VA Loan Updates

Have preapproval? Will show houses.

That’s the mantra most Realtors live by when taking buyers out to look for a house.

“Most Realtors, at this point in time, won’t even talk to anybody until they have been preapproved,” said Glynis Hyde of AmSouth Mortgage in Mobile. “It’s too expensive. With gas prices right now, they don’t want to carry people all over town and then come in and find they cannot be approved for that amount.”

The first stop, especially for first-time home buyers, should be to a mortgage lender or banker, according to real estate agents and lenders.

“Until the lender runs that credit score, the agent is not sure what program is best for that person,” said Anne Powell, director of career development at Roberts Brothers in Mobile. “We need to know before we start showing them houses.”

Lenders will walk newcomers through the process — and the paperwork, Hyde said. “Even though it’s 100 times better than 10 years ago, there’s still a lot of paperwork to sign,” she said. “When they look at that, they get a little freaked out. My job is to make sure that the person walks out of the closing happy and has understood what happened.

“You’d be surprised the people who call me to refinance and say they got a notice and didn’t know they had a balloon note or an ARM (adjustable rate mortgage). It was probably disclosed, but it simply went over their head, and they didn’t get it.”

Lender Ken Cramton said his company has tried to discourage customers from taking out the more volatile loan products such as adjustable-rate or interest-only programs.

“In many cases, what was very attractive to them is now a burden for them,” said Cramton of Home Mortgage Company in Fairhope. “They have to bail out or refinance with a more stable, conforming loan. We’ve helped some people get out of them.

“For people making purchases, the fixed rate is still under 6 percent and historically, that’s pretty doggone good.”

The 30-year, fixed-rate mortgages averaged 6.14 percent as of Nov. 30, down from 6.18 percent the previous week, according to mortgage giant Freddie Mac. The 15-year fixed rate averaged 5.87 percent.

With so many loan programs available, buyers should work with a lending expert to find what will work best for them — and their budget, lenders said.

“I’m working with a first-time buyer now and she’s getting so much information from so many directions — mom and dad, neighbors, people at work,” Hyde said. “That can be good and bad. We told her we need to do FHA (Federal Housing Administration), and she hangs up and calls dad and he says, What about VA (the Veterans Affairs loan program)?’ She’s never been in the military.”

Even experienced agents and real estate educators talk to their lenders first, according to Powell.

“When I go to buy a house, I call my lender a month to six weeks ahead of time,” she said. “If my children were buying for the first time, I’d have them call a lender six months ahead of time. I have saved thousands of dollars because I’ve had good lenders.”

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