Mortgages Built to Order

Jeri Ott, Vice President/Mortgage Loan Originator

Jeri_OttWhen it comes to residential mortgages, most banks offer the same lineup. These off-the-shelf solutions are structured to conform to the mortgage agencies’ guidelines (Fannie Mae and Freddie Mac) so that they can be resold in the secondary market.

As a borrower, this means if your property or financial situation does not conform to these standards, your mortgage request will be denied.

We Do Things a Little Differently
Although we sell some of our conforming mortgages on the secondary market, Old Second actually holds many of the mortgages we originate for our own portfolio.

We do this, in part, because properties in this area tend to be larger and many are income producers, such as farms and equestrian estates. These types of properties don’t qualify for conforming mortgages.

Borrowers who buy vacant land with plans to build their dream home also have trouble obtaining conforming loans. In these situations, not only do we lend, we don’t require our borrowers to offer additional assets to collateralize the loan over the lot’s value. When it comes to construction loans, we’re able to lend 80 percent based on the appraisal of architectural plans. This opens up the option of new construction to more people. We also allow our borrowers to be their own general contractor, which can offer additional cost savings when building on a vacant lot.

Keeping It Local
When we do hold a mortgage for our portfolio, we also service the mortgage. While few borrowers still make their payments at the local branch, borrowing locally means if any questions or issues arise, you know exactly who to call. That accountability is extended to all of our customers, even if we didn’t originate the loan and don’t service it. Advocating on their behalf by jumping on a call with their servicer or escrow agent to clear up an issue—when asked and when appropriate—is just something we do.

While a portfolio loan can be suitable for some borrowers, it may not be the right choice for everyone. Applying for a mortgage just isn’t a situation where one size fits all. That’s why it’s important to sit down with a lender before making any decisions. We can look at your whole picture and help you choose the right mortgage type for you and your property. After all, the costs associated with each loan type can have a significant impact on your finances not only today but also for years to come.

Present at Closing
All of our residential closings are held in our local branches. This way we can literally stay with each mortgage until it’s completed and funded. If last-minute questions arise or documents need amending, we can address them within minutes.

For more information on the different types of loans we can offer, download this handy comparison chart. Then, call us. We look forward to sitting down with you and talking things through so that you choose the best loan structure for your situation.

 

7 Stress Relief Tips for First-Time Home Buyers

Phillip DeLaFuente, Vice President/Mortgage Lending

PDeLaFuenteAs exciting as buying a new home is, it can be highly stress inducing. While we do our best to reduce the worry related to the mortgage process, here are seven common stress points and our tips for minimizing them.


Tips for Minimizing Home Buying Stress
           

  1. Your credit score. As soon as you find yourself thinking about home ownership, request your FICO score…and that of your co-borrower. Many credit card companies now supply this to you when you go online and sign into your account. It’s also something mortgage lenders can get for you.Knowing the score is important because it determines how much your mortgage will cost you. Generally, if your score is near or below 660, you may not be able to access favorable first-time homebuyer programs, like those provided by the Illinois Housing Development Authority (IHDA).

    Scores, however, are not set in stone. Talk to your lender about what you can do to raise yours before applying for a mortgage.

  1. Potential borrowing limit. Before you look at houses, it helps to know which ones you should be looking at. Getting prequalified for a mortgage lets you know how much house you’ll be able to afford.Prequalification involves sharing your tax returns and paystubs with your lender and discussing your outstanding debts (car loans, credit card balances, etc.) and other commitments on your income (such as child support). If your income is a little low or your debt too high, your lender can offer suggestions for improving your debt-to-income ratio before you apply for your mortgage. 
  1. Affordability. Don’t mistake the most you can afford with what you’ll feel comfortable paying each month. Remember, as you move through life, your expenses and priorities will change. Choose the monthly payment that will cause you the least amount of financial stress, rather than the maximum amount you can borrow.
  1. New debt inquiries. Once you’ve been prequalified for a mortgage, don’t apply for any new debt, such as store credit to finance furniture purchases. That could throw off the debt-to-income ratios that were used for the prequalification. New inquiries will also lower your credit score. If it’s unavoidable, be upfront with your lender. Bankers hate surprises.
  1. Down payment. Knowing where the money will come from well in advance will significantly reduce your stress. Money for a down payment can be borrowed, but it has to be from a collateralized loan from an asset such as a 401k retirement account, which is why your lender will request that you document the source. It can be cash, as long as that cash has been “seasoned,” meaning it has been in your bank account at least two months. If it’s a gift from relatives, there needs to be a written statement from them saying as much.
  1. Closing costs. The most stressful phase of a home purchase is the last. There are many moving parts that need to come together for the transaction to close. Recent regulatory changes now provide you with your closing statement three days prior to closing. This gives you time to deal with any last-minute details, like the amount due for any prorated real estate bills and fees.
  1. Not knowing what you don’t know. The best way to manage home-buying stress is to talk to your lender. We’re as interested as you are in making the transaction go as smoothly as possible. Never hesitate to give us a call.

Old Second Bank: Home Equity Loans

Want to remodel your kitchen, take your dream vacation, upgrade your old car and get a new one? What’s stopping you? If you need the money, our home equity loans just might be the answer.

Newlyweds Jackie and Jeff are expecting their first baby and with the news, they found themselves in a 9-month time and money crunch to get things finished around the home. That’s when they turned to us. By taking a home equity loan, Jackie and Jeff were able to ease their minds and begin remodeling their kitchen before their baby girl arrives. By applying right away, they also received a special bonus!

Find out how you can apply for a home equity loan and get one step closer to your dreams. Visit us at:
http://www.oldsecond.com/loans/home-equity-loans/

 

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