The FHA Expert: March 2008

Welcome class..... After reading many blogs and advertising on the internet that talk about "best rates", "no closing costs", "little closing costs", "7 day closings", "hard to close loans", etc, etc..., I decided to give a brief and basic list of what you should be asking. These are also things that I hear from the average consumer on a weekly basis.

No matter if you are applying for a FHA mortgage or a Conventional mortgage, all basic questions should be the same. Don't let anyone tell you differently or confuse you. No matter how you came across this particular lender or loan officer, not only should you answer their questions, but you should make sure that you ask a few of your own. Especially if they don't touch the ones that I am about to mention. (Can there be more that we could argue about? Yes... but I feel that these are the most important.)

Here is what you should be asking your loan officer about ....

RATE : This always seems to be most on everyone's mind. How come though, when I have asked a few people in the past what rate they were quoted, that they didn't know the exact rate that was given to them over the phone. But all they can tell me is that they got a great rate.

Payment : This in all honesty should be your first concern, not the rate. I mentioned rate first, because this is what most clients ask first. And keep in mind, anyone can quote a rate, but it's usually based on you qualifying for the mortgage first. When you shop for a car, do you walk out of the dealership not knowing what your monthly payment is? And your payment is what you should be comfortable with, a reality, not a fantasy.

Loan Amount : I have heard some clients tell me that the loan officer didn't really tell them what their new loan amount is. This would happen more in regards to refinances more than anything. On a purchase, if you know your down payment, it's easy to figure out your loan amount. Why do some loan officers not disclose your new loan amount on a refinance? Because if you new the loan amount, you could typically figure out what it's costing you, because the costs would be wrapped up into the new mortgage amount.

Fees : This can sometimes be very deceiving and misleading. Don't ask what your total is, because the loan officer will include all fees that are associated with the mortgage. Just ask for the lender's fees. All other fees are 3rd party and are just that, an estimate. No Closing Cost Loans VS Closing Cost Loans

GFE aka Good Faith Estimate : This is probably my favorite. By law, once you do an application and / or sign a good faith estimate, you are suppose to get a copy of the Good Faith Estimate (GFE) within 3 business days. In reality, there is no reason not to have a copy the same day. If you are shopping for a mortgage, if the loan officer doesn't offer to send you a good faith estimate, this could possibly be a semi red flag. If you ask for a good faith estimate and it takes more than 48 hours to obtain one, major red flag. Good Faith Estimate -- What to look for when shopping......

Lastly, in most cases, for your loan officer to help you properly, they should be asking what your goals are. Short-term goals and long-terms goals. Possibly asking if you have kids, if they are going to college soon, and anything else pertaining to your life style. Why should they get personal? In my opinion, it because easier for me to advise you on certain parts of your home financing. Example, if you told me that you were going to move in 2 years no matter what, they you shouldn't be paying points to lower the rate.

Here is a must read : Consumers need to be aware of these Red Flags !!!!!