luck!!!
If you have any questions about buying a Santa Maria home for sale in the Santa Maria Real Estate market or any properties on the Central Coastand need to get a loan in Santa Maria, CA or any where in the state of so I California not just on the Central Coast, so I can do California home loans, and first time home buyer loans, as well as refinance home loans and just plain simple mortgage loans. So please contact me by sending me an email at: GenePerez@GMSLoans.net
I do also service all the nearby communities and other markets such as the Santa Ynez real estate market, Nipomo Real estate market, Arroyo Grande real estate market, Grover Beach Real Estate Market, and all other surrounding areas regarding the homes on the Central Coast.
my goal is to provide you with resources you need. I can also help in getting the financing for your home. If you have any suggestions or questions in how I can provide more or better
information please let me know. I have been helping my clients for the last 15 years on the Central Coast, Gene Perez – 805-448-7101 , DRE 01321588
Important Disclaimer: Questions and answers provided on this website and by Gene Perez is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice.
This blog and its content is copyright of Gene Perez 2010. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge Gene Perez as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining Gene Perez’s
Other articles you might like;