While working with mortgage lenders, Caroline Strok says that time and again she watched frustrated would-be homeowners have loans declined because of things outside of their control. Strok knew there were better, more personal solutions. She took her knowledge and experience and opened Ocotillo Home Lending. Strok offers answers to some of your questions about buying a home or refinancing.
Why would someone turn to Ocotillo Home Lending instead of using their own bank?
With my knowledge and experience, I can give my clients white-glove service. I know each of my lenders’ strengths, so when we sit down, I can understand your needs and find a good match. Because I understand my client's specific needs, I can get a loan from start to closing efficiently, making it a painless experience.
There are different types of mortgages available. With home prices increasing in 2021, what types of financing should consumers consider?
There are several common types of mortgages, including conventional loans, adjustable-rate mortgages, government-insured mortgages including FHA and VA, and fixed-rate mortgages from 10 to 30 years. Everyone’s situation is different, and I can sit down with you to discuss your specific needs. I ask questions about why you’re buying. Is it a starter that you plan to keep for three to five years? Is this where you plan to raise your family? Is it a forever home? Are you buying it as a rental? All of these factors play into the type of loan a client should choose, and I can help you find the right mortgage that fits your desired monthly payment.
Ocotillo Home Lending also deals with refinancing, which is popular now because of lower interest rates. Should current homeowners consider refinancing? When do they know if that’s a good option?
As a result of COVID, I see people using this time to review and adjust their personal financial goals. People have spent the past year trying to decide what is really important. We can sit down together and discuss those financial goals and determine if refinancing is right for you. Again, the answer really depends on your long-term goals for your home and your motivation for refinancing. If you are currently in a mortgage, I would be happy to offer a complimentary mortgage review. I recommend this given today’s interest rates. During that review, I listen to your personal and financial goals, not only for your home but for your lifestyle and long-term financial goals. Homeowners on a fixed income may find it beneficial to refinance simply to lower monthly payments with no concern for paying the home off sooner. Other clients discover that refinancing is a good option so they can put their assets to work in other ways, and they might find that a 10-year fixed loan gives them the biggest flexibility. I can work hand-in-hand with your financial advisor, accountant, and other experts to ensure we find the best solution for your financial future.
Everyone worries about FICO scores and debt-to-income ratio. How exactly do these figure into a home loan?
Lenders review four items from every loan applicant: property value, credit score, debt-to-income ratio (your monthly debt reported on your credit report but not including utilities), and income source. The lender reviews these and makes an overall assessment. When I work with my clients, I explain that all four of these factors are equally important. The consumer controls everything except the property value, which is determined by fair market value.
If a consumer wants to buy a home, has a good FICO score and debt-to-income ratio, but doesn’t yet have the traditional 20% down payment, are there still options to take advantage of today’s lower interest rates?
Absolutely! In fact, with mortgage rates so low, I see a lot of clients keeping their nest egg in their savings account or putting their money to work elsewhere. If you have less than 20% equity in your property, mortgage insurance is usually required. At Ocotillo Home Lending, I offer some great first-time home buying programs, with as little as 3% down. These are conventional programs, so the better your score, the better your interest rate and the lower your monthly mortgage insurance payment. I have found these programs to be more cost-effective, have simpler underwriting, and offer more flexibility than a traditional 20% down payment. There are other programs, such as FHA, that calculate your monthly mortgage insurance based only on the loan amount. Those programs are not impacted by your score, so can be a disadvantage to some clients. At Ocotillo, we can help you figure out which alternative is best for you.
Do you recommend consumers contact Ocotillo Home Lending even before they have a home to consider?
I definitely recommend getting prequalified before viewing homes. It is important to know what you are comfortable affording based on the monthly payment expenses and your down payment. When we meet, I can help you understand the process. When you have a good grasp on the process, what fees and costs to expect before and at closing, then you are more comfortable as you go out looking at homes. I tell my clients that it is essential you know your buying power before you shop. You want to make sure your home shopping fits your overall financial picture.
How long does it take to get loan approval and has any of that changed as a result of the pandemic?
Even in these crazy times, the process of how you qualify for a loan has not changed. With a mortgage broker, we have the ability to close a transaction in 11 days, but needs, expectations, and timelines vary. Because I personalize my services at Ocotillo Home Lending, I do my best to get my clients to the closing table as quickly and as painlessly as possible. It is important for me to prioritize and provide a good experience to each of my clients.
Strok can be reached at Caroline@OcotilloHomeLending.com, 602.320.5398, or OcotilloHomeLending.com.