The Responsibilities of a Reliable Real Estate Agent

It is important to find a real estate agent that is trusted to serve the interest of the potential buyer and is able to work within the confines of one budget. If a real estate agent displays the following practice, they are most likely a solid choice:

• The agent is able to conduct thorough research to find properties that not only meet the interests of the buyer, but are also appropriate to any financial limitations.
• The agent offers advice and helps explain the difference between purchases that are fiscally appropriate and those that would cause financial stress. In addition to working within a given budget, a real estate agent should remain honest about how the home’s value will shift over the years due to external factors such as its location.
• The agent presents knowledge that allows clients to fully assess alternatives they may have when it comes to what type of home they are looking for. The better the variety of homes, the more thorough the agent.
• With the help of a pre-qualification letter, it is the utmost priority of the real estate agent to obtain a home under a reasonable price. Under the right circumstances, real estate agents have the ability to negotiate an offer that is acceptable to both the buyer and the seller.
• Reliable agents are also identified by their ability to provide constant and thorough communication to the client. While the agent helps one find a home and negotiate the price, it is important for all buyers to remember that it is their purchase and they should remain informed during the entire process.

Responsibilities of Loan Officer or Mortgage Broker

While a real estate agent may provide valuable assistance in terms of the material factors of purchasing a home, loan officers and mortgage brokers are defined by their ability to adequately assist with financing. Reliable professionals working in this field are able to:

• Help the client attain a loan that not only meets ones budgetary needs, but also works with both the long-term and existing financial plans of the individual. Without the attention to this detail, a buyer may not secure a mortgage that will create a stable financial future.
• Maintain constant contact with a real estate agent so that both parties can ensure the buyer’s purchasing power is maximized and realistic. However, the professional should refrain from discussing personal financial factors with the real estate agent and only supply information regarding qualification.
• Fully discuss mortgage options and which rates and fees will serve the client best. A trustworthy loan officer or mortgage broker can mean the difference between future financial health and incurring a fiscal burden.

Locating the Right Professionals

While one can understand which qualities identify a solid professional in the home purchasing process, Vahe Hayrapetian notes that they may not always prove easy to locate. It is suggested that prospective buyers not only refer to family and friends for references, but to also check out a professional’s reputation with associated organizations. In addition, those looking for help will want to make sure their candidates carry the right experience and certification to conduct a thorough job.

Inspect Credit Reports and FICO Score

It is important to pull information from not only one, but multiple certified credit reports. While this may seem exhaustive, gaining these reports from multiple sources can provide a more thorough comparison of what one’s true credit history entails. If one notices any major discrepancies in these reports it is best to investigate them further and resolve them if necessary.

The FICO score is also a major factor when a lender determines one’s home loan qualifications, as it provides a look at one’s ability to pay back a loan. The better a FICO score, the more trusting the lender may become. In long-term situations, individuals will benefit from improving their debt repayment by making payments on time and keeping accounts open with a zero balance.

Prepare for a Strong Down Payment

While some may qualify for loans by saving up to three percent for a down payment on a home, it is suggested to save up as much as possible before approaching a lender. Those who are able to provide a five to 10 percent down payment display more security in their ability to pay back a loan. Without a solid down payment, most credible lenders will feel that the borrower is unqualified for a mortgage due to lack of fiscal responsibility.

Provide a Steady Job History

In assessing a borrower’s financial stability and ability to repay a loan, lenders will look for a solid job history. While unemployment and job changes are factors that are not always avoidable, it is important to keep this factor in mind if one anticipates buying a home far-out in the future.

Align Assets

Banks and lenders will look more favorably upon mortgage applicants that display financial preparedness for certain situations in life, such as unemployment or medical issues. Those who are considering purchasing a home should first assess what their assets—essentially, items they own—are and what their collective worth is; establishing presence of these valuable resources can display a sense of collateral to a bank. If one does not have adequate assets, it is suggested to take some time to build them to solidify a monetary value that can provide at least six months of mortgage payments.

Vahe Hayrapetian is one professional who has worked in the home financing business for many years and understands how to help his clients obtain the type of financing that is right for them. Through his experience, Hayrapetian highlights the popular options of adjustable rate mortgages and fixed rate mortgages.

Adjustable Rate Mortgages

Although the decision to buy a home is one of the most significant purchases a person can make during his or her lifetime, it does not always mean that the buyer intends to live in the property forever. Adjustable rate options are ideal for those individuals who are looking to purchase a starter home or plan to move within seven years after buying the home. Since the length of the term of a home loan correlates to the overall cost of the loan, short-term buyers often benefit from the extra affordability offered through adjustable rate mortgages.

As the title suggests, adjustable rate mortgages will fluctuate throughout the extent of the loan, based on market conditions. Some of these mortgages are determined on an annual basis, meaning that the rate is recalculated each year. In rare instances, some buyers may prefer and qualify for a monthly adjusted rate that can often lead to lower interest rates under certain market conditions.

However, many find the annual approach unpopular, and prefer the factors provided by hybrid adjustable rate mortgages. These plans allow the borrower to accept a fixed monthly payment for a pre-determined amount of time, meaning that they may not become subject to fluctuating rates that an annual plan could entail. However, after the initial repayment term has expired, the borrower will enter into an annual adjustable rate mortgage.

These plans vary depending on the qualifications of the buyer, which means that the length of the initial repayment could prove different for several applicants. However, those who are purchasing with short-term intentions generally experience lower interest rates when compared to what they would have received through a fixed rate mortgage.

Fixed Rate Mortgages

For those that plan on living in their “dream home” forever, or for an extended period of time, the fixed rate mortgage plan may offer better consistency for the individual in terms of repayment. The appeal of fixed rate mortgages is that they offer a steady interest rate for repayment that will not vary over the years in the face of fluctuating market conditions. These mortgages are available to borrowers under terms that last either 15 or 30 years. However, considering that these plans offer a consistent repayment option with no interest rate fluctuation, most prospective home owners opt for the 30-year plan.

While the nature of a fixed rate mortgage is appealing to long-term homeowners, they are more difficult for individuals to qualify for when compared to that of an adjustable rate mortgage. However, those with stable credit who desire to purchase a home for more than seven years will want to explore the fixed rate option first, especially if their decision to buy occurs during a time of low interest rates.

Vahe Hayrapetian

Can I apply for my loan without knowing which property I’d like to buy?

Yes, and in fact this is one of the wisest things you can do as you begin the process. When you apply in advance, you are issued a pre-qualification letter. This document can help assure real estate brokers and sellers that you are a qualified and responsible buyer. The pre-qualification process helps verify that you are looking in a price range that fits your budget. Getting pre-qualified can greatly assist you as you make an offer on a property.

Does income from my second job count as my application is reviewed?

A person who has held a second job for at least two years can usually have that source of income verified.

Must I offer information about child support, separate maintenance, or alimony income?

Details about these sources of income are not required unless you would like it to get considered for repaying this mortgage.

I have co-signed a loan for another person. How will this impact my ability to get my own mortgage?

In general, a co-signed loan does not get considered as your application is assessed. As long as your co-signed loan does not impact your ability to obtain a new mortgage then it is left alone. However, when it does make a difference, then lenders can ignore the monthly payment of the co-signed debt as long as you can offer verification that the other person responsible for the debt is making the necessary payments. This is done by getting copies of their cancelled checks over the course of the last twelve months.

How does my past history of foreclosure or bankruptcy affect my ability to get a mortgage this time around?

If you have a past history of foreclosure or bankruptcy, it’s possible that this will hinder your ability to get a new mortgage. Unless you can prove that the foreclosure or bankruptcy occurred due to situations beyond your control, most lenders ask you to wait two to four years after these events in order to issue a new mortgage. It’s also essential that you currently have a solid credit history.

I work for myself. How does a lender verify my income?

Usually income of self-employed individuals by getting copies of personal or business federal tax returns during the most recent two-year span. However, it may not become necessary to have full copies of that individual’s tax returns, depending on their financial situation.

The lender will review and average the net income that is reported on the tax returns in order to determine the income that may get used to qualify for a mortgage. Lenders usually ask for a one or two year history of self-employment in order to verify that this income is stable.

Vahe Hayrapetianhas years of experience working with a variety of mortgage companies. Vahe Hayrapetianadvises potential home buyers to know the details of obtaining a mortgage prior to applying.

Know your credit

Good credit is crucial when it comes to getting a mortgage in a notoriously strict lending situation. It’s important to obtain copies of your credit history and credit scores from the three main credit reporting bureaus. Go over these reports carefully and take care to ensure that there are no foreseeable problems before you apply for a mortgage.

It’s common for lenders to ask for a minimum score of 680. Loans from the Federal Housing Administration allow for lower scores, but a score lower than 620 is not ideal.

Come prepared

No matter which lender you talk with, you will need to show some basic documents in order to apply for a mortgage. It’s best to have this paperwork available before a lender even asks to see it. These documents include: your last two pay stubs, W-2s, bank statements, and income tax returns. Keep this paperwork in an easily accessible place, and also have an electronic copy so you can send it quickly via e-mail.

Know your limits

Don’t wait for your lender to tell you how much mortgage you qualify for. Instead, plan your budget and allow for additional costs. Plan your budget carefully, especially as you’re seeking to obtain a mortgage.

Feel free to shop around

As you explore various lending options, don’t forget to do more than just compare interest rates. Interest rates are certainly important, but you should also consider closing costs and different types of loans. As a general rule, you should get estimates from three mortgage brokers and three different banks prior to deciding which combination works best for you.

Keep your credit stable

If you’ve gotten approval for a mortgage, it’s important to keep your credit stable. Many lenders will pull your credit again before the loan closes. To avoid jeopardizing your mortgage, don’t make any major financial moves during this time. Avoid applying for new credit cards, pay your bills on time, don’t finance a new car, and don’t close any accounts. Stability is important.

Attend a home buyer’s seminar

An unwise decision on your first home purchase can cause you financial strain and a long period of unhappiness. For this reason, it’s wise to get educated about the process. Seminars designed for first-time home purchasers can give you valuable tips about financing your purchase, maintaining your home once you’ve bought it, and how to shop for a home that will properly suit your needs. Many non-profit groups and city housing departments offer these types of seminars. They’re often free of charge. Find one in your area so you’re equipped with all the information you need to make a smart purchasing decision.

Know your budget

Browsing without a budget in mind is dangerous. You may fall in love with a home that is not a financially sound decision for you at that time.  To avoid this situation, go into the searching process knowing what you can afford. This means that you will view homes that are in your price range and you won’t get attached to a house that is too pricy. Narrowing your options down also helps to make house hunting less overwhelming.

Focus on what’s most important to you

When you’re shopping for a home, sometimes a budget restricts your ability to obtain every aspect that you’d ideally like to have in a home. Because of this, it’s important to create a list of your top priorities. Write down elements that are absolute “must haves” in your potential house, followed by other features that seem ideal, but are not absolutely necessary. This helps to make it easier to focus as you’re browsing different properties.

Look into different mortgage options

Chances are that you won’t pay for your home with cash; therefore you’ll want to take out a mortgage. A mortgage is a loan that uses a piece of property as collateral, allowing the bank the right to take the home if you don’t make payments. There are different types of mortgages available, and you’ll want to look into these options and consider which one works best for your family. If you know that this is a home you want to stay in for a long time, you may opt for a 30-year, fixed-rate mortgage. However, if you view this property as a starter home until you have children, you may choose an adjustable rate mortgage. Don’t feel nervous about shopping around for the right mortgage. Different lenders may have the ability to offer you different interest rates or stipulations. To get a fair comparison, ask the same questions of each potential lender.  You want to make sure your standard of comparison is equal as you’re doing your shopping.

Vahe Hayrapetianencourages potential home buyers to do plenty of research about mortgages as they begin the buying process.