People have been asking me a lot of questions on mortgages lately. If you turn on the nightly news or open a newspaper, you’re most likely going to see something about mortgages There are a number of mortgage companies going out of business and there are numerous fraudulent offers circulating. So, the question is, “Who do you trust?”

With all the 100% financing options that so many families have taken advantage of, not to mention the variable interest rate loans, the time has come for many to “pay the piper.” When the real estate demand spiked a few years ago and our supply was way down, home values also spiked. People were offering to pay higher than asking price, bidding wars were rampant.

Now, we’re left with an abundant supply of homes due to several factors. We have investors selling off some of their “investment” properties, homeowners who waited to see what would happen when the media was touting “real estate bubble” two years ago who finally decided it jump in and cash in (only too late), and the homeowners who overextended themselves with interest only mortgages and home equity lines of credit who need to downsize and buy a less expensive home…. or even rent.

Is this an easy market to sell homes in? Absolutely not. However, it’s not impossible! If a realtor knows their market, knows their business, pays attention to their client’s needs, and can get creative with marketing and business strategies - we’re still making it happen! The good news is that we’re seeing the so-called “part-time” realtors and agents who jumped in to make a quick buck, leaving the marketplace. Why? We actually have to work our tails off now. There’s no room for order takers.

Lenders are cracking down on their approval criteria and their appraisers are being ultra conservative. This does not make it easy to get 100% financing on a mortgage right now. BUT, there are lenders who are still doing it regardless of the rumors. The other myth is that because so many people are in default of their interest only loans, these must be bad loans to get. This is not necessarily true either.

The truth is that you MUST get a professional Mortgage Advisor who will ask you the right questions and help you understand what the best options for your individual goals and situation are. Each person and/or family has a unique financial situation and has completely different goals. Therefore, it is imperative that you work with someone who understands you and guides you based on those factors.

For example, here are two scenarios:

Scenario 1) A family with 2 children under 8 yrs old who have maxed their home equity line of credit to open a new business, and are now looking to lessen expenses and stay in that same home until the kids graduate high school.

Scenario 2) A newly married couple in their mid-twenties who are buying their first home, want a “fixer upper” and only plan on being in it for 2 years while rennovating it as a transition to their next home.

Along with their credit ratings, assets, etc…. it’s important to understand their current situation and what their future plans are to guide them into the best mortgage options available.

The other question is why am I talking about mortgages when I’m a licensed realtor and not a loan officer? The answer is that I work with people every day helping them to make the biggest purchases they will make in their lifetime. It is not in a realtor’s best interest to help their clients get overextended and become “house poor.” Also, because I am finding that in my personal experience, I have found that people think that realtors get a referral fee or some kind of kick back from referring their clients to their “preferred lenders.”

It is important to know that we do NOT receive any monetary compensation for directing our clients to lenders. Excellent realtors have a team of professionals in all aspects of a real estate transaction that can be relied on to provide the best service with professionalism, quality and care. This is our pay back - knowing that our clients are well taken care of in the best manner possible. It’s an enormous benefit to the client to engage a team of professionals who work together on a consistent basis. The transaction becomes seamless.

The following link gives valuable information and answers many specific questions regarding loan programs. Understanding Mortgages…

I’d say that this joke is funnier now more than ever!

Contact Kelli Grant with your real estate questions and needs in Scottsdale, Carefree and Phoenix!