Comfort is an important and underestimated consideration in the 5 steps to turning yourself into a more successful mortgage candidate. While Research is a somewhat obvious beginning, Asking Questions is the logical next step and Accepting Guidance is generally considered good to do, Eligibility often becomes the focus in the excitement of the home search and mortgage pre-qualification instead of how Comfortably you can meet the new payment expectations.
Step Four: Eligible vs. Comfortable
By now you’ve researched and have a reasonable idea of what kind of home you’re looking for. You’ve even done your homework on mortgage financing. You’ve been pre-qualified for up to a certain amount of money, and with that number, you realize you may be able to set your sights higher than you originally thought!
It’s okay to be pre-qualified for more than you’ll need. Pre-qualification is based on information you have provided, and the more accurate information you provide the more accurately your estimated qualification can be assessed. There are limitations, however, and no matter how much of your information is plugged into the equation, you may still have living expenses that don’t get factored in. Ultimately, you are going to be the expert on what you can afford and what you can’t.
Why would a mortgage company pre-qualify someone for more than they could afford? Well, the short answer is that they’re trying hard not to do that. Everybody involved is going to want you to be able to afford the home you’re financing. Rather than calculating everything up at the low end of your price range and then re-calculating every time you find a new property, it often makes the most sense to aim for the high end first, knowing that it’s easy to come down in price from there.
Comfort is Key
This leaves you to be honest with your mortgage lender, your real estate agent, and most importantly with yourself regarding your comfort level with the payment sizes you’re discussing. When looking at your price range, consider such things as how the utility payments may be different from what you’re used to, or if repairs are going to be needed. Leave yourself some room when planning out how your new budget will look. That house that’s just beautiful but just a little out of reach financially may be less fun to live in if you’re struggling to make ends meet.
Prioritize your comfort. You’ll thank yourself down the road. And the final step and topic for next week… Choose Wisely!
With Labor Day right around the corner, and the holidays quickly approaching, have you done your Fall Planning?
Between apple picking, cheering on your favorite football team and pumpkin carving this Autumn, be sure you take the time to prepare your home for the approaching cold weather season!
Winter Preparation Checklist:
[ ] Gutters: Clean out your rain gutters after the leaves have fallen
[ ] Windows: Install storm windows, put winter plastic on inside window or use energy
saver curtains on them to prevent heat from escaping
[ ] Doors: Add weather stripping to doors
[ ] Emergency Kit: Prepare an “emergency” kit in case of power outages from snow
and ice storms with some key items: Food, Important documents, Family photos,
Flashlights and Batteries
[ ] Pipes: Wrap pipes in unheated locations
[ ] Energy Source: clean and prep your furnace, wood stove or back up generator
Once you’ve prepped your home against the winter elements, be sure to take a look at your winter household budget. How does your mortgage fit into your financial budget and goals? With interest rates still at historic lows, now is a great time to see if refinancing or purchasing a new home will be beneficial to you.
Looking at the 5 steps to turning yourself into a more successful mortgage candidate we started with research and asking questions to make sure you understand what to expect. Now, let’s talk about accepting the guidance we’ve been given.
Step Three: Accepting Guidance
You researched your questions, became an expert on your specific needs and asked for guidance on anything that remained unclear. You know what kind of mortgage you want. Time to pull the trigger. Jump in. Hit the big red button. Compare companies that offer the mortgage loan product you want and pick a winner. Done.
You absolutely can take that approach, and since you’ve done your research and understand your needs, you’re in better shape for the effort. In asking questions along the way you may have been given bits of guidance from a loan officer, though, and it’s worth taking a look at what they said.
Areas of Expertise
It’s a loan officer’s business to gather as much knowledge as possible on how mortgage products work, what little “quirks” or specific requirements there may be that could cause mischief, and whether there are state specific programs available to help depending on your needs. While you are the expert on your specific needs, a loan officer is going to bring expertise on mortgage loan products to the equation. It’s a good idea to keep an open mind while you’re researching. There may be a solution that didn’t come up in your research that is perfect for your situation.
Try not to get too caught up on one idea or plan. You may be focusing on one way of keeping your costs down while your loan officer is able to see that by shifting your focus to another area you could save much more. If they let you know, take a moment and listen.
Ultimately, the decision is yours. You’re going to be able to choose the path that you want. When you do, try to keep the guidance you’ve received in perspective. There may be an opportunity that didn’t come up in your searches, and who knows. It could be a money saver. And the next step and topic for next week… Eligibility vs. Comfortability!
Natural Disaster Alert:
RMS Disaster Services:
If you are affected by Hurricane Irma and have an active loan in process, please contact a RMS loan advisor at: 1-844-505-3917
- Our loan advisors are here to help, Monday through Thursday 8am – 8pm, and Friday 8am – 6pm, EST
Who should I call?
- If you have an active loan in process, please contact your RMS Loan Advisor directly or call us at 1-844-505-3917
- Our loan advisors will work with you to extend timelines and schedule a post disaster inspection if necessary
- The Federal Emergency Management Agency. You can register with FEMA in person, online, or via phone by calling 1-800-621-3362
- FEMA offers grants to cover the gaps between insurance and SBA loans for things such as home repairs, temporary rent, and other items
- The Small Business Administration
- The SBA extends loans to replace or repair your primary residence whether you are renting or currently own a home
- Your homeowners insurance company, in addition to your flood insurance company, if this applies to your situation
- Your current mortgage servicer
The house I was purchasing was damaged or destroyed. What do I do now?
Please contact one of our RMS Loan Advisors at 1-844-505-3917. We will work with you to assess property damage and required repairs
RMS is committed to delivering a great customer experience with every customer in every transaction. Our team is here to help those customers and communities affected by Hurricane Irma get through this trying time.
We will work to ensure support and assistance is provided around relief efforts.
In this series we’re examining 5 steps to turning yourself into a more successful mortgage candidate. We’ve talked about the value of research, not necessarily to become an expert on the mortgage industry, but to become an expert on your own needs and preferences. The home buying and mortgage loan financing processes can seem complex and it’s important to understand what questions to ask to get the help you need. Now it’s time to formulate those questions.
Step Two: Ask Questions
If you don’t ask, you don’t know.
Picture this. You fill out your mortgage application and submit the documentation the mortgage company needs. Things like recent pay stubs, bank statements, photo ID, tax returns, W-2s, etc. In other words, kind of personal stuff. You’re not sure exactly why they need all of that but you want the approval so you can buy your house. “Thank you, we received your documentation,” they say. You sit back and wonder if you’ll have your mortgage approval by lunchtime.
Your first disappointment is in learning that it takes longer than a couple of hours to get through the mortgage process. Next, you learn that your intent to use that box of cash you’ve been saving up for the last year as down payment money isn’t a popular plan to the mortgage company. They’re asking whether you have other ways to pay those costs. Ways that can be documented. These misunderstandings are easily avoidable if you do some research on what happens during the mortgage process and ask questions about anything that remains unclear.
The mortgage process can go smoothly and quickly, and technology is playing a great role these days in speeding up what has been a lengthy process historically, but there are still important steps involved after you submit your application. Some of the steps have to do with documenting the security of your current financial standing and looking at your history of repaying debts. Other steps are in place to check that you aren’t trying to commit any kind of fraud or financial crime with this mortgage transaction. That may sound funny to most of us, but the mortgage industry is a big target for that sort of thing and extra caution is required.
Your loan officer and his or her team understand all of these factors and it’s their role to put your application package together completely and compliantly. The more they understand about your situation and your needs, the better they’ll be able to do that job and make sure you’re applying for the mortgage product that best fits your needs. The more you understand about how things work and what to expect, the more comfortable you’ll feel in those periods of time when you don’t have an answer yet, or when your mortgage team reaches out to you to get one more set of documents “…and quickly please.”
Your mortgage experience doesn’t have to be fraught with anxiety or delays due to misunderstandings. Ask about anything that you’re left confused or unsure over. Make sure you understand the answers you’re given. If you’re uncomfortable with anything, let your mortgage team know. And the next step and topic for next week… Accept Guidance!