Bob Barnum knows mortgages. The mortgage broker and owner of Earnest Mortgage, which sits next door to the popular Georgie’s Alibi, has run his business for six years. Many LGBT people have used the company’s services and despite the current, tricky economic times, Barnum says business continues to be good.
Barnum says that staying located in the heart of gay St. Petersburg and Kenwood has definitely helped business, but LGBTs are branching out in St. Petersburg and moving closer to the beaches, along Central Avenue and beyond.
He took a few moments to speak with us about what it takes to obtain a mortgage these days and what potential homebuyers—and those wanting to refinance—need to know before beginning the process.
Is getting a mortgage as scary as the news media makes it seem?
It’s not scary but it’s definitely more of a challenge today. You have to make sure you’re working with someone who knows what they’re doing. There is a lot of documentation involved now. You have to prove that you make whatever your income is, you need documentation that you pay your bills on time and everything has to be exact. It’s more cumbersome and can be frustrating. But if you’re prepared and your broker knows what he or she is doing, it’s not scary at all.
What do people need to know about obtaining a mortgage in today’s market?
The first thing you need to do is check your credit report. Look for any blemishes. You also need to have your down payment in line. If it’s coming out of your IRA or a 401K, have that documentation intact. It can’t just appear; it must be sourced.
Basically you need to do a financial tune up before beginning the process.
Do you recommend that partners apply for a mortgage jointly, or is it easier to have just one name directly involved?
That’s a yes and no question and a touchy subject. Co-borrowers can be same-sex couples or just friends. So it doesn’t matter and it really is based on credit and income. What’s unfair is that a married heterosexual couple in Florida can just have one spouse on the title and still use the other’s income. If something happens to the spouse on the title, the property transfers to the surviving spouse. Unmarried couples can’t do that. It’s very discriminatory.
When someone is determining what an appropriate mortgage would be, what factors should they consider?
I always tell people that the amount they qualify for and what a monthly payment should be are two different things. You may qualify for a higher payment than what you really should have and it’s really about affordability. Most people know what they can afford each month. You have to look at your disposable income and how much is left after everything has been paid. Consider your paychecks and the other home essentials like electricity and food. If you’ve been renting and paying a set amount and you don’t have a large savings account, you probably want to keep your mortgage payment about the same as what you’ve been paying in rent.
Television ads used to talk about banks and lending agencies competing for loans. Is that still how it’s done or do customers just have to go with what’s offered in today’s market?
The loan business is very competitive but a lot less people are in the mortgage industry now. Unfortunately, with the TARP funds, they’ve created a huge monster called Bank of America Mortgage. BoA bought Countrywide, and Wells Fargo is also huge. It all boils down to service. Sometimes we can do better than the big boys and sometimes they can do better than us. You have to work with someone you feel comfortable with—but either way you will get paper-worked to death. Everything is about disclosures.
The good thing is that interest rates are incredibly low right now and we can get fixed rate 30-year loans below 5%. Five years from now that will be an amazing bargain.
So there are fewer options out there, but for an owner/occupant in a primary residence, there are great options. For investors, there are fewer options.
Credit is obviously a factor in obtaining a mortgage. What minimum score do customers typically need to qualify?
A 620 score is the lowest. It’s usually very hard to get approval with anything below that but it’s not impossible. It’s always good to speak with more than one person when you’re looking for a loan. When one person says they can’t help you, another company or broker may be able to. So if you get a no, it doesn’t mean the process is done. Don’t be afraid to get a second opinion.
Where are LGBTs buying these days?
We’re moving along Central Avenue from downtown all the way out to the beach. The Tyrone and Eagle Crest neighborhoods are seeing an influx of LGBTs, and First and Second Avenues south and out to 22nd Avenue N. are also seeing an influx. People are looking at block homes from the 1950s and really looking at terrazzo floors. That’s the popular thing now.
If someone wants to refinance a mortgage, is now a good time?
If you have equity, yes. The rates are very low and as long as you’re not way past due on your payments, you can get some good rates.
