We are all too familiar with professions that have faced extinction - one hour photo developers, VHS tape manufacturers, and yes the all mighty United Airlines Mechanic. Most of these jobs went through years of phasing out. This "natural selection" gave a lot of time for most to see the writing on the wall and find other careers.
I have to give it to the Mortgage Broker. I don't know if you realized it or not, however, these folks woke up on one Monday morning in 2008 to find that someone had taken away their "wares". Relate it to a shoe salesman who went to work one day to find that someone had taken away all his shoes. What does he do now? Can you imagine the shock? Many of these salesmen worked for years and decades building up reputable businesses throughout our area only to have been told, "go away" from the same people they faithfully made lots of money for - the lenders.
Well, for those brokers still out there - "The next drink is one me"! Brokers are getting cut out of the lending arena. If you use a broker on a conventional program that requires PMI (you are putting less than 20% down), you may get declined based on the fact that you are working with a broker. Not because you have bad credit, insufficient income, or a lack of documentation , you may get decline merely because you are using a broker instead of a bank. Hmmmmm - something is rotten in the woodpile!
Thinking of buying a new home? Call me, there are a few brokers out there that I simply trust implicitly. They are priceless and the banks, in large part, are not worthy of their knowledge and commitment to their industry. But wait a minute - if they can't sell shoes I guess they will have no other choice but to work at the bank. In my opinion it is a sad story indeed. Don't fret - there are also men and women at banks that I have found equally knowledgeable and trustworthy - most of them came from the prehistoric broker period. Ironically, I feel that most of the blame from the subprime meltdown should be pointed at these same lenders who funded the loans in the first place (different topic different blog).
QUICK QUESTIONS TO ASK YOURSELF:
Do I have a 680 or higher score? If you don't you better think FHA.
Do I have a 620 or higher credit score? If you don't you better think Apartment.
Do you have a debt ratio of 45% or higher? Yes? Well you best renew the lease.
Are you buying your home in a declining market as labeled by Fannie Mae? If you are buying in the Indy Metro Area you are. This means you better butter up your lender and put the shocks on the car; you may have a rough ride ahead of you no matter what your credit is like!
Do you have a Realtor? I typically try to stay away from this personal plug, but, here goes - it is a "maze of mess" out there and you better find some good help!
Special Thanks to Mike Senn for enlightening me on some of these issues today! He's a great lender (yep he works for a Credit Union) and friend.
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