Mortgage availability and choices
REALTORS® care as much about keeping families in their homes as they do about helping them find the home of their dreams. As the first point of contact in the real estate transaction, REALTORS® are uniquely positioned to inform and guide consumers through the maze of financing alternatives to make sure a home buyer’s mortgage meets his or her financial needs.
Spokane REALTORS® urge home buyers to deal with reputable lenders and seek professional help from agencies like the Better Business Bureau and certified housing counselors to identify lenders of good standing before choosing a lender. Other sources of information are local community housing groups, consumer advisory organizations and of course, your REALTOR®.
REALTORS® can help home buyers make what is often the biggest financial decision of their lives. A big part of the purchase process is to help their clients find fair and affordable financing so they can protect their investment. Buyers are encouraged to learn what’s new about FHA mortgages. The Federal Housing Administration has made significant improvements to its mortgage insurance programs. Many aspects of the FHA application process have been streamlined to be more user-friendly and efficient.
REALTORS® believe that financial education is an important defense against abusive lending practices and unwise mortgage choices. To help educate home buyers about today’s mortgage options, the National Association of REALTORS® (NAR) has produced five brochures in its “Understanding Today’s Mortgages” series.
The three following brochures were developed in partnership with the Center for Responsible Lending: “Specialty Mortgages: What are the Risks and Advantages?”; “Traditional Mortgages: Understanding Your Options”; and “How to Avoid Predatory Lending.”
NAR partnered with the Center for Responsible Lending and NeighborWorks® America to produce Learn How to Avoid Foreclosure and Keep Your Home.
The brochure “FHA Improvements Benefit You: FHA Insured Mortgages” was created in partnership with the Federal Housing Administration of the U.S. Department of Housing and Urban Development.
All five brochures are available at the links mentioned in this column.
In today’s lending environment, if they can afford it, buyers should choose a loan that amortizes; i.e., one that pays down the original loan balance over time. Shopping for a loan with the lowest monthly payment often is not in the consumer’s best interest.
Over the past few years, a growing number of loan types allowed the outstanding balance to grow until it exceeded the value of the home, which amplifies the borrower’s risk and can significantly increase the monthly mortgage payment after the initial period.
Buyers will gain valuable insight by consulting with their REALTOR® and their mortgage professional to make sure they understand the risks associated with non-traditional and hybrid ARM loans, and what may happen when these loans adjust or convert, at the end of the initial interest rate period.
Education is Key
This section has several valuable links for online consumer research. REALTORS® believe that financial education is an important defense against abusive lending practices. www.realtor.org/home_buyers_and
_sellers/smart_home_financing.
NAR and its partners have issued a series of consumer education brochures. www.realtor.org/government_affairs/
housing_opportunity/resource_center/mortgages
They emphasize the importance of understanding the different types of available mortgages, explain how to avoid the pitfalls and entrapments of predatory loans. www.realtor.org/home_buyers_and_sellers/
how_to_avoid_predatory_lending
And, they suggest what homeowners should do if they are concerned about their mortgage or foreclosure. www.realtor.org/home_buyers_and_sellers/
protect_your_home
Consumers who need immediate advice should call 888/995-HOPE, or visit www.995hope.org. The Federal Reserve Education website provides extensive foreclosure resources and information for consumers. www.federalreserveeducation.org/
pfed/foreclosure/
As the most trusted source for real estate information, the National Association of REALTORS® encourages home buyers to shop carefully, and fully understand the mortgage choice that is best for them. Good information is readily available — please contact a Spokane REALTOR® today.