Lowering Your Monthly Mortgage Payment
by Patricia Leary ◊ Feb 03, 2012
Everyone is always asking, “Will the rates go any lower?” The truth is that no one ever knows. I always say that rates are like a moving target. They sometimes change multiple times in one day. Right now, they are at their lowest, so if you are looking to lower your monthly mortgage payment, there is no better time than now.
The Government has recently made some changes to their HARP program to help more homeowners refinance. If you took out your current mortgage before June of 2009, you don’t have monthly private mortgage insurance, and either Fannie Mae of Freddie Mac owns your mortgage, you might be eligible.
We are in a changing lending landscape so it’s more important than ever to find the right mortgage banker. In today’s marketplace, almost every lender has very similar pricing and pretty much all the same products. What’s the most important is the service that you will receive. There are tougher underwriting guidelines, licensing, and stricter appraisal guidelines. This has eliminated 70 percent of loan officers in America. The remaining loan officers represent a very high group of professionals. There are still a few bad apples, but fewer.
How do you differentiate between loan officers? First and foremost, ask for referrals. If you have a friend, co-worker, or family member who had a good lending experience, ask who they used. Talk to people who deal with lenders, such as real estate agents, attorneys, and accountants. Loan officers who work by referral go beyond to make their clients happy with product, price, and service. The loan officer you choose should be aware how the rates are derived. They should be aware of the bond market, as well as any upcoming events and economic reports that might impact interest rates. You need someone who can help you make the decision to lock when it is time to lock in your rate.
Seek out a mortgage banker who can advise you. There are many factors to consider when choosing the right mortgage. Your future income, the length of time you plan to live in the home, as well as the term that you feel comfortable with. But, most important is the monthly payment. You should know the difference between a mortgage banker, mortgage broker, and your local lending institution. As a mortgage banker, we have our own in house processors and underwriters. We also close and fund in our own name. We still broker out some of our loans, if it is a product like as a reverse mortgage. Do you want to use someone with his or her underwriter and processor in a different state than where you live or do you want a processor who is accessible to you? As a mortgage banker, I want someone accessible to both my client and myself so that I can get answers when I need them. The time to close the loan is also a large factor when choosing your loan officer.
A good mortgage banker is also a resource for other professionals when purchasing a home. They have a network of quality people, from insurance, to home improvement, to legal help. This is more important now than ever because of all of the distressed properties on the market, as well as short sales. Making sure that there are no liens on the title with these properties, as well as knowing if the home will need rehabilitation, are the factors you should know early in the process.
As we know, there is no better time to purchase that home of your dreams than now with the inventory high and rates at their lowest. Surround yourself with professionals who will help the process go smoothly for you because they know what they are doing and have spent the time to educate themselves and learn the guidelines they need to know to do their job right.
Feel free to call me at 203.645.1037 for a free consultation and, remember, I’m in your community.