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Understanding Which Home Mortgage is Right for You

By Dirk Postupack

Tell us a little bit about your experience, company history and the services you offer.

I have been in the mortgage business for 14 years now. I have worked as a Loan officer, Account executive, and owned my own company as a mortgage broker. I have spent the last 3 years working at Allentown Mortgage, which has just celebrated its 20th anniversary on April 20th, serving the Lehigh Valley and its surrounding areas. We are mortgage brokers, offering a variety of mort\gage products such as conventional fixed & adjustable rate loans FHA, VA, USDA, Homepath HARP, and "turn key" construction loans.

What is one of the most important things for potential homeowners in ___ to know when they're starting to look at the different types of home loans?

Find a mortgage broker that will explain different options for the borrowers. Explain your situation thoroughly to the broker so that he has a clear concise picture of your financial situations and also your wants and needs. Don't leave any details out and be upfront about any potential pitfalls that your situation may present to obtaining a loan. Get all financial information together and make sure it is complete, i.e Bank statements should contain all pages. If it says pg 1 of 6 we need to see all 6 pages.

Is there a common misconception about mortgages that you've seen first-time home buyers have?

The most common issue we run into is a money issue, especially pertaining to sourcing of funds for a loan and down payments. Some borrowers believe that they can just put money into their bank account, (mattress money) or borrow (get gift funds) from just any Tom, Dick or Harry. Lenders want a paper trail of funds coming into the borrowers bank accounts, so if a borrower makes a counter deposit in cash of lets say $ 900, the lender will want to know where that came from. If any funds are going to be gifted there is a certain and precise way to paper trail the transaction to make it easy for the underwriters to understand.

How should people approach trying to understand the types of loans that are available to them and deciding which one is the best fit?

The best suggestion I can give to these borrowers is a self examination of how financially disciplined they are. If they are not disciplined with their finances then it is probably not a good idea to look at an adjustable rate or any other crazy program that is out there that will get them into a home. Most loans that we do are the standard 15, 20, or 30 year fixed rate mortgages. They are not too difficult for the borrowers to understand how they work as far as the terms and conditions.

What are two or three of the most common types of loans that people apply for in ____ and the main benefit of each one?

The 2 most common types of loans that are used in todays Purchase market are the Conventional 30 yr fixed, and a FHA 30 yr. fixed due to the borrowers not having a lot of money in the bank to purchase a home.

There are pro's and con's to each of these products. The conventional loan requires a minimum of 5% down and must be borrowers owns funds, and must be in their bank account for at least 2 months and the sellers may give a 3% seller assist toward closing costs. Rates are slightly higher than the FHA loans, but the monthly PMI payment will be less per month than that of an FHA loan. FHA loans require 3.5% down, can be a gift, and will allow the seller to contribute 6% towards the closing costs, and interest rates are slightly lower, however the Mortgage Insurance premium is substantially higher than that of a conventional loan and is there for the life of the loan whereas the MI on a conventional loan will usually be there on an average of 9-11 years buy making normal payments. There are circumstances where the MI on a conventional loan can be removed earlier if the borrower and the property meet certain guidelines.

Overall, the payments usually are pretty close when the 2 loans are compared side by side. Available funds to buy a home, and credit scores are usually the 2 factors that come into play when deciding which is the better option for the borrower.

What advice would you give to prospective home buyers who want a lot of flexibility with their mortgage?

Those days are pretty much done when the payment option ARM's went by the wayside. Todays environment is either a fixed rate mortgage or an adjustable.

What's the best way for people to reach you and your company?

My cell phone which is 610-217-1113 or my email... dirkallenmtg@aol.com

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