Monday, March 30, 2015

Getting the Best Mortgage may help you financially in the long run

Cash is King. Well, maybe not if you want to buy a home. According to the recent Washington Post article, The case for not paying off yourmortgage by retirement by Jonnelle Marte there’s good debt and bad debt.  Jonnelle considers a mortgage good debt. Cash is liquid and you can’t access your cash if it’s tied up in your home. Of course, there’s also the added benefit of deducting the mortgage interest on your home. There are quite a few mortgage options now that allow you to put down a small down payment. If you are a first time home buyer you can put down as little as 3% if you qualify for a conventional loan.  FHA currently allows for down payment of 3.5%.  For all you veterans (thank you for your service!) if you qualify, you don’t have to put anything down.  Yes, VA loans allow for $) down payment, which means 100% financing. The USDA loan also allows for $0 down payment. So, as you can see, there are many loan options available right now. However, it’s important to know the different features of each. For example, VA has $0 monthly mortgage insurance fee.  USDA has .30% monthly mortgage fee.  FHA’s monthly mortgage insurance is .85%. The VA, USDA & FHA loans are government loans and they ALL have up front funding fees, so be sure to discuss those with your mortgage lender. Also, FHA now has monthly mortgage insurance for the life of the loan. It’s not removed once you have over 20% equity in your home like other loan products. Ask your lender all the questions you can about the differences in all the parts of your monthly mortgage payment as well as the costs of the loan, such as the funding fees.

***Please keep in mind this is only an example for illustration purposes.  These interest rates may not be available and/or you may not qualify for this loan type.

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Monday, March 23, 2015

Lowest Rates Today?

Spring is here and there's interesting home advice out there. I have helped clients with several purchases this week - watch those bidding price wars! Holly cow those can be rough! After an uptick in rates, they have dropped back down so refinances are keeping us busy too. What's all that mean to you? Well, with Spring comes home buying advice. The Consumer Report article shaking up the mortgage brokers by telling consumers to go to a direct lender is not a shock. However, there's so much more than just shopping the rate. I can't emphasize this enough. Shopping the rate misses the mark in so many aspects. If you call lenders and ask for their best rate, it doesn't take into account the variety of loan programs as well as the cost of mortgage insurance. I'm not a fan of Bankrate as it is very misleading to the consumer; the rates are with fee and many people don't click on the fine print to see exactly how many points they are being charged. Shopping for the best rate or lowest rate misses the mark on so many important pieces of your mortgage, such as funding fee (or not), how down payment affects your interest rate and of course, last, but not least credit score. What if you are interested in one loan with mortgage insurance or a 1st loan with a 2nd loan? That affects interest rate too. What if you ask for the lowest rate, but you don't qualify for it? In order to get the best rate, you need the best lender, who will find you the best loan program. That's how you get the best mortgage. If you get the lowest interest rate, but it has the highest mortgage insurance, your total monthly payment could be more than if you had a higher interest rate and lower mortgage insurance.  How long do you need to keep the mortgage insurance? Good question. FHA now requires you keep the mortgage insurance for the life of the loan! FHA also has an up front funding fee. If you can get a lower interest rate with an FHA loan, but you don't take into account the other fees, can you see how you could have a higher monthly mortgage payment AND payout wasted thousands of dollars over the life of the loan? Is there a better loan for you?  The best lender will help you get the best loan for YOU. Here are 10 questions to help you get started on your search for the best lender.
1. Are you a direct lender or a broker?  How does that affect me?
2. Can you issue a conditional approval on my loan within 2 business days?
3. Can you guarantee you will close my loan in 30 days or less?
4. Do you have any written references? Do you have client surveys you can share with me?
5. What is your closing ratio?
6. What are the upfront costs I will incur during the loan process before I close?
7. Do you attend the closing?
8. How long has your company been in business?
9.Are you a licensed Loan Officer?
10. How long have you been in mortgage industry?

There's a lot more to shopping banks than the rate. I always find that an educated consumer makes for a great client.

***Please keep in mind this is only an example for illustration purposes.  These interest rates may not be available and/or you may not qualify for this loan type.

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Thursday, March 19, 2015

Zillow vs.Trulia

How many of you use Zillow or Trulia?
What's so great about these real estate websites?
Should you use them as part of your home buying process?
For one reporter's opinion (as well as my comments!) check out this article:
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Monday, March 16, 2015

Credit Score Can Affect Your Mortgage Interest Rate

Do you ever wonder how credit score affects your mortgage interest rate and fees?

1. Your Interest Rate May Be Higher Lower credit scores may be subject to higher interest rates and finance charges over the course of any loan. The website offers a mortgage payment calculator that is updated regularly to show consumers how their FICO score can affect their interest rate. According to, a credit score of 620 versus 720 on a 30-year Fixed Rate Mortgage of $300,000 could cost approximately $110,000 more over the life of the loan in interest charges. Interest rates are determined by many factors but the bottom line is that individuals with lower credit scores will pay nearly three times more in interest than those with higher credit scores.

2.Your Closing Costs May Be Higher Consumers with lower credit scores may be subject to higher closing costs. Known as loan pricing adjustments, these are fees based on your loan amount, implemented by Fannie Mae and Freddie Mac in 2010 to accommodate for the risk associated with lower credit borrowers.

3.You May Pay More For Private Mortgage Insurance (PMI). PMI is insurance that mortgage lenders require from most homebuyers who have less than a 20 percent down payment when purchasing property. Lower credit scores may be subject to higher private mortgage insurance rates.

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What effects your credit score?

The Five Factors of Credit Scoring Credit scores are comprised of five factors. Points are awarded for each component, and a high score is most favorable. The factors are listed below in order of importance.
1. Payment History – 35% Impact Paying off debts on time has the greatest positive impact on your credit score. Late payments, judgments and charge-offs all have a negative impact. Delinquencies that have occurred in the last two years carry more weight than older items.

2. Outstanding Credit Card Balances – 30% Impact This factor marks the ratio between the amount owed and the remaining available credit. Ideally, the consumer should make an effort to keep balances as close to zero as possible, and definitely below 30 percent of the available credit limit.

3. Credit History – 15% Impact This portion of the credit score indicates the length of time since a particular credit line was established. A seasoned borrower will always be stronger in this area.

4. Type Of Credit – 10% Impact A mix of credit, such as an auto loan and a credit card, is more positive than a concentration of debt from only credit cards.

5. Inquiries – 10% Impact This percentage of the credit score quantifies the number of inquiries made on a consumer's credit within a twelve-month period. Each new credit inquiry can deduct points from a credit score. Note that personal credit inquiries do not impact scores.

***Please keep in mind this is only an example for illustration purposes.  These interest rates may not be available and/or you may not qualify for this loan type.

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© 2015 Vantage Production, LLC. All rights reserved

Monday, March 9, 2015

How to Get Approved for the Best Mortgage? Get Pre-Approved for Your Mortgage!

What’s the difference between Pre-Qualification and Pre-Approval for a Mortgage?

The differences between pre-qualification and pre-approval may seem minor, but they can be huge when it comes to actually closing on your dream home. Not all lenders offer the more thorough pre-approval. If your lender only offers pre-qualification, or you choose to start with pre-qualification, make sure that you are as thorough as possible with the information that you supply. Pre-qualification is the process of determining what you may qualify to purchase with a home loan. Pre-approval is the thorough process of providing your name, address history, work history and income documents for the last two years, along with your asset statements. It may not seem like a big difference, just more documents and a few more questions to answer. However, it can save you lots of disappointment and heartache during the loan process. In my book, How to Get Approved for the Best Mortgage Without Sticking a Fork in Your Eye (Available April 2015), I strongly recommend that you at minimum pre-qualify. Get pre-approved if it’s an option!

Mortgage Pre-Qualifying or Pre-Approval Make Home Shopping Much Easier

You should get pre-qualified to find out what price range your dream house needs to be within according to your current financial budget. Pre-qualifying allows you to find out exactly how much money a lender is willing to give you based on your income, assets, and other data. Having a pre-qualification will also give you confidence to make an offer when you find the right home. Pre-qualifying or pre-approval can empower you and take the stress out of your home search— you’ll know which homes to consider and which homes to avoid.

3 Monumental Mortgage Money Mistakes to Avoid

☐ Not getting pre-approved
☐ Not understanding your loan options
☐ Not planning/asking the right questions

I explain these mistakes in full detail in How to Get Approved for the Best Mortgage Without Sticking a Fork in Your Eye (Available April 2015). For a FREE EXCERPT from the book, go to
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Monday, March 2, 2015

Can Rising Default Risk Affect Getting the Best Mortgage?

Default risk is up for conventional loans! What on earth does this mean? Unfortunately it means that more people are not paying their mortgages. That’s a bummer! It’s not up much, 0.4% since December and 0.8% since January 2014. However, it’s the fifth month in a row that there’s been an increase, so that’s concerning. But, why the uptick? Inquiring minds want to know…

I wish I had the answer, but I’m afraid there’s more research to be done to find out, such as the LTV of these loans, where they are, credit profile-- and that information usually doesn’t get sorted out for a while.

So, why should you care?

The most important thing when purchasing a home is to make sure you get the best mortgage for you. Yes, for you. Not for your parents, not for your neighbor, or co-worker; for you. People talk with each other about getting the lowest rate, but don’t always realize that there’s much more to consider. Getting the best mortgage for you helps you feel confident that you can comfortably make the monthly payment and know your purchasing power. There are many nuances to the mortgage world; the rules and regulations change quickly, and in some cases, often. For example, if you are just shopping for interest rate and don’t have 20% for a down payment, your loan will require mortgage insurance which will increase your monthly payment substantially compared to a payment that a basic mortgage calculator might show you after only calculating an interest rate. Also, different loans have different mortgage insurance rates. Hmm, see how this gets complicated? Also, you may have the option of two loans-- a first and second lien instead of one loan with mortgage insurance.

What does this mean to you?

Shop for the best licensed lender, not the best rate. The best licensed loan officer will take a full loan application from you and let you know all your options. There are many loan programs available, especially for first time homebuyers. Review loan programs in detail and ask questions about each so that you are comfortable and understand each of your options. It’s extremely important to understand all the different pieces of the monthly payment, what can change, when, and, why. Just because you have a fixed-rate mortgage, it doesn’t mean your monthly payment will stay the same over the life of the loan. Your mortgage insurance, property taxes, and homeowners insurance can change and affect your monthly payment.

Please email me directly at for questions and loan program options.

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