Buying a house in Maryland - Financing

When buying a home in Maryland, one of the key factors is always and forever going to be financing. How are you going to pay for the house?

I'm Mac McCord with RE/MAX Realty Center. I'm a licensed real estate agent in Maryland and Washington, DC. This YouTube channel shows young professionals and growing families how to buy and sell homes in Germantown, Maryland. Subscribe and follow the journey.

If you got straight cash, more power to you because homes aren't cheap, not here in Maryland, and especially not in Montgomery County, Maryland. But there is help available for homeowners that are looking to make it a possibility. So a lot of times that comes in the form of other people's money or OPM. So usually when you go to other people and you're looking to borrow their money, they are going to do their due diligence. They're going to do their homework on you. So they're going to ask you for things like your credit score, your credit history. They're going to look at what your employment is to make sure that you have a job. They're going to want to see tax returns to make sure that you've made whatever income and that you've reported the same numbers to the IRS. They're going to look at how much money you have in the bank, and they're also going to look at your debt to income ratio, so how much money is going out versus how much money you got coming in.

Where are the best places to find a lender? Well, the best place is to ask your realtor. Realtors typically work with lenders on a pretty regular basis so we build a rapport and build relationships with mortgage lenders. And based on those relationships, it gives us certain access to them. Sometimes people like to use a national lender, so the big banks and some of these different dot-com mortgage companies that you see on TV and online and all that other stuff. If you can get good money and they can get you the terms and all that other stuff that you're looking for, I say more power to you. In my personal experience, utilizing a local lender has its advantages. We have access to them sometimes outside of the normal business hours. So sometimes when you go into your big chain bank, or sometimes some of these online dot-com mortgage lenders, you don't have the same level of contact with them.

So if your lender has the typical business hour, nine to five job, Monday through Friday, and sometimes on Saturday, but if you see a place on Sunday and you need a pre-approval letter because you're looking to write an offer, sometimes that can't wait until Monday at 9:00 AM to get that pre approval letter if you want to submit an offer on Sunday. In real estate, time is of the essence so things need to be done fast. So just be cautious if you're going to utilize, whether it's a local lender or a national lender, just make sure you have access to those loan officers.

Some of the perks of using a local loan officer is the simple fact that they usually have a great rapport with the realtors. So like I said before, sometimes I can text at 9:00 PM and get an answer that night. Your local lenders will usually have knowledge on any local, whether that is city, county, or state specific loan programs. So they're a good resource to have because they have options.

This is what I'm talking about when I talk about options. Home Advantage is a program that is exclusive to Prosperity Home Mortgage. Basically what it does is it gives you a second mortgage on the property that is up to 5% of the purchase price, and that money can be utilized towards down payment and closing costs. So it's not just for first time home buyers. That second mortgage is forgiven after five years. So if you live in that property more than five years, you never have to worry about paying back that second loan.

And the other cool thing about it, it's a fixed FHA loan. A fixed FHA loan means that your principal and your interest, it isn't ever going to change for the life of the loan. So if it's a 30 year mortgage and your principal and interest is 1,000 bucks a month, for 30 years, 1,000 bucks a month, that's what's going to get that thing paid off. And that's just a program that Prosperity Home Mortgage has.

Other lenders should have access to programs like the Montgomery County HOC program. They're going to have access to statewide programs too like the Maryland Mortgage Program. So these are just a few options that local lenders have.

Pre-approval matters. In a market like this, where time is of the essence, you don't have time to wait a day or two to get a pre approval letter. So you always want to make sure that you're pre approved before you go out house hunting because if you find the one, you're going to want to write an offer that day. If you have to track down all your paperwork and go through the whole pre approval process, sometimes that takes days to get all that stuff together. So being pre-approved before you even get out there, it's a lifesaver.

Even better than pre-approval? A full fledged loan commitment. Utilizing that really helps you, gives you the leg up, because it tells the seller that, "Hey, this isn't just a pre approval, I've already gone through underwriting. Now all that we're waiting for is title work for the most part and I've got the funds in hand to go buy this property."

And if you want to learn more about the home buying process, make sure you check out the complete guide to home buying!

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My YouTube channel is to teach young professionals and growing families about buying and selling houses in the DC Metro area, with a focus on Germantown MD. I release videos on a weekly basis so watch as many videos as you'd like and let me know how I can help.

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Buy a house for $0 down with Home Advantage:
https://mccordrealtor.hubspotpagebuilder.com/home-advantage

10 ways to save for a downpayment:
https://www.mccordrealtor.com/how-to-save-for-a-down-payment

The complete guide to home buying:
https://www.mccordrealtor.com/home-buying-101

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-Mac

William McCord III
McCord Realtor LLC
Direct: 240-801-5770
Email: mac@mccordrealtor.com

REMAX Realty Centre
Office: 301-591-3920