If you’re looking to buy a home, how you start the process will determines how successfully it ends. If finding your dream home seemed simple enough, securing a pilot-friendly lender and the ideal mortgage can be challenging. However, with the right team of professionals and some insider tips, getting into your new home can be smooth and stress-free.
An overabundance of advice has probably already fallen at your feet for finding the perfect home, so this article will focus on lesser-known mortgage facts. Specifically, we’ll discuss tips to help pilots secure an ideal mortgage while avoiding traditional lending pitfalls.
Whether you’re a new-hire airline pilot or a seasoned veteran, entering the process with the right team of real estate professionals should be step-one. Without the right team on your side, you likely won’t get the service a professional pilot merits. Being a professional pilot is one of the greatest jobs in the world, but unfortunately, few outside the industry understand our schedules, how we are paid, and how our contracts work. As a result, we can lose buying power, or worse, be disapproved at the last minute by unfamiliar underwriters frustrated by trying to decipher our pay-stubs and/or contract. The last thing you want is to watch what should be an exciting transition for you and your family end up turning into a nightmare.
From the very beginning, the most important thing you can do is to partner with a mortgage lender who understands a pilot’s life. Regardless of whom you ultimately go with, your loan officer needs to understand your schedule and have underwriters who understand how to translate pilot pay. You should start this relationship-building process early so that you are “ahead of the jet.” We’ll continue with the flying metaphors and throw out this further advice: Throughout the process you need to be “flying the plane (mortgage) and not allowing the plane (your lender) to fly you.” The best way to do this is to get started about three to six months before you would like to close on a new home. Otherwise, with the wrong lender, a loan officer could navigate you into some moderate to heavy turbulence.
At this point, don’t worry about credit-pulls or long applications. All you’re looking for is a good lender who has experience doing mortgages for professional pilots. They should understand our lingo and schedules. If a lender thinks you’re a part-time employee because they see that you only work 85 hours a month, don’t even bother to shoot that approach. It’s time to divert. A good lender should also be able to give you a general idea of interest rates and fees based on some simple information you provide them, such as loan amount, your credit score, home location, veteran status and anticipated down payment.
Once you’ve vetted a lender, rinse and repeat with a few others to compare your options. Interest rates can vary significantly from lender to lender, so don’t stop with the first one you find. Frequently, big banks are the first lender called but they also have the highest overhead which translates into higher interest rates, and ultimately, more money out of your pocket. Every day, I see a .375 to .5% higher interest rate offered by two of the largest mortgage lenders in the country when compared with what smaller mortgage companies are offering on the exact same product. It may seem like a small gap, but rate differences like that can cost you tens, if not hundreds, of thousands of dollars over time. Bottom line — find a pilot-friendly lender early in the process that offers great rates and will answer when you reach out.
Professional pilots are not part-time burger joint employees. You have earned the right to be treated as the professional you are, just like any doctor or lawyer. Don’t settle for a subpar experience or a go-around with the wrong lender. Your home and your money are too important to allow someone who doesn’t understand your profession to give you bad vectors.
The next article in this series will pull back the curtain (or remove the cowling) on how mortgage rates are determined and what you can do to get a better deal. In the meantime, I invite you to contact me with any questions at jk@mythl.comor on my cell phone, at 850-377-1114. I’m always happy to help a fellow pilot navigate the mortgage process.
