It is truly an exciting time in the mortgage industry! New products are being developed, property values have been much more stable than the stock market, and have created a nice nest egg for many people. More people than ever are able to own homes!
That said, it is also more confusing than ever to understand all the products that are available. As few as 5 years ago, the standard loan was amortized over 30 years, and the predominant products were either fixed rate loans or adjustable rate loans.
The market now has been flooded with Interest Only, MTA, COFI ARMS, 40 year loans, 50 year loans, Reverse Mortgages, Stated Income, No Ratio, and other unique loans. These loans all have a purpose, and for the right customer they each have different benefits.
The challenge now for the consumer is to find a mortgage professional who is knowledgeable about the different programs, and can help them understand which program is right for them.
A good mortgage professional will be able to explain to you up front why the program they are suggesting is good for you. Why is it good now, and why will it be good in 1 year, 5 years, and further down the road. What advantages will it bring, and how is it financially better for you.
Many customers are mistakenly looking for the lowest payment without learning what damage that may be doing. There are some programs that you may have presented to you with VERY low payments, much lower than most people are quoting. If you can’t find a good reason, then chances are you aren’t being told something important!
The reality is, all mortgage loans end up in the same places. All mortgage professionals have similar costs. Just like buying a car, you get what you pay for. You could go for the Yugo, but know you aren’t going to get any frills, or service for that matter. If you want Lexus service, expect to pay a bit more up front, but many times paying a bit more for an experienced loan officer will save you much more down the road!
