“It’s not your job to understand, it’s my job to be clear”

It’s a phrase that I use at just about every appointment for a mortgage application, especially when the borrower is a first time home buyer. All too often, we take for granted that the person we are speaking to is hearing what we said when in fact, they heard something else. I can’t tell you how many times I’ve spoken to someone shopping for rates and when they told me about a quote that they got from a competitor and I asked “Were there any points with that rate?” The response is usually “Well, they didn’t mention anything, so I assumed that there weren’t any.” Guess what happens when they call back?

Recently, while attending Sunday mass, our deacon told a story of a member of the German Coast Guard who heard a voice shouting out over the intercom, “Mayday, mayday, we’re sinking, we’re sinking.” The German went over to the intercom, pressed a button and replied “Good for you. Vhat are you “sinking” about?”
It’s very important to be clear on what we say and to make sure that if you as a borrower don’t understand what the mortgage originator says, that you aren’t afraid to ask questions. This is the biggest transaction you will ever have in your life. There are no stupid questions. If the mortgage originator doesn’t want to take the time to answer your questions, maybe he or she is not worthy of your business.

In light of recent news about the mortgage industry, it’s more important than ever to ask questions and be perfectly clear on what you are signing. Are there points, and for that matter what are points? Is this a fixed rate or adjustable? If it’s an adjustable, when will it adjust and by how much? What are the total settlement fees? Many times borrowers will ask “What are the closing costs?” A deceptive rep will not tell you about the escrows for taxes and insurance or other items that might not technically be closing costs. One of the forms that you will sign at an application for a mortgage is called a Good Faith Estimate (GFE). Don’t just sign one, get a copy of it. It will come in handy if there are discrepancies at the closing, although, by law, you have the right to review the closing statement (HUD) 24 hours before the closing.

A glossary of many of the terms in the mortgage industry can be found at www.rickmasnyk.com. If you can’t find what you’re looking for there, ask a question. If you don’t, you could be caught “sinking.”