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When Refinancing or Buying...Get Ready for Questions!
By Joseph Andahazy, Mortgage Shares, Inc.

Most Monday mornings and throughout the week, my phone rings with the proverbial inquest, "What's your rate today?" Now that's a fair question. However, before I answer I always ask the caller, "May I take a moment to ask a few questions first?" The caller always says, "Well, of course" or "What kind of questions?" Then I begin, "Will the loan amount be a conforming or jumbo loan? What does your credit rating qualify you for? And what program are you seeking? Fixed Rate? Balloon? Annual Adjustable? Monthly Adjustable? Net Five - Interest Only? How long do you expect to be in the home? How much equity do you have in the home? Is there a second trust or line-of-credit (LOC) to payoff? Is the LOC seasoned? This means have you taken the LOC out or have you drawn against it in excess of $2,000 within the last twelve months?"

This is very important as it relates to the cash-out payoff pricing adjustments from the lender, typically .25% to the points. This is just the beginning of the inquisition as I navigate through the layers of information I need to quote a rate that makes sense for the borrower. The same holds true for purchasing a home as well. I can certainly qualify any borrower for a mortgage and most times it's for an amount higher than the borrower(s) expected. So one very important question I ask when purchasing is "What is the maximum housing payment you can make without disrupting your personal responsibilities such as school tuition, medical expenses, other obligations etc.?" Then we design a program to meet their needs. Questions can eliminate misunderstandings. Remember, rate is crucial but the right plan is more important.

Joseph Andahazy