Finding solutions for our clients that is the key and not merely quoting Rates!
A lady called me up last week and she wants to get Pre-Qualified for a mortgage. She selling her house and buying another for a little less since they cannot afford the mortgage.
Looking into the situation a little further I came up With an entire different picture.
She has an interest only mortgage now and she is barley making the full payments on it. Her income is $2600 a month and the mortgage liability is about $3500.
I mentioned to the client that she will not qualify for a mortgage she is looking to get since her income is to low. So I got response something like this
Can you do a NO DOC Loan?
NO DOC In No Solution for not having any income.
I get that allot from clients that self prescribe themselves solutions that are in no way a solution just a temporary band aid. Like refinancing into an option arm program to hibernate from the mortgage payments.
No I said to my client, you cannot pay more then 42% of your monthly Income. income can be supplemented by having a rental income but you cannot go above that line Either no doc or full Doc.
However if you are above 62 years old you can qualify for a reverse mortgage and can have a mortgage without any payment for as long as you live in the house. you can have that on a purchase and on a refinance.
Wow the client said I never heard of that!
It's amazing that people continue to misuse loan programs for customers. Kudo's to you for not doing a loan that doesn't make sense. As a fellow mortgage professional we know that No Doc, Stated, No Asset, etc.... loan programs are for those people who are usually self employed and cannot disclose their true assets due to taxes.
I have to disagree with Simon, RevMtg are excellent (HUD backed anyway) and if you take out the required Mortgage Insurance, they are in line with most any other loan. But the insurance is a serious and excellent (and of course required) component, because IF the homeowner lives long enough, the loan value could exceed the property value. This insurance will keep the homeowner & their heirs from being burdened by such an expense. Of course, statistically this will not be a problem, but it will be a problem sometimes, and that is what insurance is for. I know this is a simplistic view, but it is accurate.
Right that It makes them mad, but we where never regarded as professionals. We where just mortgage executioners, they told us what they wanted and we had to deliver that or lose the deal.
I disagree with Simon that it shouldn't be suggested utill cost comes down but i do agree that it is a Bit pricey. However the consumer does not feel it in most cases. they make no payments they will feel it in the LTV though!
Thanks