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Monday, April 20, 2009

A Mortgage Processor's Advice


I have been in the mortgage industry since 1986.. Okay, I am really aging myself with that. I started as a Realtor and realized that it is very difficult to sell a home to a mature clientele when I was only twenty-one myself... So I became a loan officer in 1989 and worked my tail off. I enjoyed it but I was a newlywed and never saw my new husband..so I went into the office as the support person also known as the Loan Processor. As a loan processor, I handle all the paperwork required to obtain a mortgage loan. I know what FNMA and FHLMC require.. I know what the lenders want and I get it for them. I also help the loan officers and mortgage brokers fund their loans while ensuring that the borrower is happy with their loan amount, terms, and interest rate. I did take a two year break as an underwriter but discovered I am a Loan processor that's just what I am. That's what I love.
Today, there are so many people out there that have gotten over their head... They have no idea what their abuse of credit cards and installment loans have done to their credit standing...Today, I was helping a young couple to see if they can qualify for the home they made an offer on.... and I could not help them.. They had too high of balances on their credit cards and making the minimum payment was not lowering their balances but in fact the balances were going up. It became impossible to get them a good loan with a good interest. I refuse to be a party to those funky loans that has gotten our economy in the horrible shape it is in today... I only will do straight forward loans and thankfully the brokers I work with...will only do those kind of loans as well... It broke my heart that this young couple had no idea that they had systematically hurt their credit by taking advantage of the credit card promotions out there today and the "Pay no Interest until 2010...." debt is debt whether you have interest added on or not...
So here is my advise to those of you that want to purchase a home or want to refinance their existing home......
Use one credit card only... Payoff the card each month...If you can't pay for it in one month... then wait till you can..... (emergencies are excluded from this theory)
Join a credit report service - knowing your credit will help you keep it where it should be. Lenders are FICO driven. What that means is that lender will look at your credit scores to give you a credit determination... Lenders prefer 700 or higher...But will entertain as low as 640 with compensating factors..
Put something away each month.
Your mortgage payment, taxes, and insurance should not exceed 30% of your gross income
Your mortgage payment, taxes, and insurance and all your monthly debt should not exceed 38% of your income.
This is just a guideline to follow.. of course there are exceptions to every loan and nothing is black and white...by following these guidelines it will help you from going over your head.
On this blog one of my advertisers is My FICO score. This is an excellent service to join..but of course there are others out there... Knowing your credit will help you be ahead of the game
I am not a mortgage broker so I can never quote loan rates but if you have questions, please ask and if I can help you I will.

3 comments:

Delia said...

Thanks so much for the tips! What is your opinion about these credit counseling programs that are out there? A co-worker of mine just recently joined one and is working with negotiating her credit card debt. Do you have an opinion on these type of programs? Again...loved the post!

Kelly's Ideas said...

I really don't have an opinion on them. Negotiating on your credit cards can be done on your own any debt for that matter...it just takes a lot of patience and repetition. I'm glad you liked the post..
Kelly

Muthering Heights said...

Good advice...we don't have a mortgage yet, but it's good information to have!

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