Insigniaresidential - FSBO

In an earlier post, I wrote about why it is in the best interest of home sellers and buyers to work with a full-time Realtor who is focused on real estate only; not "double-dipping" by acting as a dual duty  real estate agent and mortgage loan broker. However, as a Realtor, I understand the importance of knowing what is happening with mortgage interest rates and keeping current with the latest mortgage news, loan products and trends. After all, mortgage loans are an integral part of completing most real estate transactions.

Since I am not a mortgage expert, I look to those who are to keep me abreast of their industry. I thought I would share some of the exceptional mortgage blogs that I subscribe to for expert advice.

Rhonda Porter, of The Mortgage Porter blog and also a contributor to the Rain City Guide Real Estate blog, recently wrote a very informative post on preserving your credit standings when going through a divorce or separation. Another relevant post of Rhonda's addresses mortgage loan options for writing a contingent offer on a home; a way to purchase another home prior to selling your existing home without the risk of paying two mortgages. You'll find these posts and much, much more on Rhonda's blog.

A current phenomenon that many homeowners are experiencing is adjustable rate mortgages (ARMs) going up. Morgan Brown of Blown Mortgage blog has strong advice for what steps you can take now and options that are available to those in this situation. Morgan's blog covers a wide array of industry news including: Wall Street,  the Economy and Consumer Mortgage Tips. He also writes about why he hates the mortgage industry. Fun stuff!

Both Rhonda and Morgan have been blogging for quite some time. In this handoff from Realtor to Mortgage Lender, you'll be in good hands in the company of their blog posts and mortgage industry musings!

  Brian Brady, from Bloodhoundblog.com, recently posted a very interesting article regarding real estate agents that also act as the loan officer. Having been a loan officer in a past life and now being a full-time Real Estate Agent in Southern California, I have a few things to say about dual duties and trying to handle both:

1. There is way too much to know about either mortgage lending or real estate. It is very difficult to serve clients with  real expertise if their time is divided into the two different segments. It is difficult, but not impossible to continuously learn and keep up with the latest technology and industry related trends in just one of the two jobs.
2. Mortgage Loan Officers and Real Estate Agents alike, have to pass the CAR Real Estate Exam, but it doesn't mean that either has the knowledge to represent their clients in both arenas with the client's best interest in mind. The exam covers the bare-bone basics. Skills are developed with experience, continuous learning and hopefully, a good mentor. If their focus is on one set of skills to learn, becoming better able to serve their clients comes sooner than later.
3. Mortgage interest rates can, and do, change daily as reported by Jon Ribary at Rain City Guide. Real estate buyers, sellers and mortgage loan applicants are paying good money to have the best representation that they can possibly have, and don't want to hear excuses when their agent/mortgage loan officer missed a deadline to lock their loan or inform them of a substantial rate change. 
4. Full-time real estate agents are constantly reviewing and previewing the active listings, pending sales and sold properties to guide potential buyers and sellers as to the worth of properties.
5. Full-time Mortgage Brokers are in-tune to the bond market and what the Federal Reserve is doing  with the interest rates. They are in constant touch with their wholesale lenders/clients and are getting up-dates regarding what new loan programs are available or are being changed.
6. A good mortgage broker and real estate agent will have a repetoire of other professionals that they have worked with and have respect for, to whom they refer their clients.
7. Dual duties also results in double commission for the agent who is also the loan officer, receiving revenue from the loan and also the sale of the property.
8. A "Jack of all trades" does not necessarily do the best job. If you had a heart condition would you see a General Practitioner or a Cardiologist?

Since regulation in 1988 the Home Loan Mortgage Broker has had a significant positive impact in the lending industry. Today the use of a professional Mortgage Broker is one of the key strategies used by sophisticated borrowers.

WHAT IS A MORTGAGE BROKER

Licensed under the Consumer Credit Act and authorised by the Financial Services Authority the Home Loan Mortgage Broker  is a specialist in recommending and arranging all types of Mortgage Lending. Normally with direct access to a full range of Lenders and many hundreds of mortgage products your Home Loan Mortgage Broker provides the most efficient and cost effective way to obtain financing tailored to your specific needs and goals.

WHAT PRACTICAL HELP WILL MY MORTGAGE BROKER PROVIDE

In the ever changing home lending market your Home Loan Mortgage Broker can offer their clients security, safety and peace of mind. He will monitor your mortgage through the whole application process to ensure a smooth transition through to completion. A professional Mortgage Broker will act as liaison between you the borrower and all other parties involved in the mortgage process. These parties might include any or all of the following :- Lender, Solicitor, Estate Agent, Vendor, Valuer, Underwriter, Credit Agency etc

WHY USE A MORTGAGE BROKER RATHER THAN DEAL DIRECT WITH A LENDER

Your Home Loan Mortgage Broker can normally research the products available with the various lenders using cutting edge technology and would normally have exclusive deals not available direct from the lender. Any Mortgage Broker worth his salt will be paid only on results ie satisfactory completion of the mortgage arrangements. The Financial Services Authority authorise the Home Loan Mortgage Broker in the UK ensuring financial viability of all companies and also ensuring professional indemnity insurance is in force to protect borrowers. The Mortgage Broker in providing volume business to the Lenders can in many instances obtain favourable underwriting terms and be able to complete mortgages that would otherwise be declined. In addition access to non traditional lenders can prove invaluable in placing cases outside the mainstream lending criteria.

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Deciding to buy a new home is a big step. Our goal is to provide you with a variety of well priced home mortgage loan products with many down payment options and credit scenarios to help you get into your home quickly and without a lot of hassle.

You want a home loan with great rates and expert advice? Searching for lower monthly payments and increased purchasing power? Just ask us about it.

We have a huge selection of loans built to suit specific needs of our customers. Our home loan experts are ready to help you to find the loan that is right for you! They will guide you through the entire mortgage loan process from start to finish. They can help you work out exactly how much you can borrow, and even help you find the right home loan at the best possible rate.

Quote Advisor brings different home loans to your doorstep. With many years of experience, a dedicated team of experts and a complete package to meet all your housing finance needs.

Try us! Save your money on mortgage! We help you realize your dream!

There is a great debate within the inner-mortgage circles these days. Should we, as loan professionals, encourage clients to borrow as much money as possible? Or would consumers benefit more if we helped them to understand the advantages of 15-year amortization schedules and pre-paying principal? Let's examine the pros and cons of both strategies. Leveraging Your Property. In order to understand why you'd want to borrow as much as possible for your home purchase, you must first realize that equity has a zero rate of return. Here's an example:
 
If Consumer "A" buys a home for $300,000, and puts 20% down, then they have $60,000 in equity. Over the next 5 years, the property appreciates $100,000 in value. Consumer "A" now has $160,000 in equity.
 
Consumer "B" buys a home for $300,000, and puts no money down. At the end of 5 years, that same home is now worth $400,000. Consumer "B" has $100,000 in equity, which is the same appreciation as Consumer "A", a net $100,000.
As you can see, the down payment amount has nothing to do with your rate of return. What becomes important is how you choose to manage the $60,000 you didn't use as a down payment. If you use it for frivolous activities, such as buying toys or going to
Las Vegas, it would be more prudent for you to use that money as a down payment. Especially since this will enable you to obtain a lower interest rate. 

However, if you were to invest the $60,000 in an investment that can out-earn the cost of that debt, then this could be a formula for success. This is why some lending professionals suggest putting as little down as you possibly can, maximizing your tax write-off, and investing the rest. This principle has been applied for many years in the life insurance game. The old saying goes, "Buy term and invest the rest." The key component is taking the money you would have used as a down payment and creating an asset accumulation account. This account should earn a significant enough rate of return to enable you to pay your mortgage off entirely and achieve the ultimate goal of being debt-free.  Keep in mind however, that if you borrow 100% of the purchase price, you will need to keep your property long enough to gain the appreciation.  If your plans are to keep a property for a term shorter than 4 years, it is wiser to put at least 5% down for the purchase.

Paying Your Home Down Rapidly. There are very few times over the course of my career that I have seen a client with zero debt and no financial difficulties. Choosing to pay off all of your debt can reduce stress and help you to gain freedom of cash flow for investment opportunities. A 15-year mortgage or a bi-weekly payment strategy provides structure. It can also put you on track to have your mortgage paid off within a set timeframe. Simply put, it contains built-in discipline. It's important, however, to understand that regardless of how rapidly you pay your home off, you're not getting any greater rate of return on your investment than if you paid it off slowly. 

 Conclusion. So how does one determine which scenario is best? The choice depends entirely upon the individual. Savvy consumers who are disciplined, and are comfortable taking chances from an investment perspective, would do well with the first scenario. Over the course of time, it's been proven that your rate of return over the long-haul will be far greater than the rate you'd pay for a mortgage in today's rate environment. It's important to seek the advice of a skilled investment advisor to ensure success with this strategy.  The second scenario is best for those who have a difficult time managing their money or who'll sleep easier at night knowing they have a plan in place to pay their loan off more rapidly. Be sure that your budget can handle accelerated payments. When consumers "bite off more than they can chew" with a 15-year mortgage, they frequently end up having to refinance back into a 30-year schedule.If you find this subject intriguing and would like to know more, I recommend that you read a book titled, Missed Fortune 101, by Douglas Andrew. It's an outstanding read that is very simplistic and goes into far greater detail than I can cover in this column.
Douglas is a financial planner who advises safe-structured investments such as whole life policies and tax-free fixed income instruments.

Source: Loan Toolbox

Many people are not aware that several Credit Union's can offer very competative mortgage loans.  Air Academy Federal Credit Union is located in the Colorado Springs area, with several branches in and around Colorado Springs.  We are one of the many Credit Union's that have enterred the mortgage lending arena. 

What are you missing by not using a Credit Union for your mortgage loan?  Well, for starters, Credit Union's are non-profit agencies, so our income requirements are less than banks, and mortgage broker shops.  This means we can be more competative in our pricing, and offer lower fees.  We also underwrite most of the loans locally, so the turn around time is much less than other lenders that must send their files out for underwriting.  We are so sure of the process by which we perform our mortgage loan transactions that we have offerred a loan closing guaranty.  We will provide figures to the title company three days  prior to closing, or our customer will be credited $500 toward their closing costs.

Credit Unions generally have lower mortgage insurance requirements than banks and mortgage broker companies.  Our rates are typically at least 5% less, which can equal a big difference in a monthly payment....just because we are a Credit Union.

We can offer a variety of first time homebuyer programs in Colorado.  The most popular is a 100% fixed rate loan, at 6.125%..which is the current rate as of 4-25-2007, and is subject to change with the market.  We also have programs that provide down-payment assistance for homebuyers.  We are one of a few lenders in Colorado Springs that can offer the Rocky Mountain Land Trust down payment assistance program, which can provide up to $35,000 to first time homebuyers.

Air Academy Federal Credit Union also offers VA loans, lot and construction loans, FHA loans, and can even lend in all 50 states!  Credit Unions are typically known for their "people helping people" belief.  We have core values by which we operate on a daily basis. 

Do business with someone you can trust....check into your local Credit Union mortgage loan programs today!

What you are missing if you don't use AAFCU Mortgage Lending

1.  $500.00 off buyers closing costs if we do not deliver figures to title 3 days before closing!

2.  Up to $35,000 in down payment assistance for 1st time home buyers!

3.  Not a member! not a problem!

4.  AAFCU mortgage insurance is 5% LESS than any other Mortgage lender!        Call now and ask why!

5.  Lending in all 50 States!

Subprime Lender Files for Bankruptcy; joins over two dozen subprime lenders who have shut down in recent months.

 Subprime lender New Century Financial Corp., once one of the country's largest subprime lenders (aka financial sharks), filed for bankruptcy yesterday and immediately fired half of its workforce.

That's 3200 people out of a job.  Meanwhile, New Century executives, including President and CEO Brad A. Morrice, have golden parachutes and fat bank accounts.

New Century blames the downturn in business on the growing housing crunch.  I blame it on predatory and nefarious business practices.

"New Century was the latest so-called subprime lender to fall on hard times amid a spike in mortgage defaults caused by borrowers unable to make payments.  Subprime loans target borrowers with low credit scores.  The mortgages carry relatively high interest rates but can also offer low initial payments (aka adjustable rate mortgages)." - Gary Gentile of the AP

On a financial news channel, Octavio Marenzi stated the "relatively lax" lending standards are not limited to subprime lenders and that the "problems" which resulted in the New Century bankruptcy filing could spread to the broader banking sector.

Sell your bank stocks, folks.  M&T Bank, a Buffalo, NY, based regional consumer bank saw its stock fall nearly $10.00 yesterday after it announced that it was having trouble selling some of its loans into the investment market. 

Consumer banks usually have little trouble selling its loans to lenders.  But investors are becoming a bit more leery of loans which do not require borrowers to provide as much documentation as prime loans.

New Century will try to stay in business under #150 million in loans to be provided by CIT Group and Greenwich Capital.  Greenwich and Carrington Capital will purchase certain loans, the loan servicing business and residual interest for about $190 million. 

Too bad the so-called leaders can protect their own assets under current bankruptcy laws - which in themselves are a bit bankrupt.  Shareholders are not being quiet in their anger, having filed several lawsuits alleging mismanagement by the company's directors and officers - who were wise enough to have D/O insurance policies in place to cover their sorry butts for their financial malfeasance. 

Two years ago, New Century stock traded at nearly $66 a share.  All that greed leaves 3200 workers unemployed and the company kaput.

In related news, a handful of executive managers for  Armstrong are seeking bankruptcy approval for their own bonuses to the tune of $50 million.  Unbelievable.

Is the lowest interest rates always the best for the borrower?  In determining the best mortgage loan value for a borrower, several things must be considered.  The intereste is important, the lower the rate the lower the monthly payment.  It's that simple.  Not quite so simple is what it costs the borrower to get that low rate.  Usually, there are two areas where buyers can spend a lot of money to get a loan.  One area is the loan origination fee, a fee which is usually 1% of the loan amount collected at closing.  The other area is the loan discount point, again usually 1% of the loan amount.  Keep in mind that these fees can be smaller or larger.  I've seen loans with good interest rates quoted at 0/0 meaning zero loan origination and zero loan discount.  Other examples are .75//50 meaning three quarters of a loan origination point and one half discount point; 1/2 meaning 1 point loan origination and 2 points loan discount.  Considering a $100,000 loan amount  with 6% interest rate.  The cost of loan the loan in scenario one is minimal, in scenario two the cost is an additional $1,250, and in scenario three the additional cost is scenario three is $3,000. 

Always request a Good Faith Estimate from the lender showing all the possible costs of a loan before making a decision to accept a loan.    Your Real Estate Professional can help you translate this document.  The lender should explain this document to you as well.  Know what it costs you to get a particular loan.  Don't just focus on the interest rate offered.

Find out more about the various topics available at my I Want To Know... page.

Or, check out the new topics to answer your questions:

• Difference betwen Monthly Rest and Daily Rest
• Successful Loan Application
• Applicable Fees for a Property Transaction
• Common Homebuyer's Mistakes
• Malaysia My Second Home