One of the first considerations when a first responder is looking for a new neighborhood to buy a home is the commute. I mean, in Chicago, where Police Mortgage is headquartered, that’s the biggest thorn in everyone’s side. It’s the same in practically any big city.
You need to ask, “How long is it going to take me to get the work every day?” That depends upon a number of factors. Where do you work? Is it a desk job in a police department? Are you on the beat? Are you a firefighter working 24 for on and 48 off?
However, ultimately it has to do with your family situation. Do you have kids? What does your spouse do for a living? Or are you single with no marriage plans or partner?
The nice thing is that when we talk to folks about home loans for police and other first responders, they already have a few ideas in their heads, so they talk to us about couple of different areas they are interested in.
I think what really makes a difference is the property taxes. In Chicago proper, if we have somebody who’s a suburban cop, and we have plenty of members working for police departments outside of big cities, they tend to have more choices. So, where they live is largely driven by property taxes.
In the suburbs of Chicago, property taxes can be pretty significant. Obviously, you want them to be as low as they can be, but you also want good schools, infrastructure, etc.
So, when it comes to law-enforcement home loans, we focus on financial literacy and education first. We’re skilled in discovering not just the want but the need. For instance, if we’re speaking with a young family, we pretty much already understand what the objective is.
A young couple, where one is just out of the academy, with young children they’re probably going to want a step-up home. They’re going to want something that’s affordable. We as fiduciaries need to look at property taxes as well as the interest rate for the mortgage to determine a range of affordability. We need to make them aware of the entire payment picture.
You can’t assume that the client already understands the area they’re trying to buy in. Property taxes aren’t always similar across the board even in neighboring towns. You have to really know those property taxes first.
Little things like that get missed in the whole process sometimes because buying a home is very emotional. It’s emotional for everybody. It’s emotional for me because I want to get that home for you. It’s obviously emotional for the client and if they’re married or have a loved one or partner or spouse, there can be twice the anxiety.
So, when someone comes in to Chicago Patrolmen’s Federal Credit Union North Branch to see me for the initial consultation, I’m going to look for an area that has a reasonable property tax. I’m also going to keep in mind the type of home they’re looking to buy and also for where they’re at in life in terms of their affordability level.
An old axiom that I heard way back when I started in this business is that you never want to sweat the mortgage payment. You just don’t want to sweat that mortgage payment. If you have a situation in your life where your mortgage payment is too high and you’re worrying about it every month then you should have never bought the house. I say that with respect to everyone who’s ever come to me or any of our people who have advocated that they want to buy a home no matter what.
It’s a question of affordability of payment, lifestyle, and what are you willing to cut out of your life in order to own a home. If you have to sweat that payment, then you really shouldn’t be in that home. You should be in a cheaper home. And if it’s not the right time to do it affordably, unless you absolutely have to make a move, then maybe you have to wait a bit.
It’s no secret that rates have gone up and that affordability has gone down. For some first responders, affordability may have gone down by as much as 50%. In other words, it’s cost twice as much now for a mortgage than it would have been a couple years ago.
It’s probably easier for me to talk to someone about waiting it out now than it would have been a year or two ago. At some point markets just change but today’s rates are still historically low in my history of being in the mortgage business.
So, we help first responders make an educated choice on where to live. Find a decent area. Look for reasonable property taxes. Understand the cost of your homeowner’s insurance. Look at everything together. If you’re comfortable with that payment, and you’re not going to sweat that payment, then that’s where you should buy.
Police Mortgage specializes in conventional mortgages, purchase money transactions, FHA loans, and VA loans. Led by founder and CEO John Aretos, Police Mortgage is known and respected for providing clients with exceptional service, customized terms, quick and easy closings, and low money down options. To learn more about Police Mortgage, call 312-499-8878.
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