However, the term “buyer beware” has never meant more. As rates drop, the challenges associated with “closing” under those rates seem to simultaneously increase. Mortgage banks are continuing to face challenges from the secondary market, especially in the jumbo loan market. Although at times the home buying process may seem too difficult to conquer, there are steps a buyer can take to ensure his or her dreams of home ownership become reality.
The buyer should be mindful of the importance of the qualities unique to his or her particular loan. Things like credit scores, appraised value, income ratios, cash reserves and loan amount play a major role in determining ones interest rate. Once a customer has been quoted an interest rate, he must choose a lender that can close the loan in sufficient time. Asking important questions up front can prevent confusion and often fall out. Is there an expiration date on the interest rate? If the loan does not close within that time frame what does that mean for the buyer? Higher fees? More points?
The current changes in the mortgage industry such as new licensing requirements for individual loan originators, the new RESPA* and TILA* guidelines are causing quite an impact on the focus of its professionals. The focus has changed from servicing large volumes to specialized, individual customer service. Now that NMLS* licensing is in full force, the mortgage industry is working with approximately 30% less manpower to service the same volume of customers as before. “It is important to work with an experienced, true industry professional to service your loan. Dealing with a lender who offers in house services like underwriting, processing and funding will make a huge difference in your home buying experience. Having those services under one roof provides for optimum communication, minimizing delays in the process. In this environment, choosing a reputable, local company can be the key to success as a home buyer”, recommends Brian Terrell from Guild Mortgage.
RESPA* Real Estate Settlement Procedures Act. TILA* Truth In Lending Act. NMLS* Nationwide Mortgage Licensing System.