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Archive for June, 2008

Last week I started by giving you 3 secrets that most loan officers would have never told you about. Hopefully you gained some extra insight to what happens behind the scenes. Let’s jump right into the final 2 secrets…

Secret #4 – “I have the best rates and no one else can beat what I have…”

I have to admit something; I get sick in the stomach when I hear mortgage advertisements that advertise this way. Not only is it a lie…it sounds cheesy, or is it just me? I will say right now, no lender has THE best rates guaranteed and no lender has a lock on a specific rate. Every lender for the most part has the same access to loans and programs. So when you hear an advertisement that sounds something like this “I have the best rates…come to me to get what no one else can get you…” go ahead and change the station.

Ok, seriously, here’s the thing; a lender can’t lock in a loan rate until they have borrower’s information. Once they lock in a loan they have to deliver the loan to the investor; there’s a mini secret for you. So when you hear them say they have exclusive rates, it’s just not true.

With the exception of FHA and VA loans (which not everyone has…we do!) everyone has access to the same lender programs and guidelines. And if you are working with a Bank or Broker you will have access to different programs for the client. Banks tend to have slightly lower rates vs. brokers who have more program varieties to choose from.

This is one thing that set us apart from so many other companies. We are a Bank AND a Broker. This means that we have access to some of the lowest rates (notice I didn’t say THE lowest rates…see your getting the hang of it already!) available today…but as a broker we also have the ability to shop your loan to see if we could do better.

Secret #5 – What’s the best loan term and how educated are you on it?

Why do you think that we are in the housing market mess that we are in today? Now personally, I don’t really think that the housing market is a mess but I would agree that there are many homeowners that are facing foreclosure and loosing their homes. So why do you think that is…

The main cause of this comes from loan officers helping clients get into “bad” loans and then never educating them on the use of the loan. The reason why so many ARM (Adjustable Rate Mortgage) loans are gone is because the lenders got burned. Loan officers and lenders were putting clients into loans that they knew were going to adjust but never told the borrowers.

How your loan is set up is very important. Do you think it makes sense to get a loan that’s only fixed for 2 years but has a 3 year pre-payment penalty? I can’t believe that loans like this happen…but they do all the time. This is the main reason why the lending industry has taken a step back and gone back to the basics. We are trying to get rid of these types of loan officers. And the good news is that it’s working. Fortunately, I have less competition J!

There are so many different types of loans out there that there is no such thing as a one stop shop loan…each client is different and needs to be educated differently for the type of loan that they want. Now am I saying that all ARM’s are bad?…absolutely not, ARM’s serve their purpose for certain clients. The point is to work with a loan officer that asks the right questions and comes up with options for you…the client.

Conclusion

So hopefully with some of these different secrets, I have educated you a little more on some behind the scenes info that loan officers deal with. If you would like more information because your heads spinning just shoot me an email or give me a call and I would be more than happy to answer them.

If you would like to take a look at your options for financing, I would also be happy to help out. Remember, rates and loan programs are still very competitive right now and what matters more is working with a good, ethical and knowledgeable loan officer that has your goals in mind.

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IRRRL stands for Interest Rate Reduction Refinancing Loan. You may see it referred to as a “Streamline” or a “VA to VA.” Except when refinancing an existing VA guaranteed adjustable rate mortgage (ARM) to a fixed rate, it must result in a lower interest rate. When refinancing from an existing VA ARM loan to a fixed rate, the interest rate may increase.

No appraisal or credit underwriting package is required by VA. You should be aware, however, that lenders may require an appraisal and credit report anyway.

A certificate of eligibility is not required. Your lender may use our e-mail confirmation procedure for interest rate reduction refinance in lieu of a certificate of eligibility.

An IRRRL may be done with “no money out of pocket” by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs. (Remember: The interest rate on the new loan must be lower than the rate on the old loan unless you refinance an ARM to a fixed rate mortgage).

No lender is required to make you an IRRRL, however, any lender of your choice may process your application for an IRRRL. While it might be the best place to start shopping for an IRRRL, you do not have to go to the lender you make your payments to now or to the lender from whom you originally obtained your VA Loan.

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Well, maybe not. Have you looked out your window lately? Summer is definitely not here yet. I was camping this weekend and it was a cold and drizzly mid 40’s. Crazy for June! Anyways, the idea of summer is here (let’s just put it that way) and with summer upon us now is the time to review your current loan (if you’re a homeowner) or take advantage of all the great deals on the market (if you’re a 1st time homebuyer).

For the homeowners…

For those of you who are current homeowners there are many opportunities to take advantage of in the market today. Some of them may include refinancing from an ARM to a Fixed loan or if you have an Interest Only loan to a fixed loan. Both of these options allow you to take advantage of todays amazingly low rates and start paying off the principle on your home.

Other options for those of you who may have a VA or FHA loan are the streamlined refinance. Some of you may not even know what this is…you really should! The streamlined refinance allows you to refinance your home with little to no documentation. Yes, you didn’t hear wrong…little to no documentation, no appraisal, no credit, no income, no assets…etc. All you have to do is show that you are reducing your rate. That’s it!

For the 1st time homebuyers…

For those of you future buyers who are on the fence…why? It’s an amazing time to be in the market for a home! Not only do you have some of the best deals I have ever seen but the financing options are better than you may imagine. More and more sellers are motivated to sell their properties and you can pick up homes for a steal. Plus the options that you have for financing range from subprime (FHA, I spoke on this a couple weeks ago) to conventional with amazing rates.

You should really take advantage of what this summer has to offer, even if the sun fails to make an appearance!

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