‘It should not be a stress­ful process’

GA Voice - - Outspoken -

The head­lines of a decade ago told the de­press­ing tale: a rash of fore­clo­sures, aban­doned homes across the na­tion and the crash of the mort­gage in­dus­try. One rea­son for that was lenders of­fer­ing riskier and riskier loans to more and more bor­row­ers, then the bot­tom fall­ing out.

“Ev­ery­thing goes in cy­cles. It was the wild, wild West for a while,” ex­plained Michael Lap­pin, co-owner and mort­gage loan orig­i­na­tor at Buckhead-based Stel­lar Mort­gage Cor­po­ra­tion. “It used to be very strict, and over time that eased. There’s a role in the gov­ern­ment en­cour­ag­ing peo­ple to be home­own­ers, so they back a lot of these mort­gages and they ease a lot of the re­quire­ments so that more peo­ple can get into a home. Then the mar­ket be­gan to get too loose around 2007 or 2008.”

Lap­pin said home loan re­quire­ments be­came too re­stric­tive in the years that fol­lowed, but that things have lev­eled out and found a sen­si­ble mid­dle ground.

“We can do a lot of loans now. We have tremen­dous flex­i­bil­ity,” he said, adding that it’s not a prob­lem if a first-time home­buyer doesn’t have 20 per­cent of the loan to put down, or if they are self-em­ployed. “It’s all nor­mal stuff that we do.”

First-time home­buy­ers or re­peat home­buy­ers who haven’t gone through the process in a while might be ner­vous or un­sure of the process, but it’s not as com­pli­cated as it seems.

Get­ting qual­i­fied and shop­ping for prop­er­ties

“The first thing that peo­ple should do is re­ally un­der­stand their own bud­get,” Lap­pin said.

How much do you make? How much do you spend and where do you spend it? What kind of monthly pay­ment are you com­fort­able pay­ing (mak­ing sure to in­clude not only the mort­gage pay­ment but as­so­ci­a­tion fees if buy­ing a condo, taxes and in­sur­ance).

The next step is find­ing a loan of­fi­cer or loan orig­i­na­tor and hav­ing a con­ver­sa­tion about your goals, time­line and your over­all fi­nan­cial picture so that they can fig­ure out the right loan pro­gram to put you in. After that, it’s time to fill out an ap­pli­ca­tion.

“That’s re­ally our roadmap to fully un­der­stand­ing their fi­nan­cial po­si­tion,” Lap­pin said. “Once we do that, we can get a credit re­port, be­cause a lot of rates are credit-sen­si­tive, and then we can re­ally start to get some very spe­cific num­bers put to­gether for some­body. That way they are shop­ping in the right price range for a home.”

After get­ting qual­i­fied, that’s when it’s time for what most con­sider the fun part – shop­ping for a home. That’s a good time to make sure your loan of­fi­cer and real es­tate agent are on the same page.

“I like to work with the agent in a col­lab­o­ra­tive way, so if I don’t know their agent

April 14, 2017

al­ready, I al­ways ask for an in­tro­duc­tion,” Lap­pin said. “Then we have a con­ver­sa­tion about how we want to ap­proach the of­fer. To­day’s mar­ket is pretty com­pet­i­tive, so ev­ery seller is look­ing for a pre-ap­proval let­ter for peo­ple mak­ing an of­fer. We have to work to­gether to put all that to­gether so it’s a strong, ac­cu­rate of­fer for the client.”

Once an of­fer is agreed upon and the home is un­der con­tract, the mort­gage process be­gins.

The mort­gage process in­volves a lot of pa­per­work, but luck­ily it be­came au­to­mated over the years.

“Most of it is elec­tronic and it’s pretty stream­lined,” Lap­pin said.

The loan of­fi­cer col­lects all of the pa­per­work and sub­mits it to an un­der­writer, who re­views the doc­u­men­ta­tion to make sure noth­ing is miss­ing. Once the un­der­writer ap­proves, it’s time to or­der an ap­praisal on the new home. If ev­ery­thing checks out, a clos­ing day and time is sched­uled with a clos­ing at­tor­ney. But what about po­ten­tial is­sues at the clos­ing ta­ble?

“Be­cause of com­mu­ni­ca­tion through­out,


there shouldn’t be any sur­prises,” Lap­pin said. “By the time we get there, we should have the dis­clo­sures and they should match back to the orig­i­nal es­ti­mate.”

A real es­tate clos­ing typ­i­cally takes about an hour, where all par­ties re­view the num­bers one last time be­fore sign­ing on the dot­ted line, mak­ing sure ev­ery­thing is cor­rect, then the bor­rower get­ting the keys to their new home.

“It should not be a stress­ful process,” Lap­pin said. “When it’s done right and the com­mu­ni­ca­tion is there, peo­ple get to the clos­ing ta­ble and it’s just a nice time to meet the sellers, talk about the neigh­bors, find out what day trash day is, if you’re in a condo find out if you need to walk your dog in a cer­tain place. It’s re­ally about in­for­ma­tion shar­ing and sign­ing some pa­per­work.”

And what about those who aren’t ready to buy yet, but want to in the next cou­ple of years?

“The most im­por­tant thing is to pay all of your bills on time and to make sure you pay all of your in­come taxes, and to de­clare your proper in­come,” Lap­pin said. “Get your fi­nan­cial house in or­der. Save money for a down pay­ment, make sure that you pay ev­ery­thing on time, doc­u­ment what you’re do­ing and keep good records.”

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