Real Estate Financing...

When it comes to mortgages, if you are like me, you are looking for the best price, lowest rate, and shortest travel between two points.  There is also one minor detail that you and I may have in common, it's called customer "freaking" service.  Looking for the straight line without much in the way of curves, kind of like Calvin Klein before his untimely demise.  Nevermind, he is still alive.  And if those curves arrive, which is a decent wager in this atmosphere, you probably want someone to stay and inform you every step of the way.  Perhaps I'm projecting, but still...

I've been wearing the title of Loan Officer for the better part of eight (going on nine) years now.  I've loved it and I've hated it.  Still feel both to this day.  But what strikes me as the curious sort, why do you chose that entity you choose?

I quote rates on Zillow and firmly believe some of the stuff I'm competing with is a joke.  It seems folks want to be baited initially with the 'deal of the day', as much as they detest being switched to 'the reality of it all' by the time the transaction is over.  Hey, I could be wrong but I find it highly unlikely (back to back adverbs, love it:) that the person quoting you the costs and profit (low-balling, mind you) cares much on how it turns out... as long as it closes.  It's volume driven.  It's getting the phones to ring.  It's getting the inbox on the email to have more inquiring messages.

While I hate to perpetuate any pessimistic view of the Mortgage Industry, especially in times where that seems status quo, I dare say that some of my predecessors are more John Gotti than they are Jesus Christ.  More profit than prophet.  Personally, I'd like to be a whole lot more like Jesus.  I especially respect his hairline.

If you are shopping for a mortgage, whether it be to buy or refinance a home, don't do it on price alone.  Especially not now.  Price Warfare in a Service Industry is probably going to mean you are going to get screwed Jenna Jameson style in the end. 

While I don't mind porn, it doesn't belong in Real Estate.  Shopping service is shopping smart.  And you rarely get screwed.

I was posed with a not so unique question early on last Friday's morning.  It came from a rather astute prospective client who asked, "How do I make sure I get the best rate?"

The more I thought about it after initially answering the question, the more I wondered what was really the right answer?  Heck, was he looking for the cheapest deal or the best deal, they are not always one in the same?  Was he looking for trust or smoke & mirrors?   He's a quality borrower by lending standards, yet seems to have fallen into a similar box of shoppers who have made life difficult for themselves and us by shopping on fees and rate alone. 

Devil's advocate may say, "Is this trying to substantiate ridiculous fees and a higher than market rate to pad your pocket book?" 

Devil's nightmare says, "Not at all.  Sales is volume driven, word of mouth, not getting ‘rich' off of one transaction, but making coin because you do many of them.  And I believe if you do it right, there's an education/consultation factor that just may be priceless for those who chose to work with you.  That kind of stuff saves them money, even though the Good Faith Estimate isn't the cheapest they've seen and the rate quoted is the lowest they've heard"

And he's still on that fence, which might make me a less than stellar sales guy.  Which also puts me on par with most folks who tend to be less than stellar shoppers.  My job, in part, is to consult folks on what to do and when to do it, in regards to anything involving Mortgage Financing.

Fair enough...

If you are in the position to obtain financing to purchase a home and have the desire/need/want to do just that, get off that little picket fence.  It may be electric when you look forward to see it behind you.  What does that mean?

Rates will go up.  I'm pretty sure of that.   More than likely, sooner rather than later.  The historical low we've seen has got to inevitably come to an end.  The Tax Credit thing, well, it ends soon as well.  And the inventory of homes on the market at prices more appealing than Selma Hayek in white stockings, will eventually reach a happy medium and go away. It will no longer be a Buyer's Market, at least like it is right now.

To answer the young man's question of how one can get the lowest interest rate possible, it's not always by shopping around.  While that's a starting point, this isn't a flea market.  This is probably one of the most important transactions that gentlemen will undertake.    

In retrospect, I should of answered his question with a somewhat different retort.  He is looking for the best rate and talking to me at 7:56 AM on a Friday Morning.  I think he just found it.

To spout off that we live in an interesting atmosphere in the mortgage lending business is akin to the genius next door proclaiming professional wrestling isn't real.  Yet, I shouldn't even get started on the latter.  And the former is quite diplomatic in the use of the word "interesting" rather than downright perplexing. 

Let's take for example the title of this post.  I get inquiries daily from Realtors, folks reading posts here on AR, fellow tenants in the building we rent, William Shattner, and former clients about the difference in what is said that can be done and what is actually done. 

"But there's no minimum credit score for FHA Loans," the informed consumer proclaims.  Even so, try finding me a lender or bank who will legitamately close and fund an FHA loan with a score below 620 these days and I will find you an episode of Charles in Charge that is remotely interesting.

You'll find similar discrepancies with Fannie Mae Guidelines.  One in particular, is how many mortgages on different properties that can be on credit before they will no longer lend you a dime.  If my facts serve me well, Fannie's Guidelines now allow up to ten.  However, few investors will even allow more than four.

(Of note, my opinion is if you open up the credit flood gates to quality Real Estate Investors, it will help curb what is wrong with the Housing Industry & the Economy... sooner rather than later.  That though, is another post in and of itself)

What we are experiencing is called lender overlays.  The guidelines say one thing, yet you come to find that lender's aren't abiding by that book of thinking.  The guidelines may say this, but the lender or bank says that.  Their pendulum is tending to swing a bit more conservative than the guidelines of Fannie, Freddie, or HUD for that matter.  While I can't rationalize the pool of brain cells planting the seeds for this line of business dealings, these are the facts right now.

The rules being laid out by the so-called "Big Dogs" are being tweaked a bit by the smaller puppies who are lending the money. 

This is an important reality to understand.  Credit Reporting Agencies, Mortgage Insurance Companies, Ballet Classes involving Mario Lopez, & Lender Overlays are wagging the tail of the mortgage industry.  It may not be fair.  It may not be right.  It may not be just.  But this is the hand that's being dealt, learn how to play the cards.

And deal with somebody who knows how to hold them.

Sorry, my first Kenny Rodgers reference of all-time... I believe.

~Of note, this post isn't copyrighted and feel free to copy and paste it wherever you want.  I'm tired of a litigious society of lazy people and frivilous lawsuits.  You want to publish this, go right ahead.  Just try to convince them on a second post that this crap was really yours.~

Jason Sardi

Mortgage Consultant & Fellow Human Being

jsardi@ihmci.com

610-653-0317

nice lead in....

Sometimes I fancy myself a consumer.  Aren't we all?  In those moments, I try not to think of things from a professional standpoint, nor a purely logical one.  Instead, I attempt to understand what I would think of things if I wasn't in this industry and wanted to buy a home... or already owned one and/or wanted to dabble into refinancing it.

I won't mention names because I'm not a fan of lawsuits.  Yet, I've seen subtlety directed commercials from Mortgage Companies "tied" to Government Programs.  I've seen rate sheets in the Sunday Paper that made me spit up blood.  I've seen sales at its worst, marketing at its absolute most desperate.  Creative, yes.  Misleading, damn right.

Shopping for a home loan isn't pixie sticks.  This is damn real.  Not that pixie sticks isn't real, but I'm trying to make an analogy over here:) I believe it's about time we buy the product based upon little things called communication & trust.

I tend to reference my man over at All-State.  That's who holds my Car & Homeowner's Insurance.  When I was shopping around, he was on the list but wasn't the cheapest and didn't bring me donuts upon my arrival.  I was referred to him through a friend.  I went with him, cause he sat down and explained it all... warts and everything of insurance.  To this day, if I have a question or problem... he's on it and gets back to me like an ex-girlfriend who just saw a naked picture of me on youtube. 

These days, with the folks that have survived the proverbial mess that is the mortgage business... most I know are pretty damn good people.  They will take care of you.  That typed, there are always exceptions. 

My point in all this is pretty simple.  Be cynical, be careful, and make sure the guy or gal you are dealing with is genuine.  They should not only know what they are doing, but really care.  If they are churning and burning, you may want to move on.  While sales is an institution based upon volume, rarely immediate glory, I'd much rather play the part of Sam Walton (though I don't think Walmart really represents his true vision) than a fictitious character based upon reality named Gordon Gekko.

Advertising can be a short-cut to thinking.  I understand the concept, especially when it goes National, yet I loathe the directions it can & will take.   

I don't need someone to sell me; I just want someone to tell me the truth of the matter.  It's that simple.  That's sales.

About The Author :  Jason Sardi is somewhat illiterate, somewhat intense, and does mortgages for a living.  He/We also has two cats and another stray that seems to like this abode, which he's thinking he/we should adopt.   Jennifer is a better mother than I am a father, for sure.  They will be in very good hands.  Jason Sardi also hates fine print.  Jason Sardi doesn't like B.S.  Obviously, Mr. Sardi doesn't have a degree in Marketing or direct ties to National Mortgage Companies that pad his wallet.  That's a shame, Mr. Sardi likes a padded wallet.  Hmmm, maybe Mr. Sardi will just run for Political Office.  A suit & tie can make angels of us all.

Oh, forgot the contact info.... jsardi@ihmci.com or on my cell at 610-653-0317.  And remember, no prank calls... unless they are really innovative, original, & witty.