For new homebuyers, applying for a mortgage can be exciting and overwhelming. The paperwork involved can be dizzying. The CEO of one mortgage loan told MarketWatch about his three tips that might help prospective home buyers.
Greg Schwartz, co-founder and CEO of Stamford, Connecticut-based Tomo Mortgage, said homebuyers wanted more information about the different types of mortgages available before signing a mortgage. , also said that you need to clarify your goals.
Tomo Mortgage is a mortgage originator and is licensed in 19 states. The company wants to digitize the mortgage process, reduce costs such as homebuyer fees, and speed up the process.
In an interview with MarketWatch, Schwartz said rather than going to a broker with a set of financial documents that can take six to seven days to get pre-approved, companies like Tomo have simplified the process. said he was working to Taken from an online database, it significantly reduces the time it takes to get your mortgage pre-approved.
Earlier this month, Tomo launched the product It can get mortgage approval for potential homeowners in three to four minutes, Schwartz said.
rear work at jiro“I fell in love with the mortgage industry,” Schwartz said, admitting it’s not a sentiment many people express. turned out to be very unnecessary,” says Schwartz.
With home prices doubling from a year ago, homebuyers are looking for bargains. Here are the top three things Schwartz should do when looking for a mortgage.
Tip #1: Get a Loan Quote
First, look for transparency, says Schwartz. And it starts with getting a loan quote.
A loan quote is a three-page form that you receive after you apply for a mortgage and before your application is approved or denied. Consumer Financial Protection Bureau.
This loan estate provides information such as estimated interest rates, monthly payments, total closing costs, taxes, insurance and more.
““We recommend considering multiple loan scenarios, especially based on how much you are willing to pay as a down payment.””
Getting a quote is “recommended for every family, everyone I talk to,” Schwartz says.
If you have multiple loan quotes, you can compare them to see which lender offers the best deal. And if a lender offers a lower than normal rate, you can use that offer to shop and negotiate with others.
“So ask all your friends, all your family, all your readers, always get a loan quote,” Schwartz said.
Tip #2: Ask for Loan Scenarios
Schwartz’s second tip is to ask landlords different scenarios. That is, what happens when you put down different amounts, add different sources of income, and so on.
“We recommend considering multiple loan scenarios, especially based on how much you are willing to pay as a down payment,” says Schwartz.
“There is a gradual change in the size of the loans, and there is actually a very large difference in interest rates, which can be as much as an eighth difference in interest rates,” he explained.
You should ask the lessor to run the scenario. For example, what happens if you drop 20%, 25%, or 15%, what happens to your monthly payments, and so on. You can also ask how much your mortgage will change when your source of income changes.
Schwartz also noted that potential borrowers can pay a fee to lower interest rates on their mortgages. In some cases, he can drop the rate by one point or more by a quarter of his rate.
Ask your lender to break down these scenarios in an Excel spreadsheet or similar and see what your obligations are, he stressed.
Tip 3: Be realistic about how long you’ll be living in your home
Finally, think about the plans for the house you are about to purchase.
“Be realistic about your time at home. It has a fundamental impact on your mortgage costs,” says Schwartz.
If you’re staying in the house for five years or more, look at the points, Schwartz said.
But if you know you’ll be staying there for less than five years, a variable rate mortgage might work better and save you money.
Also, tell your partner, or anyone you buy a home with, the truth about when you’re likely to be home.
Thinking about the housing market? Write to MarketWatch reporter Aarthi Swaminathan ([email protected]).