The Biggest Mortgage Lessons I’ve Learned: Episode 200

Hey guys, welcome back to our 200th episode of Mortgage Matters in Minutes. If you're doing some basic math out there, that's pretty much at four years. If you consider some holidays that we missed and weeks in there, but thank you for checking us out for over four years. And today we thought we'd give a summary being that 200 episodes might not sound like a lot, but when you're doing it each and every week and the prep that we do in the back end and the editing that we do in the front end, 200 episodes is actually a huge accomplishment and I feel like it should be celebrated. So today we're going to talk about the lessons that I've learned over 25 years of mortgage lending. And if you are so inclined, you can check down here in the comments. We're going to have a list of over 200 lessons, questions, points that can be quickly scanned for that first time buyer or that individual that is wanting to know everything about mortgages in a simple document below. So, let's get to it today and let's not make it too terribly long because our videos are always about mortgage matters in minutes. So, first, obviously the mortgage markets can change or the real estate markets can change, but the fundamentals don't change. So, what we're going to talk today about is the basic concepts that we are talking about each and every day with clients. And throughout the 200 episodes, we've referenced these in videos so you can go back and become educated with section number one, credit. What matters, what doesn't matter. Making your payments, keeping your credit card balances low, and doing that consistently over time makes a difference. Not one inquiry is going to affect your score, closing cards, closing credit accounts to cheat the system, or chasing that perfect score. It doesn't really matter if you have a 740, 760, or 780. Generally, you're going to have the same exact interest rate. Chasing that 800 credit score is not needed. It's a waste of your time to be doing other things like working hard, saving money, paying bills down will do a lot more than going from a 755 credit score to a 762 credit score. Section number two, interest rates. the obsession with the cheapest interest rate and that matters. Obviously, APR does matter. That's the most important factor, which is the cost over the life of the loan. And we're seeing that as a massive situation right now that people are chasing interest rates, not paying attention to closing costs. And that's what drives the real cost of your money over time is that APR. Time is of the essence now. The sooner you obtain the investment as a home, the more you're going to reap the benefits over time. Following daily interest rates, following trigger leads, following baiting of advertisements or news stories isn't going to give you the fact. someone that you can speak with that can give you the information and can give it to you directly. You are going to win in the long run much more than you are going to win in the short run by chasing whatever shortest cheapest interest rate you can find. Is section number three down payment and documenting your down payment. Seasoning your funds are is the money you have acceptable by underwriting. not necessarily worrying about putting 20% down. Not that many individuals do that. having mortgage insurance is not the end of the world. Using cash cannot be allowed for a mortgage transaction and depositing money at the last minute is not going to be allowed. Planning ahead with your assets and your down payment money for what you need will get you way less stress throughout the transaction. whether we can still use gift funds, retirement accounts, savings. Yes, all very doable and all can be worked out easily throughout the underwriting process, which is section four. Dealing about what underwriting really cares about, which is the ability to repay. Can you afford the mortgage over time? Underwriting deals with facts and math, not emotion. So, we're looking at a pattern of behavior of savings, your income. Are you paying down your debts? Having a story doesn't make any sense to underwriting. Underwriting wants to see stability and the ability to repay that loan through proof of income, proof of assets, and proof of credit. Those are the things that we need to get your loan accomplished. Five is the market, which always changes, but always local is the way real estate is. Local always matters. Our market here in Omaha is different than Florida. Florida is different than Arizona. Arizona is different than New York. And every little pocket to the smallest area is different in real estate. From the smallest pocket of three or four houses to the smallest pocket of 50 houses, depends on where that's located makes a huge difference. So, if you're following national headlines versus local headlines, don't stress yourself out by seeing what you feel is happening in the real estate market. We could even be in the worst real estate market in the country, but there might be some specific neighborhood that's always doing well regardless of where it's located at for some particular reason. Section six, borrower behavior. We see this happen over 25 years. I joke about it. We see the same personalities of people coming through with their finances and their situations. They just come in with a different name. So the people we see come through over and over all have different ways of relating to life, paying their bills, how they handle credit, how they handle their jobs and their savings and their assets. But in essence, borrower behavior, we can see how organized you are, determines how well you're going to be able to get approved for a mortgage loan. It's as simple as that. If you're an organized person who has their paperwork, their documentation, and they're planning ahead months in advance before making a decision, I can share with you that always wins in regards to making it a stressfree and simple process to obtain real estate and obtaining a mortgage loan as well too. So, last thing I'm going to leave you with, point seven, three lessons I would tell every buyer. Preparation beats timing. You're never going to be able to time the lowest interest rate, the best time to buy a house, but planning ahead and being organized of what you need to do will allow you to succeed in this real estate market. Education always beats emotion. I can tell you clients come in with a story that they're emotionally tied to getting this house because something is changing in their life and they might not qualify because they don't know what the rules are. They're not educated by starting early and planning ahead. And strategy always beats rate chasing. You can go out. I've seen tons of clients do this. Look for the cheapest interest rate to find out later they got charged too much. They didn't close on time. Their loan didn't get done. They paid extra amounts of money because something was to happen only to find out later on in life that they are only going to be in that mortgage for a couple years because they're moving or refinancing. So strategy and understanding long-term financial decisions are always going to win over the life of the loan. So in closing, thank you for checking out Mortgage Matters and Minutes. We have information about everything I talked about today in a very detailed mortgage matters and Minutes and we're going to continue to come to you each and every week with more real estate mortgage education and information based on local markets mainly in Omaha. But most of the topics we speak about are working across the country nationally. And that's something to say if you have an individual that you are relocating or you are in a certain area. We know of many other good mortgage companies and mortgage loan officers in those areas that also can assist. But if there's anything that we can do, please like, subscribe, phone call us at 4029915153. Check us out on our website at mtg-specialists.com and we'll see you here next week for your 201st episode of Mortgage Matters in Minutes. Have a great week everyone. We'll see you soon. Mortgage Specialists, driven, trusted, reliable.