Financing

5 Key Reasons Our Mortgage Partners Make the Difference

Every Realtor has their favorite lender. And I get that having a strong relationship with a lender makes a positive difference for a buyer. But… I was in the mortgage biz for 17 years and have a lil’ deeper insight into what makes a Loan Originator an “ok one” versus a “really awesome one”. And since buyers are in the process of making the biggest purchase of their life, being ok is just not good enough. Not for any client of mine anyway.

Here are 5 KEY Reasons why our recommended lenders will make a difference in your life!

  1. They’re really good at what they do. They’re experienced and they know their stuff! Which means they’ll help you pick the best loan product for your specific situation
  2. They’re solid people. They treat people right and the costs are always fair and straightforward
  3. They communicate – good or bad news. It makes no difference. They return phone calls / emails / text messages. They keep you in the loop
  4. They’re friendly. Getting a mortgage can sometimes feel like going to the dentist, so they’re perspective and sense of humor can keep your spirits up
  5. They go the extra mile. This past weekend showed up just one more example. Mike Wickham with Caliber Home Loans stayed til 7 on a Friday night to get a pre-qualification letter out so one of our clients could make a good offer. (Btw, they got the house! How cool was that?!) And Alan Pressley with Ruoff went into the office Saturday afternoon to help another of our clients get in position to win a bid. I think when the dust settles, we’ll have won that one too!

There are 5 key reasons why our lenders can help you win over other bidders. After all, it doesn’t do you any good to find THE right house if a lender is going to drop the ball on you, now does it? To learn how you can get the house you really want, contact our recommended lenders and you’ll go to the front of the line!

New FHA Mortgage Limits

HUD announced in December that FHA mortgage loan limits will increase for all Indiana counties.  In 2018 the loan limits ranged from $294,515-322,000.  Corresponding limits in the new year will run from $314,827-343,850.  FHA mortgage loans are insured by the federal government.  In most cases, they require a minimum cash down payment of 3.5% of the purchase price (ie. A house selling for $100,000 would require a cash down payment of $3500).  The urban rumor mill has it that these are for first time home buyers only.  That would be wrong!  They are available to most anyone, regardless of income or whether you’re a first time buyer or it’s your seventh house.  However, generally you can have only one outstanding FHA loan at a time, and they are for primary residence only.  You cannot buy a rental property with a FHA loan— (drum roll) you can buy a 2-4 unit property with a FHA loan if you are going to live in one of the units!  And even in that case, the down payment is only 3.5%!  Talk about a way to get started in real estate!!  Want to know the loan limit in your area?  Call the experts at Indy’s Choice today.

Trying to Avoid a Jumbo Loan??

I was talking to a client this past month and they mentioned they wanted to stay clear of a JUMBO loan.  We discussed some strategies that I have seen over my years in the business that have proven helpful to some in these situations.

  • Consider borrowing from your 401K. Most 401Ks allow one to borrow from the plan.  Typically, there are no upfront cost and you’d be repaying yourself.  It usually takes about 21 days to get the $$$ in your hands.  All you usually need to qualify is a copy of your purchase agreement and a preliminary settlement statement (from the closing agent) on the new house and you’re good to go
  • Do a Conventional/Conforming 1st mortgage and couple it with a simultaneous second mortgage or HELOC (Home Equity Line of Credit) to fill the gap. Then once your current house sells or you get your bonus or whatever, you can pay off the second / HELOC.  Typical costs of a HELOC are minimal, the rate is good, and repayment is often interest only.  Interest is usually deductible.  Not all mortgage lenders will have these products, though you can oftentimes coordinate with a bank or credit union to do that piece of the transaction
  • Plan on doing a Conventional/Conforming 1st mortgage on your purchase.  Take out a HELOC on your current residence now. This approach does not affect your current 1st mortgage.  Again, the upfront cost is minimal, interest rate is good, and repayment is often interest  Interest may not be deductible but you should only have this for a few months anyway.  Going this route gives you your equity in cash to work with as you go into the new transaction.  It is important to know that this MUST be completed prior to your house being listed or put on the market. It’s about impossible to find a lender who will make that loan once you’ve listed it or the terms will be far inferior.  Turnaround time on this is probably 1-3 weeks.  Different lenders work these differently and with various timelines.
  • Some combination of the above.

Hopefully this gave you some food for thought on how to avoid that Jumbo Loan. When you are ready, give me a call or text at (317) 625-0655. I’d be happy to jump on a call to work through these strategies and determine what is best for your situation.   Until then, make it a great day! – Bob