CK: What advice would you give to a first time home buyer? 

RM: I would say gather as much intel and data as possible with your pre-approval. At some point in this process, you’ll be asked to make a spot decision for an awful lot of money; and while it’s never going to be stress free, the more information and analytics you can work through with your loan officer, the better equipped you’ll be able to make the right decision as well as enjoy the process. This should be a fun and exciting time so the more we can do to mitigate stress and risk, the better the consumer experience will be.

CK: What's the most important thing to consider for a home mortgage? 

RM: Time value of money. While nobody has a crystal ball, it’s paramount to get a good gauge on how long you expect to own this property. Some loan programs are better served for short-term time frames and some are more conducive to long-term holds.  While owning a home is not purely a financial decision, we can not ignore the financial components of the process.

CK: How do you determine the best mortgage program for a client?  

RM: I want to understand what makes them tick: are they more concerned with their monthly payment, reserves left over when the transaction is over, etc. I ask a lot of questions in my pre-approval process so I can gauge where their stress points are, and part of my job is to understand and cater to those stress points so they sleep more soundly at night.

CK: There's always been a difference of opinion on a 15yr loan vs a 30yr loan. Some say you're better off not paying the loan interest vs taking the lower payment and investing the balance. What would you say to a client in regards to this type of conversation? 

RM: While I think there is no “wrong” answer, I always come from a conservative space. Where you will not have a prepayment penalty in any of my products, you can always accelerate the amortization if you feel comfortable progressing through the mortgage. You can always pay the loan down faster, but you can’t go with a 15 and pull the payments back. I think the pandemic is a great cautionary tale for what can happen that’s out of our control so I think it gives you an added layer of security to do a 30 year mortgage and lower your cost basis. We can always model out what the payments would need to be if you want to pay the loan off in 15 years and take that approach on a 30 year amortization as well, which in my mind gives you the best of both worlds.

CK: Can parents cosign on a mortgage? 

RM: Yes they can! Co-signers can be anyone related to the borrower.

CM: What other fees should be considered when preparing to move forward with a home mortgage? 

RM: Typically, you have your closing fees, which include underwriting, appraisal, credit report, attorneys fees, recording fees etc., and typically those are in the 5-7K range (they will vary depending on price point). In addition to that, you will need to anticipate ancillary costs (tax adjustments, homeowner's insurance, escrow deposit, etc.) which typically runs in the 2-5K range — so I tell clients to anticipate 10-12K which is a very conservative estimate.

CK: Are interest rates going to continue to rise in 2022? 

RM: I believe they will rise slightly, but not to a significant degree from where they are right now.

CK: What is home mortgage insurance and is it required to finalized a loan?  

RM: Mortgage insurance is basically gap insurance for the bank to cover a down payment of less than 20%. The cost of your PMI will be dictated in large part by down payment, credit score, and debt-to-income ratios.

CK: With the rise of NFT & Crypto how will this impact the mortgage industry? 

RM: I think it’s going to be something that’s here to stay and a large part of first time buyers are going to be utilizing it in some way, shape, or form with their down payment.

CK: What are points and how do they work? 

RM: Points are a part of your closing costs, and it is a fee paid at closing to buy your interest rate down for the life of your loan. Think in terms of time value of money, meaning if 1 point is $4,000 and it saves you $40 per month, it would take you approximately 100 months to get your money back. If you think you’ll be in this same loan for longer than that, it makes sense to explore; but if you do not, you never receive the benefit of the lower rate.