Homebuyers face decisions that affect long-term financial picture

Taking the step into home ownership is one of the most important financial decisions a person will make in his or her lifetime.
There are many factors to consider when embarking upon this venture. And while lending is tightening, hundreds of loan programs are still available. It is important to find the one that best fits your personal, long-term goals.
First and foremost, you must have a mortgage consultant in your corner that is willing to take the time to understand your long-term goals. Communication is the key factor here. Curious prospective homebuyers sometimes turn to Internet-based services to see what current interest rates are. But a faceless Web site will not take your future financial planning into consideration or guide you through the many nuances of the loan process. When shopping for a home loan, be wary of web-based services that offer programs to reel prospects in with attractive rates alone.
If a lender is offering an attractive rate based on a 10-day lock-in period, it is highly unlikely that you will be able to find your dream home, get through the negotiation process and secure approval from a lender within such a short period of time. This is called short pricing and when it comes time to close the transaction, the rate that was originally offered will simply no longer be available. As a result, the unfortunate prospect is bulldozed into a loan program with a higher interest rate. A qualified loan originator whose business is based upon referrals will not use unscrupulous tactics to get you in the door.
Once you have found a mortgage consultant that you feel comfortable working with, present your goals clearly; this will have a tremendous impact on choosing the loan program that meets your specific needs. For example, one important factor to consider is how long you wish to borrow the money. If you know you will only be in the home for five years, it may not make sense to opt for a 30-year loan program or pay points up front to secure a lower interest rate. This is the type of information you’ll want to share and discuss with your mortgage consultant.
Your mortgage professional should be able to narrow down a range of programs based on the information that you have provided and present you with an easy-to-read spreadsheet that clearly defines viable options for your interest rate and amortization schedule, monthly payment and any potential savings you may realize by paying points up front. Moreover, a reputable loan originator will not hesitate to share this information with your tax consultant or financial planner so they may offer additional feedback on your behalf.
Home ownership imparts a rewarding vehicle for building wealth and a strong financial future. The mortgage consultant that you choose should be there not only when your loan closes, but also should provide you with ongoing service to assist you in managing that debt over time.
Pamela Lamarre and Tracy Dearman are business partners and head California State Funding Group and HSM Realty Finance Management, respectively. For a free consultation or more information about the mortgage market, e-mail Lamarre at plamarre@sbcglobal.net or Dearman at tdearman@hsmsf.com. For more information, visit www.hsmsf.com.

San Francisco Weather Forecast, CA (94124)