Why Is EFO Important to Us?

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This video blog is typically dedicated to all things mortgage and real estate. While I can and still will talk about those topics all day long, today I wanted to talk about something near and dear to my heart.

About five years ago, my church started going down to Haiti on short-term mission trips for disaster relief after the horrible earthquake left the country in ruins. We helped out a school/orphanage with rebuilding and fixing their water source. We went on a total of five mission trips, two of which I attended. Within those five trips, we were able to get the place up and in running condition, which made a huge impact on the daily lives of all the students.

Although we helped rebuild, we couldn’t stop thinking about what would happen to those children at the orphanage once they were done with school and became adults. Unemployment is very high in Haiti, and there is little opportunity for them. This gave one member of our congregation an idea, and they started a separate non-profit foundation called EFO, or Education For Orphans.

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We’ve seen students thrive in this program.

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The idea of this organization was to raise funds to give select students scholarships that granted the opportunity to advance into secondary school. When these students graduate, they can then come back and share those skills with others and inspire them to pursue education as well.

Over the last two to three years, we’ve seen students advance and have a huge impact on their lives, as well as the day-to-day lives of those in the orphanage. Check out some video of our trips above, check out the website here, and consider helping out. Whether you donate time, money, or resources, we appreciate your consideration. I can say that it’s definitely been a very rewarding experience for me to be involved with an organization like this.

If you have any questions, don't hesitate to give me a call. I would be happy to answer them.

Is the Lowest Interest Rate Always the Best Option?

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Is lowest always best? All things being equal, of course paying the lowest interest rate would be the best option, but there all kinds of scenarios where this simply isn’t true.

We don’t want to create unnecessary fear, but you only have to go online and do a little digging to see that the experience people have when buying a home and getting a mortgage is far from uniform. There are all kinds of stories about missed deadlines and false promises. You might have terrific credit, or be principled enough to say that you’ll walk away if the numbers change, but as you’re getting ready to move your family into a home and you’ve already invested as much as $1,000 for things like appraisals and inspections, sometimes it just doesn’t happen.

The first and most important thing to remember is what you see is not always what you get. Whether that’s missing contract deadlines, missing closing dates, or the mortgage lender just misquoting certain things, there are some mistakes you just can’t be protected from. The other important thing to consider (which is often overlooked) is that many mortgage people act in a very transactional manner. Their goal is to get you to do business with them. They may present some options or numbers that might not be in your best interest, but you’re most likely to accept anyway because you’re assuming a low interest rate is great no matter what.

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What you see is not always what you get.

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There are all kinds of scenarios, though, where a different loan product or term might be better. I’ve had situations where I’ve actually gone with a higher interest rate but much lower closing costs because that kind of arrangement might be better for a person who might not be keeping a home for a long time. It’s a difficult conversation to have with a borrower to convince them to accept a higher rate in exchange for lower closing costs, but we can always run through those numbers to explain why it would make sense to them in the long run.

If you’re looking for a mortgage lender with competitive interest rates, individuals that will take the time to understand your particular situation and make appropriate recommendations, and a local team that has a track record of delivering on their promises and their timelines, reach out to myself or someone on our team at the number listed below and we’d be happy to help you out.

New Mortgage Rule Could Hurt Your Mortgage Qualifications

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Recent changes have affected the way that student loan payments will factor into FHA mortgage qualification, and it affects a lot of people looking to buy homes.

Prior to September 2015, if you had a student loan debt in deferment at least 12 months past the closing date, those debts weren't counted against you as far as how much mortgage you could qualify for. The rule that changed last fall now states that if a payment is in deferment or the payment is zero (like an income-based repayment plan), they now require us to use 2% of the balance as a payment toward your debt ratio.

So what does this mean? If you have $50,000 worth of student loans in deferment, that is the equivalent of $1,000 a month that we now need to count against you as far as how much you can qualify for. That's almost like a whole other mortgage payment. Obviously, this has had a huge impact on people, especially those with large student loan debt loads.

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Don't let this change keep you from getting into your next home.

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There are some workarounds however. Even though a student loan debt is in deferment, we've had some successes contacting student loan companies and requesting to get an estimated payment of what the payments would actually be once the deferment expires. In many cases, that payment is far less than the 2% payment that we have to use if we don't have any payment at all. In those cases, we're able to use that estimate because the lender at least has an idea of where that payment is going to be once the deferment is over.

So like I always say, the best thing to always do is to get out ahead of the home buying process. If you have student loan payments, reach out to us early in the process and come in for a consultation where we can review and see where we stand. Then we can see if we can come up with some solutions to make sure this change doesn't keep you from getting into your next home.