IF YOU'RE ALREADY A HOMEOWNER...
... and you have a 30-year fixed rate (or even a 10-year fixed rate) and you have no intention of selling your home in the next five years, STOP WHINING ABOUT HOW YOUR HOME HAS GONE DOWN IN THE VALUE. Your rate ain't changing for a loooooong time, and even if your value has gone down, you're still going to be making the same payments you're making now, and if you're comfortable with those payments, I see no reason why you should be crying like a banshee.
IF YOU'RE A HOMEOWNER AND YOU DON'T HAVE ENOUGH EQUITY TO GET CASH OUT...
... it's not the end of the world. Live within your means, get a second job to pay for your needs and wants. Your house is NOT a giant ATM machine. It never was, to begin with.
IF YOU'RE A HOMEOWNER AND YOU DON'T QUALIFY FOR A REFINANCE TO LOWER YOUR RATE...
...don't walk out on your house just yet. You need to look into FHA loans first. If that doesn't work, have a loan modification company (I refer people to American Modification Agency, since they're the only one out there that's fully licensed and bonded, and approved by the three credit bureaus) work with your lender on making your payments more affordable. If that doesn't work, there are investors looking to buy your home (I work with a company that specializes in buying properties lickety-split). If all else fails, there are affordable litigation options that allow you to stay in your home for less than your current mortgage payments.
Thursday, August 14, 2008
Stop This Homebuyer Insanity Already!
Aaaarghhh!!! Stop this insanity already!
This post may be a bit more blunt than what you're used to coming from me, but some things just have to be said.
IF YOU'RE A HOMEBUYER AND YOU DON'T HAVE MONEY FOR A DOWN PAYMENT...
... you're basically going to be SOOL (S**t Out Of Luck) come October 1st if you don't have a signed purchase contract and preapproval in place because seller-funded Down Payment Assistance is out the door on October 1st.
... keep your fingers crossed that they'll reinstate seller-funded down payment assistance programs but don't get your hopes up. It's better to err on the side of caution on this one. In the meantime, start looking toward your 401k, employer and family members for down payment assistance instead.
... just to put it into perspective, a 3.5% down payment on a $200,000 purchase is $7,000. At the very least, see if you can get your employer or family member to give you even half of that, and then go sell some stuff on eBay, or a garage sale, or get a part-time gig to come up with the rest.
This post may be a bit more blunt than what you're used to coming from me, but some things just have to be said.
IF YOU'RE A HOMEBUYER AND YOU DON'T HAVE MONEY FOR A DOWN PAYMENT...
... you're basically going to be SOOL (S**t Out Of Luck) come October 1st if you don't have a signed purchase contract and preapproval in place because seller-funded Down Payment Assistance is out the door on October 1st.
... keep your fingers crossed that they'll reinstate seller-funded down payment assistance programs but don't get your hopes up. It's better to err on the side of caution on this one. In the meantime, start looking toward your 401k, employer and family members for down payment assistance instead.
... just to put it into perspective, a 3.5% down payment on a $200,000 purchase is $7,000. At the very least, see if you can get your employer or family member to give you even half of that, and then go sell some stuff on eBay, or a garage sale, or get a part-time gig to come up with the rest.
... and you want to buy a single-family residence with a nice yard, WAKE UP! Unless the 'rents had the cha-ching to give you a brand-new, smokin' sportscar for your 16th birthday, your first vehicle probably wasn't a BMW either. If all you can afford the first time around is a condo or a townhome, deal with it. Chances are, owning your own condo unit or townhome is going to be a heck of a lot better than throwing your money away on rent every month. You can always buy a bigger, better home when your earnings catch up with your lifestyle wishes.
... keep in mind that before all the No Money Down loans happened, people did have to put at least 20% down. The straight-up No Money Down days are OVER!!!
Tuesday, July 22, 2008
How To Raise Your Credit Score By Up To 249 Points
If you need a higher score in order to qualify for a particular loan, or get a better interest rate, I hope you find this article written by Terry Price helpful.
While I do know the rudiments when it comes to what affects someone's credit scores (late payments, collections, maxed out credit lines, etc.), in the same way that mortgage advise is best left to a mortgage expert, I would rather refer people to true credit experts when it comes to raising one's credit scores.
Read and learn!
-Dez
=======================================
Insider Techniques To Raise Your Credit Score... FAST!
-by Terry Price
=======================================
If there is one question I'm asked by consumers more than any other about credit, it's this "What's the fastest way to raise my credit score?". My response is always the same "How much
do you want to raise it?"
If you wish to increase your score from 580 to 650 then your strategy will be very different from someone wanting to go from 670 to 725. Why? Because you starting point is different which requires a different approach. Also, while the removal of negative items from a report will almost always lead to an increase in score, it's a basic concept at best. Therefore, within this article, we'll discuss somewhat inside techniques known by very few (since this is what our company
specializes in publishing).
In relation to just removing negative items, these are techniques which you can use even if you have NO derogatory information on your credit report. We'll start with the most overlooked
strategy first and that's your...
DEBT to CREDIT RATIO: The most fraudulent belief I've been hearing for over 15 years is "I have excellent credit, I pay all my bills off in full every month!" This is a false belief for one to buy into and understanding your debt to credit ratio holds the key to getting your "credit mindset" right.
Your debt to credit ratio is your ratio of debt to total available credit you have been extended (revolving accounts only). For example. If you have $10,000 in total unsecured revolving credit accounts and you're currently in debt $2500, then your debt to credit ratio is 25%. Since the main way lenders make money is by charging interest, one of the elements of the credit scoring model is driven by your ability to maintain balances and pay over time. This shows your true (long term) credit worthiness which is most profitable to lenders since they make money primarily via interest and not annual fees.
Over the years we've discovered without question that carrying the proper debt to credit ratio will boost your score faster than paying off your bills in full each month. I have argued with the Better Business Bureau on this topic for and they still disagree (despite my sending them proof
from Fair Isaacs own website http://www.myfico.com/ the organization which invented the credit scoring software used by credit bureaus).
Of course, what do you do if you're like most Americans and your debt to credit ratio is too high? For example. You have $10,000 in unsecured revolving accounts but you owe $8500, thereby
giving you an 85% debt to credit ratio. How can you bring it down without selling everything you own? The answer is simple and takes us to the next technique which is...
SUB-PRIME MERCHANDISE CARDS: The single most cost effective (and powerful) tool for consumers to increase their high credit limit and decrease their debt to credit ratio is the use of Sub-Prime Merchandise Cards which report to one of more of the major credit bureaus.
Unfortunately, despite their immense benefits, these are the most misunderstood cards in the credit industry. A large portion of the misunderstanding is due to marketers misrepresenting the cards and the growing number of companies promoting them. When you learn how they work one quickly understands why they have been the subject of much misrepresentation.
A Sub-Prime Merchandise Card is nothing more than a card attached to a line of credit which allows you to buy merchandise from a specific vendor (usually the company that sold you the
card). The merchandise (in most cases) will be purchased through a catalog or online mall.
Where the problem arises is that the cards are marketed almost exclusively to the sub prime market via email, telemarketing and direct mail etc. The reason for this is they can advertise
almost irresistible offers like "$5,000 Credit Card... GUARANTEED! No Credit Check! NO Cosigner! You cannot be turned down!" or "Unsecured $10,000 Credit Line! Everyone Approved!". I'm sure you get the idea...
While there are many companies which do this and are a "shady at best", there are a few which do it legitimately and it's the best kept secret to build your credit and build it fast.
Here's how it works: the company approves anyone with a pulse (literally) and gives them a card for $2,500 to $12,500 with NO credit check and NO cosigner. However, the card is only good for merchandise through their website or catalogs and the consumer is required to put down a deposit on whatever they purchase. After the deposit is paid, the remaining balance is financed on the card.
For example. A person buys $1,000 worth of merchandise. Their deposit is $300 so they then finance $700 on their merchandise card and make payments. Sound like a scam? If you say "Yes" like most people then you're missing the point... big time.
With a legitimate Sub-Prime Merchandise Card your credit line WILL be reported to at least one major credit bureau (or more). This means if you get a $5,000 card and you finance
$500, on your credit report it will look like any other credit card and will do three extremely important things for you.
1.) It will increase your current "High Credit Limit" by $5,000 almost overnight as the account "looks" like any other unsecured revolving account.
2.) By carrying a small outstanding balance it will positively impact your credit report by building and showing potential lenders your credit worthiness.
3.) With a good payment history you are virtually guaranteed to receive "legitimate" pre-approved credit offers in the future due to other lenders renting your name from the credit
bureaus.
This technique is hard to beat for both cost and effectiveness. Of course, the whole key is knowing exactly which cards report to the credit bureau and offer the best rates.
Since this is such a loophole, I am sad to say it could be gone at anytime.
PIGGYBACKING: Despite its' virtually unlimited potential, piggybacking is not used by nearly as many consumers as it should be. It's easy, effective, and extremely fast. Unfortunately,
it's mostly used among parents and siblings while those who can really benefit stay in the dark.
How it works. Almost every credit card or credit account will allow the primary account holder to add on (at a later date) what's known as an "Authorized User" or "Secondary Account
Holder". In most cases, when this is done, the entire account history (retroactively) gets posted to the authorized users credit report regardless of their current age or credit history!
For example. If it's a credit card with a $10,000 limit which has been paid as agreed for the last 10 years, then that complete history will be posted to the authorized users' credit report. I once saw a clients' credit report who used this technique with his mother. He was only 24 at the time and he had a $15,000 Gold credit card on his report with history going back 11 years! I laughed as I thought to myself that this kid would have had to be approved when he was 13 years old
for this account to be his!
As you can see, this strategy is usually only used by parents and their children and in most cases with no regard to the benefits the children are reaping credit wise! In fact, in recent years, due to its' effectiveness, this technique has led individuals with excellent credit scores to "rent out" authorized user accounts on one or even multiple credit cards in return for a fee! I once recall seeing an ad in USA TODAY for just such an opportunity. Like most good credit loopholes, I'm sure this methods' days are numbered much like what may be the case with...
ADVANCED CREDIT PROFILING: This is a strategy while not complex, can be taken to very complex levels. Even in its' most basic form, it's taken advantage of by very, very few. It
involves intentionally building your credit report in a way which creates a "profile" that closely fits the criteria of most lenders (as well as the overall credit scoring system). Again, this is a technique which can be used in a myriad of complex ways, but for simplicity I will explain it in
its' most basic form.
While many consumers will boast when they have 10, 20, 30 or even 50 thousand dollars worth of credit cards on their report, many of these same people do NOT have even one mortgage,
automotive loan or lease, equipment loan or a even a line of credit with a local bank or credit union. These other forms of credit create a much more well rounded credit profile for the consumer. This is achieved by showing greater credit account diversity and experience with multiple types of credit due to the various lines held.
For example. A person with $50K in credit cards does not represent near the credit experience as a person with the same $50K along with a mortgage, an automotive loan and an equipment lease. We have clients who have financed vehicles not because they had to (or even wanted to) but because they "needed to" in order to create a credit profile that would position them in the
future to secure the lowest possible rate on a mortgage when they applied and needed it.
More complex forms of Advance Credit Profiling involve one subscribing to affluent or semi-affluent business and professional publications and organizations. These would include
magazines, newsletters, trade journals and national associations. The goal is to get ones name into the databases of these publications and organizations. Why? To get on highly targeted lists
in order to receive select credit offers.
Marketers of credit offers have found that simply renting names of consumers from the credit bureaus does not provide enough information about the person as a credit risk anymore.
Therefore, it is speculated that many will rent a list from the credit bureau and then cross-reference this list against another list they have secured from a consumer source such as an
affluent business or professional publication, trade journal or organization.
By crossing the two lists together the marketers find the names contained on both lists. This in turn provides them with one highly refined and targeted list to mail their offer to. This results in shortening the process of securing a new quality account holder thus lower the overall account
acquisition cost of new accounts.
When a consumer learns how to intentionally put themselves into these databases to wind up on these refined lists, the credit building process is sped up exponentially. Of course, many would call this "highly speculative" but we have undeniable experience that it works.
DEPOSIT LOAN PROGRAMS: This is a technique so unbelievable that I myself proclaimed it had to be a scam before researching the facts. It allows the consumer (or business) to have a
$25,000 to $250,000 loan appear on their credit report as "Paid as Agreed" by way of very creative financing. This method is extremely effective and not within the budget of most ($750 to $7,500 upfront). Also, because this technique takes advantage of certain banking laws, I have reason to believe it could be made unavailable at any time if those banking laws were to change. This method can be used with consumer credit files on SSN's as well as business and corporate credit files done on TIN's as well as Dunn and Bradstreet.
In the end, all of us need to remember that today our credit score is more important than it has ever been in the history of the credit reporting system. While credit miracles don't happen
overnight, you can create your own credit miracles by applying simple insider strategies consistently over time. Before you know it, you're a proud member of the 700 Club. The "700
Plus Credit Score" club that is!
=======================================
The "CREDIT SECRETS BIBLE" has been in print since 1994 and is published by Consumer Publishing Group. For more information on the "CREDIT SECRETS BIBLE" click here.
=======================================
While I do know the rudiments when it comes to what affects someone's credit scores (late payments, collections, maxed out credit lines, etc.), in the same way that mortgage advise is best left to a mortgage expert, I would rather refer people to true credit experts when it comes to raising one's credit scores.
Read and learn!
-Dez
=======================================
Insider Techniques To Raise Your Credit Score... FAST!
-by Terry Price
=======================================
If there is one question I'm asked by consumers more than any other about credit, it's this "What's the fastest way to raise my credit score?". My response is always the same "How much
do you want to raise it?"
If you wish to increase your score from 580 to 650 then your strategy will be very different from someone wanting to go from 670 to 725. Why? Because you starting point is different which requires a different approach. Also, while the removal of negative items from a report will almost always lead to an increase in score, it's a basic concept at best. Therefore, within this article, we'll discuss somewhat inside techniques known by very few (since this is what our company
specializes in publishing).
In relation to just removing negative items, these are techniques which you can use even if you have NO derogatory information on your credit report. We'll start with the most overlooked
strategy first and that's your...
DEBT to CREDIT RATIO: The most fraudulent belief I've been hearing for over 15 years is "I have excellent credit, I pay all my bills off in full every month!" This is a false belief for one to buy into and understanding your debt to credit ratio holds the key to getting your "credit mindset" right.
Your debt to credit ratio is your ratio of debt to total available credit you have been extended (revolving accounts only). For example. If you have $10,000 in total unsecured revolving credit accounts and you're currently in debt $2500, then your debt to credit ratio is 25%. Since the main way lenders make money is by charging interest, one of the elements of the credit scoring model is driven by your ability to maintain balances and pay over time. This shows your true (long term) credit worthiness which is most profitable to lenders since they make money primarily via interest and not annual fees.
Over the years we've discovered without question that carrying the proper debt to credit ratio will boost your score faster than paying off your bills in full each month. I have argued with the Better Business Bureau on this topic for and they still disagree (despite my sending them proof
from Fair Isaacs own website http://www.myfico.com/ the organization which invented the credit scoring software used by credit bureaus).
Of course, what do you do if you're like most Americans and your debt to credit ratio is too high? For example. You have $10,000 in unsecured revolving accounts but you owe $8500, thereby
giving you an 85% debt to credit ratio. How can you bring it down without selling everything you own? The answer is simple and takes us to the next technique which is...
SUB-PRIME MERCHANDISE CARDS: The single most cost effective (and powerful) tool for consumers to increase their high credit limit and decrease their debt to credit ratio is the use of Sub-Prime Merchandise Cards which report to one of more of the major credit bureaus.
Unfortunately, despite their immense benefits, these are the most misunderstood cards in the credit industry. A large portion of the misunderstanding is due to marketers misrepresenting the cards and the growing number of companies promoting them. When you learn how they work one quickly understands why they have been the subject of much misrepresentation.
A Sub-Prime Merchandise Card is nothing more than a card attached to a line of credit which allows you to buy merchandise from a specific vendor (usually the company that sold you the
card). The merchandise (in most cases) will be purchased through a catalog or online mall.
Where the problem arises is that the cards are marketed almost exclusively to the sub prime market via email, telemarketing and direct mail etc. The reason for this is they can advertise
almost irresistible offers like "$5,000 Credit Card... GUARANTEED! No Credit Check! NO Cosigner! You cannot be turned down!" or "Unsecured $10,000 Credit Line! Everyone Approved!". I'm sure you get the idea...
While there are many companies which do this and are a "shady at best", there are a few which do it legitimately and it's the best kept secret to build your credit and build it fast.
Here's how it works: the company approves anyone with a pulse (literally) and gives them a card for $2,500 to $12,500 with NO credit check and NO cosigner. However, the card is only good for merchandise through their website or catalogs and the consumer is required to put down a deposit on whatever they purchase. After the deposit is paid, the remaining balance is financed on the card.
For example. A person buys $1,000 worth of merchandise. Their deposit is $300 so they then finance $700 on their merchandise card and make payments. Sound like a scam? If you say "Yes" like most people then you're missing the point... big time.
With a legitimate Sub-Prime Merchandise Card your credit line WILL be reported to at least one major credit bureau (or more). This means if you get a $5,000 card and you finance
$500, on your credit report it will look like any other credit card and will do three extremely important things for you.
1.) It will increase your current "High Credit Limit" by $5,000 almost overnight as the account "looks" like any other unsecured revolving account.
2.) By carrying a small outstanding balance it will positively impact your credit report by building and showing potential lenders your credit worthiness.
3.) With a good payment history you are virtually guaranteed to receive "legitimate" pre-approved credit offers in the future due to other lenders renting your name from the credit
bureaus.
This technique is hard to beat for both cost and effectiveness. Of course, the whole key is knowing exactly which cards report to the credit bureau and offer the best rates.
Since this is such a loophole, I am sad to say it could be gone at anytime.
PIGGYBACKING: Despite its' virtually unlimited potential, piggybacking is not used by nearly as many consumers as it should be. It's easy, effective, and extremely fast. Unfortunately,
it's mostly used among parents and siblings while those who can really benefit stay in the dark.
How it works. Almost every credit card or credit account will allow the primary account holder to add on (at a later date) what's known as an "Authorized User" or "Secondary Account
Holder". In most cases, when this is done, the entire account history (retroactively) gets posted to the authorized users credit report regardless of their current age or credit history!
For example. If it's a credit card with a $10,000 limit which has been paid as agreed for the last 10 years, then that complete history will be posted to the authorized users' credit report. I once saw a clients' credit report who used this technique with his mother. He was only 24 at the time and he had a $15,000 Gold credit card on his report with history going back 11 years! I laughed as I thought to myself that this kid would have had to be approved when he was 13 years old
for this account to be his!
As you can see, this strategy is usually only used by parents and their children and in most cases with no regard to the benefits the children are reaping credit wise! In fact, in recent years, due to its' effectiveness, this technique has led individuals with excellent credit scores to "rent out" authorized user accounts on one or even multiple credit cards in return for a fee! I once recall seeing an ad in USA TODAY for just such an opportunity. Like most good credit loopholes, I'm sure this methods' days are numbered much like what may be the case with...
ADVANCED CREDIT PROFILING: This is a strategy while not complex, can be taken to very complex levels. Even in its' most basic form, it's taken advantage of by very, very few. It
involves intentionally building your credit report in a way which creates a "profile" that closely fits the criteria of most lenders (as well as the overall credit scoring system). Again, this is a technique which can be used in a myriad of complex ways, but for simplicity I will explain it in
its' most basic form.
While many consumers will boast when they have 10, 20, 30 or even 50 thousand dollars worth of credit cards on their report, many of these same people do NOT have even one mortgage,
automotive loan or lease, equipment loan or a even a line of credit with a local bank or credit union. These other forms of credit create a much more well rounded credit profile for the consumer. This is achieved by showing greater credit account diversity and experience with multiple types of credit due to the various lines held.
For example. A person with $50K in credit cards does not represent near the credit experience as a person with the same $50K along with a mortgage, an automotive loan and an equipment lease. We have clients who have financed vehicles not because they had to (or even wanted to) but because they "needed to" in order to create a credit profile that would position them in the
future to secure the lowest possible rate on a mortgage when they applied and needed it.
More complex forms of Advance Credit Profiling involve one subscribing to affluent or semi-affluent business and professional publications and organizations. These would include
magazines, newsletters, trade journals and national associations. The goal is to get ones name into the databases of these publications and organizations. Why? To get on highly targeted lists
in order to receive select credit offers.
Marketers of credit offers have found that simply renting names of consumers from the credit bureaus does not provide enough information about the person as a credit risk anymore.
Therefore, it is speculated that many will rent a list from the credit bureau and then cross-reference this list against another list they have secured from a consumer source such as an
affluent business or professional publication, trade journal or organization.
By crossing the two lists together the marketers find the names contained on both lists. This in turn provides them with one highly refined and targeted list to mail their offer to. This results in shortening the process of securing a new quality account holder thus lower the overall account
acquisition cost of new accounts.
When a consumer learns how to intentionally put themselves into these databases to wind up on these refined lists, the credit building process is sped up exponentially. Of course, many would call this "highly speculative" but we have undeniable experience that it works.
DEPOSIT LOAN PROGRAMS: This is a technique so unbelievable that I myself proclaimed it had to be a scam before researching the facts. It allows the consumer (or business) to have a
$25,000 to $250,000 loan appear on their credit report as "Paid as Agreed" by way of very creative financing. This method is extremely effective and not within the budget of most ($750 to $7,500 upfront). Also, because this technique takes advantage of certain banking laws, I have reason to believe it could be made unavailable at any time if those banking laws were to change. This method can be used with consumer credit files on SSN's as well as business and corporate credit files done on TIN's as well as Dunn and Bradstreet.
In the end, all of us need to remember that today our credit score is more important than it has ever been in the history of the credit reporting system. While credit miracles don't happen
overnight, you can create your own credit miracles by applying simple insider strategies consistently over time. Before you know it, you're a proud member of the 700 Club. The "700
Plus Credit Score" club that is!
=======================================
The "CREDIT SECRETS BIBLE" has been in print since 1994 and is published by Consumer Publishing Group. For more information on the "CREDIT SECRETS BIBLE" click here.
=======================================
Monday, July 14, 2008
Let Lexington Law Fix Your Credit Issues
You were only seven days late on your mortgage payment but your lender slapped with you with a 30-day late. Your daughter took out a credit card in your name without your knowledge and bought some bling-bling. You screamed "Fraud alert!" but credit card company still claims that you're liable. Your cellphone got stolen and someone made an all-day call to Europe, and you got whacked with a king's ransom in overseas phone charges. Ten years ago, that hospital that told you to go home and take some aspirin and then slapped you with a $2,000 invoice a few months after for some procedure that you know you didn't have still has their medical collection on your record, ten years after the fact.
Things like these are what bring down your credit score, and you end up getting unjustly punished. You get hit with higher interest rates, or worse, get denied for a mortgage.
If you're like most people, you know how important it is to clean up your credit but either you don't know how to go about doing it or you just don't want to deal with it at all. If you fall in either one of these categories, my recommendation is to go to a company like Lexington Law Firm
The truth of the matter is, in the same way that mortgage pros know lender guidelines like the back of our hands since we live and breathe this stuff day in and day out, only credit repair companies like Lexington Law Firm
know whether you've got a case against the creditors or not. Plus, the fact is, nothing scares the pants off creditors like someone calling with 'Law Group' in their company name. You, on the other hand, will most likely get some eye-rolling, ho-hum reaction from whoever's on the other line, no matter if you yell and scream till Kingdom Come.
Things like these are what bring down your credit score, and you end up getting unjustly punished. You get hit with higher interest rates, or worse, get denied for a mortgage.
If you're like most people, you know how important it is to clean up your credit but either you don't know how to go about doing it or you just don't want to deal with it at all. If you fall in either one of these categories, my recommendation is to go to a company like Lexington Law Firm
The truth of the matter is, in the same way that mortgage pros know lender guidelines like the back of our hands since we live and breathe this stuff day in and day out, only credit repair companies like Lexington Law Firm
Friday, July 11, 2008
Lenders Catch On To "Buy & Bail"
A couple years ago, you bought a no-frills home with a yard so small a chihuahua would get claustrophobia if you let the little critter stay out there for too long. You thought $500,000 was such a steal, considering that there were ten other offers on it. Today, it's only worth $350,000.Over the weekend, you find out that a much larger home down the street is for sale. It's got a yard that could hold a small country, and , and it's got all the upgrades that you could ever wish for. The price tag? $300,000.
"Hmmm," you say, as your mind races a mile a minute. If you're thinking that you could use your good credit to purchase a second home by telling the lender that you're going to rent out your first property and then let it fall into foreclosure once you've purchased the second one, think again. Lenders are on to what's known as the "buy-and-bail" and they've put new guidelines into place to safeguard against "buy-and-bail" situations.
Here are a couple of them:
- The borrower's current property has to have at least 30% equity in it.
- If the borrower has put their current property up for sale, and it does not close prior to the second property closing, the lender will require that the housing payment be included in the qualifying ratios unless one of the following exists: the borrower has a minimum two year history of managing rental properties verified through the most recent two years of tax returns; or provides a copy of the fully executed sales contract and the sale of the current home closes simultaneously with the subject transaction; or if not closing simultaneously, provides a copy of the fully executed sales contract, lenders commitment letter to the buyer of the current home, and verification of post close reserves sufficient to cover 6 months housing payments
Lastly, if you're thinking of getting an FHA loan and having just your spouse be on the new loan so that your debt-to-income ratios meet the lender's guidelines, think again. FHA guidelines require that the non-borrower spouse's debts be included as part of the total debt. The logic behind this is that the additional debt will impact the couple's ability to repay their mortgage.
There are several major changes to Fannie Mae guidelines that have to do with conversion of principal residence to rental property, as well bankruptcy and foreclosure seasoning requirements. If you'd like to get more detailed information about these new Fannie Mae guidelines, holla' at me!
Monday, July 7, 2008
Don't Go Out Looking At Homes Without A Preapproval
One of my Realtor partners, John Carlson, has a personality as big as the state of Texas. I'm sure that's partly why he's always in the top 10% of Santa Clarita's realtors.
It doesn't hurt that he definitely knows his stuff when it comes to buying and selling real estate, of course, but people will always gravitate toward someone who makes them feel immediately at ease and treats them like family.
The first words out of John's mouth when I was first introduced to him were, "You're really tiny." to which all 60 inches of me plus 3 extra inches by way of stilleto heels quipped, "No, I'm aerodynamic. I'm low to the ground."
He may have one joke in his hand and a dozen up his sleeve at all times but the one thing that John doesn't joke about though is a preapproval.
When he tells people time and again, "You're not getting into my car without a preapproval," he means it, and he's not alone. Any realtor worth his or her Open House sign wouldn't touch a prospective buyer with a 10-foot pole without a preapproval either, and why would they?
To be blunt about it, it's bad business to spend your time and energy on buyers who may not even be able to afford the homes that they're looking at. Not when the price of gas is $5/gallon. Not when you don't get paid unless a deal closes.
Unless you're a masochist and get off on having your heart broken, looking at homes when you have no idea how much home you can afford, or if you can afford it at all, is like going into a world-class spa to get the head-to-toe treatment, only to find out you only have enough money to get one brow waxed. You're going to fall in love with a home that you simply can't afford.
So, my advise is, get thee to a loan officer for your preapproval before you ask your Realtor to take you out for a drive.
It doesn't hurt that he definitely knows his stuff when it comes to buying and selling real estate, of course, but people will always gravitate toward someone who makes them feel immediately at ease and treats them like family.
The first words out of John's mouth when I was first introduced to him were, "You're really tiny." to which all 60 inches of me plus 3 extra inches by way of stilleto heels quipped, "No, I'm aerodynamic. I'm low to the ground."
He may have one joke in his hand and a dozen up his sleeve at all times but the one thing that John doesn't joke about though is a preapproval.
When he tells people time and again, "You're not getting into my car without a preapproval," he means it, and he's not alone. Any realtor worth his or her Open House sign wouldn't touch a prospective buyer with a 10-foot pole without a preapproval either, and why would they?
To be blunt about it, it's bad business to spend your time and energy on buyers who may not even be able to afford the homes that they're looking at. Not when the price of gas is $5/gallon. Not when you don't get paid unless a deal closes.
Unless you're a masochist and get off on having your heart broken, looking at homes when you have no idea how much home you can afford, or if you can afford it at all, is like going into a world-class spa to get the head-to-toe treatment, only to find out you only have enough money to get one brow waxed. You're going to fall in love with a home that you simply can't afford.
So, my advise is, get thee to a loan officer for your preapproval before you ask your Realtor to take you out for a drive.
Tuesday, July 1, 2008
8 Things You Should NOT Do When Applying For A Home Loan
This is a list of things to steer clear of when you are seeking to obtain financing for a home. The following items may prove to be a detriment when you wish to move forward with the loan process.
- Don’t buy or lease a car! Lenders look carefully at your debt-to-income ratio. A large payment such as a car lease or purchase can greatly impact those ratios and prevent you from qualifying for a home loan.
- Don't co-sign for someone else's car or home loan! When the lender pulls your credit, it could lower it. In addition, if the debt shows up on your credit report, unless you can prove by way of cancelled checks that someone else is making the payments, that debt will be counted as yours and it could affect your ability to qualify for a higher loan amount.
- Don’t move assets from one bank account to another! These transfers show up as new deposits and complicate the application process, as you must then disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if you need to.
- Don’t change jobs! A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.
- Don’t buy new furniture or major appliances for your “new home!” If the new purchases increase the amount of debt you are responsible for on a monthly basis, there is the possibility this may disqualify you from getting the loan, or cut down on the available funds you need to meet closing costs.
- Don’t run a TRW report on yourself! This will show as an inquiry on your lender’s credit report. Inquiries must be explained in writing.
- Don’t attempt to consolidate bills before speaking with your lender! The lender can advise you if this needs to be done.
- Don’t pack or ship information needed for the loan application! Important paperwork such as W-2 forms, divorce decrees, and tax returns should not be sent with your household goods. Duplicate copies take weeks to obtain, and could stall the closing date on your transaction.
- Don't close any credit cards unless your mortgage consultant tells you it's okay to do so. Your credit score is determined by how timely your payments are, how much debt you carry, the type of debt you have (mortgage, car loan, major credit cards, etc.) and how long you've had credit. Closing credit cards- especially if you've had them for a long time- could potentially lower your score.
Monday, June 23, 2008
Refinancing: The Mortgage Process Simplified
When you refinance, you'll go through almost the same process as when you first purchased your home, with the main difference being that you don't have the get-preapproved-and-find-a-house-to-purchase element.
Here's a simplified step-by-step process of what to expect when you're going through a refinance transaction.
1) You give your loan officer the following documentation: most recent paystubs, tax returns for the last two years, the last three months' bank statements, most current 401k, stocks and bonds statements (if any), a copy of your most current mortgage statement and a copy of your homeowners insurance policy.
2) Your loan officer will need to pull your credit report to find out what your credit score is.
3) Your loan officer, after doing a value check to make sure that your loan-to-value ratio is where it should be, will arrange to have an appraiser call you to set up a time to swing by your place and do an appraisal. You'll typically need to pay the appraiser on that same day.
4) Your loan officer will start putting your file together so it can be submitted to the lender for underwriting. Your file will include the income and asset documentation that you submitted, as well as the appraisal report, escrow instructions and a preliminary title report.
5) The lender will review your file, and if the underwriter doesn’t have any additional conditions (such as updated bank statements, etc.) that need to be submitted, your loan documents will be emailed to the escrow company. The escrow company will call you in to sign your loan documents or have a notary go to your house to have you sign loan docs. This is also the time that your escrow officer will let you know how much money you need to bring in for the rest of closing costs, if you asked that the amount not be rolled into your new loan amount.
Note: While not very many loan advisors attend their clients signing but I really prefer to be there, so that I can check and double-check and explain every document before my client signs anything.
6) Your signed loan documents are taken back to the escrow company. The escrow officer adds some more documents to the file and messengers it back to the lender.
7) The lender’s underwriter reviews your documents to make sure all the i’s are dotted and the t’s crossed. He or she will then tell the lender to release the money to the title company. The title company will then wire the money to escrow. Escrow disburses the funds accordingly.
8) Escrow sends out the forms to the courthouse of the county in which the property is located for recording.
9) Shortly before or after the recording, the escrow officer will call you and confirm that the deal's done. If you're doing a cashout refinance, you'll either pick up a check or have the escrow company wire it into your bank account.
10) Hooray! You're done!
Here's a simplified step-by-step process of what to expect when you're going through a refinance transaction.
1) You give your loan officer the following documentation: most recent paystubs, tax returns for the last two years, the last three months' bank statements, most current 401k, stocks and bonds statements (if any), a copy of your most current mortgage statement and a copy of your homeowners insurance policy.
2) Your loan officer will need to pull your credit report to find out what your credit score is.
3) Your loan officer, after doing a value check to make sure that your loan-to-value ratio is where it should be, will arrange to have an appraiser call you to set up a time to swing by your place and do an appraisal. You'll typically need to pay the appraiser on that same day.
4) Your loan officer will start putting your file together so it can be submitted to the lender for underwriting. Your file will include the income and asset documentation that you submitted, as well as the appraisal report, escrow instructions and a preliminary title report.
5) The lender will review your file, and if the underwriter doesn’t have any additional conditions (such as updated bank statements, etc.) that need to be submitted, your loan documents will be emailed to the escrow company. The escrow company will call you in to sign your loan documents or have a notary go to your house to have you sign loan docs. This is also the time that your escrow officer will let you know how much money you need to bring in for the rest of closing costs, if you asked that the amount not be rolled into your new loan amount.
Note: While not very many loan advisors attend their clients signing but I really prefer to be there, so that I can check and double-check and explain every document before my client signs anything.
6) Your signed loan documents are taken back to the escrow company. The escrow officer adds some more documents to the file and messengers it back to the lender.
7) The lender’s underwriter reviews your documents to make sure all the i’s are dotted and the t’s crossed. He or she will then tell the lender to release the money to the title company. The title company will then wire the money to escrow. Escrow disburses the funds accordingly.
8) Escrow sends out the forms to the courthouse of the county in which the property is located for recording.
9) Shortly before or after the recording, the escrow officer will call you and confirm that the deal's done. If you're doing a cashout refinance, you'll either pick up a check or have the escrow company wire it into your bank account.
10) Hooray! You're done!
The Homebuyer's Mortgage Process Simplified
If you're buying a home, here's a simplified step-by-step process of what to expect when you're going through a mortgage transaction.
1) Before you do anything else, get preapproved for a loan so that you know if you're qualified and if you are, how much home you qualify for. Heads up that you're going to need to gather your income (most recent paystubs, tax returns for 2006 and 2007) and asset (the last three months' bank statements, most current 401k, stocks, bonds and life insurance statements, etc.) documentation. Your loan officer will also need to pull your credit report to find out what your credit score is.
2) Start looking for a realtor to represent you in the buying process. Your loan officer will usually have a list of recommended realtors. If not, ask trusted family and friends for references.
3) Once you're preapproved, go look at homes within your price range with your realtor.
4) Once you find a home you like, your realtor will send an offer letter to the listing agent for that particular property.
5) If the seller accepts your offer, you’ll be giving your realtor a check (usually $3,000 to $5,000 for a single-family residence) to give to the escrow company that the seller’s agent chooses, and that will be kept “in escrow” as your earnest money deposit until the end of the transaction. Usually, that amount goes towards your closing cost and down payment at the end of the transaction.
6) A typical purchase transaction can take anywhere from 30-45 days. Sometimes it's less. Sometimes it takes longer. From the time that you get accepted on your offer, you typically have a 17-day contingency in which you’ll want to get the inspection done (to make sure the house is in good shape and doesn’t have mold, cracks in the foundation, etc,) and the appraisal as well (to make sure the house is valued correctly.
If the home is worth less than the offered price, you'll have to decide whether you want to pay over and above that or walk away from the deal while the 17-day contingency is still in effect. If it’s valued more than the purchase price, hey, so much the better. Instant equity for you!).
Within this contingency period is when you'll also need to have your loan approval (what you had prior to finding a house was a preapproval). In the approval process, in addition to your income and asset documentation, the lender will look at the appraisal report, escrow instructions, preliminary title report to make sure the property’s free and clear, and the value is where it should be. Expect to sign a ton of paperwork. Fun times. Fun times.
7) If the lender doesn’t have any additional conditions (such as updated bank statements, etc.) that have to be met prior to sending out the loan documents to the escrow company, the loan documents will be sent to the escrow company. The escrow company will call you in to sign your loan documents or have a notary go to your house to have you sign loan docs. This is also the time that your escrow officer will let you know how much money you need to bring in for the rest of the down payment or closing costs, if any.
Note: While not very many loan advisors attend their clients signing but I really prefer to be there, so that I can check and double-check and explain every document before my client signs anything.
8) Your signed loan documents are taken back to the escrow company. The escrow officer adds some more documents to the file and messengers it back to the lender.
9) The lender’s underwriter reviews your documents to make sure all the i’s are dotted and the t’s crossed. He or she will then tell the lender to release the money to the title company. The title company will then wire the money to escrow. Escrow disburses the funds accordingly.
10) Escrow sends out the forms to the courthouse of the county in which your property is located so that the property can be recorded in your name.
11) Shortly before or after the recording, your realtor will take you to the property to do a walkthrough to make sure the property is in the condition that it should be.
12) The escrow officer will call you and confirm that the property has been recorded in your name and arrange for you to swing by and pick up your keys.
13) Hooray! You walk into your new home and do the happy-happy-joy-joy dance!
1) Before you do anything else, get preapproved for a loan so that you know if you're qualified and if you are, how much home you qualify for. Heads up that you're going to need to gather your income (most recent paystubs, tax returns for 2006 and 2007) and asset (the last three months' bank statements, most current 401k, stocks, bonds and life insurance statements, etc.) documentation. Your loan officer will also need to pull your credit report to find out what your credit score is.
2) Start looking for a realtor to represent you in the buying process. Your loan officer will usually have a list of recommended realtors. If not, ask trusted family and friends for references.
3) Once you're preapproved, go look at homes within your price range with your realtor.
4) Once you find a home you like, your realtor will send an offer letter to the listing agent for that particular property.
5) If the seller accepts your offer, you’ll be giving your realtor a check (usually $3,000 to $5,000 for a single-family residence) to give to the escrow company that the seller’s agent chooses, and that will be kept “in escrow” as your earnest money deposit until the end of the transaction. Usually, that amount goes towards your closing cost and down payment at the end of the transaction.
6) A typical purchase transaction can take anywhere from 30-45 days. Sometimes it's less. Sometimes it takes longer. From the time that you get accepted on your offer, you typically have a 17-day contingency in which you’ll want to get the inspection done (to make sure the house is in good shape and doesn’t have mold, cracks in the foundation, etc,) and the appraisal as well (to make sure the house is valued correctly.
If the home is worth less than the offered price, you'll have to decide whether you want to pay over and above that or walk away from the deal while the 17-day contingency is still in effect. If it’s valued more than the purchase price, hey, so much the better. Instant equity for you!).
Within this contingency period is when you'll also need to have your loan approval (what you had prior to finding a house was a preapproval). In the approval process, in addition to your income and asset documentation, the lender will look at the appraisal report, escrow instructions, preliminary title report to make sure the property’s free and clear, and the value is where it should be. Expect to sign a ton of paperwork. Fun times. Fun times.
7) If the lender doesn’t have any additional conditions (such as updated bank statements, etc.) that have to be met prior to sending out the loan documents to the escrow company, the loan documents will be sent to the escrow company. The escrow company will call you in to sign your loan documents or have a notary go to your house to have you sign loan docs. This is also the time that your escrow officer will let you know how much money you need to bring in for the rest of the down payment or closing costs, if any.
Note: While not very many loan advisors attend their clients signing but I really prefer to be there, so that I can check and double-check and explain every document before my client signs anything.
8) Your signed loan documents are taken back to the escrow company. The escrow officer adds some more documents to the file and messengers it back to the lender.
9) The lender’s underwriter reviews your documents to make sure all the i’s are dotted and the t’s crossed. He or she will then tell the lender to release the money to the title company. The title company will then wire the money to escrow. Escrow disburses the funds accordingly.
10) Escrow sends out the forms to the courthouse of the county in which your property is located so that the property can be recorded in your name.
11) Shortly before or after the recording, your realtor will take you to the property to do a walkthrough to make sure the property is in the condition that it should be.
12) The escrow officer will call you and confirm that the property has been recorded in your name and arrange for you to swing by and pick up your keys.
13) Hooray! You walk into your new home and do the happy-happy-joy-joy dance!
Friday, June 6, 2008
Foreclosure: The Pros and Cons
Ed McMahon appeared on Larry King Live yesterday and talked about how he is on the verge of having his Beverly Hills home foreclosed because he is $644,000 behind on payments on his $4.8million mortgage.
While poor planning does play a big role (personally, if I had been in McMahon's shoes, and given that he says he had much less money than what people thought he made, there are better things I can think of to use my hard-earned money on- things that would have ensured that my money kept making even more money- than a swanky mansion in the 90210 zip code, but that's just me) foreclosure can happen to anyone, and often, it's due to a combination of factors, a lot of which cannot be helped, such as the economy, health problems, job loss, or divorce.
In a perfect world, if you can't make your mortgage payments anymore, you'd call you bank, ask them to do a loan modification. They'll acquiesce and come up with a way to make your payments affordable and you'd live happily ever after. That's not always the case.
If you're currently thinking of walking away from your home, here are some pros and cons that I hope will help you make the right decision.
THE PROS:
- If you choose to walk, you may be able to stay in your home payment free for up to 18 months.
- During that period of time, you will be able to save the payments you would have made to your lender and pay off your consumer debt or save for life after foreclosure.
- After you've been foreclosed on, you may have to put several month's rent down to secure a rental property.
- At this point, you may have nothing to lose. If you owe more than the house is worth, your home is no longer an investment. And if the property is not your primary residence, the "investment" may be costing you an awful lot of money.
- It may be significantly cheaper to rent than to continue paying the mortgage on your property.
- As home prices continue to plummet, making payments on a home bought at the peak of the market may just be throwing good money after bad.
THE CONS
- The principle area of concern is that there will be a foreclosure on your records. Foreclosures stay on your credit report for seven years. It is usually at least four years before you can get back into a house.
- When you go into foreclosure, the bank is often able to get a deficiency judgment. This means you will owe the bank the difference between what the house was sold for and the balance on the mortgage. Many people have a deficiency judgment against them, find themselves in a position where they have to file bankruptcy on top of the foreclosure.
- You should consider where you will live after the foreclosure. Many large property companies won't consider renting to people with foreclosures on their records. Individual investors may consider you only with a deposit of several month's rent.
Given that foreclosure should always be the final option, I do hope that you call your trusted mortgage advisor, as well as your CPA, to discuss the ramifications of your individual situation before you make your final decision.
Friday, May 30, 2008
Top 10 Questions I Ask Borrowers
Let's face it. Lenders don't know us from Adam or Eve, so the only way they can tell how big of a risk we are to them is by measuring us up against a set of guidelines. I call these the 4 C's of Lending.
Here's a list of the top 10 questions I ask my borrowers to determine if they measure up to those guidelines:
1) Do you know what your current credit score is ?
2) Do you have any lates, charge-offs or any kind of delinquencies on your credit cards, auto loans, student loans, etc.
3) Did you co-sign for anyone's loan?
4) How much debt are you carrying right now (especially on your credit cards, auto loans, student loans)?
5) Have you had a bankruptcy or foreclosure?
6) Are there any type of liens against you ?
7) What is your gross annual income ?
8) How much money do you have in a savings/checking account or CD ?
9) If you have a 401k, how much is in it ?
10) If you have stocks or bonds, how much are they currently worth ?
These ten questions merely scratch the surface. The best way to determine whether you qualify and what you qualify for is to actually talk to a trusted mortgage advisor about your particular situation.
Here's a list of the top 10 questions I ask my borrowers to determine if they measure up to those guidelines:
1) Do you know what your current credit score is ?
2) Do you have any lates, charge-offs or any kind of delinquencies on your credit cards, auto loans, student loans, etc.
3) Did you co-sign for anyone's loan?
4) How much debt are you carrying right now (especially on your credit cards, auto loans, student loans)?
5) Have you had a bankruptcy or foreclosure?
6) Are there any type of liens against you ?
7) What is your gross annual income ?
8) How much money do you have in a savings/checking account or CD ?
9) If you have a 401k, how much is in it ?
10) If you have stocks or bonds, how much are they currently worth ?
These ten questions merely scratch the surface. The best way to determine whether you qualify and what you qualify for is to actually talk to a trusted mortgage advisor about your particular situation.
Friday, May 16, 2008
Consider Foreclosures If You're Thinking of Buying A Home
In my last blog, I mentioned that foreclosures decreased in April, and that this may be an indicator that the housing crisis may have hit rock-bottom, and that it can only get better from hereon out.It seems that more data confirms this positive trend. I picked up a copy of the Los Angeles Daily News yesterday and the headline emblazoned on the front page was So-Cal Housing Market Sales Hit 8-Month High.
Here's the takeaway from that story:
- Home sales hit their highest level in eight months in April due to bargain hunters snapping up foreclosed properties.
- 66% of those April sales were for homes priced under $500,000
- There was a jump of 22% in home and condo sales from March.
- Most of the activity was in areas hardest hit by foreclosures, specifically the Antelope Valley and Inland Empire.
- Analysts are mixed on whether numbers do in fact indicate that the worst may be over, but according to John Karevoll of Dataquick, "it's looking as if the worst is behind us".
- Although we may have reached the bottom of the sales slide, it doesn't mean we've also reached the bottom of the price decline, because foreclosures are still working their way through the system and will push down prices.
If you want to see what's out there in terms of foreclosures in your area, here's a freebie that you can take advantage of:
Before any of you go out foreclosure hunting though, whether you're a first-time homebuyer or an investor, please, please, please, puh-leaze don't look at any homes until you call me first (or your own mortgage advisor, if you already have one) and get preapproved (my preapproval process includes a detailed review of how you stack up against the lenders' guidelines, how much of a loan amount you're qualified for based on your monthly payment comfort level, what you can expect in closing costs, the do's and don't's you need to keep in mind as you go through the homebuying process, just to name a few).
Unless you know how much home you qualify for (or, if you don't qualify based on your current circumstances, what you can do so you can qualify for a home before you're priced out of the market again), you should NOT be out there looking at anything. You'll just break your own heart.
Till next time, Happy Foreclosure Hunting!
Dezzi Rae
Mortgage Monsters Who Give The Industry A Bad Rep
It's a sad fact that a lot of people think that loan officers and mortgage brokers rank even lower on the respectability totem pole than used car salesmen (no offense to the used car salesmen out there who do their jobs with honesty and integrity).
In my quest to ensure that I give my clients the best service possible, I've hung my real estate license at a few mortgage companies. While I loved hanging my hat with the last one, I felt that working with a company that was Los Angeles-based was important for several reasons. Thus, I began my search for the company with the right fit. In my mind, "right fit" meant a mortgage company that is highly regarded within the community, one that charges fair, reasonable rates and which places a high premium on honesty and integrity.
When I first started working in the mortgage industry, I came upon a website called The Mortgage Professor and in it, Jack Guttentag introduced the concept of the Upfront Mortgage Broker or UMB. Ever since then, the UMB Commitment has been my guiding principle as a mortgage professional and it was important that the company that I hung my license with believed in these same principles.
Luckily, I found that company in First Security Lending. Considering that it had been voted the best mortgage company eight years in a row by the City of Burbank, I couldn't have asked for a better new home.
In my quest for a new mortgage company to move to however, I was reminded of why so many people look down on mortgage professionals. I had responded to this one internet posting and got the following email back from Ryan Z:
thank you for your response to my posting on craigslist. I reviewed your website and do no feel that you would be a good fit with my company. I think your section on "YSPs: The Mortgage Industry's Dirtiest Little Secret" is irritating and obnoxious. not that I condone rate abuse, bate and switch or as you put it leaving the client holding the perverbial bag, but honestly I think your feeling about YSP and charging people to help getting them a loan ridiculous. I bet you are the type of person that goes to an expensive restaurant for dinner, orders her food, eats everything on the plate, goes home and the next morning complains that she was over charged and wants her money back. its people like you that actually feels sorry for the borrower that bought houses that they couldn’t afford 2 years later when their loans turned adjustable. I bet you are the type of person that blames the mortgage industry for the housing crisis! either way I would never hire someone like you to work in my office. I am looking for aggressive, intelligent and successful people not kiss asses!
I wish you the best of luck and im sure there is some lucky broker out there that would be blessed to have someone taking up his/her time not charging people! im sure that brokers enjoys giving away free loans!
get a life
I read his email with bemusement, deliberated on whether I should just hit the 'delete' key or shoot him back a response. I decided to go with the latter, and sent him this reply:
Quite the contrary. I do not blame the mortgage industry for the current housing crisis. I blame irresponsible loan officers who put borrowers in loans that they damn well know these people should never have been given in the first place.
True, there is that argument that the lenders should never have come up with these ridiculously lax loan programs in the first place, but as far as I’m concerned, the buck stops with us. If we do what we’re supposed to as mortgage consultants- which is, educate borrowers (so that they know just how much home they could afford, the pitfalls of loan programs du jour. etc.), and help them make the right choices that would not put them in financial disarray, the mortgage meltdown may not be as bad as it is now.
As for some lucky broker out there being blessed with someone like myself who takes up his/her time NOT charging people and giving away free loans, I don’t do my deals for free, I charge what’s fair, and it’s meant having clients for life. Sure, I’ve been known to do the loans for less than what I should be charging. However, what I lose in heavily discounted fees, I more than make up for in the goodwill and constant stream of referrals that I’ve gotten from my past clients. Plus, I sleep soundly at night.
Knowing what I know about you now, you’re the last person whose company name I’d want on my businesscard as well. Being aggressive, intelligent and successful are traits that are laudable in any loan officer. Being greedy is not.
I have a life- one that’s filled with borrowers who have become good friends.
Now go get yourself some integrity.
In my quest to ensure that I give my clients the best service possible, I've hung my real estate license at a few mortgage companies. While I loved hanging my hat with the last one, I felt that working with a company that was Los Angeles-based was important for several reasons. Thus, I began my search for the company with the right fit. In my mind, "right fit" meant a mortgage company that is highly regarded within the community, one that charges fair, reasonable rates and which places a high premium on honesty and integrity.
When I first started working in the mortgage industry, I came upon a website called The Mortgage Professor and in it, Jack Guttentag introduced the concept of the Upfront Mortgage Broker or UMB. Ever since then, the UMB Commitment has been my guiding principle as a mortgage professional and it was important that the company that I hung my license with believed in these same principles.
Luckily, I found that company in First Security Lending. Considering that it had been voted the best mortgage company eight years in a row by the City of Burbank, I couldn't have asked for a better new home.
In my quest for a new mortgage company to move to however, I was reminded of why so many people look down on mortgage professionals. I had responded to this one internet posting and got the following email back from Ryan Z:
thank you for your response to my posting on craigslist. I reviewed your website and do no feel that you would be a good fit with my company. I think your section on "YSPs: The Mortgage Industry's Dirtiest Little Secret" is irritating and obnoxious. not that I condone rate abuse, bate and switch or as you put it leaving the client holding the perverbial bag, but honestly I think your feeling about YSP and charging people to help getting them a loan ridiculous. I bet you are the type of person that goes to an expensive restaurant for dinner, orders her food, eats everything on the plate, goes home and the next morning complains that she was over charged and wants her money back. its people like you that actually feels sorry for the borrower that bought houses that they couldn’t afford 2 years later when their loans turned adjustable. I bet you are the type of person that blames the mortgage industry for the housing crisis! either way I would never hire someone like you to work in my office. I am looking for aggressive, intelligent and successful people not kiss asses!
I wish you the best of luck and im sure there is some lucky broker out there that would be blessed to have someone taking up his/her time not charging people! im sure that brokers enjoys giving away free loans!
get a life
I read his email with bemusement, deliberated on whether I should just hit the 'delete' key or shoot him back a response. I decided to go with the latter, and sent him this reply:
Quite the contrary. I do not blame the mortgage industry for the current housing crisis. I blame irresponsible loan officers who put borrowers in loans that they damn well know these people should never have been given in the first place.
True, there is that argument that the lenders should never have come up with these ridiculously lax loan programs in the first place, but as far as I’m concerned, the buck stops with us. If we do what we’re supposed to as mortgage consultants- which is, educate borrowers (so that they know just how much home they could afford, the pitfalls of loan programs du jour. etc.), and help them make the right choices that would not put them in financial disarray, the mortgage meltdown may not be as bad as it is now.
As for some lucky broker out there being blessed with someone like myself who takes up his/her time NOT charging people and giving away free loans, I don’t do my deals for free, I charge what’s fair, and it’s meant having clients for life. Sure, I’ve been known to do the loans for less than what I should be charging. However, what I lose in heavily discounted fees, I more than make up for in the goodwill and constant stream of referrals that I’ve gotten from my past clients. Plus, I sleep soundly at night.
Knowing what I know about you now, you’re the last person whose company name I’d want on my businesscard as well. Being aggressive, intelligent and successful are traits that are laudable in any loan officer. Being greedy is not.
I have a life- one that’s filled with borrowers who have become good friends.
Now go get yourself some integrity.
YSPs: The Mortgage Industry's Dirty Little Secret
I'm about to let you in on an explosive dirty little secret that no broker or bank wants you to know- a dirty little secret that spells the difference in whether you get a fair rate on your mortgage or not.
That dirty little secret is called the yield spread premium or YSP (for banks, it's called a service release premium or SYP).
What's a YSP? It's a broker's income for for increasing the rate on brokered loans (or, in the case of a bank, the bank's income for increasing the rate on correspondent loans). One YSP is equal to one percent of the total loan amount, just so you know.
Former Secretary of Housing and Urban Development Mel Martinez claims that it is costing American homeowners over $16billion in closing cost overcharges and unnecessary interest, and it has a lot to do with YSPs.
This reward that the loan originator gets for increasing your rate goes by many names. The most common are Yield Spread Premium (for brokers), Service Release Premium (for banks). overage, broker rebate, lender paid fees or lender paid compensation. But for the remainder of this article, let's just call it a YSP. Regardless of what it's called, not knowing about the YSP spells the difference between getting a fair rate or being bilked out of thousands of dollars over the life of the loan.
How does the YSP end up costing you thousands of dollars in overcharges? Simply put, it's got everything to do with your mortgage broker disclosing what he or she is really charging you- both upfront as part of your closing costs, and "in the back" by way of a YSP. There are some brokers who will tell clients that they only charge 1% of the total loan amount, while some say they don't charge any broker fees. That's all great in theory but in the real world, if brokers and loan officers actually did that, they'd be in the running for sainthood because, generally speaking, we're all on 100% commission and if you don't charge enough or didn't charge at all, how the hell are you going to feed your family and pay your bills?
What most brokers are NOT disclosing is the fact that they only charge 1% upfront but are taking more YSPs than they should. The mentality behind this is either "I want my clients to feel that they are getting a good rate and are not paying too much" or "What I get as a yield spread premium is paid directly to us by the lender, it doesn't come from the borrower's pocket."
My response to that is, "DUH! On a $400,000 loan amount, you just raised someone's rate from 5.875% to 6.5%, you're making them pay $208 more per month than they should, and to add insult to injury, stuck them with a three-year prepayment penalty while you scurry away with as much as 3 YSPs (which comes out to $12,000 since 1YSP equals 1% of the loan amount), in addition to the 1% ($4,000) that you charged as part of upfront closing costs. So now the borrower is left holding the proverbial bag stuffed with a three-year prepay and a fully indexed rate that is much higher than it should be, which in turn leads to higher negative amortization. DUH!"
In my case, since I dislike playing games and bargaining from the onset, my rule is always this: disclose upfront, disclose upfront, disclose upfront. "These are my fees and it's your choice whether you want to pay for all of it upfront, pay some of it upfront and have the lender pay for the rest as a yield spread premium (which typically works best for most folks since the interest rate and their upfront closing costs both stay reasonable) or pay nothing upfront in order to have the smallest amount of closing cost possible as long as one keeps in mind that this translates to a much higher interest rate."
I find that it's a great way to weed out the people I'd rather not have as clients anyway. so I'm able to work with the no-nonsense straightshooters who appreciate dealing with an upfront mortgage consultant who charges only what's fair and reasonable and won't hide YSPs from them.
I had one client who practically fainted when she received her Good Faith Estimate from me. It turned out that her last loan officer had been pulling the wool over her eyes for several years. "I only got charged a flat $800 broker feewhen I refinanced last year!" she cried. I asked her to bring her Final HUD-1 from her last mortgage transaction so we could go over it. Surprise, surprise! Her loan officer had whacked her with a 7.9% on a 30-year fixed whe her profile indicated that she would ahve been able to get a 5.5% for her $325,000 loan amount. It was a pretty rude awakening when she found out that her loan officer had made off with a 3% yield spread premium on the back. So, what she thought had been a bargain at $800 turned out to be a costly illusion. Not only did she get hit with a higher rate where she ended up paying more per month, she also ended up with a 2-year prepayment penalty as well. After I handled her transaction, she wrote me a really nice email that said, "I know I wasn't the easiest person to deal with. I was played a fool for so long that working with someone who tells it like it is was a bit of a shock, but I learned so much from you during my transaction, and I know better now."
So how do a lot of mortgage brokers explain it when their clients spot the YSP on the Good Faith Estimate or the Final HUD-1? There are two columns on a GFE and a HUD-1 - debit and credit. Since the YSP doesn't show up as something coming out of the borrower's pocket upfront, most borrowers don't even notice it. The ones that do are given some hogwash along the lines of "Oh, that's just a standard incentive that we're given by the lenders on every loan."
Now don't run off to your nearest savings and loan institution either, thinking that you won't find YSPs over there. While Federal Real Estate Procedures Act rules that govern informing you of this extra profit, this only applies to the YSP in brokered loans. Banks and broker-banks- because they have more money to pay lobbyists in Washington- are completely exempt from disclosing that "extra" profit they receive on their loans because technically, their loans are not brokered loans. Scary, no ?
Don't get me wrong. There are advantages to the YSP. If you want to shell out less in upfront costs, or if you want what is falsely termed a no-closing cost loan (I hate the term because it is so misleading. Read my lips: There is no such thing as a no-closing cost loan!), you have the option of having the lender pay some or all of your broker's fees by way of a YSP. The trick is in making sure that you know what that YSP is.
Want to see if you got ripped off or want to ensure that you don't get ripped off? If you're a homeowner, take out your loan documents and look for your Final HUD-1 (the settlement statement of closing costs) and call me so we can through it with a fine-tooth comb. If you're a homeshopper just starting the homebuying process, pull out the Good Faith Estimate that you were given and give me a holler. You've got thousands of dollars at stake. Learning to spot the YSP could save you a lot of money in the long run.
That dirty little secret is called the yield spread premium or YSP (for banks, it's called a service release premium or SYP).
What's a YSP? It's a broker's income for for increasing the rate on brokered loans (or, in the case of a bank, the bank's income for increasing the rate on correspondent loans). One YSP is equal to one percent of the total loan amount, just so you know.
Former Secretary of Housing and Urban Development Mel Martinez claims that it is costing American homeowners over $16billion in closing cost overcharges and unnecessary interest, and it has a lot to do with YSPs.
This reward that the loan originator gets for increasing your rate goes by many names. The most common are Yield Spread Premium (for brokers), Service Release Premium (for banks). overage, broker rebate, lender paid fees or lender paid compensation. But for the remainder of this article, let's just call it a YSP. Regardless of what it's called, not knowing about the YSP spells the difference between getting a fair rate or being bilked out of thousands of dollars over the life of the loan.
How does the YSP end up costing you thousands of dollars in overcharges? Simply put, it's got everything to do with your mortgage broker disclosing what he or she is really charging you- both upfront as part of your closing costs, and "in the back" by way of a YSP. There are some brokers who will tell clients that they only charge 1% of the total loan amount, while some say they don't charge any broker fees. That's all great in theory but in the real world, if brokers and loan officers actually did that, they'd be in the running for sainthood because, generally speaking, we're all on 100% commission and if you don't charge enough or didn't charge at all, how the hell are you going to feed your family and pay your bills?
What most brokers are NOT disclosing is the fact that they only charge 1% upfront but are taking more YSPs than they should. The mentality behind this is either "I want my clients to feel that they are getting a good rate and are not paying too much" or "What I get as a yield spread premium is paid directly to us by the lender, it doesn't come from the borrower's pocket."
My response to that is, "DUH! On a $400,000 loan amount, you just raised someone's rate from 5.875% to 6.5%, you're making them pay $208 more per month than they should, and to add insult to injury, stuck them with a three-year prepayment penalty while you scurry away with as much as 3 YSPs (which comes out to $12,000 since 1YSP equals 1% of the loan amount), in addition to the 1% ($4,000) that you charged as part of upfront closing costs. So now the borrower is left holding the proverbial bag stuffed with a three-year prepay and a fully indexed rate that is much higher than it should be, which in turn leads to higher negative amortization. DUH!"
In my case, since I dislike playing games and bargaining from the onset, my rule is always this: disclose upfront, disclose upfront, disclose upfront. "These are my fees and it's your choice whether you want to pay for all of it upfront, pay some of it upfront and have the lender pay for the rest as a yield spread premium (which typically works best for most folks since the interest rate and their upfront closing costs both stay reasonable) or pay nothing upfront in order to have the smallest amount of closing cost possible as long as one keeps in mind that this translates to a much higher interest rate."
I find that it's a great way to weed out the people I'd rather not have as clients anyway. so I'm able to work with the no-nonsense straightshooters who appreciate dealing with an upfront mortgage consultant who charges only what's fair and reasonable and won't hide YSPs from them.
I had one client who practically fainted when she received her Good Faith Estimate from me. It turned out that her last loan officer had been pulling the wool over her eyes for several years. "I only got charged a flat $800 broker feewhen I refinanced last year!" she cried. I asked her to bring her Final HUD-1 from her last mortgage transaction so we could go over it. Surprise, surprise! Her loan officer had whacked her with a 7.9% on a 30-year fixed whe her profile indicated that she would ahve been able to get a 5.5% for her $325,000 loan amount. It was a pretty rude awakening when she found out that her loan officer had made off with a 3% yield spread premium on the back. So, what she thought had been a bargain at $800 turned out to be a costly illusion. Not only did she get hit with a higher rate where she ended up paying more per month, she also ended up with a 2-year prepayment penalty as well. After I handled her transaction, she wrote me a really nice email that said, "I know I wasn't the easiest person to deal with. I was played a fool for so long that working with someone who tells it like it is was a bit of a shock, but I learned so much from you during my transaction, and I know better now."
So how do a lot of mortgage brokers explain it when their clients spot the YSP on the Good Faith Estimate or the Final HUD-1? There are two columns on a GFE and a HUD-1 - debit and credit. Since the YSP doesn't show up as something coming out of the borrower's pocket upfront, most borrowers don't even notice it. The ones that do are given some hogwash along the lines of "Oh, that's just a standard incentive that we're given by the lenders on every loan."
Now don't run off to your nearest savings and loan institution either, thinking that you won't find YSPs over there. While Federal Real Estate Procedures Act rules that govern informing you of this extra profit, this only applies to the YSP in brokered loans. Banks and broker-banks- because they have more money to pay lobbyists in Washington- are completely exempt from disclosing that "extra" profit they receive on their loans because technically, their loans are not brokered loans. Scary, no ?
Don't get me wrong. There are advantages to the YSP. If you want to shell out less in upfront costs, or if you want what is falsely termed a no-closing cost loan (I hate the term because it is so misleading. Read my lips: There is no such thing as a no-closing cost loan!), you have the option of having the lender pay some or all of your broker's fees by way of a YSP. The trick is in making sure that you know what that YSP is.
Want to see if you got ripped off or want to ensure that you don't get ripped off? If you're a homeowner, take out your loan documents and look for your Final HUD-1 (the settlement statement of closing costs) and call me so we can through it with a fine-tooth comb. If you're a homeshopper just starting the homebuying process, pull out the Good Faith Estimate that you were given and give me a holler. You've got thousands of dollars at stake. Learning to spot the YSP could save you a lot of money in the long run.
Wednesday, May 14, 2008
Is The Housing Crisis Over ?
I just read an article in The Wallstreet Journal indicating that the housing crisis is over. It's a pretty lengthy piece, so rather than cutting and pasting it into this blog, I'd rather have you click on this link so you can read it in its entirety (after you finish reading my blog, of course): Wall Street Journal: The Housing Crisis Is Over
Not to rain on anyone's parade or anything, but before you start jumping up and down and doing the happy-happy-joy-joy dance though, here are a few real world facts I thought I'd throw out there:
Not to rain on anyone's parade or anything, but before you start jumping up and down and doing the happy-happy-joy-joy dance though, here are a few real world facts I thought I'd throw out there:
- Just because the market's bottomed out doesn't mean the value will shoot up like crazy over the next year or so the way that it did five years ago so don't start counting your equity chickens before they hatch. Besides, a house is not a giant ATM machine.
- Lenders have gotten stricter with their guidelines. Forget about 100% financing loans without having to provide income documentation. Those vanished right about the time lenders started keeling over from the vast number of defaults on these same I-don't-have-to-see-how-much-you-make loans that they churned out like crazy.
- If you're looking to buy and your score is as low as 580 and you don't have enough for a down payment or closing costs, you may still qualify for an FHA loan BUT you (and your co-borrowers) need to be in the same line of work for at least two years, you can prove by way of paystubs and tax returns that your house payments plus other debts aren't more than 45% of your total gross monthly income.
- If you are looking to refinance and it's difficult to document your income (like a late actor I knew of who made most of his moolah signing autographs at fan conventions but would require the convention organizers to pay him in cash so he wouldn't have to declare it, which isn't fair to the rest of us, but that's a whole 'nother Oprah), you can still do a stated income loan but you have to have reasonable assets (at least 2-3 months worth of house payments) and a score of at least 680 to compensate for the fact that you don't have the full income documentation to back up whatever you say you make. And yes, you have to have at least 20% equity left in the property after the refinance is done.
- If the rate on your loan is about to adjust for the worse and you currently have a 1st and 2nd loan, even if the combined amount of both loans is 110% of the value of the property, if your 1st loan amount is under 95% of the value of the property, you may still be able to qualify for an FHA loan just to bring your interest rate down. But again, you'll need to provide full income documentation.
- You can't qualify for a loan (FHA or conventional) if your bankruptcy hasn't been discharged for at least two years. No way. No how.
- If you've got the triple threat (crappy credit, have difficulty documenting your income, don't have enough liquid assets) but you need a cashout for some reason and you need it baaaaad, there are still hard money loans out there but it only works if you've got tons of equity (as in, your loan is only 60% or so of the value of your property) and you're willing to pay the figurative equivalent of an arm and both legs in lender fees (it can go as high as 18% of your loan amount) and interest rates (which can be as high as 11-16% as well).
Every scenario is different though, so I always say, it never hurts to discuss your situation with a trusted mortgage advisor who can provide good, solid advise.
Till next time,
Dezzi Rae (The Mortgage Maven)
Tuesday, May 13, 2008
The 4 C's of Lending
Whether you're refinancing or buying a home, you'll want to know what lenders look at when approving a loan.
While I'm giving you a rundown below of what I call the 4 C's of Lending, there's several layers to each "C" that come into play (folks who switch employment, kind-hearted people who co-signed for relatives without realizing that the relative's debt also becomes factored into their own debt ratios, astute pennypinchers who pay everything with cash so they inadvertently have no credit history on record, etc.), so my recommendation is to contact me about your own particular situation so I can help you paint a better picture of your strength as a borrower.
CAPITAL
How much money do you have in your checking and savings accounts, CDs, 401k, stocks and bonds? Do you have enough cash for the down payment and closing costs ? (Note: If you don't have enough for down payment and closing costs, I do have Down Payment Assistance programs that you can apply for. All you gotta' do is ask me! -Dez) Do you have enough cash for emergencies?
CAPACITY
How much do you make and can you repay the debt ? A good rule of thumb is that your mortgage payments should ideally not exceed more than 31% of your monthly gross income. (Note: If you need help calculating your debt-to-income ratio, shoot me an email. -Dez)
CHARACTER
What's your credit history like? Do you pay your bills on time ? Have you maxed out your credit cards to kingdom come? What's your credit score? Anything above 700 and lenders will love you. Anything in the low 600's, they'll go, "hmmmm...". Since lenders don't know you from Adam (or Eve), your credit history is the one of the few things they have to go by to determine whether you will repay the debt or not. (Note: Just because your credit score's blemished doesn't mean you're out of the running. Divorces and health crises have ruined many lives financially, and you just need the lender to see the whole picture. -Dez)
COLLATERAL (aka The House)
Lenders will only allow you to purchase a home that you can truly afford. If, after considering all the factors, they determine that your $1,800/month comfort level means being able to afford a home under $200,000, that's all you're going to get approved for. Anything over that would put you in danger of default and foreclosure, and the lender in jeopardy of holding the veritable real estate bag if you can't repay your loan.
Remember, shoot me an email at dezzirae@dezzirae.com or call me at (818) 642-9343 in case you want me to help you determine how strong of a borrower you are, what loan programs are available to you. If you're not as strong a borrower as you'd like to be, I'll give you tips on how to get there.
While I'm giving you a rundown below of what I call the 4 C's of Lending, there's several layers to each "C" that come into play (folks who switch employment, kind-hearted people who co-signed for relatives without realizing that the relative's debt also becomes factored into their own debt ratios, astute pennypinchers who pay everything with cash so they inadvertently have no credit history on record, etc.), so my recommendation is to contact me about your own particular situation so I can help you paint a better picture of your strength as a borrower.
CAPITAL
How much money do you have in your checking and savings accounts, CDs, 401k, stocks and bonds? Do you have enough cash for the down payment and closing costs ? (Note: If you don't have enough for down payment and closing costs, I do have Down Payment Assistance programs that you can apply for. All you gotta' do is ask me! -Dez) Do you have enough cash for emergencies?
CAPACITY
How much do you make and can you repay the debt ? A good rule of thumb is that your mortgage payments should ideally not exceed more than 31% of your monthly gross income. (Note: If you need help calculating your debt-to-income ratio, shoot me an email. -Dez)
CHARACTER
What's your credit history like? Do you pay your bills on time ? Have you maxed out your credit cards to kingdom come? What's your credit score? Anything above 700 and lenders will love you. Anything in the low 600's, they'll go, "hmmmm...". Since lenders don't know you from Adam (or Eve), your credit history is the one of the few things they have to go by to determine whether you will repay the debt or not. (Note: Just because your credit score's blemished doesn't mean you're out of the running. Divorces and health crises have ruined many lives financially, and you just need the lender to see the whole picture. -Dez)
COLLATERAL (aka The House)
Lenders will only allow you to purchase a home that you can truly afford. If, after considering all the factors, they determine that your $1,800/month comfort level means being able to afford a home under $200,000, that's all you're going to get approved for. Anything over that would put you in danger of default and foreclosure, and the lender in jeopardy of holding the veritable real estate bag if you can't repay your loan.
Remember, shoot me an email at dezzirae@dezzirae.com or call me at (818) 642-9343 in case you want me to help you determine how strong of a borrower you are, what loan programs are available to you. If you're not as strong a borrower as you'd like to be, I'll give you tips on how to get there.
Friday, May 2, 2008
FHA LOANS MAY JUST SAVE THE DAY
Here’s the lowdown, folks: those easy-to-qualify stated income/100% financing loans that lenders were churning out like there was no tomorrow just a couple years back are few and far between, and if you do find them, they come with pretty stringent guidelines- and rightly so. With foreclosures at an all-time high, investors know that they run the risk of losing their shirts if they give a borrower with not-so-great credit a half a million dollars without seeing paystubs or bank statements.
Before you start crying into your pillow though, I have some good news for you. If you’re a renter who thinks your dreams of homeownership will remain nothing more than that due to the stricter lender guidelines, or you’re a homeowner who was hoping to get a refinance but couldn’t get approved due to lack of equity or the fact that stated income loans are hard to come by, there just may be hope for you yet in the form of FHA loans.
Here are just a few reasons why an FHA loan may be what you’re looking for:
No minimum credit score. You can have a FICO score in the 500’s as long as your debt-to-income ratios are within FHA guidelines. (You do have to submit proof that you do make what you say you do though!)
Before you start crying into your pillow though, I have some good news for you. If you’re a renter who thinks your dreams of homeownership will remain nothing more than that due to the stricter lender guidelines, or you’re a homeowner who was hoping to get a refinance but couldn’t get approved due to lack of equity or the fact that stated income loans are hard to come by, there just may be hope for you yet in the form of FHA loans.
Here are just a few reasons why an FHA loan may be what you’re looking for:
No minimum credit score. You can have a FICO score in the 500’s as long as your debt-to-income ratios are within FHA guidelines. (You do have to submit proof that you do make what you say you do though!)
FHA allows non-occupant co-signers. If you can’t qualify on your own income, you can ask your favorite aunt to be your co-borrower, as long as she can document her income.
FHA will allow up to 97% of the total purchase price. Before you start lamenting the fact that it does you no good because you don’t have the remaining 3% for the down payment, read on. Mind you, the norm was that homebuyers used to have to put down at least 20% so the fact that you can still buy a home without putting any money down is still a steal, no matter how you look at it.
Seller can contribute up to 6% of the total loan amount towards closing costs. Great news for those who want to buy but can’t cough up the closing costs associated with buying a home.
Down Payment Assistance programs allowed. So, you’re approved for the maximum 97% In addition to your seller being able to contribute as much as 6% toward your closing costs, FHA also allows you to use Down Payment Assistance programs as well.
Gift funds allowed. If you don’t want to apply for a Down Payment Assistance program, FHA also allows 3% gift funds from a family member or employer.
No reserves required on 1-units. If you are buying or refinancing a single-family home, but you don’t have enough reserves in your bank account, 401k, stocks or bonds to show after the transaction closes, FHA won’t hold that against you. On 3-4 unit properties, you do have to show at least 3 months reserves though.
Rate & term refi’s can go up to 97% of the value of your home. If you merely want to refinance to get out of an ARM that will raise your monthly payments, this is the loan for you.
Cashout refi’s can go up to 95% of the value of your home. Perfect for those who need to pay off higher-interest debts. Prior bankruptcies OK. If you have a Chapter 7 that was discharged two years ago, or even if you’re in a Chapter 13 but you have at least 12 months of demonstrated payments, you’re good.
While FHA loans may be your key to homeownership today, not all lenders and brokers are able to do FHA loans. At First Security Lending, we’re proud to say that a huge portion of the mortgage transactions that we do are FHA and Cal-FHA, so we know what we’re doing.
In addition, we’ve been voted “Best Mortgage Company” by the City of Burbank eight years in a row, named one of INC’s 2007 Top 5000 private companies in the U.S. and was honored by the Burbank Association of Realtors in 2005 as “Affiliate of the Year”.
I love answering questions about mortgage, so feel free to call me at (818) 642-9343 or at dezzirae@dezzirae.com .
While FHA loans may be your key to homeownership today, not all lenders and brokers are able to do FHA loans. At First Security Lending, we’re proud to say that a huge portion of the mortgage transactions that we do are FHA and Cal-FHA, so we know what we’re doing.
In addition, we’ve been voted “Best Mortgage Company” by the City of Burbank eight years in a row, named one of INC’s 2007 Top 5000 private companies in the U.S. and was honored by the Burbank Association of Realtors in 2005 as “Affiliate of the Year”.
I love answering questions about mortgage, so feel free to call me at (818) 642-9343 or at dezzirae@dezzirae.com .
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