Buyers often use Realtors for the home, but do not ask them about a loan. Now Realtors are not loan experts for the most part. But a good Realtor will know about products available. Case in point was a blog I posted about a buyer losing 22,000 on a deal due to bad decisions.
I often recommend Mortgage brokers as they shop loans. However if you are using Georgia DCA you cannot use a Mortgage broker unless in rare cases that company is going to hold the paper. So a mortgage broker may offer you a number of options but not have that one in his bag. That is 14K you could be giving away!
Lets say you have a property, or a banker you like, and are living in a Metropolitan area. You decide to go "Green Acres". You find a local Realtor and you get a loan from your local bank where you live. Your Banker tells you you qualify for FHA. So you put 3.5 percent down and away you go. What you have missed is USDA 100 percent financing for a rural loan. Your in town banker didn't even think about that loan as she never writes them. BUT your Realtor if they are worth anything should mention it.
To make matters even worse the way FHA does insurance and fees you could , and I have seen it , have a higher monthly payment with the loan you got putting 3.5 percent down! So the point here is as a Realtor I am not an Mortgage expert and quite frankly do not want to be. However as part of my service I do become knowledgeable about types of loans available and loans that may be unique to my market. So when you are moving into an area ask your Realtor about your loan. It is an added layer of expertise that can save you potentially a lot of money.
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Charlie Ragonesi All Mountain Realty Big Canoe and Mountain Blog
On line at www.allmountainrealty.com Call at 706 579 1098
That's one of the first things I discuss with my buyers. Financing is the key. Their interest rate has a huge bearing on what they can actually afford. It also gives me a heads up on what type of property we're looking for. I work with alot of $80,000 and under buyers and some homes won't pass the inspections for FHA or USDA.
Even at a local bank, some offer both FHA and USDA. Alot won't put it through as a USDA simply because it takes a little longer and there is more paperwork involved. You just have to ask. If you qualify for USDA, it most situations it's the best loan availble.
Here in Connecticut there is a state subsidized loan offering called CHFA available to first time home buyers. This product can only be offered by lenders licensed within the state of Ct, and it turns out to be a decent deal for first timers. The problem comes with buyers that come in from the border states with out of state lending pre-qual letters, or with financing they are attempting to do with the on-line lenders. None of them can offer the product. With these people, I at least suggest that they check it out, as it's a free consult, which also allows me to have a lender I trust verify their abilities.
At the very least, we can suggest without steering some primary lenders that could help them, and also advise them to ask for certain programs that we feel would help them.
Rarely will I go out with a buyer unless I know they are pre-approved with their credit scores pulled. . I talk to the mortgage specialist they are pre-approved with as well.
Hi Charlie:
I often suggest to buyers to do their homework. If necessary, speak to more than one mortgage rep.
Very important, especially in these times.