The housing inventory shortage could become tighter in 2018, according to a new study released by realtor.com. In a poll of 1,054 homeowners, the study found approximately 59 percent of respondents had no plans to sell their home in the next year, while 35 percent were planning to sell and nearly six percent were unsure. Among those planning to sell in the next year, 60 percent of potential sellers were Millennials who were either looking to buy a larger home (25 percent) or one with what they considered as “nicer features” (24 percent).

Realtor.com noted the sale of Millennial-owned housing could possibly free up the supply of starter homes, which was down 17 percent year-over-year—in comparison, the medium-sized home inventory was down 10 percent and the larger-size home supply was down five percent. However, 85 percent of Baby Boomers surveyed stated they had no intention to sell their home in the next year.

Realtor.com noted that homeownership among Boomers is nearly twice as high as the level among Millennials, thus limiting the overall housing inventory. “The housing shortage forced many first-time home buyers to consider smaller homes and condos as a way to literally get their foot in the door,” said Danielle Hale, chief economist for realtor.com. “Our survey data reveals that we may see more of these homes hitting the market in the next year, but whether these owners actually list will depend on whether they can find another home.”

Source: National Mortgage Professional

As you set goals for the coming year, remember to dream big and don’t let anyone else tell you
that you can’t be or do anything you set your mind to. Here are a few reminders:

• In 1962, four nervous young musicians played their first record audition for the executives
of the Decca Recording Company. The executives were not impressed. While turning
down this group of musicians, one executive said, “We don’t like their sound. Groups of
guitars are on the way out.” The group was called The Beatles.
• In 1944, Emmeline Snively, director of the Blue Book Modeling Agency, told modeling
hopeful Norma Jean Baker, “You’d better learn secretarial work or else get married.”
Norma Jean went on to become Marilyn Monroe.
• In 1954, Jimmy Denny, manager of the Grand Ole Opry, fired a singer after one
performance. He told him, “You ain’t goin’ nowhere, son. You ought to go back to drivin’ a
truck.” The boy went on to become Elvis Presley.
• When Alexander Graham Bell invented the telephone in 1876, it did not ring off the hook
with calls from potential backers. After making a demonstration call using the new
technology, President Rutherford Hayes said, “That’s an amazing invention, but who
would ever want to use one of them?”
• He dropped out of school at 15 to support his parents, tried sending his resume to The
Carol Burnett Show and was rejected, was booed off the stage of his first public comedy
show, and failed to land a coveted part on Saturday Night Live. Jim Carrey is now a movie
star and millionaire comedian, and was invited to host Saturday Night Live.
Everywhere we look we can find similar stories behind many of our greatest inventions, stars,
and heroes. These stories remind us that when we stay true to our vision for ourselves—even in
the face of other people’s lack of vision, anything is possible.

Wade Conway NMLS #157765

Your Real Estate/Mortgage Consultant For Life
P.S.  I hope you stay true to your vision this year. Contact me at
wconway@lincolnhomeloans.com or call me at 615-838-8777.

10 Worst First-Time Homebuyer Mistakes

By Amy Fontinelle February 23, 2017 — 12:10 PM EST
Are you gearing up to buy your first place? Shopping for a home is exciting, exhausting and a little bit scary. In the end, your aim is to end up with a home you love at a price you can afford. Sounds simple enough, right? Unfortunately, many people make mistakes the prevent them from achieving this simple dream. Arm yourself with these tips to get the most out of your purchase and avoid making 10 of the most costly mistakes that could put a hold on that sold sign. (Don’t know even where to get started when purchasing a home? Check out Financing Basics For First-Time Homebuyers and our First-Time Homebuyer Guide.)

1. Not Knowing What You Can Afford
As we’ve all learned from the subprime mortgage mess, what the bank says you can afford and what you know you can afford or are comfortable with paying are not necessarily the same. If you don’t already have a budget, make a list of all your monthly expenses (excluding rent), including vehicle costs, student loan payments, credit card payments, groceries, health insurance, retirement savings and so on. Don’t forget major expenses that only occur once a year, like any insurance premiums you pay annually or annual vacations. Subtract this total from your take-home pay and you’ll know how much you can spend on your new home each month. When calculating this figure use a mortgage calculator to research current interest rates. This will give you an estimate of what your total mortgage payments will be.

If you end up looking at homes that are outside your price range, you’ll end up lusting after something you can’t afford, which can put you in the dangerous position of trying to stretch beyond your means financially or cause you to feel unsatisfied with what you actually can afford. You may even learn that you can’t afford the type or size of home that you desire and that you need to work on reducing your monthly expenses and/or increasing your income before you even start looking. (Read Six Months To A Better Budget and Get Your Budget In Fighting Shape to learn more.)

2. Skipping Mortgage Qualification
What you think you can afford and what the bank is willing to lend you may not match up, especially if you have poor credit or unstable income, so make sure to get pre-approved for a loan before placing an offer on a home. If you don’t, you’ll be wasting the seller’s time, the seller’s agent’s time, and your agent’s time if you sign a contract and then discover later that the bank won’t lend you what you need, or that it’s only willing to give you a mortgage that you find unacceptable.

Be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, like finance a car purchase. If you cause the deal to fall through, you may have to forfeit the several thousand dollars that you put up when you went under contract. (To learn more, read Pre-Qualified Vs. Pre-Approved – What’s The Difference?)

3. Failing to Consider Additional Expenses
Once you’re a homeowner, you’ll have additional expenses on top of your monthly payment. Unlike when you were a renter, you’ll be responsible for paying property taxes, insuring your home against disasters and making any repairs the house needs (which will occasionally include expensive items like a new roof or a new furnace).

If you’re interested in purchasing a condo, you’ll have to pay maintenance costs monthly regardless of whether anything needs fixing because you’ll be part of a homeowner’s association, which collects a couple of hundred dollars a month from the owners of each unit in the building in the form of condominium fees. (For more information, see Does Condo Life Suit You?)

4. Being Too Picky
Go ahead and put everything you can think of on your new home wish list, but don’t be so inflexible that you end up continuing to rent for significantly longer than you really want to. First-time homebuyers often have to compromise on something because their funds are limited. You may have to live on a busy street, accept outdated decor, make some repairs to the home, or forgo that extra bedroom. Of course, you can always choose to continue renting until you can afford everything on your list – you’ll just have to decide how important it is for you to become a homeowner now rather than in a couple of years. (For related reading, read To Rent or Buy? The Financial Issues – Part 1 and To Rent or Buy? There’s More To It Than Money – Part 2.)

5. Lacking Vision
Even if you can’t afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home otherwise meets your needs in terms of the big things that are difficult to change, such as location and size, don’t let physical imperfections turn you away. Besides, doing home upgrades yourself, even when you have to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done the work for you. (For more information on remodeling, read our related article Fix It And Flip It. The Value of Remodeling.)

6. Being Swept Away
Minor upgrades and cosmetic fixes are inexpensive tricks are a seller’s dream for playing on your emotions and eliciting a much higher price tag. Sellers may pay $2,000 for minimal upgrades or pay several thousand dollars on staging. If you’re on a budget, look for homes whose full potential has yet to be realized. Also, first-time homebuyers should always look for a house they can add value to, as this ensures a bump in equity to help you up the property ladder.

7. Compromising on the Important Things
Don’t get a two-bedroom home when you know you’re planning to have kids and will want three bedrooms. By the same token, don’t buy a condo just because it’s cheaper when one of the main reasons you’re over apartment life is because you hate sharing walls with neighbors. It’s true that you’ll probably have to make some compromises to be able to afford your first home, but don’t make a compromise that will be a major strain.

8. Neglecting to Inspect
It’s tempting to think that you’re a homeowner the moment you go into escrow, but not so fast – before you close on the sale, you need to know what kind of shape the house is in. You don’t want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs. Keeping your feelings in check until you have a full picture of the house’s physical condition and the soundness of your potential investment will help you avoid making a serious financial mistake.

9. Not Choosing to Hire an Agent or Using the Seller’s Agent
Once you’re seriously shopping for a home, don’t walk into an open house without having an agent (or at least being prepared to throw out a name of someone you’re supposedly working with). Agents are held to the ethical rule that they must act in both the seller and the buyer parties’ best interests, but you can see how that might not work in your best interest if you start dealing with a seller’s agent before contacting one of your own. (To learn more, read Do You Need A Real Estate Agent?)

10. Not Thinking About the Future
It’s impossible to perfectly predict the future of your chosen neighborhood, but paying attention to the information that is available to you now can help you avoid unpleasant surprises down the road.

Some questions you should ask about your prospective property include:

What kind of development plans are in the works for your neighborhood in the future?
Is your street likely to become a major street or a popular rush-hour shortcut?
Will a highway be built in your backyard in five years?
What are the zoning laws in your area?
If there is a lot of undeveloped land? What is likely to get built there?
Have home values in the neighborhood been declining?
If you’re happy with the answers to these questions, then your house’s location can keep its rose-colored luster.

The Bottom Line
Buying a first home can seem stressful and overwhelming, and it isn’t without its share of potential pitfalls. If you’re aware of those issues ahead of time, you can protect yourself from costly mistakes and shop with confidence.

For many people, a home is the largest purchase they will ever make, but it need not be the most difficult.

Be sure to read Investing In Real Estate to learn more about the perks of owning property.

Amy Fontinelle
Amy Fontinelle is a writer, editor, and personal finance expert. Her clients include personal finance websites, financial institutions, public policy organizations, academic journals and professional economists. She has written hundreds of articles on budgeting, credit cards, mortgages, real estate, investing and other topics. In addition to Investopedia, her articles have been featured on the homepage of Yahoo! and on Yahoo! Finance, Forbes.com, SFGate.com, Bankrate and other websites.

In addition to her personal finance articles, Amy writes business-to-business copy and composes ghostwritten and content marketing pieces. She polishes articles and papers written by economists, consultants and other professionals who need to communicate clearly and compellingly through their writing. She has also defined hundreds of financial terms for Investopedia’s online dictionary and written in-depth tutorials on budgeting, banking, investing and home buying. Learn more about Amy at www.AmyFontinelle.com.

Read more: Amy Fontinelle Bio | Investopedia http://www.investopedia.com/contributors/195/#ixzz4rxJ1npf2
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Can a builder or seller allow a buyer an allowance to buy there own appliances, carpet, window treatments etc?

Yes and no. Sellers, Realtors and builders in a particular transaction are considered interested parties. Interested parties can contribute to the buyer but there are limits and restrictions. Some are based on the amount of down payment and some limit the type of things that the interested party can contribute.

The two types are Financing Concessions and Seller Concessions. The main difference it that Seller concessions are considered an inducement to buy and will effect the loan to value of an transaction. For example for a home purchase of $100,000 with a 5% down payment, if a seller wanted to allow the buyer a $3000 or 3% credit to buy appliances the effective loan to value would go from 95% to 98% and would require more funds to close.

Financing Concessions
Financing concessions that are paid on the borrower’s behalf are subject to Fannie Mae’s IPC limits. Financing concessions are:
financial contributions from interested parties that provide a benefit to the borrower in the financing transaction;
payments or credits related to acquiring the property; and
payments or credits for financing terms, including prepaids.
Typical fees and/or closing costs paid by a seller in accordance with local custom, known as common and customary fees or costs, are not subject to Fannie Mae IPC limits. Payoff of a PACE loan by a seller is not subject to Fannie Mae IPC limits because it is not a financing concession. Financing concessions that exceed the limits listed below are considered sales concessions and are subject to Fannie Mae IPC limits.

Financing concessions typically include origination fees, discount points, commitment fees, appraisal costs, transfer taxes, stamps, attorneys’ fees, survey charges, title insurance premiums or charges, real estate tax service fees, and funds to subsidize a temporary or permanent interest rate buydown (if these fees are not considered common and customary fees or costs based on local custom, as described above). Financing concessions can also include prepaid items, such as:
interest charges (limited to no more than 30 days of interest);
real estate taxes covering any period after the settlement date (only if the taxes are being impounded by the servicer for future payment);
property insurance premiums (limited to no more than 14 months);
homeowners’ association (HOA) assessments covering any period after the settlement date (limited to no more than 12 months);
initial and/or renewal mortgage insurance premiums; and
escrow accruals required for renewal of borrower-purchased mortgage insurance coverage.

Sales Concessions
Sales concessions are IPCs that take the form of non-realty items. They include cash, furniture, automobiles, decorator allowances, moving costs, and other giveaways, as well as financing concessions that exceed Fannie Mae limits. Consequently, the value of sales concessions must be deducted from the sales price when calculating LTV and combined LTV ratios for underwriting and eligibility purposes.

Freddie Mac and Fannie Mae

Freddie and Fannie are loosening up some of their guidelines. Here are the highlights

1. DTI expanded to 50% from 45%
2. Appraisal waivers at 80% LTV added to some Purchases
3. Child Support subtracted from income instead of listed as liability
4. Student loans on IBR or $0 payment on credit that payment can be used for the debt ratio
5. This one is not new but Both Fannie and Freddie have 3% down payment programs for those that fit in certain income brackets and in some areas there is no income max.

   From Fannie
   July updates: Policies to align with DU version 10.1 including max DTI ratio of 50%, max LTV for ARMs up to 95%, and simplified process for disputed tradelines; loan eligibility for borrowers with employment offers/contracts; flexibility for borrowers with student loans, mortgages paid by others, alimony obligations, and timeshare accounts; document custody requirements streamlined; and changes to seller/servicer fidelity bond and omissions insurance requirements, effective Oct. 1, 2018.

   Alimony/Child Support/Separate Maintenance Payments
   When the borrower is required to pay alimony, child support, or maintenance payments under a divorce decree, separation agreement, or any other written legal agreement—and those payments must continue to be made for more than ten months—the payments must be considered as part of the borrower’s recurring monthly debt obligations. However, voluntary payments do not need to be taken into consideration and an exception is allowed for alimony.

   For alimony obligations, the lender has the option to reduce the qualifying income by the amount of the alimony obligation in lieu of including it as a monthly payment in the calculation of the DTI ratio. If the lender exercises this option, a copy of the divorce decree, separation agreement, court order or equivalent documentation confirming the amount of the obligation must be obtained and retained in the loan file.

   Note: For loan casefiles underwritten through DU, when using the option of reducing the borrower’s monthly qualifying income by the monthly alimony payment, enter the adjusted income figure as the income amount in DU.

   Business Debt in Borrower’s Name
   When a self-employed borrower claims that a monthly obligation that appears on his or her personal credit report is being paid by the borrower’s business, the lender must confirm that it verified that the obligation was actually paid out of company funds and that this was considered in its cash flow analysis of the borrower’s business.

   The account payment does not need to be considered as part of the borrower’s individual recurring monthly debt obligations if:

   the account in question does not have a history of delinquency,
   the business provides acceptable evidence that the obligation was paid out of company funds (such as 12 months of canceled company checks), and
   the lender’s cash flow analysis of the business took payment of the obligation into consideration.
   The account payment does need to be considered as part of the borrower’s individual recurring monthly debt obligations in any of the following situations:

   If the business does not provide sufficient evidence that the obligation was paid out of company funds.
   If the business provides acceptable evidence of its payment of the obligation, but the lender’s cash flow analysis of the business does not reflect any business expense related to the obligation (such as an interest expense—and taxes and insurance, if applicable—equal to or greater than the amount of interest that one would reasonably expect to see given the amount of financing shown on the credit report and the age of the loan). It is reasonable to assume that the obligation has not been accounted for in the cash flow analysis.
   If the account in question has a history of delinquency. To ensure that the obligation is counted only once, the lender should adjust the net income of the business by the amount of interest, taxes, or insurance expense, if any, that relates to the account in question.
   Court-Ordered Assignment of Debt
   When a borrower has outstanding debt that was assigned to another party by court order (such as under a divorce decree or separation agreement) and the creditor does not release the borrower from liability, the borrower has a contingent liability. The lender is not required to count this contingent liability as part of the borrower’s recurring monthly debt obligations.

   The lender is not required to evaluate the payment history for the assigned debt after the effective date of the assignment. The lender cannot disregard the borrower’s payment history for the debt before its assignment.

   Debts Paid by Others
   Certain debts can be excluded from the borrower’s recurring monthly obligations and the DTI ratio:

   When a borrower is obligated on a non-mortgage debt — but is not the party who is actually repaying the debt — the lender may exclude the monthly payment from the borrower’s recurring monthly obligations. This policy applies whether or not the other party is obligated on the debt, but is not applicable if the other party is an interested party to the subject transaction (such as the seller or realtor). Non-mortgage debts include installment loans, student loans, revolving accounts, lease payments, alimony, child support, and separate maintenance.
   When a borrower is obligated on a mortgage debt – but is not the party who is actually repaying the debt – the lender may exclude the monthly mortgage payment from the borrower’s recurring monthly obligations if the party making the payments is obligated on the mortgage debt.
   In order to exclude non-mortgage or mortgage debts from the borrower’s DTI ratio, the lender must obtain the most recent 12 months’ cancelled checks (or bank statements) from the other party making the payments that document a 12-month payment history with no delinquent payments.
   
   Deferred Installment Debt
   Deferred installment debts must be included as part of the borrower’s recurring monthly debt obligations. For deferred installment debts other than student loans, if the borrower’s credit report does not indicate the monthly amount that will be payable at the end of the deferment period, the lender must obtain copies of the borrower’s payment letters or forbearance agreements so that a monthly payment amount can be determined and used in calculating the borrower’s total monthly obligations.

   For information about deferred student loans, see Student Loans below.

   Home Equity Lines of Credit
   When the mortgage that will be delivered to Fannie Mae also has a home equity line of credit (HELOC) that provides for a monthly payment of principal and interest or interest only, the payment on the HELOC must be considered as part of the borrower’s recurring monthly debt obligations. If the HELOC does not require a payment, there is no recurring monthly debt obligation so the lender does not need to develop an equivalent payment amount.

   Garnishments
   All garnishments with more than ten months remaining must be included in the borrower’s recurring monthly debt obligations for qualifying purposes.
   
   Installment Debt
   All installment debt that is not secured by a financial asset—including student loans, automobile loans, personal loans, and timeshares—must be considered part of the borrower’s recurring monthly debt obligations if there are more than ten monthly payments remaining. However, an installment debt with fewer monthly payments remaining also should be considered as a recurring monthly debt obligation if it significantly affects the borrower’s ability to meet his or her credit obligations.

   Note: A timeshare account should be treated as an installment debt regardless of how it is reported on the credit report or other documentation (that is, even if reported as a mortgage loan).

   Lease Payments
   Lease payments must be considered as recurring monthly debt obligations regardless of the number of months remaining on the lease. This is because the expiration of a lease agreement for rental housing or an automobile typically leads to either a new lease agreement, the buyout of the existing lease, or the purchase of a new vehicle or house.

   Loans Secured by Financial Assets
   When a borrower uses his or her financial assets—life insurance policies, 401(k) accounts, individual retirement accounts, certificates of deposit, stocks, bonds, etc.—as security for a loan, the borrower has a contingent liability.

   The lender is not required to include this contingent liability as part of the borrower’s recurring monthly debt obligations provided the lender obtains a copy of the applicable loan instrument that shows the borrower’s financial asset as collateral for the loan. If the borrower intends to use the same asset to satisfy financial reserve requirements, the lender must reduce the value of the asset (the account balance, in most cases) by the proceeds from the secured loan and any related fees to determine whether the borrower has sufficient reserves.

   Open 30–Day Charge Accounts
   Open 30–day charge accounts require the balance to be paid in full every month. Fannie Mae does not require open 30–day charge accounts to be included in the debt-to-income ratio.

   See B3-6-07, Debts Paid Off At or Prior to Closing, for additional information on open 30–day charge accounts.

   Other Real Estate Owned—Qualifying Impact
   For details regarding the qualifying impact of other real estate owned, see B3-6-06, Qualifying Impact of Other Real Estate Owned.

   Revolving Charge/Lines of Credit
   Revolving charge accounts and unsecured lines of credit are open-ended and should be treated as long-term debts and must be considered part of the borrower’s recurring monthly debt obligations. These tradelines include credit cards, department store charge cards, and personal lines of credit. Equity lines of credit secured by real estate should be included in the housing expense.

   If the credit report does not show a required minimum payment amount and there is no supplemental documentation to support a payment of less than 5%, the lender must use 5% of the outstanding balance as the borrower’s recurring monthly debt obligation.

   For DU loan casefiles, if a revolving debt is provided on the loan application without a monthly payment amount, DU will use the greater of $10 or 5% of the outstanding balance as the monthly payment when calculating the total debt-to-income ratio.
   
   Student Loans
   If a monthly student loan payment is provided on the credit report, the lender may use that amount for qualifying purposes. If the credit report does not reflect the correct monthly payment, the lender may use the monthly payment that is on the student loan documentation (the most recent student loan statement) to qualify the borrower.

   If the credit report does not provide a monthly payment for the student loan, or if the credit report shows $0 as the monthly payment, the lender must determine the qualifying monthly payment using one of the options below.

   If the borrower is on an income-driven payment plan, the lender may obtain student loan documentation to verify the actual monthly payment is $0. The lender may then qualify the borrower with a $0 payment.
   For deferred loans or loans in forbearance, the lender may calculate
   a payment equal to 1% of the outstanding student loan balance (even if this amount is lower than the actual fully amortizing payment), or
   a fully amortizing payment using the documented loan repayment terms.
   Unreimbursed Employee Business Expenses

   The lender must determine whether the borrower has unreimbursed employee business expenses for the following scenarios:

   when a borrower has commission income that represents 25% or more of the borrower’s total annual employment income, or
   when an automobile allowance is included in the borrower’s monthly qualifying income.
   The lender must determine the borrower’s recurring monthly debt obligation for such expenses by developing a 24–month average of the expenses, using information from the borrower’s IRS Form 1040 including all schedules (Schedule A and IRS Form 2106). Automobile depreciation claimed on IRS Form 2106 should be netted out of this calculation.

   For both of the above scenarios when calculating the total debt-to-income ratio, the monthly average for unreimbursed expenses should be subtracted from the borrower’s stable monthly income. Automobile lease or loan payments are not subtracted from the borrower’s income; they are always considered part of the borrower’s recurring monthly debt obligations.

USDA mortgage requires two types of fees: an upfront guarantee fee and a monthly fee similar to FHA.

The term “guarantee” simply refers to USDA’s loan backing that allows lenders to issue loans according to its guidelines.

The upfront guarantee fee stands at 2.75 percent of the loan amount, and the “annual fee” is currently 0.50 percent, paid in twelve equal installments and included in each mortgage payment.

Starting on October 1, 2016, the upfront fee will be reduced.

Current upfront fee: 2.75%
New upfront fee: 1.00%
The monthly fee will also drop.

Current annual fee: 0.50%
New annual fee: 0.35%
The changes will be in effect until September 30, 2017. Typically, USDA re-examines financials of previous fee changes then raises, holds, or reduces fees accordingly. If loans in USDA’s portfolio perform well, another drop could come in 2017.

But the 2016 reductions alone equal big savings for USDA home buyers.

Imagine if you will for a moment, that you wanted to shop for the cheapest gas station to buy gas at. It seems easy enough at first. You can drive around and look at the big billboards and after you get tired of driving, you simply pull into the one that had the best price. That seems reasonable enough.

What if the store owner had the ability to adjust the billboard very easily with just the click of a button and did so multiple times a day? Even MORE tricky right?

What if when you pulled into the station that had the best price you saw as you drove around, and in the time that it took you to drive around, the price you saw at the others had changed? Virtually impossible to shop simply on price right?

Welcome to today’s mortgage market.

You say wait a sec. What about those guys on the internet that you go to and they supposedly get you several quotes from lenders? Maybe a good idea, maybe not.

95% of the guys advertising interest rates online are not lenders at all, but just lead sellers.

They take your information and sell it to all bidders. Your phone might be ringing for days and again, you will be getting quotes from different lenders over different time frames and ultimately, you really are not guaranteed the rate until you’ve made application and locked the rate at which time, even more time has passed and rates have changed again.

Sound like a sales pitch? It might, but it is just the facts when you are talking about a volatile market with VERY fluid interest rates. Take a look at the chart above to see a fairly calm day in the mortgage market. It still shows variance of around .25 to .375  of a point. That may not seem like much, but in order to buy down an interest rate that same 1/8 on a $200,000 loan, it would cost around $1000 to $1500. In the last year, we have seen the market move over .5% in one day.

That means at noon you could have been quoted 4.5% and at 5 PM the same lender would be quoting 5%!

What is a shopper to do?

I recommend working with someone you can trust that is recommended by friends or family and that you know is a trusted professional. In this market, the timing that the lender used to lock your rate is more important than the rate that was quoted when you were shopping for it. How do you know you are dealing with a professional?

I am glad you asked. Tune back in for our next installment: Four questions to ask your lender to know if they are a True Pro or email me with “Shopping Letter” in the subject line for the free report.

Are you guilty of over-shopping your mortgage the rate? Do you continue calling and getting quotes until you get one that you like? If so, you might have just found an in-experienced loan officer that does not know how to properly qualify you.

There are over 16 factors that go into determining an interest rate and they are different for every person and property. If you expect to get an accurate rate quote without an application these days you are fooling yourself. Besides the fact that even a quoted rate is not a delivered rate since pricing literally changes by the minute like the price of gasoline. Add to that the fact that you’d be lucky if you called 3 loan officers today if you had 2 call you back.

Be aware, there are still inexperienced LO’s out there either don’t know how to properly figure costs or deliberately misstate them thinking they can explain it away somehow. It is just as important even more important in most cases to choose a professional who you know you can trust as it is to find a good deal.

John Ruskin
“It’s unwise to pay too much, but it’s worse to pay too little. When
you pay too much, you lose a little money – that’s all. When you pay
too little, you sometimes lose everything, because the thing you
bought was incapable of doing the thing it was bought to do. The
common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well
to add something for the risk you run, and if you do that you will
have enough to pay for something better.”