Observations From A Loan Officer: Stop Paying Rent – Build Relationships & Execute A Strategy. #4 In A Series

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I talk to a lot of  home buyers.  They understand the market relationship of low inventory and high rent.  High rents are caused by declining inventories of available homes.  It is frustrating to spend a significant percentage of monthly income on rent. Rent does not Mike Nelson - Equity Primegenerate any equity and the renter misses out on significant tax advantages of a mortgage.

 How Do We As Agents & Lenders Help These Customers?

Long Term Relationships – A low inventory/high rent market is a competitive market.  Agents and lenders are competing for buyers.  Buyers are competing for the few listings that are available, putting the sellers at the advantage. Sellers often receive multiple offers and bidding wars have become quite common. It is important that agents and lenders have strategies, outside of just the highest offer, to make their buyer the most attractive.

However, we must realize a competitive market is not necessarily a bad market.  Home owners are certainly due their return on investment.  Obviously, the renter wants to enter the ranks of home owners so they can get their return on investment too.

Click for moreObservations From A Loan Officer: Stop Paying Rent – Build Relationships & Execute A Strategy. #4 In A Series

Find A Lender That Will Take the Time to Know You – A Mortgage Is Personal

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Equity Prime - Michael NelsonLenders don’t always require two years of tax returns to approved self-employed mortgage applicants. Know these strategies, and get an approval.

Source: How To Get A Mortgage If You’re Newly Self-Employed | Mortgage Rates, Mortgage News and Strategy : The Mortgage Reports 

I have said it so many times in this blog.  A mortgage is personal.  The right mortgage should reflect your goals – both long and short term.  A mortgage is certainly not 15 minutes on the web with a completed application and a rate ready to lock.

The Quick & Easy I Hear About Sounds Really Expensive

Equity Prime - Mike NelsonIn the past weeks, I have heard stores from borrowers telling me the joys of a quick and easy on-line loan application.  I agree, it was quick and it was easy.  The problem is the quick and easy I hear sounds really expensive and does not reflect the goals of the borrower.

Which brings me to the article above.  Give it a read – it is good.  Towards the end of the article, the author discusses the difference between DO (Desktop Originator) and LP (Loan Prospector).  DO and LP are desktop underwriting systems that loan officers use to qualify buyers.  One of the subtle differences between these systems is the need for tax returns.  In many cases, LP will yield an eligible finding with only one year of tax returns – DO requires two.  The subtle difference in two underwriting programs can be the difference between credit approval and denial.

Equity Prime - Michael NelsonSubtle Differences In A Mortgage Can Be The Difference Between Approval & Denial

The point is this, you must have a relationship with a loan officer who knows the subtle details.  The subtle details of borrower qualification relative to the borrower’s circumstances can be the difference between getting the loan approved or being denied.

I spend a lot of time working with real estate agents.  I want to build profitable relationships with the agents to help them grow their business.  Key to these relationships is my ability to know a borrower and find a way to secure funding within the limits of regulation and law.  This requires both product knowledge and understanding of borrower needs.

Click for moreFind A Lender That Will Take the Time to Know You – A Mortgage Is Personal

Here’s how to fix the appraiser shortage

The fact is we are on the verge of a major appraiser shortage unlike any I have seen in my 30 years in the business. Unless this trend is stopped, the quality of appraisal values will eventually decline and public trust in the housing economy could once again fall apart. …

Click for moreHere’s how to fix the appraiser shortage

Let’s Talk Appraisals – Or Religion – Or Politics……

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Michael Nelson - Equity Prime, LLC
What You Need to Know About Home Appraisals – Geoff Williams – US News

We all have heard the age-old adage – never talk religion or politics with customers, the date you want to impress, or the in-laws.  Well, we might as well add appraisals into the forbidden discussion category.  As a mortgage lender, this is a tough topic.  Regulations are very clear on the interaction allowed between a loan officer and an appraiser.  Which is to say a loan officer and an appraiser can have no interaction at all.

 

 

Appraisals are a hot topic – lots of emotion and added stress!

Michael Nelson - Equity Prime
What You Should Know About the Appraisal Process – Michele Lerner – Realtor.com

I don’t take issue with the regulations for all the obvious reasons.  History has certainly taught us that relationships between loan officer and appraiser are ill-advised.  But, I do suggest regulation has taken the pendulum too far to the other side.  Scarcity of appraisers and the time required to get an appraisal have made the 30 day close very hard to hit.  Especially in a TRID environment and refinance transactions.  While, I understand that each state is different, I can tell you the appraisal situation in Colorado is especially troublesome.

Click for moreLet’s Talk Appraisals – Or Religion – Or Politics……

Points & Mortgages: Good idea or wasted money? Observations from a LO – #3 in a series.

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Warning this post is long, technical, & full of numbers!
Understanding points takes a few more words than most of us want to read.

Mortgages are not the most exciting topic on the planet.  I try to keep my posts relatively short and to the point.  If you are considering discount points for a mortgage – give this post a read.  If you don’t want to read it – give me a call or send me a note.

If you have insomnia – I recommend this blog and a smart phone as you try to go to sleep.

Virtually every mortgage transaction includes a discussion of discount points.  Candidly, points are confusing.  From time to time, I will hear good analysis on points but most of the time I find the analysis misguided.

 Michael Nelson, Equity PrimeUse the right tool, in the right amount, for the right purpose

Points are like an ice cream scoop.  If you use the ice cream scoop a few times a week to scoop your favorite bowl of ice cream, the scoop is a great tool.  If you use that scoop 5 times a day for the next year it will bury you in debt – I mean ice cream. 

 

 

Click for morePoints & Mortgages: Good idea or wasted money? Observations from a LO – #3 in a series.

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