Selective Mortgage Decision Making

Selective Mortgage Decision Making



Selective Mortgage Decision Making
In a​ recent article appearing on​ IndyStar.com*,​ it​ was reported that Indiana and Ohio lead the​ nation in​ the​ number of​ home mortgage foreclosures .​
as​ the​ article describes,​ there are many reasons for the​ high mortgage foreclosure rate .​
Regardless of​ the​ reason,​ one key to​ avoiding this situation is​ proper mortgage planning .​
Unexpected medical expenses or​ the​ loss of​ a​ job are likely beyond your control,​ however,​ you​ can control the​ decision regarding your next mortgage .​
Making an​ informed and educated decision regarding a​ mortgage refinancing,​ second mortgage,​ or​ home purchase loan will help you​ avoid trouble .​
Remember the​ following the​ next time you​ are shopping for a​ mortgage.
Think Independently – Most children have heard this sage advice… If your friend jumps off a​ cliff,​ are you​ going to​ jump,​ too?…essentially meaning think for yourself .​
That same philosophy applies when talking to​ your loan officer .​
Just because he/she states that you​ qualify for a​ certain mortgage refinancing,​ second mortgage,​ or​ home purchase loan amount does not mean you​ should accept the​ loan .​
Compared to​ a​ few years ago,​ today’s lending guidelines accept higher debt to​ income ratios and/or reduced income documentation,​ which allows more mortgages to​ be approved .​
Remember,​ you​ are the​ one who must make the​ mortgage payment,​ not the​ loan officer .​
If you​ are not comfortable with the​ payment,​ do not accept the​ loan.
Understand Your Mortgage – It is​ imperative that you​ understand the​ terms of​ the​ new mortgage refinancing,​ second mortgage,​ or​ home purchase loan you​ are considering .​
you​ need to​ know the​ following:
1) Is the​ mortgage a​ fixed or​ variable interest rate?
2) Is the​ mortgage interest only,​ deferred interest,​ or​ fully amortizing?
3) Is there a​ prepayment penalty?
4) Are there any balloon features to​ the​ new mortgage?
5) Are the​ property taxes and homeowners insurance included in​ the​ mortgage payment?
If your loan officer is​ elusive or​ gives vague answers to​ these or​ any other questions,​ find a​ new loan officer
Shop – Consult with two or​ three loan officers about your mortgage refinance,​ second mortgage,​ or​ home purchase loan .​
you​ will find a​ wide range of​ knowledge and ability among loan officers .​
At the​ same time,​ working with more than three will often lead to​ information overload .​
Along with comparing interest rates and closing costs,​ consider your loan officer’s integrity,​ knowledge,​ and experience .​

These guidelines are simple and common sense ideas,​ but are often forgotten during the​ excitement and emotion of​ completing a​ home purchase loan,​ mortgage refinancing,​ or​ second mortgage.
*www.indystar.com; March 18,​ 2018; Title Foreclosures in​ Indiana Hit New High; Author Ted Evanoff




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