It's no secret that I help many house hunters find their dream homes. What you may not know is that I also help them navigate their mortgage process.
Unless you developed an iPhone app in your early teens or are a world class snowboarder with a sponsorship deal your first home will most likely require a mortgage. Everyone knows a person in the mortgage industry and most likely has a great uncle Harold that they believe will charge them less and save them money. Often great uncle Harold is the first one to admit that he isn't your best resource. Saving that $200.00 application fee doesn't make an inexperienced or out of touch lender your best option for the lowest rates, most affordable closing costs or overall ease of transaction. I work from the time my eyes open to the time I fall asleep most days when my clients need me. There are a handful of lenders that keep these same hours and Mike Suffoletto is one of best of the best due to the fact he's as committed as I am to making things go smoothly. Below are the answers to the questions my clients most frequently ask me to ask him.
Mike, What do you wish first time buyers knew?
The mortgage industry, requirements and regulations have changed so dramatically recently. Many of the first time homebuyer programs require successful completion of a homeowners class. I encourage buyers to attend a class prior to looking for a home because they also contain great information about how a loan works , how to apply, how to pay a mortgage and various other things that can help greatly.
Note from Lisa: Also some of the first time buyer programs offer better rates and lower closing costs from time to time. There are also down payment assistance options through some. Be sure to ask what's available.
What documents should a first time buyer have when they start their mortgage process?
Everything in the mortgage world seems to follow a rule of two. The documentation needed can vary from product to product, but in general we need most recent two years of Federal Tax Returns and W2s. We'll need the most recent two full bank/investment/retirement statements as well as most recent two paystubs (four if paid weekly). However, the rule two changes to rule of three with first time homebuyer programs. A first time homebuyer is defined as anyone who hasn't owned a home in the past three years. So, they collect three years for taxes and w2s to verify mortgage interest does not show up within the returns. These items are not required at time of pre-approval, but I certainly recommend to have them gathered and given to the mortgage loan officer for review. This will help avoid any unwelcomed surprises when it matters most!
Note from Lisa :Yes, it's true, after 3 years of not owning a home you are considered a first time buyer. Crazy right? That's the mortgage world for you. Now you see why it's important to work with someone who gets it!
Does it make sense for people to call you before they find a house or would you rather they call once they have a home identified?
Hands down, call me before a houses has been identified. It's important to not only confirm the pre-approved range, but also gives us time to prepare should any adjustments need to be made. I will help guide buyers to obtain the very best mortgage and very best rate. I'll be able to complete a full financial analysis, provide advice, and help prepare for the moment when the right house comes along. In a competitive market, a prepared buyer is a good buyer!
Note from Lisa: I speak to many people who assume the rate they get from the mortgage calculator online is accurate when in fact it couldn't be further from correct. Rate calculators don't take your credit, insurance premiums, real taxes or personal debt to income ratio into consideration and should not be used as a guide in place of an accurate rate and mortgage payment quote from a local lender.
What's the difference between buying in MA and NH from a mortgage standpoint?
The mortgage process and requirements are generally the same in MA and NH. There are however a few slight differences.
In MA there is a first time homebuyer program called MassHousing and in NH the program is called NH Housing. They both allow as little as 3% down. In some rural areas there is even the potential to buy with no money down.
Conventional loan limits are capped at $417,000 however in certain counties those limits have been increased to offer a conventional loan up to $625,500. NH has two counties with increased loan limits up to $517,500 which are Rockingham and Stafford. In MA, Bristol county offers up to $426,650. Essex, Middlesex, Norfolk, Plymouth, and Suffolk offer up to $517,500. Dukes and Nantucket offer up to $625,500. These limits are not absolute caps as to how much you can borrow, they just represent the limits for a conventional loan. Any loan amounts above those ranges can be obtained with a portfolio or jumbo loan.
Lastly, the closing costs in NH and MA are similar other than the state transfer tax. In NH the buyer and seller split the 1.5% transfer tax which is based on the sales price.
Note from Lisa: Massachusetts buyers will often get frustrated with the lack of "new" or "modern" homes in the border communities within their budget point and decide to look over the border. Often people assume that everything is the same when in fact that couldn't be further from the truth. Mortgage costs, closing costs, taxes and city amenities are drastically different. Let me know what towns you are interested in comparing and I can send you a breakdown showing which have school bus pick up, trash pick up, lower taxes, higher taxes etc.
Here are lists of the most heavily searched for price points locally with homes available in each
Here are North Andover homes for sale up to $600,000