First homebuyer speaks to a loan officer or a real estate agent. For some reason, they decide to seek a 2nd opinion because of that gut feeling or because they have heard something different.
A buyer called me regarding some mortgage information after speaking to another loan officer. Forward ahead, skipping details of the story. I give them a totally different answer and I see some major read flags. I also have a bad feeling about how this loan officer is explaining things based on the buyers answers to me. This buyer tells me that they will get the documents from her mom and call me the next day. I never heard back from her, so I followed up. Here is what I received in an e-mail today....
"His mother is still looking it over and is waiting for her other Son to get back from vacation to look it over. She also has a Brother who has purchased numerous homes looking it over. I mentioned to her that maybe she should look to getting a professional second opinion. She however is not going to make a decision without her other sons and brother input. When he returns I will pass on your information and concerns to him."
What is wrong with this picture? As a first time homebuyer, she is gravitating towards advice from family members. But shouldn't they be seeking advice from other like minded professionals? Maybe another mortgage professional? I know opinions and insights can help some. But if I needed a second opinion on a special type of surgery such as heart surgery, am I going to wait for my son to come home, who has had shoulder surgery and surgery on his gall bladder? Maybe to get an idea if it was painful or not, but really nothing else. But what else could my son tell me? Could he in detail explain the exact procedures for such a surgery? What would be right or wrong? Maybe tell me things that he read online? Even reading things online can be dangerous. Please read these two posts showing the bad information that is out there.
- HUD guidelines are creating misinformation & scare tactics - by Paula Henry - Very good post, yet very scary because of the details set forth by a specific loan officer, which was 110% wrong and incorrect.
- Rumors about FHA loans monthly mortgage insurance increase - Same kind of wrong information that is talked about in Paula's post above. That someone else listed the same wrong information of 1.55% for the monthly mortgage insurance.
Too many hands in the cookie jar? Again, seeking help from family members can some times be helpful when trying to seek a specific direction in life or when dealing with a problem. But to try and get insightful knowledge about mortgages from family members? I would rather take my chances with a deadly snake in the amazon. At least if I get bit, it will be a quick death. In regards to the woman above, it could be a slow death, after trying many different answers from her family members. Not unless they deal with mortgages on a daily basis, should this woman be taking strong advice from them. Sorry people, I have seen this back fire more often then none. I have even seen the old "going with a friend" answer fall apart at the end. It's easy to give an answer or to promise something, but when it falls apart or doesn't come true? Then were are all of these people at?
Hey, want a cliff notes version of this women's story? Before I start... Mother pays $800 a month on her house. They will cash-out $220,00 to give to the daughter to buy their new home in cash. So, bottom line was that this loan officer told them that her mothers new payment would go from $800 to $1,350 a month. pppssss... mind you, she only has 5 yrs left on her mortgage. But the worst part? The loan officer said that the mother could still pay the $800 monthly and she, a new home owner, could pay her mother the extra $300. And then went on to say, this is great considering that we are talking about 2 homes. Hey loan officer, what about taxes and home owners insurance? Ah, another $400 a month for the mother and another $500 a month for this first homebuyer who will own the home free and clear. Rut row, that is another $900 a month that he didn't explain about and the buyer didn't think about this. It gets better.
I told her that he mom could co-sign for her instead of tapping into her mom's house. Remember, mom only has 5 years left. Secondly, I did some research and found out that the property that they wanted was approved for a USDA loan in New Jersey, for 100% financing. She began to listen, but still needs to talk to family members.
Conclusion : First off, it sounds like this other loan officer has no clue and was just telling her what she wanted to hear. Imagine that. Secondly, she seems to want to trust family and not a professional expert. Lastly, will she pick door number 1 or door number 2? ( ssshhhh, I am behind door #2) Time will tell and I will keep you posted.
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For more information on FHA loans, please go to this link. The FHA Expert
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!
For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors
Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc
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