FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware

Are we larger than life just because we work for a large company or a well recognized name in the industry? Examples of this would be Wells Fargo, Bank of America, RE/MAX, or Keller Williams.

You as a consumer, when shopping for that realtor or loan officer, do you first search for that large name? A company that is recognized on tv, in the paper, or by word of mouth from friends and co-workers? 

Do you think that you will get the best deal by going to a large company?  Or is it security, in fear of the company going bankrupt, so your decision is based on bigger and established?

 

 

This is not to throw any one individual or company under the bus, but just recently, I have spoken to 4 separate borrowers who all started their process with Wells Fargo. Not only are they being told that it could take 45 to 60 days to close their transaction, but many of their loan officers aren't supplying accurate information. I actually had one borrower who was told incorrect information by 3 different loan officers from the same company. Many of us would think if the majority of the people say the same information, that it must be correct. Unfortunately in my opinion, this is not longer the case now, especially when it comes to mortgages.

Yes, it comes down to education, education, and education. And no, I am not saying that you have to be educated with a degree from Harvard. But that the person servicing you, helping you through the transaction, should be educating you on the whole process.

 

In the world of mortgages, we say that there are two types of loan officers.

1.) A true professional, who is on top of their game, knows most programs and can explain them, will give you good customer service, and will be more than fair with you when it comes to rates and costs OR

2.) An order taker.  Someone that could easily work at a fast food joint, in which case, sometimes your order doesn't come out the way it should. The same in mortgages. There are loan officers that will tell you what you want to hear, even if they don't know if the answer is correct or not. People, it happens.

 

 

So, how do you pick your loan officer or realtor?  Does a large company name matter to you as much as you think it should? Again, there are very good people at both large and small companies. But from my experience with consumers in the last several months, it seems like there are more order takers at the larger companies now than ever before.

Pros & Cons -  Many of you think that just because that company is one of the largest, that they are a safe choice and that you should be able to get the best deal. This is not always the case. Back in 1998 or so, Norwest Mortgage was the largest lender out there. They were bought out by Wells Fargo, even though it was for name sake for the larger scope of things. And now look at Countrywide, who was the largest, until Bank of America just bought them out.

Best price/rate from a mortgage company?  How about service?  Do you know that there is a small price for excellent service and that in many cases, what is promised or advertised as the best price, usually doesn't come with the service. Same goes for realtors. Just because most real estate transactions have a 6% fee, doesn't mean that if you get it lower, that you will get excellent service. Again, are you looking for the giant to make you feel secure or are you looking for the one that isn't selling you false hope or promises.

 

 

Summary :  Many consumers don't understand the mortgage and real industry. One main thing that is forgotten in many cases.  Most of us are 100% commissioned.  In many cases, these are you least experienced and least knowledgeable in the business. Many would think that service should come with their real estate transaction at all times, no matter what.  At many larger companies such as Wells Fargo, if you talk to someone on the phone, they are part of a call center.

Keep this in mind.... Many that I know in both real estate and mortgages love their jobs, and truly love helping people. Many of us will go out of our way, even if it means we will earn less. But we don't work for free and I hope I can speak on behalf of other realtors and loan officers. This is not McDonalds, where service comes with a smile. Many of us are dedicated and passionate in what we do, because it's not a job, but a real career.  Just think about this next time when you are speaking with a realtor or a loan officer.  What do you truly want?  In my opinion, it should come down to the person that you are dealing with, not the company. Sure, reputations do make a difference, but that is a whole other topic. Bottom line, you are dealing with people.

 

 

 

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- Mortgages -

 

Experience & Knowledge at its BEST !!!

 

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger

I think this is a good post just for the fact that it simple and easy to understand... this is a great time to buy and that your parents can help you buy and it's not that difficult as many will describe.  But I needed to clarify something that is all to often stated incorrectly and was mentioned in the blog below.

"FHA closing costs are "too high". Yep, FHA will have slightly higher closing costs than conventional. Seller may not pay closing costs."

FHA loans don't have higher closing costs. Maybe some lenders charge more, because they can. But in my 16 years, FHA loans have always been the same or cheaper than conventional loans. I spoke to 5 other loan officers across the U.S. that agreed with me, those that have been doing FHA loans for over 8 + years. The costs are no different than a conventional loan.  I can actually in most cases, be cheaper on a FHA loan than a conventional loan.  I am a 1/2 pt better on FHA loan at 5.0%.  I am .269 pts better on a 4.75% rate. And I am about .26 pts worse on a FHA loan compared to a conventional loan. But then again, you need to compare fico scores and down payments. Because if you put less than 20% down and your credit score is under a 720, it costs you a 1/2 point more. So then hands down, FHA loans are cheaper. And when I say 20%, I mean 19.99% down. If I put 25% down, with a credit score of 719, it will actually cost you .75 pts more. These are things that many loan officers don't compare or explain, because they just assume. Don't believe me, please read :

The other issue....  sellers are allowed to contribute up to 6% of closing costs to the borrower. In one case, she mentions this and in another case, she says it's not allowed. The basics of the home buying process can be confusing enough, but to have two conflicting pieces of information? 

One last thing... the tax credit is good only through November 31, 2009, not through the end of the year. It might not sound as critical, but if you are under the assumption that the tax credit is good through the end of the year and you settle on your loan December 1st, 2009, you will get no credit. There are no exceptions, not unless Congress extends this later on.  For more information on the 2009 first time homebuyers tax credit, please read :  First time homebuyers tax credit of $8,000

I just had to point these 3 issues out because just in the last 10 days, I have heard that FHA loans are more expensive than conventional loans... and not just twice, but about 5 times. We need to keep the correct information out there and not just average information.   Comparing FHA loans to Conventional loans with 20% down - A Reality Check

For more accurate information, please don't hesitate to contact me at : jbelonger@ihmci.com  thanks, Jeff

 

 

BEWARE

              of web sites when searching for information. Who or what you think is behind a specific site might not be what you think.  Just as the picture, 'who is the man behind the mask'. Just as in mortgage web sites, are you dealing with the government such as HUD or USDA, or lenders and lead generators pretending to be someone else.

What leads me to this blog is because someone left a comment on one of my USDA loan blogs and left a link to a web site. It was one of theirs that makes it appear as a web site for the USDA. If you do your research, it's a lead generator. It's wear you leave your information and this company puts you in touch with numerous lenders. But you would not know this unless you know what to look for. Besides, he had an Active Rain profile, which described what he does for business.

 

 

As many of you know or those that follow my blogs, I am all about education. I have never claimed to know it all, but if I don't, I will try to find the correct information. After explaining to this gentleman my thoughts and opinions about leaving his link as a comment, and that I felt his site was misleading to the general public, he wrote back to me. This is what he said.

"www.fhaloansfhamortgages.com  This is a FHA site, right?"

He referred to my other blog site that is listed above, trying to tell me that I am advertising that site as an FHA site for FHA loans.  I then stated that I don't see how that is possible, when not only do I give my name at the top right part of the site, but there is an about me page, telling people a little information about myself. His site?  In my opinion, it truly leads me to believe that it is the USDA site. Here is the front page and you be the judge.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I am sorry, but I have a problem with a site like this. In big bold white letters, it states USDA Rural Development and then opens with the statement, "USDA Rural Development Welcomes You".  I know what the USDA site looks like, but do many of you?  If you were searching and came across this site, would you know any differently?  Do you know this site gathers names and e-mail address and sells them to other lenders?  Here is the USDA loans site -  USDA Loans -

 

 

Do you know that all domain names ending in dot gov has to be approved and registered. There is even a government site that states this. Government Domain Registration & Services - This site protects domain name integrity and this is found on the front page. Here is what it says :

"Domain Name Integrity
To maintain domain name integrity, eligibility is limited to qualified government organizations and programs. Having a managed domain name such as .gov assures your customers that they are accessing an official US Government Site."

My point on web sites is, look at the URL, the very end of it, ( end in dot gov is a clear indication that the government is watching over the site.) This can usually give you a better indication to who is running the site, who is in charge of the site.

 

 

I have also seen many FHA web pages claiming to be the main site for FHA loans.  There is only one main site and that is called www.hud.gov  What I do appreciate and respect are those sites that might look and feel like the main site by the government, but they state right on the site that it's not a government site. Here are a few examples.

 

 

 

 OR

 

 

 

 

 

 Both of these are clippings for other FHA web sites that talk about FHA loans and FHA mortgages. And as you can see, they don't claim to be all about FHA through the government. The first one even says that it's not affiliated with any government agencies, including FHA. I do have a problem with some of these though, because they make these statements in very small letters at the bottom of the site. If you aren't reading the whole site, you might miss this.

 

 

 

Here is one that I have a slight problem with....  this site puts you in contact with other lenders that can do FHA loans. Remember the old saying that people usually don't do anything for free?  Well, do you think web sites give out free information?  This FHA web site is what I call a lead generator. They put you in contact with other lenders and receive a fee for this from them. Who do you think this fee usually gets passed down to?  You, the borrower, because it's carried as an advertisement expense by the lender that signs up for this type of service.

 

 

 

 

 

 

Summary :  My whole purpose of this blog is to educate others in what to look for. There are many very helpful web sites out there in regards to USDA loans, FHA loans, VA loans, and mortgages in general. But don't get fooled that you are talking to a government agency or someone giving you information, but who may be capturing your information without you knowing it. Many of these sites have disclose this, but you have to go looking for it on that particular site. Just be careful out there.

 

 

 

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- Mortgages -

 

Experience & Knowledge at its BEST !!!

 

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger

 

As many of us search more and more online, through the internet, there becomes a greater chance for misinformation also. Now, this is just my opinion, but it's based on seeing at least 2 blogs a week now that has wrong information within the topic of discussion. I am seeing this even more so when it comes to FHA loans.

What disturbs me most is that if we don't question the author of that blog, those reading it will believe it and spread that information as the bible per se. I even went as far as to send an author of a blog on AR, telling her that she was incorrect and that she should change her information. Not only did she not respond to me, but she never changed her information. And she continues to write on here. What does that say?

 

 

I am speaking to about 2 to 3 consumers per week now, that not only read incorrect information, but they hear it from other loan officers and worst of all, from past borrowers, friends, co-workers, etc, etc.  Let me give you two examples :

 

Example: I am dealing with a borrower that is shopping me against another loan officer that isn't adding in the Fannie Mae cash-out pricing hit of a 1/2 point. She shares this with her husband and this was her response.

"I told my husband everything you told me and he said let him think about this first because his friend just do the loan for $298,000 wiht 4.75% last month with no point and he paid total closing cost about $6,000 something not even $7000 yet."

People, there is not one deal that will ever be the same. This is a great example of this, because her husband's friend bought the house and he borrowed $298,000.  This is a cash-out loan and the loan amount is only $152,000. Each company has a specific profit margin, no matter the size of the loan. So if someone has a smaller loan amount, in order to meet that profit margin, they will need to charge more. It's simple math.  Please read this for more clarification : I want the same deal my friend got - Please read the comments also.

 

Another Example :  I have a borrower in Long Island, NY who has spoken to 3 different loan officers at Wells Fargo in her area. All 3 of given the same information about monthly mortgage insurance and how it will fall off in 5 years on a refinance, even though they will be at a 88% loan-to-value. This is 110% false and there is even a FHA document that every borrower is required to sign, that explains this. But here is what is scary....  I usually say that if you have 4 out of 6 people that give you the same information, then it must be right. Well, not in this case. As it stands, 3 out of 4 people gave the same answer and it's the wrong information. Moral of the story?  Be extremely careful no matter what you hear. Please read :  Two wrongs don't make a right.

 

 

What other things that I am reading or hearing about that are false or misleading when it comes to FHA loans? 

• That you need 5% of your own money and as a down payment.  FALSE - you only need 3 1/2% down and of your own money. And that 100% can be gifted from a relative/family member, even to use for the down payment.

• No matter how much you put down on a FHA loan, you will have monthly mortgage insurance for at least 5 years.  This is TRUE.

• I read just the other day that FHA credit scores will now have pricing hits for scores under 660. This is 110% false. Yes, some investors already have this pricing adjustment on FHA loans and there will be some more to follow.  And when I questioned this person, they came back and stated that it was Bank of America/Countrywide making this change. But his blog made it sound like everyone will be changing, but didn't specify.

• That FHA loans take 45 - 60 days to close. - FALSE - Sure, many lenders are under staffed and many are taking a longer time. But we are still closing loans in 3 weeks. It starts with the loan officer, putting the deal together correctly and with most of the information needed. And if you get the appraisal done in 10 days, 3 weeks should still not be an issue.
  

• FHA is is harder on the appraisal.  - FALSE -  They are a lot more relaxed than they were in the 90's. And the FHA appraisal is done on the same form as a conventional appraisal.

• FHA loans have more fees than conventional loans or are more expensive. Double false. I can actually be a tad cheaper on an FHA loan because of the higher SRP's, which is called the servicing release premium. Sometimes they might seem more expensive because the loan officer might be taking advantage of the borrower because of their credit.

 

 

These are just some of the basics that I am reading about, and that scares me even more. Just imagine some of the other things that these loan officers might be spreading out there then, if they can't get the basics of FHA loans 101 correct, such as your down payment requirement. 

Lastly, just because someone claims to be an Expert or Specialist in their field, doesn't mean that it's 100% true or accurate. Don't be fooled by ones title.  Please read : To be an Expert or not to be an Expert, that is the question.

 

 

 

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- Mortgages -

 

Experience & Knowledge at its BEST !!!

 

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger

 

USDA loans in many areas are becoming more popular, yet many loan officers still don't know much about them, hence why they still aren't talked about much. Just as FHA loansweren't used as much as they should have from 2000 - 2006, because subprime and some conventional loans were easier for the loan officer to give to the consumer, even though it might not have been the best loan for them. I am sure in some cases, FHA loans are given before the USDA loan because of the lack of education on the loan officers part.... just my .02.

 

Some great benefits that USDA loans offer -

• It's one of only two types of mortgages that offer real 100% financing, with no money down on the property. The other would be VA loans.

• Just because it says rural development doesn't mean farm land or properties that are miles apart from each other. Ask your loan officer if your property that you are looking to purchase might fit into the property location guidelines.

• There is no monthly mortgage insurance, even with zero down payment. The only other mortgage like this, again, VA loans.

• There is no seller contribution limit, just as in FHA loans, to where the seller can contribute up to 6%. It's look upon as reasonable closing costs.  And keep in mind, each state has their own limits to what a lender can make anyhow, usually falling under section 32.

• 100% of the closing costs can be gifted.

• The loan amount can include closing costs and repairs up to the appraised value. (call me or e-mail me for more of an explanation)

• Credit scores of 580 and below are highly scrutinized by USDA. There are many things that need to be looked upon. Scores from 620 and above meet the normal credit standards and get an automatic credit waiver on such things as explaining derogatory credit and rental verifications.

• Normal qualifying income ratios are 29%/41%. You can exceed these ratios if you have scores above 660 and you don't have to apply for a debt-to-income waiver. Those below 660, you have to have compensating factors and apply for an income ratio waiver.

• There are income restrictions, yet as of April 20th, 2009, there will be new income limits for the better. Basically the 4 person income limits will now be for 1 person income limits.

• One important thing to remember, you can't have an in-ground swimming pool if you are using USDA that came from the 2009 stimulus bill. If it's the normal USDA monies allocated yearly, then it's okay, but you need to check on this with your lender.

 

 

 

IMPORTANT -  These are USDA's guidelines, yet lenders can after overlays, to where they might be more critical on credit scores or debt-to-income ratios.  Please keep this in mind.

 

 

 

 

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- Mortgages -

 

Experience & Knowledge at its BEST !!!

 

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger