Could you answer more than 100 questions about closing mortgages to a group of total strangers on the Internet?
Well, that’s what Reddit user LoanManGuy asked for and received.
For the uninitiated, Reddit is a share-and-chat website that offers regular “Ask me anythings” where specialists avail themselves to users to share knowledge.
The site is heavily moderated and LoanManGuy would’ve provided proof of his/her mortgage lending prowess.
Here's the intro post:
"Loan Man Guy here to answer your mortgage related questions. Entering my 11th year in the industry, Top 1% Loan Originator in US. Happy to share my knowledge and industry expertise. Ask me anything!"
Here's one such question from the hundreds of comments:
I’m trying to figure out my best option for purchasing my first home. My parents are both currently working in a different state, but intend to retire and move in with me once I purchase a home. They intend to co-pay the mortgage before and during their residence with me. There will be a couple of months gap between their residence because they will have to navigate the retirement process and sell their house.
co-sign, co-borrow, written lease agreement, fha, conventional, homeready?
About the area
FHA loan limit for my area is $295,000
HomeReady income limit for my area is $67,000/year (my income around $60,000)
General price range for suitable house $300,000 to $350,000
Anticipated mortgage $2,200-$2,500/mon with 5% down
And here is the answer from LoanManGuy:
"Yeah just sounds like a basic non occupying co borrower situation to me. Or parents could even buy it as a second home more than likely. You can do a Conventional loan in either case. This is an easy one assuming you all qualify with income/credit. You'll just need to get an application going so we can look at the debt to income, credit, etc and tell you what the best option is."
What do you think of his answer? Is this AMA actually benefiting the potential homeowners? Or how about this part, where LoanManGuy goes so far as to predict the next housing downturn in his answer.
Here's the question:
What do you know about the chenoa loan and it’s rates? Is it better to go through chenoa vs saving a down payment? For context, I’m in a MAJOR growing city and the homes are overpriced and sell fast. I’d hate to wait another year for the rest of a down payment and then not be able to afford what’s out there
To which LoanManGuy replies:
I know quite a bit about Chenoa and the rates stink compared to just coming up with 3.5% on your own for FHA or as low as 3% for Conventional.
In my opinion, housing prices can't continue to increase without a stabilized correction. Within a year to 18 months I predict a downturn in housing prices in most to all markets. It might not be a terrible idea to wait and save up a few bucks incase that happens.
Or I could be wrong and housing continues to climb for the next 10 year's without interruption and we all pocket thousands in equity. Who knows.
Either way though...Chenoa isn't the best option. I was really excited to offer it at first for my clients until I saw the rates and then was really disappointed.
Judging by the volume of questions and comments, and how basic most of them are, there is clearly a lack of mortgage education out there for the general public. Let's hope more efforts such as this will come along to help assuage the public's ignorance on mortgage lending.