Finding the right mortgage is one of the most important steps of buying a new home. To help you prepare for what may be your biggest purchase ever, we’re launching “Ask Nick!” This Q&A series is designed to help teach you all about shopping for and finding a mortgage.
Nick Peacock, Beazer’s Vice President of Lender Choices, will answer your questions about shopping for a mortgage and comparing the information that you receive.
Nick has more than 27 years of experience in the mortgage industry. More importantly, he knows a lot more than the average Joe when it comes to navigating the mortgage waters. Nick is devoted to helping consumers understand our Mortgage Choices program, which encourages everyone to shop around for the home loan that best fits their needs.
We’re kicking off our first “Ask Nick!” with a few questions about the mortgage process from our own employees who are currently going through the home buying process. In this edition, Nick explains the differences between lenders, and the upcoming changes to FHA loans.
Q. Sarah: Do different lenders really make a difference – aren’t they all the same?
A: They are definitely NOT all the same! They vary in terms of their loan programs, underwriting guidelines and processes. While most lenders underwrite their loans according to agency (FHA, VA, FNMA, etc) guidelines, many have unique “overlays” that make it more difficult for a borrower to qualify. For example, some lenders may offer FHA loans to borrowers with credit scores of 600, while others will not approve borrowers with scores below 640. Rates and fees can also vary from one lender to another. It definitely pays to talk with several lenders to find the one that is right for your personal circumstances and needs.
Q. Bonnie: Explain the new regulations on FHA loans that are coming up. Who qualifies? What are the advantages compared to a conventional mortgage?
For example, we were able to get a conventional mortgage while only putting 3.5% down, but we had to pay mortgage insurance. What are the pros and cons to doing that?
A: The major changes that have been made to the FHA loan program impact the cost and duration of the annual mortgage insurance. After June 3rd, FHA borrowers will be required to pay mortgage insurance for the life of the loan, and at a rate of 1.35% – which is much higher than on a conventional loan. While interest rates are generally lower on FHA loans, the higher mortgage insurance often will make them more expensive. Borrowers with excellent credit will likely do much better with a conventional loan.
Now is the time to tell us what you want to know about mortgages. Not sure what APR is? Ever wonder why people shop around to find the best deal on a new car, but don’t shop around to find the best kind of mortgage? Did you know you CAN shop around for a mortgage?
Let’s hear from you!
We’re always taking your questions. You can email them to us at AskNick@beazer.com. Nick answers every question, so you’ll be sure to get a personal response.
Even if you don’t have a specific question for Nick, you can still learn more about buying a mortgage. Every week, we’ll post some of the “Ask Nick” questions and answers on our blog, Facebook, and Google Plus. Don’t forget to follow along on Twitter with the hashtag #AskNick.
We’re looking forward to your questions!
* Beazer Homes is not acting as a mortgage broker or lender. Homebuyers should consult with a mortgage broker or lender of their choice regarding mortgage loans and mortgage loan qualification. ©2013 Beazer Homes