Q: Jo, we're first time home-buyers, and we're incredibly confused about the mortgage and loan process. We're getting a lot of conflicting information. Could you give us some tips?
--Brian and Kristie, Los Feliz
A: Brian and Kristie, you are definitely not alone in your confusion about home loans and mortgages--it's an incredibly dense process and there's a lot of misinformation being peddled around. I recently did an interview with Gary Blau, mortgage guru and Senior Loan Consultant at OnQ Financial. Hopefully these tips will give you a better understanding of where you stand. Here's what he had to say:
Jo: What's the difference between a mortgage bank (you) and a regular bank?
Gary: I've worked at both so I know the answer to that. Banks have rules and rigid guidelines, and if you don't fall into those guidelines, no loan. But as a mortgage banker, we can shop your loan to many different investors and green-light you right away. We also have in-house underwriting--we do everything under one roof so we don't have to wait around for someone to get back to us. We do everything in-house so we get answers as quick as we want them.
Jo: How long do you have to have been working at your current job to get a loan?
Gary: It's a little different for self-employed people vs. salaried people. If you're salaried, all you need is a single paystub. If you're self-employed, you need a two-year history in the same field. If you jump from self-employed to another job and back, you've got to wait another two years.
Jo: What's going on with interest rates this year?
Gary: If I had a distinct answer, I'd be a multimillionaire! What I can tell you is that in the last year or so we've hit historic lows--the lowest ever. In the last year, they've gone up about a percent, and they've gradually been going up. The Fed is predicting that 2015 is when the first rate hikes will take effect and it's already been priced into the market. My suggestion is to buy now--prices are still great and rates are still incredibly low.
Jo: Does your credit score go down if you check it, even once?
Gary: I get this question all the time. Checking your credit score does affect your credit, but incredibly minimally. But when you're shopping for a home loan--and I advise you to shop around--you can run your credit score in a 30-day period 1,000 times and it will not affect your score any differently than running it once.
Jo: Does it help you to close out credit cards or pay off all your bills at once?
Gary: The first thing you should do is call me regarding anything with credit. Don't do anything on your own. In some occasions, paying things off will help, and sometimes closing things can actually hurt you. The credit scoring business is weird; I've been doing this for about 18 years and I know the ins and outs, and I can help you and tell you what to do and what not to do when it comes to credit reports.
Brian and Kristie, I hope that answers some of your questions. To get a sense of where you personally stand in terms of getting a loan, give Gary a call at 805-852-2247 or shoot him an email at Gary.Blau@OnQFinancial.com. He's incredibly helpful and can help you with all things mortgage. Good luck in shopping for your first home--how exciting!
Got a real estate/neighborhood question? Email me at askjo@theokeygroup.com. Interested in seeing homes currently on the market in NELA/on the eastside? Check here: http://www.jorealestate.com/idx/search/
See you next week!
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