Colorado Springs Mortgage Loans

Monica's Short Sale Book

2012-02-21T11:02:00.000-08:00

A friend of mine just published a book called "Create your own 'Done for You' Short Sale System" by Monica Adams. It's a how to guide for short sale investing. It provides downloadable forms and a complete how to guide. Really good read. You can get it on Amazon.

A new turn of events is Banks offering cash to sellers on Short Sales. Read http://www.usatoday.com/money/economy/housing/story/2012-02-19/lenders-allow-more-short-sales/53157246/1

This has been offered on foreclosures often referred to as "Cash for Keys" for quite some time the thought being that it affords the opportunity to move out of the home more easily. With cash for a short sale the thought is that they can occur faster and save the bank money in the long run. We'll have to see if this works as well for short sales as it does foreclosures.

Difference in Mortgage Loan Officers

2012-02-14T08:06:00.000-08:00

The real difference. What is the real difference in Mortgage Lenders? In today's environment, not much....REALLY!!! Money is green, it's green today and will be green tomorrow. So, mortgage consultants sell green, regardless of where they work (insert any company name here). And the next thing, we all sell the same products: VA, FHA and Conventional...with minor if any deviations. So for those two reasons I can see why the thought would be "not much". The only true difference any more when applying for a mortgage loan and who to choose; integrity, education, dedication and willingness/ability of their processors and underwriters to get the job done. Getting the job done; closing a mortgage loan on time, without last minute conditions, at a fair rate and price and with a happy new home owner in the end. I don't understand why these simple things allude so many lenders today. Sure underwriting has gotten tighter and documentation is the key so knowing that, being prepared in advance is your best move. Being prepared means hiring the right person to use for advice in the first place. What criteria are you using when selecting someone like a Mortgage Loan Officer? You should know where your financing is coming from before you start to look for homes. Trust me, the fun part is finding the home but putting in the work upfront will ensure you; have the financing you need, that your credit is what the lender is looking for, and that you aren't wasting your time looking at homes you can't afford. So, knowing the difference in the lender you select is key to ensuring you are prepared, educated on your loan, and that this home purchase will be smooth.

Increase in Guarantee Fee

2012-02-09T13:02:00.000-08:00

On loans sold through Mortgage Backed Securities there is a fee expressed through the cost of the rate to the consumer called a guarantee fee or Gfee. With the attached release back in December 2011, congress has mandated an increase of 10 basis points (10 cents on the dollar) to be paid directly to the Treasury. Right now these fees run between 15 and 25 basis points or cents on the dollar may be easier to understand. So the actual cash out of pocket to the borrower as expressed through higher rates charged by lenders to cover this cost could be significant:

The FHFA release from December 29, 2011:
“On Dec. 23, 2011, President Obama signed into law the Temporary Payroll Tax Cut Continuation Act of 2011. Among its provisions, this new law directs the Federal Housing Finance Agency (FHFA) to increase guarantee fees charged by Fannie Mae and Freddie Mac (the Enterprises) by no less than 10 basis points from the average guarantee fees charged by these companies in 2011 on single-family mortgage-backed securities.

This requirement is effective immediately, meaning that the average guarantee fees charged in 2012 need be at least 10 basis points greater than the average guarantee fees charged in 2011 and that this increase be remitted to the U.S. Treasury, rather than retained as reserves by the Enterprises. The law also requires FHFA to determine a schedule for guarantee fee increases over a two-year period that must satisfy other requirements of the law.

To begin implementation of these requirements, today I am directing Fannie Mae and Freddie Mac to announce before year-end to their seller-servicers that, effective April 1, 2012, the guarantee fee on all single-family residential mortgages shall increase by 10 basis points.

In early 2012, FHFA will further analyze whether additional guarantee fee increases are appropriate to ensure the new requirements are being met. FHFA will announce plans for further guarantee fee increases or other fee adjustments that will then be implemented gradually over the two-year implementation window, taking into consideration risk levels and conditions in financial markets. FHFA will monitor closely the increased guarantee fees imposed as a result of the new law throughout its effective period, which ends Oct. 1, 2021.”

2010-08-02T11:56:00.000-07:00

This is a tough article to read, http://online.wsj.com/article/SB10001424052748704723604575379463676740680.html very dreary outlook on the housing market. I say, let's make lemonade from this historic time in our economic outlook. This is the time to buy, buy, buy but only if you have the ability. No one should buy just for the sake of buying, there are bargains to be had and avenues to make this the opportunity of your lifetime. Sure qualifying for a home loan has gotten tougher sometimes even grueling, but choose a Lender wisely; someone service oriented. Someone that will drive across town to meet with you and will go the extra mile to show you that you are worth the effort and you'll fair just fine.

2010-06-18T10:23:00.000-07:00

I got this article from Mortgage Market Guide: Former Federal Reserve Chairman Alan Greenspan wrote an op-ed piece in the Wall Street Journal titled "US Debt and the Greece Analogy," where he warns that the present path of government debt accumulation is unsustainable. “Don't be fooled by today's low interest rates. The government could very quickly discover the limits of its borrowing capacity,” said Greenspan. He also added that the present low inflation and low long-term interest rate environment has fostered a "sense of complacency (within the government) that can have dire consequences." What Mr. Greenspan is saying is that government, rather than cut budget deficits and show fiscal restraint - is taking advantage of this low interest rate and low inflation environment to accumulate more debt - and the consequences can be very bad...just look at Greece. Mr. Greenspan also said that Treasury yields could spike, and in a hurry. “I grant that low long-term interest rates could continue for months, or even well into next year. But just as easily, long-term rate increases can emerge with unexpected suddenness. Between early October 1979 and late February 1980, for example, the yield on the 10-year note rose almost four percentage points.” Mr. Greenspan’s sobering comments should not be taken lightly. There is no fundamental reasons why interest rates – and more importantly to us, mortgage rates – should be this low. The confluence of factors all coming together at the same time have made for an incredible low interest rate opportunity, but it won’t last long, and can change very quickly. Borrowers have temporarily been given this gift of historically low rates. It’s our job to help them see and capitalize on this opportunity, before it is gone.

Is Small Beautiful?

2010-05-20T09:11:00.000-07:00

Does the fact that the median size of a new home being built is smaller suggest that Americans want greater simplicity in their living conditions, or does it suggest a need to buy a less expensive home? Are there lasting trends here, or will home sizes become larger again when the economy improves? And what does this mean to the marketing and selling of your home? In a 2007 survey, the National Association of Home Builders found that 42% of home buyers wanted a bigger home with fewer amenities, but 58% wanted a smaller house with “high quality products and amenities.” The same question in a 2000 survey found that 51% wanted the bigger home with fewer amenities. But this doesn’t necessarily mean our nation’s housing tastes are changing, even as we pay more attention to energy bills and efficient home design. There is an identifiable downsizing trend today, attributable in part to several trends among homeowners and home buyers. Baby boomers (those born between 1944 and 1964) expect to live longer and more independently, and they seek more manageable (that is, smaller) homes that provide the amenities they want. Housing sales and trends are regional, what is selling in Atlanta may not sell in San Diego. First time home buyers have changed the flavor of the market too. I personally think small is beautiful because I don't have to clean the bigger house, but hey, that's just me. Whether, smaller or bigger may be a personal preference the trend is definitely towards smaller more affordable homes.

Fixer Upper Loan Option

2010-05-13T13:40:00.000-07:00

You could take advantage of a fixer-upper home and make repairs with an FHA 203(k) rehabilitation mortgage loan. The 203(k) is one mortgage loan that combines the cost of buying the home with the cost of making repairs. The 203(k) could be ideal for qualified buyers interested in purchasing a home that needs repairs or updating. Advantages to using a 203(k) loan are qualifying with as little as 3.5% down, the cost needed for repairs is built into the loan amount, the loan amount is based on the subject to home improvement value. This is a wonderful option if the home needs only limited repairs. You do have to qualify for the 203(k) just as you would any home loan. There are two options: Streamline or Full. The FHA Streamline 203(k) has all of the advantages of the Full 203(k), except it is limited to $35,000 of loan proceeds being applied toward repair or rehabilitation. Of course, I'm available to explain the details so you can select a loan that suits your needs.

Following the Almanac

2010-05-07T09:59:00.000-07:00

I don't know why but I love the Farmers Almanac. I read it from cover to cover. It makes me laugh, it makes me think. It makes sense of weather and obscure things like what to do with vinegar. It advertises unusual products that you won't find anywhere. Right now I'm reading about Mark Twain, 10 Curious Facts about Mark Twain. Very interesting, and lots of fun.

Mortgage Note: Creative financing is gone. It really is time to purchase a home with prices down and rates down. But there is no humor in the market for needing to be creative.

New Programs for Home Owners

2010-03-25T08:28:00.000-07:00

Over the last 18 months with the National Homeownership Retention Program, it seemed that only those that had gotten themselves into trouble one way or another were refinanced and given relief. Well today in a news release, Bank of America announced a Earned Principle Forgiveness program which should be rolling out in May. This program is tied to homeowners performance. If you make the payments on time, that performance is going to be "rewarded". This is an innovative approach: An interest-free forbearance of principal that the homeowner can turn into forgiven principal over five years resulting in a maximum 30% decrease in the loan principal balance to as low as 100 percent LTV (loan to value); in each of the first five years, up to 20 percent of the forborne amount will be forgiven annually for borrowers that remain in good standing on their mortgage payments; forgiveness installments for the first three years set at the 20 percent level; in the fourth and fifth years, the amount of forgiveness will be dependent upon the updated value of the property, so that the LTV will not be reduced below 100 percent through principal forgiveness. This sounds like a move in the right direction for those seeing themselves in certain Pay Option ARMs (adjustable rate mortgage) or 2 yr hybrid ARMs set to adjust.

Cash Assistance for Home Purchase

2010-03-11T11:04:00.000-08:00

I talked about the CHFA program earlier and thought you might want to know the major highlights of the program:

Program 1: First Step Program Highlights
First Time Homebuyer or Eligible Veteran
Income limits and Purchase Price Limits apply
$1000 minimum financial investment
No CoSigners
ReCapture Tax Applies
Minimum Credit Score 580
Max DTI 45% on manual underwrite
Buydowns allowed
Count all household income regardless if everyone is on the loan
Homebuyer Education required

Program 2: HomeOpener Program Highlights
No First Time Homebuyer requirement
Income limits apply, but no Purchase Price limits
$1000 minimum financial investment
Accepts CoSigners
Not subject to ReCapture Tax
Minimum Credit Score 580
Max DTI 45% on manual underwrite
Buydowns allowed
Count all household income regardless if anyone is on the loan
Homebuyers Education required

Cash Assistance for Home Buyers

2010-03-01T13:40:00.000-08:00

With the draw down on the El Paso County Bond money, still some available, but limited. There are other options available like CHFA, Colorado Housing and Finance Authority. This program provides up to 3% if you need it just like the El Paso County Bond. There are a few differences in the programs but both provide the money you may need. Lenders assisting in this type of financing have special training provided by the Authority. And if you act fast, you can get the Tax Credit too. Remember you have to be under contract NLT April 30th to qualify for the tax credit.

Tax Credit

2010-02-17T09:23:00.000-08:00

Time is running short for the Homebuyers Tax Credit. The credit was extended to April 30th or at least you have to be under contract by April 30th to be eligible for the credit. This credit has been in effect for quite some time and has been extended once so I don't really anticipate any further extensions. So, if you were considering purchasing a home within the next 12 months, you may just want to consider moving that deadline up to NOW to be able to take advantage of this credit. They refer to it as a "credit" but it is actually an interest free gift from the federeal government, so don't look a gift horse in the mouth. Act now.

Arrested for Doodling....Really

2010-02-08T09:05:00.000-08:00

Have you ever been sitting somewhere (hopefully in your younger days) and absent mindedly doodled on a desk or a chair. Most of us do it in school. Well, chalk one up for NYC schools, they arrested a 7th grade gal for doodling. They call it graffiti. She even put her name on it so she wasn't trying to conceal her identity as most would with graffiti. Now, I am not condoning writing on school property. But at some point, our Teachers and Police Officers have to realize what is and isn't a crime. Is this all that some of NYC finest had to do that day; arrest a hardened criminal like the school doodler. The school would have taught the same lesson if she had been required to wash all the desks in the school or made her write a paper (long paper) on vandalism of school property, but to arrest her is totally absurd. I am sure somewhere someone did vandalize the school with graffiti which got us to this place but how come these college educated "Teachers" who probably did lots worse than this gal when they were in college....can't use a constructive punishment without involving the law? In the office sits the gal and her parents, give the option. Hey, Parent we can either have your child arrested or this Saturday she can clean every desk in the place...which would you prefer?

Doing the Right Thing

2010-02-04T14:54:00.000-08:00

When did doing the right thing become an option? Is it our political climate of say what ever sounds good to that person then do what you want behind closed doors. Or is it the do it to them before they do it to you plan. Or maybe it's just there isn't time to do it right. Or I'm just doing my job. I am frustrated by a situation with a Home Owners Association that is charging $320 to do a Condo Certification (this is a simple form that has to be completed before we can lend on the condo that only the association can do). There are maybe 15 questions that's $21.33 per question. Now I know the poor gal on the phone with me is "only doing her job" but really she needs to get a grip. Where is Erin Toll when we need her? I hope I can return the favor some day...oh, wait!!! Would that be doing the right thing?

Does anyone really care what they wear?

2010-02-02T05:00:00.000-08:00

I spot watched the Grammy's but totally missed the fashion parade. I saw Joan Rivers dishing the "Stars" choices yesterday evening and wondered who ever made her a fashionesta. I remember her being a comedian (if you could call it that) but for many years now her career choice puts her in front of us as some kind of expert on fashion and don't even get me started on her The Apprentice win. I digress, not here to trash Ole Rivers. Does the average American really care who the entertainers were wearing for their big night out? There was one who wore a basket as a necklace, now that's fashion. And it wasn't even a Longaberger. These people who often make bad decisions when it comes to drugs and alcohol get all dress up for a night and what they are wearing is supposed to impress us. Rubbish. For that matter, I could care less what they do in their personal lives. I don't care if Brad and Angie break up but I do care if their next movie is something I'd pay to watch/rent.

"What was your job on the boat, Mom?"

2010-01-28T06:58:00.000-08:00

Kids really do say the darn est things. One day many years ago now my daughter who was about 4 at the time and I were going to daycare on a Monday morning and out of the blue she asks, "Mommy, what was your job on the boat?" Of course, I reply, "Honey, Mommy hasn't ever worked on a boat, what are you wanting to know". And she didn't believe me so she says, "No really, what was your job"...now I'm a little concerned that I forgot I had a job on a boat at some point in my life. I replied, "No really, I've never worked on a boat. What boat?". She replies, "You know Mommy the boat when it rained for 40 days and 40 nights, what was your job?" Now we know what she learned in Sunday School the day before. And of course I didn't have a great reply like, "Mommy's job was to pick up all the elephant dung"....no, I just laughed.

Changes coming for FHA Financing

2010-01-20T11:13:00.001-08:00

FHA announced changes to their financing guidelines that will take effect this spring. First they are changing the up-front mortgage insurance premium to 2.25% from 1.75%. This amount (in most cases) rolls into the loan amount and is a premium paid to ensure the lender in the event of foreclosure. Then they are requiring a 580 credit score to get a down payment of 3.5% anything lower will require 10% down. Also, they are reducing the seller concessions allowed from 6% to 3%. Your lenders will be aware of these changes but be aware as an informed consumer that changes are coming.

Foreclosures

2010-01-19T12:15:00.000-08:00

Wow!!! Most recent information says that there were 2.8 million foreclosures in 2009 and that was while there was governmental slow downs imposed. Foreclosure is where the Bank/Lender takes the home away from the current Owner for non payment of the monthly mortgage payment. This is a bad proposition for all concerned because the Owner wants to stay in the home and the Bank wants their payments. So, when the Owner can't pay and the Bank wants paid....let the head butting begin. Banks don't want the homes back, Banks are not Realtors, they don't want to have to sell the homes. Owners just want to make their payments to the Bank as agreed, but "something" has happened that they can't make the payments. There really is no happy medium. Sure the Banks try to work out modifications and roll back payments and the Owners try everything they can to get the payments in on time, but sometimes and evidently 2.8 million times in 2009 a deal could not be struck. So, with all this inventory it is a really good time to buy a home if you are looking. Make sure you are getting a solid loan program for your situation by talking to a Mortgage Professional that you trust. I expect to see more foreclosed homes on the market in the very near term because some of the afore mentioned governmental slow downs are being lifted. I am always available to consult with you on a mortgage that will be right for you.

Bank of America

2010-01-14T09:13:00.000-08:00

I want to give a huge shout out to Bank of America, my employer. I am so very proud to be working here to day. The horrific tragedy in Haiti is so overwhelming that they've stepped up to the plate with $1 million in aid. In todays market, it is easy to get sidelined by all the bad press that we get that I just want to acknowledge this wonderful outpooring of concern and caring so quickly. Right on time and right on Bank of America!!!

Forcast for 2010

2010-01-12T09:15:00.000-08:00

Wow, I was reading The Mortgage Market Guides forecast for 2010 and they really narrow it down. As a Mortgage Lender, if you aren't part of MMG I really think you are missing a huge opportunity for growth. And no, I am only a long time member and I get no kick backs for that comment. They forcast rates to range from just above 5% early in the year to 6.5% later in the year. There are so many factors that play into this analysis that I will cover them some other time. Rates are about 1% lower than they would be if the Fed weren't buying Mortgage Backed Securities and they are going to stop buying in March so what does that tell you. Yep, come March/April timeframe...rates will start the climb. Then come the end of April the tax credit will end (must be under contract by the end of April) so the new home buyer stands to gain between $13,500 and $16,000 on a home (200K) if they act now.

El Paso County Colorado Bond Money

2010-01-07T15:24:00.000-08:00

I just have to talk about the new release of The El Paso County Bond. These funds came available today. Simply put there are only 13 Lenders in the State who have access to this bond money, and of them two got the lions share. Yes, I am one of the lions. To explain, this is a Mortgage Revenue Bond that provides 3% of the loan amount to the home Buyer that doesn't have to be paid back and can be used for down payment or costs. This is not a loan, it is a grant to the home buyer in El Paso County Colorado, yes a true grant. If you don't need the cash assistance, there is a option to get a 30 year fixed rate for 4.625%. If you do elect to use the cash assistance, the rate is only 5.125%. As you can imagine this bond will be used up quickly and it is on a first come first serve basis. There are income and purchase price limits that apply as well as target and non target areas. If you live in this market area, give me a call and let's see if this program applies to you. The great news....the $8000 tax credit still applies.

What are "Coaches"?

2010-01-05T14:09:00.000-08:00

I am stuck on the word "Coach" as a profession. Now, I am not referring to the tried and true Athletic Coaches we all know and love. I am referring to the trend in today's market where it seems everyone is a "Coach". So, I went on a quest to find out what a Coach really is....tutor, handler, private instructor, person who gives instruction or a trainer. We are "Coached" on everything from life to love, work to relationships, health to death? I saw a ad for a "new life coach"...the gal must have been all of 23 and was getting a certification. A CERTIFICATION!! Now if someone 80 years old professes to be a COACH; I am going to listen and probably take notes. Should I say I am a Mortgage Coach because surely I train every day on some aspect of lending. I know it is just the buzz word of the day but when you go to a networking event and 75% of the participants job title is "Coach" it just makes you wonder who's really out doing the work; if a coach teaches, instructs, or mentors than who's really working? This title will become over used and fizzle away; here I remain just a Mortgage Loan Officer (LO for short) now and forever.

New Year

2010-01-04T10:03:00.000-08:00

Happy New Year! My first full day back at work. This is going to be a great year, I know this because this morning when I woke up there were birds singing and the sun was shining just to greet me. I got up put dinner in the crock pot, because yes when I get home tonight I have a child to feed. Now at work, typing my first blog of 2010 and I have a follower. I am thrilled!!!! Yesterday, I went to the mall and the whole way there I tell my daughter about this thing I am doing called "Take the Stairs" (Rory Vaden) so knowing that when we get to the mall the store I need is on the second level I prepare her that we are walking up the stairs, I get the obligatory eye roll. When we get to the mall, there are only escalators no stairs, now I probably could have found stairs somewhere in the mall, but not at our entry point. This of course was the most hilarious thing for her but quite frustrating for me because these escalators empty out at the chocolate store. My mind starts racing about how I can manage to impart my newly found goal of taking the stairs; I decide that we will take the escalator steps two at a time to get our heart rates up. That didn't work. As I looked like I was moon walking more than hurdling two steps in a single bound. As punishment for laughing at me on our next set of steps she has to do them twice; and me.....did I mention this is going to be a great year.

Regulation Changes for Mortgage Fee Disclosure

2009-12-17T09:09:00.000-08:00

Landmark changes are about to occur with relation to how lenders disclose the fees they charge on mortgage loans. We refer to this as Regulation X, Reg X is a federal regulation that implements RESPA (Real Estate Settlement Act), a consumer protection law issued by HUD. One purpose is to provide borrowers with information about the settlement costs and charges associated with mortgage loans. This change requires that all lenders provide a standardized form detailing their costs so comparison shopping is easier for the consumer and once disclosed will have to adhere to fee change tolerances. There are other provisions but this is the one I'd like to highlight for today. The idea is that there will be more transparency, ensure a competitive market, provide for more accurate estimates, and allow for an easier comparison of the initial fee disclosures with the final fee disclosures. As with anything, there will be those that skirt the system and find ways to be deceptive to the consumer so still be aware that nothing is fail safe and being an informed borrower is your best protection in the market place.

Social Media

2009-12-16T14:40:00.000-08:00

Okay, I have given into the younger generation and accepted that the old belly to belly sales I am used to is giving way to computer marketing. Yes, social media. Rory Vaden told me that to treat Twitter like chatting at a party (and I like to party) and treat Facebook like a BBQ (and I love a good BBQ). Let the party begin. I have to agree that this changes things a bit for me. I don't have to get ready for the party, just show up. I don't have to put on makeup or shave my legs or even be dressed for that matter. Now in "normal" networking situations these would be big big no no's. But Twitter has no idea if I am sitting there in the nude or in a suit. For me, I have to be dressed to sit at the computer and type, to keep focused I have to be ready to accept the day fully. Or maybe it's just that I have a leather seat and ....I know you know where I am going with this. So, I am on my journey to come of age and embrace the new social media format. This could be fun and then again I may just burp up BBQ and be done.

Home Buyers Tax Credit

2009-11-09T14:28:00.000-08:00

The Home Buyers Tax Credit has been extended and expanded to cover more Buyers. So, the $8,000 tax credit (or 10% of the purchase price of the home) continues for first timers and it has been expanded to cover those that have owned a primary residence for 5 of the last 8 hears for a lesser amount of $6,500. This time Cinderella has to be under contract NLT April 30, 2010 and close on the home NLT June 30, 2010. It further covers our Military Members that have been deployed until May 2011. Income limits have also been extended to $125,000 per single person and $225,000 for married couples. So, it may just be time to buy that new home and use this tax credit to your advantage.

Mortgage Rates are a Moving Target

2009-09-08T10:37:00.001-07:00

Those of you looking to set in a mortgage rate know how frustrating it can be to want the lowest rate and not know exactly when to lock in. Well as educated as we are in the lending industry we never know "exactly" when the right time is to lock in a rate...that exact moment when the market is turning. But we can make some very educated decisions to lead you down the right path. Lenders watch Mortgage Bonds or Mortgage Backed Securities to see the trends in the market then we use technical signals and economic data to make those educated "guesses". If someone tells you they can tell you definitively what rates are going to do...run away from them, but if you have someone tell you that they watch the trends and follow those trends...ding, ding you may just have a winner. Ask further, what trends they are watching....if they are watching the 10 year T Bill...run away again. They should be watching Mortgage Backed Securities...and as the cost of a Security (Bond) goes up rates go down and vice versa. So, using a Mortgage Professional who knows the loan products is crucial but it is equally important that they know how the market works to give you the strongest advice.

Jobs Report

2009-08-07T07:38:00.000-07:00

I am not sure I am buying all the published numbers about jobs losses. Economists were expecting 320,000 job losses this morning but I actually thought it would be higher. It came in at 247,000. So of course, Mortgage Backed Securities took a dive which means Mortgage Rates went up. Just trying to apply some common sense here, it isn't passing my sniff test. It is estimated that 745,000 jobs have been added to the economy in the past four months...just looking locally and talking to family and friends...does that sound reasonable? Not to me either.

Okay, I have to admit I am a new blogger

2009-07-24T10:27:00.000-07:00

I admit it, I am a new blogger and twitterer about mortgages so now I know why everyone that is not in the mortgage industry is confused. Especially with the twitters. In just a few moments, lenders post lock, don't lock......and none of them are consistent with one another. One person will say rates are down one will say rates are up..the thing I can't stand about that is to know where they really are you have to know where that particular person started from. I mean, if you've been quoted 5% by your lender and you read that another lender says rates have gone down then you are expecting that you can get a better rate than 5% when in reality the person saying they went down was starting from 5.25% and had just hit 5%. Very interesting I think.

First Time Home Buyer Tax Credit

2009-07-16T06:32:00.000-07:00

Yes, it is true. The Federal Government is providing a tax credit to first time home buyers (haven 't owned a home in three years) who purchase now t0 December 1, 2009. Don't know if it will be extended or changed but this is what we have for now. The tax credit provides first time buyers with $8000 cash without repayment as long as you reside in the home for three years. So, the way to start the process to decide if you can/should buy a home is to talk to a Mortgage Loan Officer.

The Shell Game

2009-07-15T07:01:00.000-07:00

Okay, let's face it understanding closing costs from one Lender to the next is confusing. One company calls it this and another company calls it that...what is it really. Well, it's the shell game. You know the carnival game where a skilled slight of hand artist puts a item under a one shell and moves it around on a table with two other shells. Then the "player" gets to choose which shell holds the item. Well, mortgage costs are just the same. When someone tells you they are not charging something be cautious because none of us works for free. And usually when fees are waived that means the Loan Officer is taking a hit (meaning not getting full commission). Taking a hit is not something we like to do on a regular basis. So, the fee has probably been transferred (via the shell) to another spot on the settlement statement. The way to solve this situation is to get to know your Lender. Ask questions, look at the good faith estimate, ask questions, look at the bottom line, ask questions, if it sounds too good to be true; it is, ask questions.

Let's Talk Money

2009-07-13T07:44:00.000-07:00

Let's talk about money you'll need to close the loan. There are three costs associated with closing on a mortgage loan: down payment, closing costs, and prepaids or escrows. The down payment is just what it says, it's the money you bring to the table basically getting some skin into the game. The lender says we'll bring in the majority of the money but you have to be a player with us. And oh, by the way....where did you get that money (we'll talk about this later). Closing cost is the money used to pay someone to do something on your behalf during the loan processing and closing. You'll pay for appraisals and title information. Most of these are paid at the closing table but most Lenders collect portions of them upfront at loan application. Then the prepaids or escrow items which are really your funds set into an account on your behalf to pay something for you down the road, like pay your yearly hazard insurance or taxes. So, as a rule of thumb when saving to purchase a house (people still do that) plan for costs at about $3000 plus 1%. Yes, this is just a rule of thumb different areas of the country will be different so it is best to call for a quote.

The Lighter Side of Mortgages

2009-07-10T07:25:00.000-07:00

I see from all the chatter that searching for a mortgage is really confusing for many. It doesn't have to be although sometimes we have no choice but to get down and dirty in the details of your life to get a loan approved. I'd like to keep this lighter and say that the best thing you can do to prepare for home ownership is know your credit. Your credit report will determine what loan programs we can use for you. So, step one is contact a Mortgage Loan Officer and simply run the credit and have a frank and honest discussion, if there are issues, about what to do and how to correct if possible any derogatory information. And, it is what it is, the lighter approach is that most if not all credit issues can be corrected either through direct effort with the creditor, credit reporting agency, and in some cases just time will heal.

Mortgage Happenings

2009-07-09T07:01:00.000-07:00

I recommend you qualify to buy a house before you start looking for the home. Most prospective home owners do this in reverse...they start looking then say hey I wonder if I can afford that house. Someone once told me (I wish I knew who to give them credit here) this story to explain why you should qualify with a Mortgage Lender before you ever talk to a Realtor: You are invited to a formal dinner so you go out to buy a dress, you find the most beautiful dress and just have to have it, it's the right color, right length, and shows off your legs perfectly. This dress costs $100 and you go to the counter and open your check book and only have $50 to spend so disappointed you go look for $50 dresses. And there are some great $50 dresses, but none compare to the $100 dress, but had you known you could pay $50 in the first place you would have found the perfect dress at $50 and never have disappointed yourself with the $100 dress. So, seek out a Mortgage Loan Officer first!!!!