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Getting a Home Loan - Interview with Kevin Pierce, Senior Loan Officer
With real estate markets rebounding, we are fielding a lot of questions with regard to financing options and how they may have changed with the new regulations. We sat down with Kevin Pierce, a Senior Loan Officer with Real Estate Mortgage Network (REMN), to get the scoop. He also offered great tips for first time home buyers to secure their first mortgage loan.
Bamboo (B): Tell us about you. How long have you been in the mortgage industry?
Kevin Pierce (KP): I have been in the Mortgage business 7 great years, and I have seen the ups and downs! I started when Sub-Prime Loans were booming. My processor (who is my backbone) has 19 years of lending experience – 11 in residential mortgage and 6.5 years in commercial lending.
B: What types of mortgage loans do you work on?
KP: We do FHA loans (203B, 203K, and Full 203K)—some down to 600 credit scores—as well as veteran loans, conventional loans, Native American loans, ARMS, investment properties, second homes, jumbo loans, USDA loans, and land loans. We also have the ability to do some commercial loans as well.
B: For those considering a home purchase, why is now the right time to buy?
KP: The first reason I would say the time is right to buy is because the rates are extremely LOW. The second reason is because most economists would tell you this is a buyer’s market. The third reason is because the tax incentives for having a house of your own versus renting are at an all-time high.
B: We’ve been hearing a lot about interest rates lately. Are they really at historic lows? And how long do you expect them to stay?
KP: The rates are at the lowest I have seen them in the seven years I have been in this industry. For example, if you were going to get an FHA loan with decent credit (640 and up), your rate would be somewhere around 3.75% with an APR of around 4.852% on a 30-year mortgage. With the rates being this low and FHA being assumable, you could purchase a house, sell it in 10 years, and give your buyer this rate of 3.75% (a rate which we believe will not be available in 10 years). We expect the rates to stay at these levels for at least another year, and possibly two years.
B: For someone purchasing a home, how does a change in interest rate impact their payment?
KP: For someone buying a $200,000 home (FHA) and putting down 3.5% or $7000, their payment at 3.75% for 30 Years would be around $909 a month before taxes, home owners insurance and mortgage insurance. If you bought the same house at say 4.75%, your payment would be $1024 a month. So, as your interest rate goes up by one percentage point your payment goes up by around $120 per month.
B: You work with a lot of first time home buyers. What are some things you enjoy about working with them?
KP: I LOVE when I can make people SMILE; it makes me feel great. Many of the first time home buyers don’t believe they can purchase a house until we get them to the finish line and they close, which is also an incredible feeling. I really enjoy making first time home buyers realize their dream of owning a home. I feel like everyone out there should have the chance to own their own home.
B: Can you give us a brief overview of the loan qualification process for first time home buyers?
KP: First we will get them to fill out a pre-loan application to see their credit scores, income, work history, residence history, employment history and financial information. This will give us a pretty good idea of what they will qualify for, and help us to determine what documents we will need next. It is a very easy process and takes about 15 minutes to fill out the form and less than 30 minutes for us to run your information.
B: Any pointers for first time home buyers? Are there any pitfalls to avoid?
KP: The best pointers I can give first time home buyers is to make sure they don’t extend more credit, open new credit and make large purchases until the loan process is over (closed and funded). Also, with first time home buyers, it is very important to make sure they have reserves (extra money) in their liquid accounts (bank and savings) so if they should happen to lose their job, they will still have enough money to keep paying the mortgage for several months into the future.
B: For anyone interested in hearing more about first time home buying and qualifying for a loan, how can they reach you?
KP: Anyone can call my cell or on email. My motto is "always available" so feel free to call anytime.
Senior Loan Officer Kevin Pierce with REMN