1. How long do you intend to live in the property, are you going to be statistically average and move every 5.7 years.
2. Are you going to make improvements to your property in the next few years increasing the value substantially
3. How much equity is in the property based on the purchase agreement. Are portions of the house unfinished that you plan to finish adding value to your home
4. Would you like Zero Down financing?
5. Is a gift available from a family member to get you a more competitive loan program?
6. Can your mortgage professional tell you where mortgage rates are heading, up or down?
7. Can your mortgage professional answer these four questions?
a. What are mortgage interest rates based on? (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)
b. What is the next Economic Report or event that could cause interest rate movement? (A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, visit www.jeffaafedt.com and hit the green MMG Weekly banner)
c. When Bernake and the Fed "change rates", what does this mean… and what impact does this have on mortgage interest rates? (The answer may surprise you. When the Fed makes a move, they are changing a rate called the "Fed Funds Rate". This is a very short-term rate that impacts credit cards, credit lines, auto loans and the like. Mortgage rates most often will actually move in the opposite direction as the Fed change, due to the dynamics within the financial markets. For more information and explanation, just give us a call)
d. What is happening in the market today and what do you see in the near future? (If a lender cannot explain how Mortgage Bonds and interest rates are moving at the present time, as well as what is coming up in the near future, you are talking with someone who is still reading last week’s newspaper, and probably not a professional with whom to entrust your home mortgage financing.)
8. Is your mortgage professional or banker offering you these loans for first time homebuyers?
9. Fannie Mae My Community Mortgage which allows up to six percent seller paid closing costs, require zero money down from buyer and have a reduced mortgage insurance premium.
10. Are they offering Freddie Mac home possible 100 loans which also allow up to six percent seller paid closing costs, require zero money down from the buyer and have a reduced mortgage insurance premium?
11. Offer you either the chase USRDA or Dreammaker program which are similar to the two loans above except they have a lower interest rate and have no mortgage insurance at all. Build equity in your home faster and save $590.00 in Mortgage Insurance Premiums per year on a $100,000.00 loan.
12. Do they offer FHA and VA financing?
13. Were they able to explain why and when you would want a loan with mortgage insurance and the benefits of it and when you wouldn’t??
