Welcome to part three of Jim’s experience buying a home as a mortgage professional. Jim has been the industry basically forever. For nearly a decade, he has been the CEO of LodeStar, the leading experts in mortgage closing costs, and he grew up working in his family’s title agency.

 Today we’re picking his brain about the mortgage process and how being the CEO of a mortgage software company helped him navigate the ins and outs of the process.

How did you find your lender?

From the outset, Jim and his wife cared a lot less about sticker price of house and more about monthly payments, taxes, and how those costs are going to change. After that, the next most relevant number was the interest rate of the loan.

To start shopping for mortgages, Jim underwent a prequal and received a quote above 5%. He then used that to shop around. He got a recommendation from the realtor to use a local broker, whose estimate he used to compare other potential lenders. The prequal process allowed him to get an estimate, which he was able to send to other potential lenders. He would show them the broker’s quote and ask, “Can you beat this?”. When no one could, he knew he had the right mortgage. To be sure, he also ran his address through LodeStar, to compare the calculator’s rates with what lenders were quoting.

Not a lot of people shop around and compare rates, which is hugely important.

Two helpful strategies

1) Jim decided on an Adjustable Rate Mortgage (ARM). In fact, he went looking for one from the outset. If there’s one thing about the market that’s constantly reliable, it’s the volatility of rates. They go up, they go down. Everyone likes to brag about their interest rate, but it comes down to what you can afford monthly.

2) Knowing about private mortgage insurance (PMI). If your down payment is below 10%, PMI jumps up in price. So, knowing your budget for monthly payments and weighing that against what you’re bringing to the table for a down payment is crucial.

What can lenders do?

It’s hard to tell MLOs what to do, because anyone who does one thing as much as an MLO does can fall into speaking in industry jargon. In addition to avoiding that when speaking to borrowers, lenders can also focus on benefits of different kinds of loans, instead of just features.

And of course, as proponents of clarity here at LodeStar, we’re big on providing education.

Thanks so much for being tuning in to LodeStar Lending Leaders! We can’t wait to resume our conversations about the mortgage industry and related topics when season 3 begins in September 2022.

To listen to this and other episodes of the LodeStar Lending Leaders Podcast, check out our YouTube channel. Please consider subscribing! It helps us out a lot. You can also find us on Anchor.

For anyone looking to purchase a home in the greater Philadelphia, Jim can’t recommend the following realtors highly enough:

Amanda Benincasa
REALTOR®
Elfant Wissahickon Realtors
P: (215) 247-3600
C: (215) 520-0991
abenincasa@elfantwissahickon.com

Jim Benincasa
Associate Broker
Elfant Wissahickon Realtors
P: (215) 233-3434 Ext. 532
C: (215) 850-6020
F: (215) 233-0903
jimb@elfantwissahickon.com