is, your payments are much higher than they would have been if you’d simply chipped away at the balance of the loan all along. Such loans can make sense if after five years you anticipate an increase in income and can afford the extra mortgage payment. Or, if you plan every once in a while to pay above and beyond the amount due.
The typical home buyer doesn’t go the route the Garners took. When Randall Evans was shopping for an existing single-family house in the District of Columbia for his family, he did not have a builder to handpick a lender. Instead, he worked with Lisa Wilson, a Wells Fargo loan officer, after hearing her bank’s presentation at a luncheon of the 100 Black Men of Greater Washington, D.C. As it turned out, she was a fortunate choice and an ally.
“When we had problems with our real estate agent,” says Evans, “Lisa stepped in. She ordered an appraisal of the house, for example, which showed it had a ceiling problem. She brought us together with the seller and worked out a reasonable agreement.”
Of course, she helped with the mortgage, too, enabling Evans, his wife, Deborah, and their three children to recently move into a house that cost more than $600,000. “Lisa went over our options with us,” says Evans, “and we decided to use 100% financing to buy the house: an 80%-20% arrangement, with a first and second mortgage. I wanted to minimize my up-front costs and stay liquid because we were buying the house as is. It’s livable but I expect to have to spend a great deal on improvements.”
In your search for a mortgage lender, you can find a wealth of information online. Many mortgage brokers, banks, and credit unions have detailed information and even loan applications on their Websites. Once you have identified a lender, e-mail a request for more information or ask the mortgage specialist to contact you. A few places to start are Fannie Mae (www.fan niemae.com, 800-732-6643); U.S. Department of Housing and Urban Development (www.hud.gov, 202-708-1112); Mortgage Bankers Association of America (www.mbaa.org, 202-557-2700), and National Association of Mortgage Brokers (www.namb.org, 703-342-5900).
Assembling a great team is only the beginning of your house search. You need to manage your professionals — listen to what they have to say, so you can make the right calls and go home a winner.
Law in Order
Kellye Curtis Clarke, a partner at the law firm of Shreves Schudel DeVol Saunders Jackson & Clarke P.L.L.C. in Alexandria, Virginia, and counsel to RGS Title, L.L.C. provides this list of “Questions Prospective Purchasers Should Ask.”
- What real and personal property (if any) is included in the purchase?
- How should I take title?
- What financing and terms of payment can be arranged?
- Are any liens filed against the property?
- Are real estate taxes paid to date?
- How can I evaluate the physical condition of the property?
- Do any easements or covenants restrict use of the property?
- What local land use regulations affect the property?
- Is there mandatory membership in a homeowners association?
- What happens if
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