Thursday, May 30, 2013

Where Do Mortgage Interest Rates Actually Come From ?

Chicago, IL  Home of the Chicago Board of Trade

I have listened people for years say things like "The stock market is down, so rates must be going up", or "The Fed Reserve is meeting today and the rates may go up, right ?".

All WRONG.  Have you ever noticed that sometimes the Federal Reserve will make an announcement about reducing the prime rate, and mortgage interest rates actually rise after the announcement?  That doesn't quite make sense does it?

Tuesday, April 30, 2013

How the New Mortgage Eligibility Requirements Affect You...

I am proud to present the article below that has been written specifically for Mortgage Notion by guest blogger ANGIE PICARDO with NerdWallet.  I appreciate her contribution...
Now that the housing market has bottomed out, many lenders are easing borrowing restrictions in order to get more people into homes. There are several programs that the federal government initiated in order to facilitate qualifying more people for mortgages, including the Making Home Affordable Program (MHA). Additionally, banks and credit unions are working with borrowers to make it possible for a larger number of people to qualify for mortgages.

New borrowers are, of course, seeing challenges in securing a home in the first place. Even though there are many houses available and reasonably affordable—especially in distressed markets—borrowers still must secure a loan before they can move forward. To this end, lenders are being more lax about borrowers’ credit history or down payments.

Friday, March 29, 2013

ALERT ! Your Credit Report is a Lot More than Just Your Score...

It happened again the other day.  I had a new client that had recently pulled their own credit report and had a decent middle score above 600.  I can actually originate a loan with this score.

But your credit report is so much more than your score.  Of course, the score matters, but not as much as you would think.  Your credit report contains a lot more information that can keep you from obtaining a mortgage loan than your score.

Sunday, March 24, 2013

Rental History. How to Avoid the Pitfalls of Being A Renter...

It happens all of the time. A person rents a home from a landlord and makes their payments on time, every month. They pay by money order, cash or both, thinking they are doing themselves a good service. Things are going well with their job and life in general, and they save up enough money for a down payment on a new home. And then, they discover that they have a rental history issue.

Tuesday, January 22, 2013

What Alternative Do You Have ? Alternative Credit and How to Make it Work for You...

More and more these days, borrowers are using creditors that do not report to the credit bureaus. Not that the borrowers are seeking them out on purpose. It may be more than a coincidence that when it's hard to obtain credit, those that offer credit don't really pay much attention to the credit bureaus. Something tells me the interest rate to borrow the funds from these creditors is probably a little bit higher than normal...

But that's another blog !

To get back to the blog at hand...This can be a disaster for some clients, because their bad credit scores from the past remain that way, bad scores. Since there has been no recent activity on their credit report, the bad scores become frozen in time.

Monday, January 14, 2013

Who Does the Attorney Represent at Closing ?

Who does the Closing Attorney represent in a real estate transaction?

Well...It depends...

In a cash transaction in the state of Georgia (outright purchase of the property), the attorney generally represents the party that contacted them first to oversee the transaction. But this can be seen a gray area as well, it's according to how the parties act in the transaction as to whose interest the attorney represents. Therefore, it is very important to establish who the attorney will represent in the transaction at the very beginning, so there is no confusion. There is an area on the Purchase & Sale Agreement (Sales Contract) that allows either the buyer or seller to be represented by the attorney.

If financing is involved - well, that's a different story.  Borrower's almost always assume (mistakenly) that the closing attorney represents them during the real estate closing. It is totally understandable to think this, since the buyer generally is footing the bill for the title services.  But this thought process is incorrect.

Sunday, January 6, 2013

Why I Started This Blog...

I purchased my first home in 1992. I was in my mid to late 20's and still was figuring out what it meant to be a grown up. Needless to say, I was scared to death during the loan process. There were a lot of things to do, not to do, to consider and to discuss with my real estate agent. And the mortgage jargon was just as mysterious to me as understanding Mandarin Chinese. Points, DTI, LTV ?  What do these words mean ? Why are they important ? I have never been one to go along with the phrase "Just trust what I say, okay ? ". So I used to spend some evenings looking up all of the words used by the mortgage broker just so I could try to keep up.

Fast Forward to 2005. I am now a mortgage loan officer myself. The real estate industry is booming. People are purchasing and refinancing homes like crazy. But there is one disturbing trend I begin to notice. Borrowers still did not understand the mortgage loan process. It didn't matter if they were buying a home for the first time, or refinancing their second home. They were just as confused as I was 13 years ago when I was in the process of purchasing my home. Not that they were as paranoid as I was, mind you - but confused nonetheless.