It used to be 20% down. Now you can get the same rate with 3%

Evan Tempelman

Ep 12Oct 25, 2021

Smart Answers About Mortgages & Home Buying

I don't think someone should buy a house because interest rates are low. I think a person should buy a house when they are financially secure.
Evan Tempelman

More moments · 5

"I make just as much as him, how is he buying that house?"

Prepay your mortgage or invest the money? The simple math

Over 90% of my clients take the 30-year mortgage. Here's why

I refinanced from 3.2% to 2.875%. Should I do it again?

"I never missed a payment!" Then why is your credit 690?

Try this · top 3

Quotes

“Whenever an inspector inspects a home, expect him to find problems with the home. That's his job.”

Evan Tempelman

“Nobody has anything until you have a signed contract.”

Evan Tempelman

“A person should not be quoting a rate without knowing your specific file.”

Evan Tempelman (on spotting a bait-and-switch lender)

“If there's a family that has multiple children in a Jewish school, the underwriter cannot calculate that. So that does fall back on the homeowner knowing what he could afford.”

Evan Tempelman

“My suggestion is first and foremost, before you actually miss a payment, is to call the servicer.”

Evan Tempelman

Takeaways

1 Lenders check the three Cs: credit, capacity (income) and collateral (the property's value). Credit scores above 760 get the best rates.
2 Banks may allow total debt payments up to about 43-49% of gross income. They don't count tuition or other personal expenses, so you have to know what you can afford.
3 The bank lends on the lower of the purchase price or the appraisal. When prices rise fast, appraisals lag behind and buyers must cover the gap.
4 In the 2021 market, many contracts dropped the mortgage contingency and the appraisal requirement, putting the buyer's down payment at risk.
5 An offer isn't binding and neither is an accepted bid. Only a signed contract counts.
6 Over 90% of his clients take a 30-year fixed. A 15-year saves about half a point on the rate but locks in a much higher payment, and refinancing out of it costs thousands.
7 Big family gifts are common on $2 million homes, but most $600K-$1M first-time buyers in his area put together $50-70K themselves. The typical first-time buyer is about 30.
8 A mortgage broker shops many lenders for you. Red flags: quoting a rate before seeing your file, and roundabout answers.
9 Property-tax breaks like clergy/parsonage exemptions apply only after you're on title. Ask a local realtor what applies.
10 Affordability drives where young families move: Toms River, Monsey, Pomona, Florida. Cheaper Five Towns houses often carry higher taxes.

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