Today's Mortgage Lesson: The Three R's ... Rumors, Reminder, 'Rithmetic

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Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI

 

 
 Gene Mundt Chicago Bancorp Three R's blog, Rumors, Reminder, 'Rithmetic

     Today, I want to address 3 things that seem to crop-up frequently when working with home buyers ... and that's ...

           Rumors, Reminders, & 'Rithmetic!
 
    
    
    Rumors first, as I believe misconceptions and untruths can scare potential home buyers from searching out the facts.
 
    The rumor I hear most often concerns the need for down payment.  So many potential home buyers (especially first-time buyers) believe that you must have 20% down to buy a home.  That's just not true! 
 
    There are multiple programs that allow for smaller down payments.  Some are:
  •  USDA Rural Development  -  Properties in qualified counties and specific villages are eligible for these loans with NO MONEY DOWN ... and credit scores as low as 620.  (First-time buyers only)
  •  IHDA Loans  -  $1,000 down with GRANT money used for remainder of down payment.  (First-time buyers only)
  •  FHA  -  Down payments can be as little as 3.5% ... and this is for ALL buyers.  First-timers and step-up too.
  •  VA  -  Veterans can buy or refinance at 100% with NO MONEYDOWN.
     Locally-offered down payment assistance programs may also exist that would prove financially beneficial to prospective home buyers.  Don't let RUMORS keep you from investigating the possibilities that exist.  Talk to a professional mortgage lender.  Seek the facts as they pertain to you personally!
 
     A Reminder is next!  And I can't over-emphasize the importance of this.  Should you actively be thinking of buying a home, or actually in the process of buying a home ...
DO NOT APPLY FOR NEW CREDIT 
DO NOT GO ON A SHOPPING SPREE  
 
    
     Until you have talked to your mortgage lender and received their "okay" to do so, don't do a thing.  Literally!  I recently had a client that ran out and bought a house full of appliances and furniture because he "just couldn't pass-up the holidays sales"!  We had talked about this multiple times, but he still pursued the purchases.  So frustrating for him and me both!
 
     I remind you that the new credit you seek, that new car, those new appliances, the new furniture you envision in your new home ... can literally stop your home purchase dead-in-the-water.  At minimum, it can gum-up the mortgage processing and cause delays.  If you'd talk to my client now, he'd tell you the same thing.
 
    Prior to making any financial move (and that includes moving bank accounts and monies) talk to your mortgage lender.  Actions as simple as these can create problems for you.  Avoid the headache or heartache that can come as a result of untimely or mishandled credit/financial actions.  Check with your mortgage lender first.  It IS that important! 
 
     Gene Mundt Chicago Bancorp Three R's blog, Rumors, Reminder, 'RithmeticFinally, there's 'Rithmetic.  With all the mortgage programs, down payment assistance programs, underwriting requirements, and quickly-changing regulations in today's mortgage lending industry ... being able to "cipher" and perform the new mortgage 'Rithmetic has never been more important.
 
    
     To put it simply, only an experienced, educated professional mortgage lender that deals with the changes on a daily basis can possibly know and determine if YOU are capable of buying a home at the present time, or when that possibility will exist for you in the future. 
 
    
     I support efforts to educate oneself via the internet.  Using the many calculators, websites, seminars, webinar features that are available makes good sense.  They can supply a very useful stream of information and provide great tips in a myriad of ways. 
 
     But when it comes down to gathering facts, to the nitty-gritty of pre-qualifying yourself for a loan, making a final determination on whether you can or wish to proceed with homebuying?  Do yourself a favor.  Contact a professional lender.
 
     I don't want to beat the topic into the ground, but the mortgage business has gotten increasingly detailed.  It's quickly changing, tricky to navigate.  Anyone that tries to "cipher" whether they are truly mortgage "approvable" on their own ... runs the risk of eliminating themselves from buying a home needlessly or prematurely.
 
      Find a professional mortgage lender.  Let them do your 'Rithmetic.  It's the only way you'll know the true facts about your present personal financial scenario.  And if you find you can't buy immediately?  You'll learn how to proceed so you improve your credit as quickly as possible.  You'll maximize your financial efforts through their guidance.  Typically, most mortgage lenders perform these services for free.  Why not take advantage of free services and guidance?
 
      Working with an  experienced professional mortgage lender will help to dispel Rumors.  Your lender will provide timely Reminders ... do the 'Rithmetic that will help guide you through the home buying process, from initial credit inquiry through to closing your loan. 
 
       Rumors.  Reminders.  'Rithmetic.  Know them.  Live them.  Successfully close on your new home.
 
 
     * Contact me today for answers to your questions and mortgage guidance and service.  You can reach me at:
Direct:  815.277.4036    Cell/Text:  708.921.6331
       
 
 
 
 
 
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

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Rainmaker
83,308
Mike Cathell
Real Estate Services of SWFL, LLC - Fort Myers, FL
Real Estate Investing for Real People

Good info Gene! Even though I am Commercial Realtor, I felt this was important enough to share with my Facebook friends who are in residential.

Jun 01, 2011 07:22 AM #1
Rainmaker
1,240,821
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Thank you so much, Mike!  I'm honored.  Sure hope the message of the post helps your friends and their clients ...

Gene

Jun 01, 2011 07:30 AM #2
Rainmaker
287,582
Barb Van Stensel
Chicago, IL

I am sitting here reading your post and started laughing when I read "do not go on a shopping spree".  OMG!!!  Gene, I had clients that saved $50,000 in one year by taking bagged lunches to work.  No kidding!  They had a budget and they kept with it.  Credit was awesome.  The money was there.  I told them:  "one of the biggest things the lender will check is if you buy a large ticket item and so I ask that you refrain from buying anything larger then a bread box."  They bought a grand piano and paid cash!!!  They thought it would be okay ... why?  because it wasn't on a credit card!  I asked them: "Where did the money come from?"  They responded:  "Their savings account but don't worry we still have plenty for the closing".  I about dropped my drawers on that one.  We closed.  I am more careful how and what I say, because this is all so very true.

Thank you for the light side of real estate.  My second laugh for the afternoon.  Must mean .. I am relaxing more?

Take care my friend.

Jun 01, 2011 08:22 AM #3
Rainmaker
1,240,821
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Barb:  So glad that YOUR story turned-out so well!  I was actually stunned into silence when my client told me what they had done.  AFTER they had done it, of course!  And asked ... is that going to be a problem????  I wish all my clients had YOUR client's ability to save!  Wow ... you're good at giving instructions!  I'll pick up some tips from you on that when we meet for coffee .... soon????   I'll be in touch next week ...

Gene

Jun 01, 2011 08:32 AM #4
Rainmaker
287,582
Barb Van Stensel
Chicago, IL

Gene, we could meet next week or when I get back from Michigan regarding my hearing.  Should be back on the 15th ... only gone for 2.3 days - LOL!!!  But it is my first adjustment since I had that fangled ear installed.  Would love to!  Let me know.

Barb

Jun 01, 2011 08:50 AM #5
Rainmaker
144,804
Markita Woods NMLS#196099
Fairway Independent Mortgage - Woodbridge, VA
Queen of Mortgages - FHA, VA, Conventional, USDA

Love the post the three r's but my favorite is the Reminders of what to do and not to do when buying a home. I can't overstate them enough. No shopping sprees, no large deposits, and no switching jobs in the middle of the transaction!

Jun 01, 2011 01:15 PM #6
Rainmaker
1,240,821
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Next week would be good for me, Barb.  I will be in touch tomorrow to set-up a time.  Talk soon ...

Markita:  Oh man ... I forgot to mention the job thing!  Good point!  A HUGE R for sure ...

Gene

Jun 01, 2011 02:28 PM #7
Ambassador
2,364,310
Fred Griffin, on leave of absence from ActiveRain
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Outstanding post, Gene.

I once had a Buyer who purchased a new Van the day before Closing.  The Lender ran a "final credit report" on the morning of the Closing.   The Payment on the new van wrecked the Buyer's ratio, the Loan was denied, and the transaction fell through.

Jun 01, 2011 05:09 PM #8
Rainmaker
1,240,821
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Fred:  Unfortunately I've heard that story repeated too many times.  Hoping with repetition of this reality, that future clients will be spared because they learned the lesson.  Thanks for writing ...

Gene 

Jun 02, 2011 01:43 AM #9
Rainmaker
321,465
Jack Tenold
Jack Tenold LLC - Spokane, WA
Specializing in Reverse Mortgages

Gene, .....and speaking of "financial actions", I've had purchasers show up with major cash deposits in their bank accounts that couldn't be documented very well.

Outstanding blog!  What more can I say!

Jun 02, 2011 01:26 PM #10
Rainmaker
1,240,821
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Jack:  I know how that feels .. and you wonder, "did that make sense to them"???  Thanks for the thumbs-up!

Tagrid:  Thanks for the compliments ... I appreciate your kindness.  Looking forward to talking and "meeting" in the future ...

Gene

Jun 03, 2011 07:13 AM #12
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Rainmaker
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
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