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So, You Are Purchasing Your Next Home In Allentown, Pennsylvania?

*The following is an entry from the Mortgage side of things into the First ActiveRain -- Buyer Challenge ). There have been some wonderful contributions from some very talented Realtors out there. I was asked to throw in what financing options potential buyers had. Here we go.*

Tom & Michelle,

It was a pleasure speaking with you today about the financing options available to you in your desire in buying a home here in historic Allentown, Pennsylvania. I want to first thank you both for the chance to earn your business, as you were referred to me by Colleen Kulikowski. I also want to applaud you in your decision to work with Colleen, as my experience with her has been nothing short of outstanding. She will prove to be a valuable individual to help you find a home that will meet your short term needs and long term aspirations.

I wanted to take this time to briefly summarize a couple of the options we discussed today for your Home Financing Needs. As we went over your application and the supportive documentation I will need from your end, I also wanted to help summarize what we spoke about in terms of financing options. When we spoke, you expressed that you wanted to be in close proximity to an elementary school so that your two young children could have the option of walking to school. That also led to a conversation pertaining to the present and possible plans down the road. Since you're looking to buy a home in the $400,000 price range and you are able to put $90,000 down, you will be able to avoid the infamous PMI we spoke about. You talked about maybe selling the home and downsizing in 7-10 years when your children went off to college. I wanted to reiterate the options we spoke about earlier that seemed to be of the most interest to your situation now and desires down the road:

30 Year Fixed Rate Mortgage (Fixed Rate for the life of the loan)

A more traditional route that has been taken by many individuals and families whom aren't sure of what the future may hold. Heck, who is? While there are many products that prove to be invaluable financial tools for your future, there is a comfortability factor within this product that should not be ignored.

PROS

Your principle & interest payment will never change. You will know what payment to expect now and 12 years from now should you decide to not sell your home or change your Mortgage situation.
Rates are typically lower than other products (Interest Only & 40-Year Loans) so you can be sure that you'll be provided the lowest rate the market has to offer, without add-ons for more exotic and sometimes financially savvy loan products.

CONS

You will be making the full payment, principle and interest, every month as long as you choose to keep the loan. This won't allow the ability to get a lower monthly payment that can free up money for other financial endeavors and future goals.
There is no flexibility within this product, here's your payment, that's it. Without flexibility, your financial future is somewhat limited.

Conforming Fixed 10/20 IO (This is a conforming fixed loan 30 year where the first 10 years are interest only)

The loan will be re-casted after the first 10 years. So if you pay only the interest for the first 10 years, the whole balance will now be due on a 20 year term. Hopefully you pay a little more than just the interest so the payment won't be so high on the remaining 20 years.

PROS

This is an excellent financial tool to give you a very low monthly payment, allowing you to free up money to save up for your children's college tuition and to stock away for retirement.
The payment is fixed for 10 years, which fits nicely into the time frame that you may want to explore downsizing to a smaller home when your children go off to college

CONS

There is typically an add-on to the interest rate for this option, so you'll be paying a slightly higher rate than you would on a run of the mill 30-year fixed rate mortgage.
It could turn out that you choose to stay put, even when your kids go off to school. We spoke about this possibility and why it may be detrimental to your financial situation when the loan is re-casted after the 10 years is up. We spoke about the Sleep Principal, a very human & valid element, in any financial decision.

As you folks discuss some of the pros and cons I laid out, I will continue to educate you about the process, the products, and give feedback as needed. I will continue to work closely with Colleen to make sure your transition to the Lehigh Valley and Allentown area is smooth and informed. I look forward to speaking with you further in the next few days and moving forward accordingly.

Regards,

Jason Sardi

First Choice Equity Group Inc.

Mortgage Consultant

610-439-2166 ext. 229

jsardi@fcegi.com

Posted by Jason Sardi, Mortgage Banker on 09/18/2007 09:18 PM

Comments (44)

buyer challenge, buying a home in allentown, first choice equity group inc, jason sardi

Originally posted at: Real Estate Financing...: So, You Are Purchasing Your Next Home In Allentown, Pennsylvania?

This post has been included in Pennsylvania Information Lehigh County, PA Information Allentown, PA Information
Post is included in group: Pennsylvania Professionals
Post is included in group: The Active Rain Buyer Challenge Contest

44 Comments on So, You Are Purchasing Your Next Home In Allentown, Pennsylvania?

SEP

2007

Hey Jason, You're giving all the Realtors a run for their money! :) This is an excellent article. If I received something like this from a lender, it would be a no brainer who I would choose to work with. I appreciate the way you spell out the pros and cons of different loan options.

Jason -- you are a professional. I really liked this approach. You blog really got my attention because tomorrow, I am meeting with "Tom and Michelle" former clients who now have 2 children and need a bigger home. What I liked so much is that you spelled out the pros and cons of each loan which might fit the buyers needs. One size does not fit all.

Jason....Your confused...Tom and Michelle are buying in Hampstead NH...they just haven't told Joan that they are not meeting her in Concord tomorrow. They'll be writing an offer with me in Hampstead tomorrow instead.

Lola - That is truly a honor for you to even say that. So, thank you much and the check is in the mail:-)

Joan - Your last sentence is so very true! Good luck with your meeting with your own "Tom & Michelle."

Monika - Lol, I'll get licensed in NH and shoot you an email manana:-)

What no Music!!! http://www.youtube.com/watch?v=KZsLmB2Jw8c

Excellant post my friend as usual!!! Good luck... I guess I should go read the others to be sure..

Lol, I used that one already amigo:-( How about this..... http://www.youtube.com/watch?v=5sZTcdrt0g0

Jason - very nice job! I think in this sentence "So if you pay only the principle for the first 10 years, the whole balance will now be due on a 20 year term. " you meant to say if you only pay the interest for the first 10 years.....

http://www.youtube.com/watch?v=EYbUCvz1LYE

Might be a better fit.

Shucks, good point Kim......I will correct. Nice heads up though, darn my late night, off-the-cuff, writing efforts. Thank you!

Carney - You the man, I agree.

Jason - Regardless you did an excellent job on this!

Jason, this is awesome. As an agent, I'm a little like a mother hen with my clients, and I want them working with a loan officer who will walk them through their options so they understand there's more to choosing a loan than interest rate shopping. I'll bet you make your clients feel very comfortable with their loan choice (and lender choice)... congratulations on a great post. (And thanks for commenting on my buyer challenge post.)

Jason nice post and I like how you show the pros and the cons on the programs.

Nice Jason :)

I received what may be the most well-written letter today from a lender who expects she'll be representing my client. I was so impressed that I actually read it all the way through. (Imagine that!)

But after reading this, she isn't looking nearly as good. (But then, she wasn't wearing a wife beater either). You've raised the bar on the information a buyer should receive in writing. I can give eloquent primers on lending to my clients, but their eyes glaze over pretty quickly. I doubt any of it sticks. Besides, I'd be thrilled to have a copy of the pitch their lender gives so we can evaluate their options together.

Well done!

Jason - Way to go. Excellent to compare the loan programs to help buyers see their choices. Nice work my friend.

Hi Jason, I wanted to comment with out my remarks being influenced by the other comments so I did no read them as yet.

First, this information as you presented it is excellent. I think you actually learned something again that you actually already knew. When you enable a client to make their own "Best Decisions" based a complete set of criteria that is accurate and thorough, you have built a bond that creates a relationship as opposed to just a loan order or transaction.

When criteria is not just spoken but actually put in writing with the benefit of your counsel, you create that relationship based on trust and empowerment.

Most people want to learn but because of the haphazard way things are usually presented, they often move forward but still have fear based on incomplete understanding.

It would be my suggestion, if you don't already incorporate this in your business plan, to make your proposals to your clients in just the same way as it is presented here. This will also afford that your referrals should increase dramatically and you will never need to use the phrase, Trust Me" ..... Because you will have already earned it.

SEP

2007

Bravo -very nicely done - clear and understandable - best of luck

Tom & Michelle get around.

And I want you licensed in my state. Tell Geary to work on that.

Love you and Bob with your dueling YouTube videos. :o)

Jason, I'm glad your getting the loan for Tom and Michelle, since they are moving to Saline! I've wanted to do a transaction with you so now we can. :)

Jason,

Good luck with the loan:)

Nice set up with the presentation. Good luck in the challenge!

Jason, Great post. I really liked how you explained it..."This won't allow the ability to get a lower monthly payment" I can't tell you how many times I get that question

Jason,

I think you did great on this, and you explained it well!! especially as a referral, if that was really the case, then you did a terrific job..

Tom Weiss

Jason, a very good letter! I would pick you for a lender hands down!!!

Jason, Good post! I liked the way you gave the good and bad points of each financial option.

Jason,

This is a great letter. I look forward to the opportunity to be able to work with you. If your service fits your letter, I think your clients must be very relaxed and informed. The pros and cons are not generally a thing I get from mortgage guys. This leaves me with the impression that I won't be dealing with surprises later, which is a great thing, because I don't like surprises.

Awesome post Jason!

I rather confident I have never worked with a lender that would provide such detailed information in a letter - it's hard enough for clients to get this information face to face! <G>

Thanks for taking the time to enter the contest.

Now this is what I'm talking about. In my entry I did not give any names out as I wanted the buyer to let me know if they wanted my referrals. I also didn't want to give big loan info as I leave it up to the LO. You know what....you and I should have teamed up and written a whopper of an entry to the contest.

Okay...now go do the the one for David and the VA loan. :)

Nice job and get entry! It's nice to hear from a lender, especially in this market. What no 2 year ARMS?:) (BTW, you have "confirming" instead of "conforming". I hate correcting but I know I hate it more when I find a typo that no one told me about.:) Congats on doing this...I just couldn't get motivated this time.

Kim - Thank you!

Margaret - No doubt about that. By the way, your post was very good, that competition turned out to be a very enlightening, entertaining, and very competitive one.

Ashley - I think that is crucial. There are pros and cons to everything, especially different loan products.

Jennifer - Awwww, how sweet. Thanks. I'd be happy to go over anything you get from another lender, just so your client can and you can have an independent and unbiased second opinion.

William - Very well put my friend. While I think I incorporate this the majority of the time, there is always room for improvement.

Thesa - Thanks, I don't think I'm in the running. I was asked to participate though, so I obliged.

Sarah - I'm working on Geary and I have a feeling the dueling youtube videos between Carney & I has just begun:-)

Missy - Even though I'm not licensed there, we could pretend. I would love to work with you!

Neal - Thank you, I was hoping you'd enter from the Realtor side of things.

Matthew - You and me both, our trade is becoming one more of teaching rather than selling I believe.

Thomas - This is purely hypothetical but the way I try to treat every client. I do a pretty good job at it most of the time.

Diane - You know how to find me:-)

Brigita - I think that is vital in the education process.

Andrew - I would love the opportunity to work with you, sooner rather than later.

Debbie - The letters and emails I send can be a bit detailed, there's always room for improvement though.

Sis - You are killing me:-) I would love to team up with you anytime!!

Diane - Thank you, that's what I get for poor planning. My imperfection shines right through:-) No 2 year ARMS in this market, they are priced ridiculously now and were abused then. I think they'll be back someday...hopefully used more properly.

Hi Jason - love that you entered this contest and your post is terrific. I really like how you laid out their options in plain English and in a format they should be able to easily understand, with both the advantages and disadvantages of each.

When you get licensed in NH, please be sure to add my name to that email to Monika!

Yep, I still do.....
Ann

Excellent article, Jason. This was a pleasure to read. You convinced me! Good luck.

Jeff

If I were buying in PA I know who would be doing my mortgage. You! You've got any future referrals I may have. I'm confident you'd treat them right.

Nice post Jason! I liked how you explained it out, nice and easy for the consumer to understand!

Ann - I do too. I had no idea what I was going to write about, which situation that was, or how I was going to go about it. Holy off the cuff batman....and it shows:-0

Jeff - Thanks man, right back at ya!

Maggie - I feel the same about you hun, give me a call anytime, even if just to shoot the breeze.

Annie - Why thank you, I appreciate those very kind words. Hopefully, this helps consumers in some way who may be reading.

SEP

2007

Hi Jason,
This is an awesome post with so much information I don't know what to comment on so I'll just leave it at you are one happening mortgage guy. Go, go, go!

Lol, why thank you Cynthia! I can be pretty fly....for a Mortgage Guy:-)

Well done Jason. Always proud to be your associate. Well, most of the time anyway. Educate, educate, educate...Only then is the deal sealed. That's the way it's been, the way it is, and the way it always will be. Your the best!

Well done as always, Jason. This is especially helpful for the Realtors who often don't see how we submit scenarios to their buyers. You are such a great asset to ActiveRain! Love ya,

Geary - I'm very glad you specified that you are proud to be my associate MOST of the time, otherwise I might lose my reputation:-)

Janet - Awwww, thank you Janet. I love you right back!

SEP

2007

Jason--- I have one similar that I use for all of my clients, but I like yours so much better!! Are you a member of By Referral Only? I notice a few of Joe Stumpf's key ingredients in that letter.

SEP

2007

Aaron - Not sure if I am or not, haven't heard of Joe but I will check it out. Thank you by the way!

Jason- extraordinary post. I LOVE the educational angle. It's one I need to move on aggressively. The Pros/ Cons are excellent.

This sure beats the "Blues Blogs" that seemed to drag on a bit and were becoming your SOP. (Appeared anyway).

While we obtained some insight as to your personality.... THIS informative type of post is what will allow you to reach your goals.

Kudos. A big 5 and a flag feature.

Thank you Rob. Are you saying you don't like my "Crap" posts or as you call them "Blues Blogs"? Lol. Someday you'll get me, they probably weren't what you thought.

You are right about informative posts Rob, the public needs these badly!

SEP

2007

Thanks for a great post. I will suggest this product to buyers as well , in the future. There are not many of them around.

Hey, thanks Gita. It is a nice product (the 30 year fixed rate, 10 year Interest-Only) for some people. Now go out and find those buyers....they are out there:-)

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