Let's find the Money!
The process of acquiring money is very scary for people.
It doesn't have to be!
The first order of business is…finding the money. The process of acquiring money is very scary for people. They have to expose themselves personally and nobody likes the feeling of being exposed. I have to know what your income to debt ratio looks like. What does your credit look like? Have you had any credit problems in the past? Do you have any savings? Trust me, I get it. These are tough issues for people to talk about. But guess what…it’s not as bad as you think. I can begin the process of fixing that and do what’s necessary to make you more attractive to a credit union or bank in order to get you the best deal and into your dream house!
Once I find the money to buy your home, we have to figure out what you think you want to do with it. Is this your forever home? Do you want to move in 5 years? Maybe you want to keep it and rent it out when you buy your next home. Whatever you answer is will depend on what type of loan I will recommend. If it’s your forever home, a 30-year fixed will be your best bet. Especially when rates are low. When they are low, as your financial advocate, I would advise you to pay any other assets first since there really isn’t any incentive in paying off your home when you’re in a low interest rate mortgage.
Many times people will sit down with their loan officer and get led into a 15-year mortgage on the premise that they’re going to pay off debt. They get a super low interest rate but in return have a higher payment every month. Guess what, homes appreciate. All of a sudden you have a hundred thousand dollars of equity in the home and you want it. So the loan officer will replace that low interest rate mortgage that you’ve already paid $10,000 for up front! The loan officer should have noticed from the beginning that these people we’re not ready to get out of debt. Why talk them into a 15-year mortgage? Because they’re not advocating for you best interest, that’s why. They want to put you into whatever loan they can, make their commission and move onto the next person.
Then there are the crazy mortgages like a 3-1, 5-1, or 7-1 30-year amortization loans. Your rate stays low for the first 3, 5 or 7 years. That helps people qualify for the loan but they quickly find themselves way over their head. They haven’t paid down any extra money to the principle and those 3-5-7 years are up. The remaining term of 23, 25, and 27 years all of a sudden jumps on them as interest rates go up and now they owe more than double where they started and can’t afford their mortgage. This is what happened during the housing bubble back in 2008.
At Von App Financial Service you will not be put in a position where you feel like you’re in over your head. We will put you in what is right for you and that starts at the beginning.