Financing Rates and Options
Depend on Knowing ...
Condo or Townhome?
The Scenario:
A female applicant for mortgage contacts me as the result of a referral. She says she has contracted to buy a townhome. She has spoken to two (2) mortgage lenders prior to speaking to me (one a bank, the other a broker).
Can I quote her the mortgage program options available to her and also interest rates? She also wants to know how Mortgage Insurance will impact her as she is placing only 10% down on her purchase.
My interest rate quote turns out to be 1/8% higher than the previous two lenders she has spoken with. She asks why am I charging her a higher interest rate? My quoted Closings Costs are comparable.
The Facts ...
The answer to my young buyer's question lies in the FACTS surrounding the property she is buying. It is, in fact, NOT a townhome, as both the realtor and two other lenders assumed.
The property was legally platted and developed as a condominium. How do I know that it is legally a condominium? I know how to find that information and I took the time to research the property and find that out.
The Inevitable Question ...
WHY the discrepancy in the quotes received then?
Because the property is legally a condominium and was developed as such, it carries a higher cost of financing. When the down payment is less than 25% and/or the loan-to-value is greater than 75%, that is the case.
The cold hard truth is ... the marketplace, and many professionals within it, still do not know or recognize the difference(s) between the two types of properties. They do not take the time to properly research it either. And those differences can be HUGE and affect all the participants involved in a transaction.
In this particular instance, the buyer was receiving erroneous information based on unsubstantiated facts. By getting the FACTS from me, my buyer found out the true and factual costs and interest rate surrounding her property purchase ... right from the initiation of our transaction together.
Because I knew the FACTS surrounding her property and purchase, I requested the proper financial documentation from the seller immediately. I also asked that a condominium questionnaire for the property be completed. And the proper info and requests surrounding a condominium appraisal were conveyed to the appraiser. All of these actions greatly impact the timing of a closing ... which for this client was only 30 days away.
The Outcome ...
A successful closing. On time. And, my buyer fully understood the interest rate charged her, her loan fees, her Mortgage Insurance Option in detail, and the mortgage process itself. Knowledge is powerful ... and it was key to my client's successful Closing.
To Wrap it Up ...
The current lending environment is rapidly and continuously changing. It is imperative that buyers protect themselves by working with a knowledgeable and experienced mortgage lender. For my buyer, that meant the difference between receiving FACT or fiction ... and successfully closing her transaction on time.
Financing rates and options depend on your knowing ... Condo or Townhouse? Does your mortgage lender know the difference? Does your agent? Do they take the time and make the effort to find out?
If not, you're working with the wrong person ...
* Thinking of buying a townhome or condo? Work with a mortgage lender that has indepth knowledge and experience in real estate appraising. My 20+ years of professional appraising background will serve you well during your buying experience. Contact me today at any of the following to ask your questions or seek the experienced mortgage assistance you need and deserve:
Direct: 815.277.4036 Cell/Text: 708.921.6331 Email: gene@chicagobancorp.com
Skype: 630.219.1316 Website: www.genemundt.com
Click Here 4 a: NO Cost NO Obligation Mortgage Consultation
Gene Mundt, Sr. Vice President
Personal NMLS #216987
The Federal Savings Bank
1823 Centre Point Circle, Naperville, IL 60563
Now on Skype! 630-219-1316
