Home Loan Testimonial
In the café where I used to work, conversations always drifted up around me. Whether I was out on the floor filling coffee cups or in the back washing dishes, I could hear the café patrons sipping their drinks and talking about lots of different subjects.
I knew several of the regulars pretty well and could often predict how their conversations would go. Wendy, for instance, was a stay-at-home mom. Her conversations were mostly about her children, her friends and family, or her favorite topic, history, about which she knew quite a lot. Then there was George, a college student who delivered pizzas at night. I knew his favorite subjects by heart as well: politics and theater.
When Stan started coming into the café on a regular basis, I didn't really notice him at first, but soon he became almost as predictable as the other regulars, showing up pretty much every Tuesday and Thursday with a different person or couple each time and always discussing home loans.
The first time I caught myself paying attention to his conversation, he was telling a friend that he could use the equity in his home to pay off his student loans. I heard Stan say, "You have the choice between a closed-end second loan which is a one-time amount with a fixed rate, or you can choose the HELOC. This type has a variable rate, but you'll be able to draw the money out again and again if you need to. " My parents were considering taking out a HELOC, so I knew it was short for Home Equity Line of Credit. That's when I realized Stan must be a loan officer.
My guess was confirmed over the following weeks. On Stan's next visit he had a couple with him who were looking to buy a home for the first time. I caught most of their conversation as Stan explained to them that, depending on how much they
could afford to put down, he could get them a better rate on the loan. He also let them know that if they needed 100% financing, it was available, and that some of the loans he could get offered interest-only payments for several years before the borrower would be required to pay on the principal. That couple seemed most interested in obtaining 100% financing by using what Stan called an 80/20, a first and second mortgage on the same house that would help them avoid having to pay mortgage insurance while still allowing them to finance 100% of the cost of the home. I saw the same couple in the café several months later and heard them talking about their house, so I knew Stan must have been successful in helping them finance their first home.
Most of the time Stan had his clients with him, but one day, finally, he came alone right around lunch time. After giving him his coffee, I had to ask, "Are you a loan officer?" He looked surprised that I knew what he did for a living, but smiled and let me know that he was indeed a loan officer who preferred to meet with his clients outside the office. He told me he thought it helped them feel comfortable and not as though they were being pressured into anything they didn't want to do.
That's when I sat down and told Stan that I was interested in buying a home, but didn't know if I could get a loan, seeing as I made most of my money in tips. Stan explained that there were programs for people just like me called stated income programs. For a stated income mortgage program, I would simply state what I made on average per month instead of having to show pay stubs reflecting my income. Stan told me to be prepared to show my bank statements to back up my claims and I told him that would be no trouble at all. He also asked me about my credit score, and I answered that it had been excellent the last time I checked it.
Stan made sure I knew the basics about home loans, such as the difference between a fixed and an adjustable rate mortgage, the interest-only options available to me that would allow me to have a smaller monthly payment due on even larger loan amounts, and the 80/20 option similar to what the young couple had chosen.
I made an appointment with Stan for the next week to fill out a loan application. I thanked him for letting me know that purchasing a home was something I would likely be able to do after all. Stan asked me where I would like to meet him and I said, "How about your office?" I gestured to the surrounding walls of the coffee shop and laughed, "I could use some time away from mine!"