Also known as mortgage brokers...
I found an interesting article online discussing mortgage brokers on cnnmoney.com today. Here is an overview.
"A good one (mortgage broker) can save you time & thousands of dollars over the life of a loan."
"It's up to you to understand the loans you're being offered and the fees involved."
Key Questions:
Do I need a broker?
-Do you understand mortgage products? 30 fixed, 2/28, 3/27, IO
-Do you know where rates are right now? 30 fixed, short term
Brokers can help. They have access to wholesale rate sheets from many banks & have the time to shop rates. Afterall, its their job.
Who can I trust?
Find out the following:
-How much does the broker stand to make on your loan?
-How will the broker make money (Fees &/or yield spread premium)
-If you don't feel comfortable, talk to another broker!
Am I getting a fair deal?
-$0 application fees. ONLY appraisal ($350) & credit ($13 - $25) should be charged in advance. That being said, these fees should not be required to complete an application.
-What are the pros & cons of at least 3 different types of loans
-Understand terms of loan (rate, fixed or adjustable, prepay, margin, rate cap, etc)
-The broker should be able to guarantee fees once the loan is locked.
-Request paperwork (a copy of the HUD-1) before closing & compare them with the good faith estimate
http://money.cnn.com/2007/07/24/real_estate/salesman_factor.moneymag/index.htm
Showing posts with label Personal Analysis. Show all posts
Showing posts with label Personal Analysis. Show all posts
Feb 11, 2008
Jan 7, 2008
5.875% + 6 months no payment!
This morning, I heard an ad on the radio selling an amazing loan program!
5.875% 30 year fixed rate + No Payment for 6 months!
Wow! It sounds too good to be true.
It is. I haven't called in to shop this loan program, but before getting excited let's take some time to guess where 6 months of payment freedom comes from. It's going to be one of two places:
1 - EQUITY!
2 - Closing Costs (Since we'd be talking about 6 months of payments rolled into your closing costs, I think its fair to say that this 'payment freedom' will in fact be 'equity payments.')
There is no such thing as a free lunch. This program simply offers you the opportunity to eat up your equity. However, it may be a good fit for a select few people.
Let's say you have great credit but have just experienced major unforeseen expenses and need some help to get back on your feet. Perfect!
On the other hand, if you are incapable of living within your means and need payment freedom to pay down $15,000 in credit card debt, this isn't a solution. It's a band aid. The real problems? Financial management, self-control and budgeting.
Shady marketing is just that.... shady! The company has one goal, and that is phone calls. Once you've called, I hope you are ready to be told that you don't qualify because of ________ (select one or more: credit, employment, assets), but you do qualify for this higher interest rate loan that will allow you to skip two months payments!
I hope they mention that every refinance allows you to enjoy no mortgage payment for two months.
I also hope that they disclose where the money for this payment freedom is coming from.
A - Equity
B - Closing Costs
I encourage you all to trust your home to financial professionals who are not transaction driven, but people driven. You deserve a consultation where your needs and goals are discussed. Let's all get past minimum payments and start talking about how you can work towards financial freedom! It can be a reality, but it's not going to fall into your lap!
Wishing you all a wealth of real estate knowledge in 2008.
5.875% 30 year fixed rate + No Payment for 6 months!
Wow! It sounds too good to be true.
It is. I haven't called in to shop this loan program, but before getting excited let's take some time to guess where 6 months of payment freedom comes from. It's going to be one of two places:
1 - EQUITY!
2 - Closing Costs (Since we'd be talking about 6 months of payments rolled into your closing costs, I think its fair to say that this 'payment freedom' will in fact be 'equity payments.')
There is no such thing as a free lunch. This program simply offers you the opportunity to eat up your equity. However, it may be a good fit for a select few people.
Let's say you have great credit but have just experienced major unforeseen expenses and need some help to get back on your feet. Perfect!
On the other hand, if you are incapable of living within your means and need payment freedom to pay down $15,000 in credit card debt, this isn't a solution. It's a band aid. The real problems? Financial management, self-control and budgeting.
Shady marketing is just that.... shady! The company has one goal, and that is phone calls. Once you've called, I hope you are ready to be told that you don't qualify because of ________ (select one or more: credit, employment, assets), but you do qualify for this higher interest rate loan that will allow you to skip two months payments!
I hope they mention that every refinance allows you to enjoy no mortgage payment for two months.
I also hope that they disclose where the money for this payment freedom is coming from.
A - Equity
B - Closing Costs
I encourage you all to trust your home to financial professionals who are not transaction driven, but people driven. You deserve a consultation where your needs and goals are discussed. Let's all get past minimum payments and start talking about how you can work towards financial freedom! It can be a reality, but it's not going to fall into your lap!
Wishing you all a wealth of real estate knowledge in 2008.
Oct 17, 2007
Would You Like to Own a Home?
I think it's fair to say that everyone would like to own their own home. It's the American Dream after all!
Oftentimes, sacrifices must be made to own a home. Most people will do whatever it takes. Others will not.
I think people need to take time to honestly and realistically analyze their financial goals as they prepare to buy a home.
1 - Budget. Don't fit your budget to the home. Find a home that fits your budget. Of course the more expensive home is nicer. As you battle to pay the bills every month, find yourself behind on taxes, fighting with your spouse and spread so thin that you can't afford to go out for a nice meal, you will despise this nice home and long for affordability....
2 - Stability. If you have no idea which state you will live in 6 months down the road.... don't buy a house unless you plan on renting it out. Have a stable job? Lead a pretty stable life? It might be time to buy!
3 - Prioritize. For fun, please rank the following in order of importance:
1. New Rims
2. $8,000 Birthday Party
3. Brand New Car
4. A Home
This seems like a big joke, but it's really not. Sitting in the office today, we were chatting about the most mind boggling reasons we have seen to NOT buy a home... Numbers 1 - 3 were our finalists.
My definition of "hood rich":
My rims are 20" and spinning. I partied like Keith Richards for my 25th birthday. Oh, by the way.... those rims are on my new Beemer!
If you're earning huge money, have a balanced portfolio of investments and are on track to meet your long term financial goals, I could care less if you are blowing some cash. It's play money for you!
Prioritize. Create goals. Build a realistic game plan to obtain those goals.
Would you like to own a home or are you on your way to home ownership?
Oftentimes, sacrifices must be made to own a home. Most people will do whatever it takes. Others will not.
I think people need to take time to honestly and realistically analyze their financial goals as they prepare to buy a home.
1 - Budget. Don't fit your budget to the home. Find a home that fits your budget. Of course the more expensive home is nicer. As you battle to pay the bills every month, find yourself behind on taxes, fighting with your spouse and spread so thin that you can't afford to go out for a nice meal, you will despise this nice home and long for affordability....
2 - Stability. If you have no idea which state you will live in 6 months down the road.... don't buy a house unless you plan on renting it out. Have a stable job? Lead a pretty stable life? It might be time to buy!
3 - Prioritize. For fun, please rank the following in order of importance:
1. New Rims
2. $8,000 Birthday Party
3. Brand New Car
4. A Home
This seems like a big joke, but it's really not. Sitting in the office today, we were chatting about the most mind boggling reasons we have seen to NOT buy a home... Numbers 1 - 3 were our finalists.
My definition of "hood rich":
My rims are 20" and spinning. I partied like Keith Richards for my 25th birthday. Oh, by the way.... those rims are on my new Beemer!
If you're earning huge money, have a balanced portfolio of investments and are on track to meet your long term financial goals, I could care less if you are blowing some cash. It's play money for you!
Prioritize. Create goals. Build a realistic game plan to obtain those goals.
Would you like to own a home or are you on your way to home ownership?
Aug 8, 2007
Par for the Course?
I don't know why, but I'm a big fan of sports analogies. Perhaps it is because sports are relevant to me and so sports analogies are a little bit more relevant.... Who knows. Whatever the reason, here we go.
The game of golf is horrible. I love it, but I spend at least half of the round flat out ticked off. The worst part of the game is the simple fact that I alone am responsible for my plight...
I think the terms "What was that?" and "Are you kidding me?" are a couple of my favorite golf phrases. (I must confess, at times there are some four letter words that sneak into the mix along with occasional mistreatment of my golf clubs, but I try and keep those to myself...)
I think its interesting how scoring well works. It doesn't take any great shots. It takes consistency.
We came across a par three. It was about 220 to the pin. I smoked my tee shot and rolled onto the green. My first thought... "Par!"
Wrong... As it turns out my 25 foot putt had about 4 feet of right to left break in it. I blew my first put way past the hole. I faced a 13 footer for par and left it short about 4 feet. I pushed my bogey put about an inch left. I took a 5!
Seeing opportunities to score well explode before your eyes is tough.
Scoring well takes the complete package. It doesn't take any great shots. It requires consistent play and wise course management.
If my business were a golf game, I can't help but wonder how I would be scoring...
The game of golf is horrible. I love it, but I spend at least half of the round flat out ticked off. The worst part of the game is the simple fact that I alone am responsible for my plight...
I think the terms "What was that?" and "Are you kidding me?" are a couple of my favorite golf phrases. (I must confess, at times there are some four letter words that sneak into the mix along with occasional mistreatment of my golf clubs, but I try and keep those to myself...)
I think its interesting how scoring well works. It doesn't take any great shots. It takes consistency.
We came across a par three. It was about 220 to the pin. I smoked my tee shot and rolled onto the green. My first thought... "Par!"
Wrong... As it turns out my 25 foot putt had about 4 feet of right to left break in it. I blew my first put way past the hole. I faced a 13 footer for par and left it short about 4 feet. I pushed my bogey put about an inch left. I took a 5!
Seeing opportunities to score well explode before your eyes is tough.
Scoring well takes the complete package. It doesn't take any great shots. It requires consistent play and wise course management.
If my business were a golf game, I can't help but wonder how I would be scoring...
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