Tips on the Mortgage Origination Process with Greg Whiteside

In the latest episode of Real Estate on the Up, I chatted with Greg Whiteside, a mortgage loan originator at Fidelity Mortgage Services with 20 years of experience in the mortgage origination process. 

With the help of his wife Erin, a loan processor, Greg built their family business to help clients with their financial decisions. I met Greg a decade ago, and ever since, he has been one of the professionals I reach out to with my questions about lending processes. Focusing on customer service, he aims to give the best advice on buying a house and getting a mortgage to prospective homebuyers.

Asking him about buying a property in the current market, I learned:

How to Qualify for a Mortgage in the Current Market

According to Greg, there are four areas that a borrower needs to be concerned about as an underwriter is evaluating their file. The first steps on how to qualify for a mortgage are,

Income

Income concerns,

•  The debt-to-income ratio (DTI) is evaluated by the amount a borrower brings into their household and the amount that goes to their debts based on their credit report. DTI is calculated by taking the total of monthly debts divided by income. Your loan program and your credit score number determine the final percentage. DTI, at best, should be at or below 45%.
• The price of the new property also plays a vital role in this process. 
• To meet the loan requirements, a source of income that has been running for two years is essential because an underwriter will overlook your recent sources of revenue.
• Paying some of your debts and ensuring that you don’t get involved in more loans during the evaluation process also facilitates the process. 

After dealing with income, looking into what you consider an asset is essential.

Assets

With assets, you will need money for:

• The downpayment
• Closing costs
• Reserves (the remaining of your money after purchasing the house)

Consider making a downpayment using your retirement savings to become a homeowner. If you are a young individual, consider asking blood relatives for funds. Furthermore, look for down payment assistance programs in your state. 

Down payment assistance programs require class participation and a certificate. Therefore, anyone interested should seek this solution as early as possible. 

You can also compensate for down payments with VA, USDA, and FHA loans. However, these options require paying for private mortgage insurance (PMI). With conventional financing, dealing with PMI can be more manageable.

Other matters that allow you to qualify for a mortgage are credit and collateral (which refers to the property). In summary, like hiring a trainer and following a diet and exercise routine, Greg believes mortgage loans need planning.  

How Early Can I Contact a Mortgage Lender

Discussing the best time to approach a loan originator, Greg believes that despite previous credit problems, getting in touch with a loan originator even 12 months before your loan plan is a great idea.

Otherwise, it would be great for people with financial security to start 60-90 days before purchasing a property. If your lease is running out, starting 3-6 months before is suggested. And if you are living with your parents, a 60-90-day jump start is excellent.

Qualify for a Mortgage with a Co-borrower

Ask high-income relatives to step in as non-occupying co-borrowers, especially with a credit score at your rate or above, which will help you qualify for a co-borrower. Many young people leverage this opportunity to become homeowners at a young age.

Florida Real Estate Market: Future Interest Rates

I understood that, as Greg indicates, interest rates are unpredictable. However, studying the reason behind their high amount could help. One solution to predict mortgage interest rates is mortgage-backed security (MBS). 

As the demand for MBS increases, interest rates go down, and vice versa. In other words, the demand for fixed income is what is going to determine interest rates. 

The Federal Reserve can control inflation, allowing you to use fixed-income sources. Decreased Inflation can also lower interest rates.

The CME FedWatch Tool is a great way to predict interest rate changes. Regarding the consumer price index (CPI), it can reach 3%. 

Florida Real Estate Market Trends to Watch in 2024 and Beyond

The demand for properties is still high despite the rise in interest rates. However, inventory is the only way to keep up with the market demand. There have also been cases of price reduction across Florida, which state that fewer prospective buyers are purchasing properties despite the high demand for new homes. 

Many pre-approved prospective buyers wait for interest rates to drop from 7% to 5% before purchasing their homes. 

Further Insights

To learn more about the real estate industry in Flordia and specifically the mortgage origination process, you can email Greg at [email protected] or find him on Facebook. You can also find him on Instagram. 

For the latest insights on Florida’s house market, join me on the Real Estate on the Up podcast or engage with a broader audience by appearing as a guest on the Icons of Real Estate podcast.