Mortgage Maneuvers

How doing your homework helps

“An article in the Washington Post said that interest rates were the lowest they had ever been in 40 years,” recalls homeowner Maria Webb. “That’s what made me decide to start shopping for a home.” That was in 1993. By late summer 1996, Webb was the owner of a two-unit Victorian row house in the Capitol Hill section of Washington, D.C. “I started going to open houses and then, started talking to a realtor. I was doing my homework. Then the realtor called and told me about NACA.”

The Neighborhood Assistance Corporation of America (NACA, www.naca.com) was founded in 1988 as a nonprofit community advocacy and housing services organization operating in 17 states. With interest rates currently so low, officials at NACA said this is a great time to take advantage of this and other programs and opportunities that exist.

Webb enrolled in NACA’s program in March 1996, where she received guidance on budgeting, taxes, and removing an old blemish on her credit report. They helped with financing; as a result, she was able to negotiate a 5.5 % interest rate. “NACA helped me write my contract, which I presented to the seller stipulating that he buy down my points,” Webb recalls. “It was a real learning process.” It was a process that not only saved her from a possible scam, but helped her to negotiate the best possible deal.

According to Stephanie Ebron, director of NACA’s Washington, D.C., office, “When a lender agrees to participate in NACA’s program, they [the lender] agree to pick up the closing costs. This is a great relief for our clients. [In addition,] interest rates on mortgages obtained through NACA are 1% lower than the current market interest rate. This, coupled with our no-money-down policy, allows the purchaser to afford more house for their money.”

Marlon Seenarine, owner of MGN Funding Corp. (www.mgn funding.com), a mortgage banking company, says that it is important for consumers to shop around and compare rates, services, and special programs. “The concerns of the buyer change considerably with each individual,” he says. “You have to be in control, and find a company or organization that suits your needs. The lender is primarily interested in your ability to payback the loan, but all lenders have different programs.”

Seenarine and other experts offer tips on how to be assertive in the home-buying process — and not get taken:

  • Ask how long the mortgage lender has been in business. Experts recommend at least 10 years.
  • Never make assumptions about your credit. Making assumptions may prevent you from buying a house — or at least looking at the possibilities. “Talk to a mortgage lender or an independent source about their programs and offerings for first-time homebuyers, and let them help you determine your standing,” advises Seenarine. Freddie Mac (www.fred diemac.com) offers a free online credit initiative called CreditSmart, and Fannie Mae (www.fanniemae.com) offers the free publication, Knowing and Understanding Your Credit.
  • Take notes at every meeting and keep copies of all your documents. Compare notes after each
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