Hi everyone. This is your Tampa Bay realtor Lance Mohr and over the last 20 years, I have gotten this question from so many buyers, both new home buyers and veteran home buyers. What is the best Loan program? That’s what I’m going to address in this video.
What is the best loan program? I get that quite a bit and I still do as real estate agent used to get it a lot more when I was in mortgage banker but everybody wants to know that. I know this is maybe a little disappointing for some people watching this video but there isn’t a Loan Program that one size fits all. When I first started off lending. I thought it was actually very, very easy to get loans and help people. The reason is that a lot of loan officers were very complacent. What happens is, the buyer calls the loan officer and ask them, what is your interest rate and the loan officer automatically defaults into a 30-year fixed loan. They don’t talk any loan programs or ask questions. The buyer says thank you, they hang up, end of story. What I started doing was when people would call me up and they would say what’s your best interest rate, I would ask them some questions. The two main questions that I want to know are:
1. How long are you going to plan on living in the home?
2. How long are you going to plan on owning the home?
In other words, are you going to live in it for so many years and then just sell it or are you going to live in the home for so many years and then rent it out. Make it a rental property and then buy another one. Because everything depends on how long you’re going to live in the home. I had a lot of people that will call up, they would ask the question. I would say how long you are going to live in your home.
I was in California when I very first started and a lot of military bases around and they said, well a lot of them were going to probably live in there, three, maybe four years because then we are probably going to be stationed somewhere else or maybe they were relocating and I would not put them on a 30 year fixed mortgage. What I would do is, I would explain the advantages of different programs with them and a lot of times what I would end up doing was putting them on a five or seven-year reset program and no one really even knew what these were. What they are is where the interest rates are based on a 30-year. It’s amortized over 30-years. It’s fixed for five years or seven years depending on which one you take and its lower interest rate than what you’re going to see on a regular thirty-year mortgage but after the five years or seven years are up it converts into an adjustable rate mortgage which they don’t want. But if they’re not going to be in the home why pay the interest rate of 30-year or maybe a situation they would come up and that they would say, well I mean what we are going to do is we are probably going to live in the home two years and then we’re just going to rent the property out, we’re going to buy another property and I’ll ask them how long are you planning on keeping it and lot of times they would just say, well forever or which could mean 15 years, 30 years who knows.
I would go over it and they would go over different programs with them and a lot of times people wanted to leverage their money so they wanted to go with an FHA Loan program that’s a less down payment and I would explain to them if you go with the FHA program though that’s a great program you’re never going to get rid of the mortgage insurance. The only way to get rid of the mortgage insurance is to refinance your home. You know on refinancing I’ll put a video above (https://www.youtube.com/watch?v=QCW18ddjdn4). You need to watch this video before you even think of refinancing. They would usually say, well I don’t think that’s such a good option then I would explain to them the advantages of a conventional loan. Then once they hit that 20% threshold they could go ahead and get the mortgage insurance off. My job as a lender even my job as a realtor right now, it’s not to tell people what to do but it’s to explain to all the options for them and let them make the wise choice for them and their family. There is no real one size fixed fits all. You have to get what the lender or if you’re looking at real estate a realtor but if you’re looking for a loan, get with the lender who knows what they are doing. Someone who’s going to ask a lot of questions, because we are in a busy market right now and I find a lot of lenders are very complacent. They’re just like blown and going picking up the telephone. They are not really concerned with the individual situations. I would do that, if you are in Florida I’ll put my lender Jeff Hoffman. I’ll put his information up above. If you are in Florida reach out to Jeff, he’s a phenomenal lender, he’s been in the business for years. He knows what he is doing and he really cares about people.
I wish you the best of luck. I hope this video is helpful to you. If it is, leave a comment below and give me thumbs up. I hope you have a wonderful day. Goodbye.
For more educational and informative videos. Visit my channel https://www.youtube.com/Tampa2Enjoy. Give us a call 813-317-4009.