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How will the outcome of the election influence mortgage rates? 

Stan talks about his divorce, online dating, and a new special someone in his life.

Everyone please be safe over there on the East coast as hurricane Matthew bears down.  Stan booked his trip to NY, give him some suggestions on places and things to check out during his trip!

 OMG!  Stan has a new YouTube channel...  Check out his first Video "Blob"!

 

 

Here you go... 

 

5.  Lower Your Rate

Well, yeah, that is usually the #1 reason but because it is the first thing people usually think about when considering refinancing, we consider it too obvious to rank it higher. Just make sure that even if you have been a previous client of ours, get at least one other quote so you are completely comfortable with the rate we are quoting you. And remember, we always try to match any competitor's quote, but if we can't for any reason, we will still be happy to advise you through the process with the other lender.

 

 4. Getting rid of an ARM (Adjustable Rate Mortgage)

Most homeowners don't ever consider an ARM anymore but if you happen to have one, it may have made sense a few years ago. Now with rates still at record lows, get rid of it! You don't need that stress. That being said, we can crunch the numbers and if for any reason it would behoove you to keep it until it gets closer to the "balloon" date, we will definitely let you know. 

 

3. Take advantage of your credit score

If you've been diligent about making your mortgage payments on time every month, you are normally rewarded with a higher credit score and refinancing will more than likely be a piece of cake.  That, in turn, could translate to qualifying for a lower interest rate. WOO HOO!!! 

 

2. Convert to a shorter term on your loan

As with all loan decisions, shortening the length of your loan may be the right thing to do based on your individual circumstances.  If you can swing the higher monthly payments on a 15 year fixed, you will ultimately save a lot in interest over staying in a 30 year loan.

 

And the #1 reason to refinance NOW...

Build Your Equity Faster, Smarter, Better!

If your ultimate goal for homeownership is to pay off your house sooner rather than later then refinancing at a lower rate and shorter term but continuing to make the same monthly payment will mean you'll have more equity to play around with should you ever need to take any cash out. It is a lot less painful to do that when your interest rate is fixed at let's say 3.5% rather than 4.5% or higher.

 

Stan "The Mortgage Man's" Blob

March 4, 2016 

 

Quote of the week...

               

"Happy are those who dream dreams and are ready to pay the price to make them come true."

    

--Leon Suenens, Clergyman

 

 

LOL...

Dog Eat Doug by Brian Anderson

 

 

Stan's slant...

 

Dear Mortgage Family Member,

 

HAPPY BIRTHDAY OJ MORTGAGE!!  We celebrated our 22nd anniversary on Valentines Day! 

It took over 10 years, but I finally lost the extra weight I put on in my 50's. (Going through a divorce might have something to do with it.)

Nobody wanted to believe yours truly last year when I predicted mortgage interest rates would fall by the 2nd quarter 2016.  But they did.  Great time to refinance is once again upon us. FHA, VA, welcome.

  • Refinance to lower your monthly payments
  • Refinance to consolidate your credit card debt (and lower your monthly payment)
  • Refinance to pay off your adjustable rate HELOC (all adjustable rate mortgages will feel the pain of a Federal Reserve rate increases in the near future).
  • Refinance to get rid of your PMI
  • Refinance to lower your interest rate and payoff your loan much, much sooner.
  • Refinance to pull out some cash to do home improvements, create a college fund, buy an investment property, etc.

Rates will probably never be this low again.  Don't wait too long. Pay attention! You should have all year to do so, but try to take advantage of this opportunity by the fall.

Please call me if I can be of help.

I hope this letter finds you and yours enjoying all that life has to offer.  I wish you and yours the best of health always.

Remember: balance in all things. Diversify your assets. Think positive. Love yourself and those closest to you.

 

Respectfully submitted,

Stan

 

 

 

 

 

 

Stan "The Mortgage Man's" Blob

March 11, 2016 

 

Quote of the week...

               

"If anyone is having a bad day, remember that today in 1976 Ronald Wayne sold his 10% stake in Apple for $800.  Now its worth $58,065,210,000."

    

--Mark Cuban, Entrepreneur

 

 

LOL...

The Pajama Diaries by Terri Libenson

 

 

Stan's slant...

For those of you selling your home this summer (or know someone who is) the following is a must read.

    

TIMING CONUNDRUM-Great news. You sold your home. But that means you have to get a move on-quickly. Don't get caught in the squeeze.

By Marilyn Kennedy Melia, bankrate.com

 

Home sellers in many areas of the country face a problem that's rather nice to have: They have found a buyer who is eager to move in, and now they must find another property to buy - the faster the better. That's a change from the depths of the housing crisis, when finding a suitable home to buy was easier than selling one. In markets as diverse as Boston, Detroit and Naples, it's getting harder to find a home to buy. Those three markets had significantly fewer homes for sale in late 2013 than in 2012, said Lawrence Yun, chief economist for the National Association of Realtors. Low inventory plagues other markets, too. Here are questions that sellers should ask so they can minimize the squeeze caused by selling a home before buying another.

 

How long will it take to sell?

Using the Multiple Listing Service, or MLS, data, a real estate agent can measure the time it takes for comparable homes to move from initial listing to having a purchase contract accepted to the closing of a sale.

In a pronounced seller's market, "You might see averages as little as eight to 20 days" for homes to go under contract after listing, said Kristy Gonzalez, an agent with ERA Evergreen Real Estate in Hilton Head, S.C.

 

Another forecast on selling time can be gleaned right after a home is listed. "Certainly you can get an idea of how fast it will sell," said Gonzalez, who adds that on some of her listings, agents were booking appointments for buyers to tour within hours.

 

Is it possible to sell and buy simultaneously?

It's never too early to research homes in the neighborhoods you'd like to buy in, said Eric Tan, an agent with Redfin in Los Angeles.

 

Once your home is listed, he said, "luck and coordination" are needed to close on the sale and purchase at the same time.

 

To have homes pass among various hands in one day, it helps to have the same firm handling the closings, Tan said.

 

"Different states have different rules," he said. But whether it's a law office, title company or other real estate-related firm, hitches, which come with the copious paperwork, may be resolved more easily with fewer sites involved.

 

Can you ask your buyer for more time?

Because selling first and then buying is problematic in a seller's market, experts advise taking advantage of your strong position as a seller as you work out the timing of your purchase.

 

"Negotiate a longer time until the closing," said Raylene Lewis of Century 21 Beal in College Station, Texas. "If closings are normally out 30 days, ask for 50 days so you have more time," she said.

 

Depending on how home purchase contracts are written in your locale, it might be possible to tell a buyer that you'll accept that offer, but it's contingent on whether you have a home to purchase by a certain date, Lewis said.

 

On the flip side, as a buyer, you might ask that your purchase offer be contingent upon your home being sold by a specified time. But in a hot market, "it's unlikely a seller will accept such a contingency without at least a purchase contract (pending) on your property," Gonzalez said.

 

Who can afford to buy before selling?

Before the financial crisis, home sellers could obtain "bridge loans" to finance down payments, said Neil Caron, vice president of retail production at Freedom Mortgage Corp. in South Windsor, Conn. Bridge loans were short-term loans to be repaid as soon as the borrower's first house was sold. Now, if sellers need the proceeds from the sale to use as a down payment, it's difficult, if not impossible, to find bridge financing, Caron said.

 

Another option is to use the proceeds of a home equity loan as a down payment, said Charles Chedester, past president of the trade group Mortgage Professionals of Iowa. The caveat here is that sellers must apply for home equity credit before they list their homes for sale because lenders won't extend loans on properties up for sale.

 

 

 

 

  

Stan "The Mortgage Man's" Blob

April 7, 2016 

 

Stan's slant...

              

New financial advice rules set

Washington Post

         

To prevent bad or conflicted advice, brokers and advisers now face stricter standards

       

The Labor Department announced sweeping rules Wednesday that could transform the financial advice given to people saving for retirement by requiring brokers and advisers to put their clients' interests first.

        

The long-awaited "fiduciary rule" would create a new standard for brokers and advisers that is stricter than current regulations, which only require that brokers recommend products that are "suitable," even if it may not be the investor's best option.

         

At a time when mom-and-pop savers are increasingly being put in charge of their own retirement security, the rule is meant to add a new layer of protection to guard workers from poor or conflicted investment advice. The rule is supposed to improve disclosures and to reduce conflicts of interest, such as cases when a firm is paid by a mutual fund company or other third party for recommending a particular investment.

          

"This is a huge win for the middle class," said Thomas Perez, secretary of the Labor Department. "In far too many places and on far too many issues, the rules no longer work for working people."

             

Proponents of the rule say it should cut back on cases of retirement savers being steered into complicated and pricey investments, leaving them with more savings in their pockets. While the new rule won't ban commissions, brokers may have to explain why they are recommending a particular product when a less expensive option is available, and they could face scrutiny if they recommend complicated products. Conflicted investment advice costs savers $17 billion a year, according to an estimate from the White House Council of Economic Advisers.

           

"Hard workers need every dollar to work for them," said Sen. Elizabeth Warren during a press event Wednesday announcing the rule.

             

It's too soon to know exactly how the rule will play out, but the change could lead savers to invest more of their money in low-cost index-based funds, analysts say. Some investment firms could also lower their fees. 

             

Another potential impact of the new rules for retirement savers is that they might end up switching accounts or investment firms. Some investors may have conversations with their brokers and advisers over the next several months about whether they should be moved into a different kind of account or work with a different firm altogether.Some firms may decide to move investors from commission-based accounts to fee-based accounts where funds may be managed by a financial adviser and an investor's cost may be structured as a percentage of assets invested, instead of a fee per transaction, according to the report released in October by the fund research firm Morningstar.  The move would put savers into accounts where what brokers and advisers are paid would not depend on the type of investment product they sell.

           

Those fee-based accounts are already subject to fiduciary standards but may raise costs for investors who rarely make trades and are more likely to hold on to investments for the long term.

                 

The Labor Department also says educational information offered to retirement savers about types of investments would still be allowed under the new rules. But investment firms consulting savers on whether they should keep their money in a 401(k) or roll them over into an IRAwould be required to meet the new standard on any advice they offer. Financial firms would have until January 2018 to get into compliance.

 

 

Quote of the week...

               

"The pro is the person who has all the hassles, obstacles, and disappointing frustrations that everyone else has. yet continues to persist, does the job, and makes it look easy."

    

--David Cooper, Sales Trainer

 

 

LOL...

 

 

 

 

Refinance to a shorter term mortgage

By refinancing a standard 30-year mortgage to a 15-year mortgage is a sure fire way to pay off your mortgage in half the time. By refinancing to the shorter term you will, naturally, make larger payments, but you will also typically pay a substantially lower interest rate.

Of course, you will be locked into these higher monthly payments and should make sure that you are in a financial position to shoulder the extra burden for the length of the mortgage. If you have any doubts, some of the less aggressive tips that follow may be a better option.

 

2.       Commit to paying a little extra each month

Adding a little bit to your mortgage payment each month can go a surprisingly long way to cutting down on the time and interest of your mortgage. Because whatever you pay extra each month goes toward the principal of the loan, you are consistently cutting down the amount interest you pay.

There are, however, a couple of things to keep in mind when using this technique. One, make sure to read your contract to make sure there are no prepayment penalties. And, two, make sure that the extra money you are paying actually goes toward the principal of the loan and is not simply being applied to future payments.

 

3.       Refinance your loan and keep the same monthly payment

Typically when you refinance your home loan, you can negotiate a better interest rate and lower your monthly payment. But if you refinance to that lower interest rate and keep the same monthly payment, the difference will go to the principal of the loan, again shortening the life of the loan and saving you money on interest paid.

 

4.       Apply cash windfalls to your mortgage

Just as adding to your monthly payments reduces the principal of your loan and ultimately the interest you pay, making lump sums toward the principal of your loan when you get a nice influx of cash can shorten the life of your loan and save you a good amount of money in the long run.

Consider applying work bonuses and income tax refunds toward your home mortgage.

460

 

How to get the most from an appraisal

By Marilyn Kalfus

There are ways to help, and hurt, the value an appraiser puts on a home and whether a sale goes through.

The Register asked appraisers working in Southern California and elsewhere what homeowners can do – and should not do — before and during an appraisal. They offered a variety of ways that sellers and real estate agents can make the process go more smoothly from the start:

*“Give us a brag sheet,” advised Craig Gilbert, an appraiser in Huntington Beach.

“Tell us everything about your house, all the positive things you can think of: ‘I’ve got a new roof, the kitchen is six months old, these are brands of our appliances, here’s what we paid for them, the flooring, the scraping of the ceilings,’ ” he said. “Spell out: ‘Here’s the year I did it, here’s what it cost and here are some of the specifics.’ ”

Appraisers actually are required to report the year that the kitchen and each bathroom was updated or remodeled — or if they were not improved in the past 15 years.

*Provide comparable sales that truly are comparable. Go beyond the square footage and prices of nearby homes that sold. Include relevant details, and point out the homes that should not be used as comps, as well. “For example, ‘That property backs a busy street. That property does not have a swimming pool and I do. That property has an original kitchen built in 1950; my kitchen was remodeled in 2012,’ ” Gilbert said. *Don’t lie about illegal room additions. One homeowner told an appraiser a room was already there when he bought the house. But it turned out that the man built the house. Appraisers will learn the truth, so just be honest. Better yet, pull the addition permits for them, even if they were done before you owned the property. *Don’t lock rooms and leave. Appraisers have to see the whole house. Don’t make them come back, incurring additional cost and delays. *Don’t follow the appraiser around, shooting the breeze. “It gets me out of my process,” said Cook, of Torrance, who focuses on Los Angeles’ South Bay area. “I do love to talk, but it does distract me. If I’m talking as I’m walking past a door and I forget to go back, and there’s a bathroom there, that’s not good.”

His analogy: “If your mechanic was working on your car and you’re jabbering the whole time, he might forget to tighten a bolt.”

And, several appraisers said, get out of the way while they take photographs of various rooms.

* Get a business card from the appraiser. ”It is imperative that the appraiser inspecting the property is the same one who prepares and signs the report,” Gilbert said. “This will avoid being scammed by a ‘ghost’ writer working for an appraiser.”

*For condos, provide the appraiser with the name and a contact for the Homeowner Association, as well as your account number. You also can call the HOA before the appraiser comes out to get the number of units in the project, including the number of owner-occupied units. *Explain anything unusual about the property. Why is there a large hole in the ceiling? Is there is access to the rear of the lot from another street? “We appraisers may not notice everything and/or we may jump to the wrong conclusions,” Zibas said.

* Skip details about routine fixes. ”Do not bother with most standard maintenance items that are expected to be periodically replaced, such as a water heater,” Zibas said. “Every time I hear something like ‘We just replaced our air conditioner,’ I can’t help but wonder: ‘What else is about to die?’”

Interviews and a question posed in an online appraisers’ forum yielded additional peeves. Some highlights: Homeowners who fail to mention that a rattlesnake recently made an appearance in the bushes next to the house — and wasn’t caught. Or who proclaim, “My dog is friendly and never bites,” as the canine charges, hackles up.

And, several appraisers said, homeowners should always be sure to let their spouse and children know that a stranger will be roaming the house.

Challenging appraisals

Appraisers take a lot of heat in the real estate industry.

“Depending on where we are in the (housing market) cycle, we’re either fraud artists deliberately over-inflating values, or deal killers trying to ruin the market,” said appraiser Matt Cook of Torrance.

But no one is harder on appraisers than other appraisers.

A nationwide appraisers professional association and veteran appraisers have cited problems in the way appraisal management companies assign and pay appraisers, saying too much of the emphasis is on working quickly and cheap. Appraisal management companies have countered that the way their businesses operate is misunderstood.

Real estate agents responding to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey in February said appraisal issues were the reason for about 10 percent of closing delays.

Under a rule that went into effect this year, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, lenders must promptly give mortgage applicants a free copy of the appraisal results.

Applicants can ask a lender to review the appraisal or order a second one. If a consumer requests a review, that should be backed up by facts the appraiser included or left out of the report, not just a disagreement over the appraiser’s opinion, said Ken Chitester of the Appraisal Institute, a Chicago-based professional association with about 22,000 members.

A mortgage, basically speaking, is a loan. When you set out to purchase a home, no one expects you to have, say, $250,000 in cash. So that’s where a mortgage comes in: You borrow the extra money that you need to buy your chosen home, agreeing to pay it back in the coming years. A huge debt? Yes. But its appeal lies in the fact that the mortgage helps you to buy an asset with the expectation that its value will increase over time, which adds to your financial portfolio, gives you a big tax break and, you know, finances a place for you to live.

Along with being expensive, a mortgage can also be complicated, so we’re breaking down the basics for you.

FINDING THE RIGHT LENDER

The companies that supply you with the funds that you need are referred to as “lenders.” Lenders can be banks or mortgage brokers, who have access to both large banks and other loan lenders, like pension funds.

The first thing that potential borrowers should know is that mortgage lenders are in business to make loans. If the underwriter turns down all the applications that lender does not make any money and they are out of business. So the underwriter is not the bad guy in the loan process. Loan guidelines do need to be met and documentation is required and the underwriter’s job to see that those items are achieved for the loan approval.

That said, not all mortgage lenders are created equal. In 2012, the biggest lenders in the country included Wells Fargo, Chase and Bank of America. Those big banks have some great mortgage programs, but they aren’t the only option. You may decide to go local, which is great, but keep in mind that many community banks or credit unions will make a loan to you initially, and then sell it to one of these larger institutions. You want to make sure that you choose the mortgage program that’s right for you, and that whoever you work with directly has a reputation for being reliable and efficient.

STAN’S SLANT Consider finding your mortgage professional first, before hiring a real estate agent. Why? Before shopping for that new home, shouldn’t you know how much you can qualify for first? Why take your time and the real estate agent’s time looking at homes that are well above what you can qualify for?

SHOW ME THE MONEY

Cash may be king, but a high credit score is even better. Mortgage lenders don’t lend hundreds of thousands of dollars to just anyone, which is why it’s so important to maintain your credit score. That score is one of the primary ways that lenders evaluate you as a reliable borrower—that is, someone who’s likely to pay back the money in full. A score of 720 or higher generally indicates a positive financial history; a score below 660 could not only be detrimental, but lead to a higher interest rate. Even if you have a bank account that is overflowing with cash, but you have never made a payment on time in your life, expect to have a harder time in getting approved for that mortgage.

PRE-QUALIFIED VS. PRE-APPROVED

Before you start looking for a home, you will need to know how much you can afford, and the best way to do that is to get pre-qualified for your loan. Many real estate agents want you to be pre-qualified so they can show you homes in your price range.

To get pre-qualified, you just need to provide some financial information to your Discover mortgage banker, such as your income and the amount of savings and investments you have. Your mortgage banker will use this information to estimate how much Discover can lend you.

You can also get pre-approved for your mortgage, which may involve providing your financial documents (W-2 statements, paycheck stubs, bank account statements, etc.) so Discover can verify your financial status and credit. Pre-approval gives you “cash-buyer confidence” when you’re ready to make an offer, and it helps your seller take in your offer seriously because they know you can get the money you need to buy their home.

MORTGAGE STRUCTURE: IT’S A PITI
 With a mortgage, you’ll pay the principal, interest, taxes and insurance — commonly referred to as PITI. Principal: This is the original amount that you borrowed to pay your mortgage. Interest: This is essentially the cost of borrowing money. When you take out a mortgage, you agree to an interest rate, which will determine how much you pay a lender to keep lending. Since a higher interest rate means higher monthly mortgage payments, lower rates might mean that you can afford to borrow more money or pay the loan off faster.

Taxes: Property taxes go toward supporting city, school district, county and/or state infrastructure, and you can pay them along with your mortgage. They’re expressed as a percentage of your property value, so you can roughly estimate what you’ll pay by searching public records for the property taxes for nearby homes of similar value. If you’re a high-risk borrower, your lender might establish an escrow account to hold that money until it’s paid to the proper recipient–in this case, the government. Insurance: Any payments reserved for homeowner’s insurance to protect against fire, theft or other disasters are also held in an escrow account. If you’re a high-risk borrower — or if you lack the 20% down payment — you’re also required to have private mortgage insurance (PMI), which helps guarantee that the lender will get money back if you can’t pay it for any reason.

Mortgages are structured so that the proportion of your payment that goes toward your principal shifts as the years pass. At first, you’re paying mostly interest; eventually, you’ll pay mostly principal. Your actual payments will be the same, but they will be distinguished on the lender’s end in a process known as amortization.

FIXED OR ARM?

When it comes to getting a mortgage loan, homebuyers have two primary options:  A fixed-rate loan maintains the same interest rate and monthly principle and interest payment for the entire term. Most borrowers choose either a 30-year or 15-year fixed-rate term, though other fixed terms may be available.

An adjustable rate mortgage (ARM) usually starts with a fixed term — often five or seven years — and then resets periodically, usually every six to twelve months, in line with current interest rates. This means the interest rate — and the monthly payment–can fluctuate over time, so you should carefully consider your ability to handle potential increases.

IT’S A LOCK: 
Interest rates can change in the time it takes to complete the home loan application process. To protect yourself against a potential rise in interest rates, you can ask your lender to lock in the rate you have been quoted for a specific period of time, usually 30-60 days (some lenders may charge a fee for locking in the rate). If you decide to lock in the rate, be sure to get the agreement in writing and make sure it covers the length of time needed to complete your home purchase or refinance your mortgage. Other borrowers prefer to take the chance that interest rates will decrease while the loan is processed and let the rate on their loan “float.” The rate can then be locked in at any time until the day before your loan closes.

CLOSING COSTS: The actual cost of obtaining a mortgage mainly depends on whether or not the borrower is paying “points” for a lower mortgage rate. These upfront fees (they typically work out to be about 1% of the loan amount) are usually a form of pre-paid interest. If you already have a good down payment, paying points may be a way to further reduce your interest rate on the loan, but they’re generally just a way for the lender to get more money upfront. Points are paid at closing, so if you’re trying to keep your upfront costs as low as possible, go for a zero-point option.

In some cases, there are also other loan processing and underwriting fees associated with the the work involved in the transaction. And, please keep in mind that there may be other closing costs not associated with a mortgage or real estate transaction to be aware of. Appraisal, pre-paid property taxes, insurance and interest, HOA dues and inspections are a few additional out-of-pocket expenses you should budget for.

Either way, a true mortgage professional has to be able to fully articulate the long and short-term financial benefits of choosing one loan scenario over another.

STAN’S SLANT: The final thing that you need to know is that the mortgage business is evolving daily. I have been in the real estate and mortgage world for 40-plus years and I am constantly learning new things and constantly seeing lender guidelines and requirements change. Which is exactly why you want to work with full-time professional lenders who take your business seriously.

by Diane Tuman  

If you find yourself in a position where you have to sell your house quickly, there are a few things you can do to help expedite finding a buyer. Here are some tips from some successful real estate agents:

De-clutter and de-personalize your home:

Look at your home through the eyes of a prospective buyer. Would you be interested in seeing somebody’s wedding photos and kid’s baseball picture? Or would you like to see how the space can be used and picture your belongings in the home? Removing the clutter opens up spaces such as countertops and shelving and lets the buyer use their imagination. Be strategic with your furniture. Pieces in corners tend to make rooms feel smaller.

Have your home ready before placing it on the market:

Walk the home with your agent prior to listing it on the market and make a punch list of things to be done before it hits the MLS. Research shows the activity of a house spikes when it is first listed, so it needs to be ready for that initial surge. If the home is not ready, most of those buyers will not be back to view it when it finally is. That’s why it is essential to put your best foot forward from the get go. Remember, first impressions are typically lasting ones.

Consider staging your home if you are moving before it sells:

A vacant home can feel cold and hollow to prospective buyers. Staging companies can add furnishings to homes to help add warmth and color for a reasonable fee. By placing furniture in your house you are showing buyers how space can be used and giving it a homey feel while still allowing them to picture how their belongings would look. The cost of staging a home is usually less than your first price reduction, and can be an effective tool in selling your home. As an added bonus, furniture helps hide blemishes in carpeting and on the walls.

Have your home inspected before placing it on the market:

Pre-inspections are becoming more and more popular with today’s sellers. For a fee of around $300 to $500, a licensed inspector will evaluate your home’s major systems (including electrical, plumbing, heating, cooling, and roof). By having this prior knowledge, sellers have the chance to make repairs or modifications on their own terms and can alleviate any issues that may come up during a buyer’s inspection. Nobody’s home is perfect, yet sellers are often blindsided by demands for costly repairs they didn’t anticipate on systems they have never had issues with. They often feel stuck after possibly agreeing on a purchase price of less than they originally asked, then after having their home off the open market for 10 to 20 days once it’s under contract being asked to make costly repairs or reduce the price even more. On the positive side, if systems show up as being in good working order after a pre-inspection, sellers can use this information as a marketing tool.

Hire an experienced real estate agent:

Do you feel comfortable being somebody’s guinea pig? That’s exactly how you’ll feel if you make the wrong choice when selecting your agent. An experienced agent will have the knowledge necessary to give you the most leverage in the market. They will have performed enough transactions to anticipate any problems that may arise and know what it takes to sell a home in the most competitive of markets. Ask your agent questions such as how many transactions they performed last year, what their average time on the market was, what their sales price to list price ratios look like, and also for a list of references from past clients. If an agent is unable to answer these questions to your satisfaction, keep looking. Your home is too important to be somebody’s “learning” experience.

Price your home to sell:

No matter what steps and precautions you take, if it is overpriced it will not sell. Partner with your agent when determining the price of your home, and be realistic when setting the sales price. Sellers who actively participate in researching comps (comparable homes) usually have better luck in selling their homes. An agent can show them how they come up with a price based on prior sales and active listings, and, by being involved, sellers get a better feel for the marketplace. Ask to meet with your agent at his or her office so you can view history on the MLS with them. Overpricing first, then counting on settling for the “real” price is setting yourself up for failure.

Cash may be king, but a high credit score is even better. Mortgage lenders don’t lend hundreds of thousands of dollars to just anyone, which is why it’s so important to maintain your credit score. That score is one of the primary ways that lenders evaluate you as a reliable borrower—that is, someone who’s likely to pay back the money in full. A score of 720 or higher generally indicates a positive financial history; a score below 660 could not only be detrimental, but lead to a higher interest rate. Even if you have a bank account that is overflowing with cash, but you have never made a payment on time in your life, expect to have a harder time in getting approved for that mortgage.

PRE-QUALIFIED VS. PRE-APPROVED

Before you start looking for a home, you will need to know how much you can afford, and the best way to do that is to get pre-qualified for your loan. Many real estate agents want you to be pre-qualified so they can show you homes in your price range.

To get pre-qualified, you just need to provide some financial information to your mortgage broker, such as your income and the amount of savings and investments you have. Your mortgage broker will use this information to estimate how much they can lend you.

You can also get pre-approved for your mortgage, which may involve providing your financial documents (W-2 statements, paycheck stubs, bank account statements, etc.) so OJ Mortgage can verify your financial status and credit. Pre-approval gives you “cash-buyer confidence” when you’re ready to make an offer, and it helps your seller take in your offer seriously because they know you can get the money you need to buy their home.

MORTGAGE STRUCTURE: IT’S A PITI With a mortgage, you’ll pay the principal, interest, taxes and insurance — commonly referred to as PITI. 

Principal: This is the original amount that you borrowed to pay your mortgage.Interest: This is essentially the cost of borrowing money. When you take out a mortgage, you agree to an interest rate, which will determine how much you pay a lender to keep lending. Since a higher interest rate means higher monthly mortgage payments, lower rates might mean that you can afford to borrow more.

by Stan Blacker Aug 07, 2013

  1. MYTH: An interest rate is the only thing that impacts your monthly payment.
Wrong. Most monthly mortgage payments consist of principal, interest, taxes and insurance.
  2. MYTH: A pre-qualification is the same as a pre-approval.  
Wrong again. A pre-qualification is when a potential borrower provides basic financial information to the lender to get an estimateof how much house the buyer can afford. Pre-approval actually involves an application and review by an underwriter, verifying the borrower’s credit score, income and assets. Always, pre-approve.
  3. MYTH: Choosing the mortgage banker wherever you do your checking and savings.
Sure, it’s a good place to start, but why stop there? Research your all of options carefully by asking friends, family, tax advisors, realtors or trusted colleagues for referrals. Chances are you will be surprised at the outcome. Rates and fees can vary widely from one lender to another, as can closing costs. You can save thousands of dollars by shopping around.
  4. MYTH: Owning a home is more expensive than renting. 
Actually, owning a home is almost always sound investment over the long term. Value may rise and fall with the market, but as you pay down principal, your investment increases value. Plus, homeowners may benefit from tax deductions, that renters won’t qualify for. And, of course, there’s nothing like that sense of freedom and pride.
  5. MYTH: Times are too hard to refinance right now. 
Yes. The entire world is suffering the cost of the credit crisis, instigated by the mortgage foreclosure fiasco. However, for the majority of homeowners, and a growing number of previous-homeowners who went through the foreclosure or short sale process, there are many viable programs out there. In short, if you haven’t considered refinancing in the last six months or so, you are missing out on a lot of savings. And if you lost your home to foreclosure or short sale prior to 2012, there may be a new world of opportunity to explore.
  6. MYTH: The mortgage process is just too hard. 
Yes. Mortgages require due diligence and refinancing can be daunting. And there really are no one-size-fits-all answers. But, if you look at how much money you can save over the years, then the effort is worth it. Also, because there are mortgage refi loans available with no closing costs, there’s no reason not to exploring refinance options even to save a single percent.  It all adds up!

To get up to speed on the modern mortgage market and make better decisions on loans, simply give us a call at (727) 773-0505

Whether you’re a first-time home buyer or a seasoned investor, the mortgage approval process can be a slightly overwhelming adventure without a proper road map and good team in your corner. While this site is full of useful information, industry terms and calculators that will help you research the mortgage approval process in detail, this particular post was designed to give you a brief outline of the important components involved in getting qualified for a new mortgage loan.

Step One – Organize your documentsTwo years W-2 and one month of paystubs or if self-employed, provide two years tax returns (all schedules attached).

Two months statements for each bank, stock, mutual fund account, and 401k.

If you own rental real estate, provide all rental agreements and two years tax returns, including Schedule E.

If divorced, provide a copy of the divorce decree and property settlement agreement (if applicable).

If you are not a US citizen, provide a copy of your green card, or H-1 or L-1 visa.

Step Two – Pre-Qualification vs. Pre-Approval

A pre-qualification letter is used when you are making an offer on a property. The pre-qualification letter indicates to the seller that you are qualified to purchase the house you are making an offer on. A pre-qualification is normally conducted by your mortgage specialist after he has interviewed you and determined, based on the information you’ve verbally provided him, the dollar amount you can be approved for. Your mortgage specialist will then issue you a pre-qualification letter. Mortgage specialists, however, do not make the final approval, so a pre-qualification is not a commitment to lend.

Pre-approval, on the other hand, involves verifying your credit, down payment, employment history, etc. Your loan application is then submitted to an underwriter and a decision is made regarding your loan. If your loan is pre-approved, you are then issued a pre-approval certificate. Getting your loan pre-approved allows you to close very quickly when you do find a house. A pre-approval can help you negotiate a better price with the seller, since being pre-approved is very close to having cash in the bank to pay for the house! It’s highly recommended that you get pre-approved before you start looking for a house.

Step Three – Shop Loan Programs and Rates

It’s always smart to shop around for the best possible mortgage deal. Armed with your documents in hand, seek out the best quotes based on your individual situation and your future goals. Remember that this decision shouldn’t just mean the lowest interest rate but the best overall loan terms from a trustworthy mortgage lender. Take your time to check out any lenders you are considering applying with, and make sure that they are reputable. After all, a low quote means nothing if that isn’t what you get when it comes time to close.

Questions to keep in mind:

How long do you plan to keep the property? Factors like when you plan to sell the property can affect the type of loan that fits your needs.

Understand the relationship between rates and points. One point is equal to 1% of the loan amount. The more points you pay, the lower the rate will get. Consult your tax advisor for applicable tax deductions.

Compare different programs. This can become confusing and difficult because there are so many different programs to choose from. This is why it’s important to speak with an experienced mortgage specialist who will help you make the best decision for your situation.

READ MORE ABOUT SHOPPING MORTGAGE INTEREST RATES

Step Four – Obtaining Loan Approval

Once you have filled out a loan application, your mortgage specialist will begin the loan approval process immediately by:

Running your credit

Verifying your employment

Verifying the property value

Verifying your assets

This is where most homebuyers make the mistake of kicking back or going furniture shopping. You need to get busy, but whatever you do, don’t take on any new credit or you could throw off your score and ruin your chances of getting approved. Instead, start ensuring that all of the third party items are being ordered and taken care of, such as appraisals, home inspections, homeowners insurance and title insurance. Note: a great mortgage lender can help you with these items, but still shop around to make sure you are getting the best rates.

Step Five – Closing of Your Loan

Once you clear the underwriter’s conditions it is time to schedule your closing. This is where you will be required to sign your final disclosures and pay your closing costs.

Before arriving, review the final disclosures on the settlement statement so that you are not surprised or pressured into taking loan terms that are not what they were supposed to be. Check the interest rate, terms and the name and property address for accuracy.

Bring a cashiers check for the payment of closing costs (Personal checks are usually not accepted) and ensure that you have valid identification in the form of a driver’s license or passport to verify who you are.

Celebrate!

Inflation isn’t rising and the job market, while doing better, is creating just enough jobs to keep up with population growth. So why are rates rising?

You can blame Ben Bernanke.

At least that’s how investors have (over)reacted to the Federal Reserve Board Chairman’s June 19 statement that “the downside risks to the outlook for the economy and the labor market have diminished.”For several years now, the central bank has kept interest rates super-low by buying up billions of dollars worth of bonds. Ideally this helps the economy grow by encouraging businesses and consumers to borrow and spend more. And even though Bernanke also said there would be no immediate change in the central bank’s easy money policy, Wall Street investors figured the moment is near for the Fed to start closing up its efforts to support the economy.

In the real world, that translated to a nationwide average rate leap for a 30-year mortgage to 4.46 percent from 3.93 percent in late June— the biggest one-week increase since 1987 and the highest rate since July 2011, according to the Federal Home Loan Mortgage Corp.

For local home buyers, many of whom have struggled since the Great Recession and credit crisis to qualify for mortgages, this uptick in rates cuts into their buying power.

For example, buyers who obtained a $200,000 mortgage when interest rates were about 3.5 percent in April landed a monthly payment of about $900. But if rates increase to 5 percent, buyers hoping to get that same $900 monthly payment would have to limit their mortgage to $170,000 — or $30,000 less than they could have afforded with the lower loan rate.

And, over the 30-year life of that $200,000 mortgage, a home buyer would pay an additional $63,000 in interest with a 5 percent rate — $63,000 not available for spending within the community on consumer goods or services.

The speed of this change is rattling the healing housing market, but there’s no reason to hit the panic button just yet. Rising rates should just be considered a nudge for would-be buyers to act – as they seek to lock in deals before rates increase further. And in housing, as elsewhere in the economy, real interest rates are still very low by historical standards.

A reverse mortgage is a financial instrument that allows homeowners to borrow money against the value of their home without repayment of the loan until the borrower dies or the residence is sold. While no payments on the loan are due, homeowners must stay current on property taxes and insurance or risk defaulting on the reverse mortgage.

In the United States, homeowners must be at least 62 years old to qualify for a reverse mortgage. Typically, reverse mortgages are utilized by seniors as a retirement plan, supplement to social security, or for unexpected expenses such as medical bills or even home improvements. 

While reverse mortgages can be attractive, and are often the best option for many people, there are some downsides that should be noted.

Reverse mortgages can be expensive. There are typically high up-front costs associated with reverse mortgages, and the interest rates on these types of mortgages may be higher than a traditional home loan. 

Also, because there is no payment being made on the principal or the interest of the mortgage, the resulting compound interest can deflate the equity in the home much quicker than with a traditional mortgage.

Finally, reverse mortgages can be confusing and some less than scrupulous lenders may seek to take advantage of seniors for whom this may not be the best option. If you think that a reverse mortgage may be right for you, make sure to do your homework and feel comfortable with the entire process before committing yourself to anything.