Did You Conduct a Year-End Review?

Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
Did You Conduct a Year-End Review?
For many businesspersons, the end of one year and the beginning of the next signals the need for a year-end review.  And while I always conduct such a review of my own business, I typically don't share my findings publically.  
But this year, I'm going to speak of my results, as I was somewhat surprised by what I found during this annual exercise.  Very pleasantly surprised in one specific category.  

I definitely recognized that changes were taking place, as a many of the Chicagoland housing markets have healed to a good degree since the housing and economic downturn of the mid-2000's.  I was expecting that my business would reflect that better health.

But I truly had not realized that my personal business was subtly but steadily evolving throughout the past year to a noticeable degree too.  I guess I was "head-down-blinders-on" while concentrating on delivering Closings for my clients.  

One of the ways I categorize and analyze my database is by Loan Type ... that meaning Jumbo Loan, Conventional, FHA, VA, and "others" (in-house Portfolio).  While I had noted that the majority of my clients had held higher Credit Scores than those of previous years, I had not realized just how much those Scores had improved.  Or how those improvements had resulted in real change taking place throughout the year. 

The number of closed Conventional Loans reflected the starkest improvement and growth.  There was a marked shift away from FHA loans.  

Many of my clients that might have gone FHA previously had this year qualified for and taken advantage of the Fannie Mae "HomeReady" or the Freddie Mac "My Community" Program.  In many of these cases, my clients could qualify (and thus choose) between an FHA and HomeReady Loan.

As a refresher, here's a breakdown of the features of each kind of loan:

     FHA Requirements:
  • 3.5% minimum Down Payment
  • Typically has lower Credit Score Requirements
  • Higher Monthly Mortgage Insurance payments
  • When placing less than 10% Down, offers "life of loan" (30 years) Mortgage Insurance


     "HomeReady" (Conventional Loan) Requirements:  

  • 3% minimum Down Payment
  • Slightly higher Credit Score Requirements (than FHA)
  • Lower Monthly Mortgage Insurance payments 
  • MI payments that can, and typically do fall off after 8, 10, 12 years of payment when the original Loan is paid down to 78% - 80% of the initial Purchase Price


Note:  When considering the utilization of each the above, a study is performed.  Then comparisons are made showing the benefits of using the FHA Loan VS "HomeReady" Loan.  As in every case, Credit Scores, Down Payment amounts, Loan amounts, Debt-to-Income Ratios, can and do affect the cost of the Monthly Mortgage Insurance Payments. 


This side-by-side comparison  between FHA and Conventional "HomeReady" or "My Community" loan is then presented to the Borrower for their consideration. 


At this time, I also deliver my recommendations as to which Loan Program I project would lead to the most beneficial results.  


The criteria considered most heavily is: 

  • Which loan type produces the highest likelihood of a successful Loan Closing? 
  • Which loan type provides the best financial choice/results for my Borrowers ... both in the short-term and long-term?  


This comparison is also made:  

  • Monthly Payment(s) VS Projected Stay in the Home  


What I typically found was that home buyers holding an FHA Loan and choosing to stay in their home were likely to pay more than those holding a "HomeReady/My Community" Loan ... due to their ongoing Monthly Mortgage Insurance payments (currently FHA's policy).
All of the things mentioned above contributed greatly to the shift I saw in my mortgage business.  And I felt good about that.
My clients, after receiving the facts regarding their individual financing scenario, clearly understood their choices well.  They had obviously listened, studied, and learned the pros and cons of each option presented to them.  That had resulted in them choosing the loan type they were most comfortable with and felt best represented a beneficial financial path for them moving forward. 
Gotta love that ...
There were many positives to be found in my year-end review.  They're also encouraging signs as we enter 2018 ... for my clients, the overall economic outlook, and myself. 
Did you conduct a Year-End Review?  If so, what interesting trends and results did you find?
If in need of financing information/advice or thinking about buying or refinancing a home in the New Lenox - Will County -Chicagoland region, Illinois and Wisconsin ... contact me at your convenience at any of the following:
Gene Mundt
Mortgage Originator  -  NMLS #216987  -  IL Lic. 031.0006220  -  WI Lic. 216987
American Portfolio Mortgage Corp.
NMLS #175656

Fax:  815.524.2281


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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656


Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 


Your Referrals & Testimonials are Always Greatly Appreciated! 




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Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy


Yes, we do.  It gives us additional data to be aware of.  We do every month as we do our books.  A

Jan 25, 2018 12:31 PM #1
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

Yes, my business partner and I go through the year and look at where business came from, what we could have done better, what we should do new in the coming year.  We call it a post mortem, though, and I'm thinking annual review has a nicer ring to it! LOL

Jan 25, 2018 01:34 PM #2
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Gene for the last 4-5 years my loans have been changing more and more conventional loans, and less and less FHA.  I think this will continue to be the patern until FHA once again becomes more Borrower friendly.

Jan 25, 2018 04:32 PM #3
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Gene, did the year end? When did it end? Just kidding. Yes I always look at where my business comes from what per cent is referrals, what per cent is conversions etc... hence I know where to focus and spend more effort and energy on. Endre

Jan 25, 2018 06:36 PM #4
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

You know, I have noticed a marked shift from FHA to conventional too, Bro Gene! I honestly feel that a good deal of that here is because buyers don't want the sellers frowning on the potential appraisal issues that we seem to routinely have with appraisers here.

Because an FHA appraisal stays on record and cannot be changed (at least they WON'T make changes), that gives sellers great pause. Buyers want to win in bidding wars so, they opt to put more money down and go conventional.

And, yes, I do the year end report - in fact, we worked on it on New Year's Eve! I wanted to be 100% prepared for the CPA ASAP this year!

Hope you have a fantastic week!

Jan 29, 2018 09:45 PM #5
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Good morning Gene.  I think a year-end review would be beneficial for anyone in this business.

Jan 30, 2018 05:44 AM #6
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Well, you know I'm anxiously awaiting that call, Bro Gene!! 

Happy Tuesday!

Jan 30, 2018 09:37 AM #7
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

Ha, I'm laughing at Susan Haughton s response.  And yes, it is pretty important to know where our business is coming from and also the ROI for our marketing efforts and investments.  

Feb 09, 2018 11:45 AM #8
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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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