Did You Do a Year-End Review of your Business?

Did You Do a Year-End Review

of your Business?

For many businesspersons, the end of one year and the beginning of the next signals the need for a year-end review.  And while I always conduct such a review of my own business, I typically don't share my findings publically.  

But this year, I'm going to speak of my results, as I was somewhat surprised by what I found during this annual exercise.  Very pleasantly surprised in one specific category.  

I definitely recognized that changes were taking place, as a many of the Chicagoland housing markets have healed to a good degree since the housing and economic downturn of the mid-2000's.  I was expecting that my business would reflect that better health.

But I truly had not realized that my personal business was subtly but steadily evolving throughout the past year to a noticeable degree too.  I guess I was "head-down-blinders-on" while concentrating on delivering Closings for my clients.  

One of the ways I categorize and analyze my database is by Loan Type ... that meaning Jumbo Loan, Conventional, FHA, VA, and "others" (in-house Portfolio).  While I had noted that the majority of my clients had held higher Credit Scores than those of previous years, I had not realized just how much those Scores had improved.  Or how those improvements had resulted in real change taking place throughout the year. 

The number of closed Conventional Loans reflected the starkest improvement and growth.  There was a marked shift away from FHA loans.  

Many of my clients that might have gone FHA previously had this year qualified for and taken advantage of the Fannie Mae "HomeReady" or the Freddie Mac "My Community" Program.  In many of these cases, my clients could qualify (and thus choose) between an FHA and HomeReady Loan.

As a refresher, here's a breakdown of the features of each kind of loan:

     FHA Requirements:

• 3.5% minimum Down Payment
• Typically has lower Credit Score Requirements
• Higher Monthly Mortgage Insurance payments
• When placing less than 10% Down, offers "life of loan" (30 years) Mortgage Insurance

     "HomeReady" (Conventional Loan) Requirements:  

•  3% minimum Down Payment
• Slightly higher Credit Score Requirements (than FHA)
• Lower Monthly Mortgage Insurance payments 
• MI payments that can, and typically do fall off after 8, 10, 12 years of payment when the original Loan is paid down to 78% - 80% of the initial Purchase Price

Note:  When considering the utilization of each the above, a study is performed.  Then comparisons are made showing the benefits of using the FHA Loan VS "HomeReady" Loan.  As in every case, Credit Scores, Down Payment amounts, Loan amounts, Debt-to-Income Ratios, can and do affect the cost of the Monthly Mortgage Insurance Payments.   

This side-by-side comparison between FHA and Conventional "HomeReady" or "My Community" loan is then presented to the Borrower for their consideration.  At this time, I also deliver my recommendations as to which Loan Program I project would lead to the most beneficial results.  

The criteria considered most heavily is: 

• Which loan type produces the highest likelihood of a successful Loan Closing? 
• Which loan type provides the best financial choice/results for my Borrowers ... both in the short-term and long-term?  

This comparison is also made:  

• Monthly Payment(s) VS Projected Stay in the Home  

What I typically found was that home buyers holding an FHA Loan and choosing to stay in their home were likely to pay more than those holding a "HomeReady/My Community" Loan ... due to their ongoing Monthly Mortgage Insurance payments (currently FHA's policy).

All of the things mentioned above contributed greatly to the shift I saw in my mortgage business.  And I felt good about that.

Why?

My clients, after receiving the facts regarding their individual financing scenario, clearly understood their choices well.  They had obviously listened, studied, and learned the pros and cons of each option presented to them.  That had resulted in them choosing the loan type they were most comfortable with and felt best represented a beneficial financial path for them moving forward.  Gotta love that ...

There were many positives to be found in my year-end review.  They're also encouraging signs as we enter 2018 ... for my clients, the overall economic outlook, and myself. 

Did you conduct a Year-End Review?  If so, what interesting trends and results did you find?

If in need of financing information/advice or thinking about buying or refinancing a home in the New Lenox - Will County/Chicagoland region, Illinois and Wisconsin ... contact me at your convenience at any of the following:

Gene Mundt

Mortgage Originator  -  NMLS #216987  -  IL Lic. 031.0006220  -  WI Lic. 216987

American Portfolio Mortgage Corp.

NMLS #175656

www.genemundt.com 

815.524.2280 

708.921.6331

gmundt@goapmc.com

Fax:  815.524.2281

   

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking: 

Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago 

and the greater Chicagoland region, including: 

The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, 

Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, 

Romeoville, Naperville, etc.), DuPage County, the City of Chicago, 

Cook County, and elsewhere within IL & WI.

Your Referrals are Greatly Appreciated and Welcomed!