A Guide for Consumer Choice in Your Next Mortgage

From Spring Cleaning to Buying Fever - A Guide to Purchasing

Posted by Joel Asbury on Thu, May 22, 2014 @ 12:08 PM

Spring can be a great time of year to purhase a new home. It can also be the best time to do a little cleaning after a long winter. I bet you are considering the former while doing the latter, especially if your home may be too big! Let me introduce you to some interesting facts below about the whole process of buying while answering four of the most common misconceptions about when the "right time to buy" may be.

First, do you know a great Realtor or a Mortgage Loan Originator that you can utilize to make this process as smooth as possible? Secondly, have you done your homework online or by word of mouth as far as what to expect and when? Finally, do you have a plan for moving? Let me unpack these questions and more that I see everyday in my quest to find people homes in the Indiana market.

Should I wait for someone to tell me where to get qualified?

The easy answer is always - "No." Why do you want to wait? Are you questioning your decision over and over and over again? That does nothing for you NOW! Whenever you get the "urge" to move up, move down, move over, or move all around - you should first contact your local real estate agent for available properties in the area you wish to move to. After you contact your agent of choice, call a mortgage broker. It doesn't have to be a bank.

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We have all seen those Lending Tree commericals where the little green guy sits around in his boxer shorts, pretending he is shopping for a mortgage on his computer. He tells his buddy that puts on a suit to go to the bank that this is what everyone should do because it's faster, easier, and banks compete for you. It ends in an awkward scene with both guys on the couch in their respective boxer shorts shopping for a mortgage online. Why do you think this commercial works? Because with the advent of the Internet, Joe Consumer becomes more knowledgeable almost instantaneously.

So why should I start looking right away you ask? The answer is pretty simple: the sooner you find out if you are qualified for a mortgage, the sooner you can move out of your current housing situation and into the home of your dreams.

How do I become qualified?

Do your homework ahead of time. Check out this case study I recently had with a client that knew what she wanted, came to me to get qualified, and subsequently had one of the best loan experiences she will possibly ever have because of it:

I recently had a client that was awesome - there, I said it. I will admittedly brag on her for being prepared and always ready for my phone call when needed. How did she do it, you ask? She did her research. Granted, she is a professional researcher by trade, so it was in her blood to do it, but she came to our company for a mortgage because she knew our name, lived in the area, and trusted us to get her the best available product. I was able to do all of that, and then some. I quoted her an initial rate when we started the application based upon current rates of the day, but then when we went to lock in her interest rate, she gained a half of a percentage point lower! Wow! I couldn't believe it, but because she had come to me for a full pre-approval, she was able to obtain her qualification for a mortgage while she searched for an available property and while interest rates were at their highest fluctuation in months. Almost instantaneously she found a property the very day her initial application returned from the lender approved! This made the rest of the transaction super easy. It was so easy, we closed her loan three weeks before the scheduled expiration of her purchase contract!

Why am I telling you all of this? If only one thing resinates with you from this article, get this: You need to act fast in today's real estate market! Properties are there to be bought and sold, but some are hard to find. If you act now, you will be rewarded.

I Have Second Thoughts About Selling, Why Should I?

There is no better time to sell your home like the present. Even if you have thoughts at all, go ahead and do it. Home prices are driven by individual market. Each market is different. When viewing the national news or reading nationally covered newspapers, keep in mind every market is different. Your local market may be outperforming the national average, or it may be way below. Either way, look for homes in other markets outside of yours like Chicago, Ney York, or Los Angeles to make a comparison. Then look at the Indianapolis market. You will see that the MidWest is super cheap and the more highly sought after markets are super expensive! Supply and Demand drive home prices. It's simple economics. Right now Demand is supplying us with better home prices because the inventory available has shrunk significantly post the 2008 meltdown. There are many contributing factors to home prices. Let me list a few and discuss them now.

Number 1: Total Amount of Living Area

This truly is the biggest contributing factor in determining your home's value. Do you have an open floor plan? Chances are greater your home will have more value if the living area is open to all of the common areas of your home. Do you have a finished vs. unfinished basement? Basements add additional value to a home, but main floor living space is still where an appraiser will estimate the greatest value for the home. He/she has to make adjustments if your house has a basement, but no other comparables in your area do.

Number 2: My Neigborhood Has Not Performed Well Lately

That may be true, but did you know an appraiser has an adjustment radious of twenty-five miles from the subject area? Rural areas tend to get this exception before more densely populated areas, however. If your neighborhood has not performed well in the market, it could be due to the fact homes around your neighborhood are not built to the same specifications, and that has caused lots of adjustments to value due to non-existing exact comparables. When it comes to selling your home, make sure you have the expertise of a Realtor or Licensed Appraiser that can pull the comparables in your neighborhood just to be safe. You never want to out price your market, nor do you want to under value your property.

Number 3: Desireability

Is your neighborhood in a desireable market? If it is, only move out of it if you are planning to move to a more desirable area. Once you have found yourself in the most desireable neighborhood, stay put! Only move if you have to! By all means, never move just to move unless you have the desire to start fresh, or circumstances force you to. That is why you need a qualified Realtor and not just trust your own instincts - it is their job to find the desireable areas for you and find a buyer for your current place.

Finalizing the Process

Ok, so you have finally sold your property after stewing over it for months on end. What now? The hope there is that you will have some other property already found and a lender working on finalizing the loan so you can purchase it. But, have you given the above advice some thought? Have you been preparring ahead of time for the day when you buy your next home all along? Good for you if you have!

Working alongside a mortgage loan officer in your neighborhood is a great way to ensure not only that you are approved to buy, but that you did your homework ahead of time. It is also a great way to flatter the Boy Scouts of America and "Always Be Prepared." Preparation is key in the real estate business. Doing things ahead of time, having a mortgage company working for you that is detail oriented, having a real estate agent that is knowledgable of the area you wish to live, and always being available for when these people have questions for you or need documents from you like my example above will guarantee your next success in purchasing your next home.

I will leave you with this challenge: when shopping for your next home, call a mortgage professional right away to determine your credibility for taking on a new expense this substantial. You will learn so much upfront that the process will become much easier than you think, or what you've heard it is.

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Topics: mortgage tips, easy mortgage, Home Buying Tips, home purchase, real estate sales

About Our Authors

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Tony Gregory regularly contributes to this blog. He is an experienced loan officer in both residential and commercial lending from a commercial banking background. He participates daily in the economic and political activities that continue to shape this industry. You can email him directly at:

tonylends1960@gmail.com

Joel Asbury is Sr. Vice President of Compliance Operations for Winterwood Mortgage Group, LLC as well as a licensed Loan Officer. He regularly consults potential clients for the Sales Team while maintaining relationships with former ones via multiple marketing channels as well as developing new business through new lending channels. You can contact him directly:

jasbury@winterwood.net

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Linda Begley regularly contributes to this blog as a Reverse Mortgage Commentator. She has been a teacher in the Public School and Private School sectors, but then after retirement decided she could no longer take not being able to teach! It is her life passion to educate, which she carries on with her Reverse Mortgage seminars for not only the Public Sector, but the Financial Planning and Accounting business sectors as well. Linda has recently rejoined Approved Mortgage A Winterwood Mortgage Group as a Reverse Mortgage Consultant. Email her today at:

lbegley@approvedmortgage.com

We will do everything we can to help you succeed in your next home mortgage endeavor.

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