So, which is better, a Fixed Rate or an Adjustable Rate on your Mortgage? Why it's such an easy answer, both! Wait, no, that's not it. The real answer is neither. Nope, that's not it either. Ah-Ha, I have it, the answer is both & neither. Yep, that's it, that's the answer. Thanks for stopping by, my work here is done.
I'm kidding of course, there's so much more that goes into answering that question, client to client, case by case. I should mention though, if you aren't into the whole semantics of money, statistics, charts, & jargon of Economics, this may bore the heck out of you. In fact, I would recommend skipping the next couple of paragraphs because what will be said will be about as interesting to you as watching Professional Bowling Interviews after a bad hangover would be for me. That said, I advocate at least trying to learn something about the Yield Curve. It goes back to that knowledge is power thing, especially for you budding Money Junkies!
If you are a more financially savvy type of guy or gal, Real Estate Professional or Consumer, perhaps you're astute with the what is called the Yield Curve. To learn more about the what a Yield Curve is and how it works, check out this site.
If you are looking to purchase a home or refinance your current mortgage, here are my thoughts on the Yield Curve:
*Flat or inverted yield curve in a historically low interest rate environment = I Say Go FIXED*
*Flat or inverted yield curve in a historically high interest rate environment = A Tough Call. It REALLY depends on the individual's situation, but I dare say I would lean towards an Adjustable Rate to take advantage of riding rates down through the cycle.*
*Standard yield curve in a historically low interest rate environment = FIXED if a longer term purchase (10+ years), appropriate ARM if a shorter term purchase.*
*Standard yield curve in a historically high interest rate environment = Appropriate length ARM*
*In a standard yield curve, do NOT pay the premium for a 30 year protection when the vast majority of folks will not use the 30 year protection. Many won't need interest protection any longer than 10 years, hence the reason I like the 10/1.*
Home Equities = eliminating the open end vs. closed end mortgage situations = If Prime is very low I would recommend taking the rate that is fixed, if prime is very high, I recommend an adjustable rate - lock in the low rate when you can get it, use the ability of the ARM to move your payments down when you are at the top of the cycle.
OK, if you aren't dizzy by now, let's go a little bit simpler and look beyond the yield curve in determining rates.
A consumer's financial intelligence is rather critical in determining whether they should be put into an adjustable rate mortgage. A colleague of mine makes a good point, it's called The Sleep Principal. In other words, even if an ARM is the best option for you or your client, it is not the right option if they are going to lay awake at night worrying about the future rate of their mortgage. There's something to be said for having the least amount of worries in your life as possible. The roof over one's head is a terrible worry to have.
That said, what I really would like to concentrate is on all the 2/28 and 3/27 Adjustable Rate Mortgages and all the attention (some very negative) surrounding them. If you aren't familiar with what those products are, they are actually quite simple.
The 2/28 is a fixed rate for the first two years, after those two years, the rate then adjusts....Upwards.
The 3/27 works the same, only with 3 years of having a fixed rate.
Some called them Band-Aid loans, I'm not a huge fan of that term, especially if the customer needed stitches. Hence, the title to this post. A lot of what made these so popular is that those rates have been very near that to the best rates on the best market today and of yesterday. So, if you had credit bumps, bruises, bankruptcies, etc.....you may have been able to attain a rate on one of these programs in the 6% range for that 2 or 3 year time frame.
Then, things change, the rate adjusts and all of a sudden that rate changes and goes up, which means, your payment follows suit.
Let me point out the Good, The Bad, The Ugly, of these very products....in my own opinion.
The Good:
-It did give people a chance to re-group, get their credit back on the high road, and get further away from the credit bumps and bruises from the past. I've had numerous clients follow the plan & guidance I helped lay out and it took their scores from a 550 to over 700 when their rate was rate was about to adjust. It was in these instances that I could then put them in what would probably become their permanent financing, getting the best rates the market had to offer.
The Bad:
-Mortgage Professionals qualifying borrowers off the 2 or 3 year teaser rate to make sure their income qualifies for the loan. In my opinion, this was and is a bad idea all the way around. Anybody who is put into an adjustable rate product, should never be qualified off the floor rate. I'm not saying they should be qualified off the cap rate (or maximum % the rate can go up to) but I figure there has got to be a happy medium. How about qualifying them off the first rate adjustment?
The Ugly:
-This is the heart-breaker in my eyes. Take a family who was in a 2/28 or 3/27 and financed 95% to 100% of their home's worth at the time they went into that program. They did everything right, paid their bills on time, took care of any outstanding credit demons, and now their scores and credit file are in great shape! Except for one thing. They go to refinance and you find out they don't have enough equity to do anything at all. They're stuck and their rate is increasing and payment is following suit. Many areas have little appreciation, some as of late, none at all. Generally speaking, a client should not be put into these programs if they are financing more than 90% of their home's worth.
The bottom line is for the most part, there is no clear-cut answer to whether a fixed-rate is better than an adjustable or vice versa. It's a situation based answer. I will say though that the financially savvy people out there are the ones that can handle and benefit from adjustable rates the most. A large part of our population isn't financially savvy, especially about mortgages. Our high-schools and colleges need to address this. For the population who is in that boat, the fixed rate is probably the best way to sail.
Thursday, December 18, 2008
Sage Advice from a Mortgage Guy
Let's get to it...
Should you refinance? There are some homeowners who are on the fence, perhaps scared, in a jam, or have a ton of equity that isn't doing much for them. Those folks are the ones who really need to look at their options (pro & con) and make a decision. This could be a great time to take advantage of a market where interest rates are still pretty low. If not, it is usually a great time to make a plan for down the road.
Should you buy a home? If you are qualified, I don't see why not. It's a buyers market in a lot (if not most) areas. I'll put it like this; if you have money in the bank after you leave the closing table... it may not be a bad idea. If you don't, it's a risk that may not be in your favor.
Should you take out a second mortgage or line of credit? I don't see them often right now, hardly ever. Their availability is almost nill. If you are looking for one, a local bank may be your best bet. To answer the question, to pay off high interest debt and save you money that you won't in turn spend on something else... YES~! To do home improvements~ it may not be a bad idea. To supplement your income... find another job. No, seriously.
You want to sell your home in the worst way but probably won't get what you want out of it? Yup, this can be an issue. In hindsight, you overpaid and are now undervalued. Consult a trusted Realtor... period.
Is it a good time to invest in Real Estate? I'll get to that answer at the very end of this post.
How do I shop for a mortgage? It sounds somewhat odd, but how do you pick out your favorite vegetable? It's somewhat difficult and owns many variables. Folks want a low interest rate, no surprises, accountability, trust, and something that will benefit them now and down that road. That's just a guess; I have no hardened proof. Getting someone referred to you from family, friends, Realtors, attorneys, etc is a good place to start. But you want to know my other piece of advice which you can do on your own... read the blogosphere about mortgages. Not only will you get some insight on Mortgages, you'll get insight on the person. The latter is as important as the former.
I can't qualify to refinance, what now? - That depends on what you are looking to accomplish. If you wanted cash-out, to pay off your mortgage faster, lower your rate... most likely you can't refinance because you lack the equity or your credit doesn't qualify. If it is the former, you have little control in that area. If it is the latter, working with a Mortgage Professional who understands credit is a must. They should be able to lead you in the right direction. But, if your rate is going to adjust soon and you can't qualify to refinance, it's time to modify your loan. I will be writing a post about that upcoming. If you have immediate questions, contact me at my information below.
Are there any out of pocket fees if I refinance? Yes! A one-time non-negotiable and non-refundable fee to yours truly in the amount of one million dollars. Of course I'm kidding. All applicable closing costs can be rolled into the loan amount, providing you have the equity to do just that. The only out of pocket fee is the appraisal fee, a third party fee. On a single family home in Pennsylvania, I've seen that fee range from $300.00 to $400.00.
I want to buy a home, what's the first step? Find a Buyer's Realtor. They will represent you and you don't pay them a dime out of your pocket. The very next step will be to get pre-approved with a lender. Do some shopping on your own and maybe talk to a few lenders your Realtor suggests and has maybe worked with.
One final note that I'd like to point out. I've heard a lot of yells hype whispers from folks waiting to do anything (buy a home or refinancing) until the market 'comes back'. Ponder the following:
The best time to buy something is when nobody else wants it.
Should you refinance? There are some homeowners who are on the fence, perhaps scared, in a jam, or have a ton of equity that isn't doing much for them. Those folks are the ones who really need to look at their options (pro & con) and make a decision. This could be a great time to take advantage of a market where interest rates are still pretty low. If not, it is usually a great time to make a plan for down the road.
Should you buy a home? If you are qualified, I don't see why not. It's a buyers market in a lot (if not most) areas. I'll put it like this; if you have money in the bank after you leave the closing table... it may not be a bad idea. If you don't, it's a risk that may not be in your favor.
Should you take out a second mortgage or line of credit? I don't see them often right now, hardly ever. Their availability is almost nill. If you are looking for one, a local bank may be your best bet. To answer the question, to pay off high interest debt and save you money that you won't in turn spend on something else... YES~! To do home improvements~ it may not be a bad idea. To supplement your income... find another job. No, seriously.
You want to sell your home in the worst way but probably won't get what you want out of it? Yup, this can be an issue. In hindsight, you overpaid and are now undervalued. Consult a trusted Realtor... period.
Is it a good time to invest in Real Estate? I'll get to that answer at the very end of this post.
How do I shop for a mortgage? It sounds somewhat odd, but how do you pick out your favorite vegetable? It's somewhat difficult and owns many variables. Folks want a low interest rate, no surprises, accountability, trust, and something that will benefit them now and down that road. That's just a guess; I have no hardened proof. Getting someone referred to you from family, friends, Realtors, attorneys, etc is a good place to start. But you want to know my other piece of advice which you can do on your own... read the blogosphere about mortgages. Not only will you get some insight on Mortgages, you'll get insight on the person. The latter is as important as the former.
I can't qualify to refinance, what now? - That depends on what you are looking to accomplish. If you wanted cash-out, to pay off your mortgage faster, lower your rate... most likely you can't refinance because you lack the equity or your credit doesn't qualify. If it is the former, you have little control in that area. If it is the latter, working with a Mortgage Professional who understands credit is a must. They should be able to lead you in the right direction. But, if your rate is going to adjust soon and you can't qualify to refinance, it's time to modify your loan. I will be writing a post about that upcoming. If you have immediate questions, contact me at my information below.
Are there any out of pocket fees if I refinance? Yes! A one-time non-negotiable and non-refundable fee to yours truly in the amount of one million dollars. Of course I'm kidding. All applicable closing costs can be rolled into the loan amount, providing you have the equity to do just that. The only out of pocket fee is the appraisal fee, a third party fee. On a single family home in Pennsylvania, I've seen that fee range from $300.00 to $400.00.
I want to buy a home, what's the first step? Find a Buyer's Realtor. They will represent you and you don't pay them a dime out of your pocket. The very next step will be to get pre-approved with a lender. Do some shopping on your own and maybe talk to a few lenders your Realtor suggests and has maybe worked with.
One final note that I'd like to point out. I've heard a lot of yells hype whispers from folks waiting to do anything (buy a home or refinancing) until the market 'comes back'. Ponder the following:
The best time to buy something is when nobody else wants it.
Real Estate, Life & Kittens...
A new member of the Sardi family came aboard yesterday morning at 7:30 AM. He's a kitten that I won't name just yet because he doesn't want Google to 'pick him up'. He prefers the underground thing. Actually, that's my request and not his. Yet, he is so very friendly and seems to want to write his own little post because he was all over the keyboard the minute I sat down. Plus, he's a purring madman. I'll keep him underground for now, though I don't think that will last too long.
This little guy reminded me of a few things that my 'experience' and 'wisdom' helped me to forget. This pertains to life and Real Estate as I know it:
He is curious as hell and has no pre-conceived notions.
He has no fear. He is willing to explore this new territory and find his place. Even if that means confronting a somewhat hostile 'Orange Dude' named Baxter that isn't particularly happy about the new guy's existence.
All he is looking around for are friends. He's wide-eyed and destined to make them.
He's willing to love everybody, even if they don't love him back.
He just wants to be important to somebody... it doesn't have to be everybody.
The guy looks out the window to the outside world and wants to be a part of it, though he doesn't realize the dangers. He wants to exist because he exists.
He is counting on someone to help him out and he doesn't even know it. (opppppppppppppppppppppppppppp) that was his first attempt at typing. Seriously, the guy could be a player. He types faster than I do and makes more sense.
All he seems to want to do is learn. He's new and wants to fit in even if it means fading out.
Folks will comment on how adorable he is and he will take advantage of such by sitting on their laps and purring away. Innocence is just as frighting as getting along with those who share your existence.
I don't know about you, but 'growing up' sucks and the 'Real World' can kiss my pasty white posterior. Brilliant notions are nothing but simplicity. Look your newborn in their eyes, you will find the truth.
I suppose you can learn a lot from a kitten, even if you don't know its name.
This little guy reminded me of a few things that my 'experience' and 'wisdom' helped me to forget. This pertains to life and Real Estate as I know it:
He is curious as hell and has no pre-conceived notions.
He has no fear. He is willing to explore this new territory and find his place. Even if that means confronting a somewhat hostile 'Orange Dude' named Baxter that isn't particularly happy about the new guy's existence.
All he is looking around for are friends. He's wide-eyed and destined to make them.
He's willing to love everybody, even if they don't love him back.
He just wants to be important to somebody... it doesn't have to be everybody.
The guy looks out the window to the outside world and wants to be a part of it, though he doesn't realize the dangers. He wants to exist because he exists.
He is counting on someone to help him out and he doesn't even know it. (opppppppppppppppppppppppppppp) that was his first attempt at typing. Seriously, the guy could be a player. He types faster than I do and makes more sense.
All he seems to want to do is learn. He's new and wants to fit in even if it means fading out.
There are no boundaries or limitations. The young guy doesn't know any rules other than not hurting someone else.
Folks will comment on how adorable he is and he will take advantage of such by sitting on their laps and purring away. Innocence is just as frighting as getting along with those who share your existence.
I don't know about you, but 'growing up' sucks and the 'Real World' can kiss my pasty white posterior. Brilliant notions are nothing but simplicity. Look your newborn in their eyes, you will find the truth.
I suppose you can learn a lot from a kitten, even if you don't know its name.
It's Free, It's Fun, It's your Credit Report?!?
To say your credit history & score is HUGE these days may be a borderline understatement. For purposes of my experience, I'll concentrate on how credit relates to getting a mortgage to buy a home or trying to refinance the one you currently own.
Talking about credit is about as much fun as chewing broken glass while watching Yanni's latest video on VH1, at least to most. Even for the most severe masochists or staunchest Yanni advocators, it's probably not a subject full of brim excitement.
So, I'll try to make this concise and simple. Educating yourself and working with professionals who can guide you along the way, to make sure your credit is worthy of a three course meal at the White House, is crucial. I'm not just talking about those whose credit is in the crapper. I'm also writing to folks whose credit may be moderate or maybe you've never made a late payment in your life but your score is low. The Credit Reporting Industry is wagging the dog, forget about whining... work and know the system.
Here are a few tips & quips:
* Get a copy of your Credit Report. It may not provide your actual credit score, but at least you can verify the accuracy of the information on your report. I've included information below that you can utilize to do this. Quick thing here, credit modules differ within industries. For example, the credit report a mortgage company pulls may differ from that of the institution giving you a car loan or credit card. Mortgage folks weigh heavy on student loans and car loans and even heavier on your Mortgage History, provided you have one.
* Communication is key with your credit. If you are experiencing rough financial times, call them before they WILL call you. Let your creditors know what is going on. It probably won't stop them from reporting you late to the credit agencies, but it probably will provide you one less of a headache. That's what life's all about... avoiding headaches:-)
* The only thing that may be just as bad or even worse than credit overload, is no credit at all. Establish yourself in the creditor's eyes. If you have no credit, get secured credit that reports to all three credit reporting agencies. This may mean making a deposit at your bank and taking out a loan against it or pre-paying on a credit card. If you are doing the latter, use that credit card and pay it off it off regularly.
...if you have a bankruptcy or foreclosure in your past, establishing 12-24 months worth of a good credit is absolutely crucial!
* Oh, those credit cards. I'll put it bluntly, the bigger the differential between what your current balance is and what your available balance is, the better for your Credit Score. Don't be afraid to call your credit card company and ask them to raise your available balance. Don't use it, just have it there to improve your credit standing and score.
...sidenote on credit cards. Don't be afraid to call your current credit holders and ask them to lower your interest rate. If the first person you talk to can't or won't, ask to speak with a manager. If unsuccessful in that endeavor, call back at a later date. Be persistent & professional in your efforts. Lowering your rate even the slightest bit can save you some serious money now and down the road.
* Pay your bills on time. Yeah, I know, this is a no-brainer to most. Yet, it doesn't report late to the credit bureaus until you fall 30 days late. Try to make sure you don't get 30 days late on anything. Sure, you may incur late fees if you are even a day behind on some credit, though Mortgage Companies typically give you a 15-day grace period before you incur any late fees. From my experience, make sure your mortgage/rent is paid on time first, then student & car loans, then credit cards. If you are a renter...
...pay your rent by check and keep copies of your canceled checks. Twelve months worth will do (pay month by month, pre-paid bulk payments won't do you any favors...create a consistent history). This establishes a housing history. While it doesn't do anything positive for your credit, it does wonders when you apply to buy a home.
* Settle delinquent accounts for pennies on the dollar. If you owe the International Bank of Jason Sardi a cool $5,000.00 and your account is charged off, you should call to arrange a settlement once it goes to collections. Often times, you can come to an agreement for a lump sum of $2,500.00 or less and you may even be able to work out a payment plan. Either case, make sure you pay that account satisfactory and get the paperwork of the agreement and the final pay-off to prove it. Paying off delinquent accounts will probably drop your score at first, but will do wonders for your score down the road (provided you keep paying everything else on time).
* Avoid 'Hard' Inquiries. Your current creditors may check your credit, but that is considered a 'Soft' inquiry and shouldn't affect your credit score. Yet, if you are applying for credit out the behind, those inquiries can adversely affect your score. It raises the red flag that you may be on your way to becoming credit dependent. Psychologically speaking, never give them that drift, make them know that their livelihood depends on you... not the other way around.
* Credit Restoration Companies may be able to help but avoid anything that says, "Consumer Credit Counseling." CCS is considered a form of bankruptcy in many lenders eyes and their ability to pay your debts at a 'consolidated interest rate & lower payment' is suspect and often times worsens the situation. On the other hand, I've only witnessed one Credit Restoration Company worth its weight in the seven years I've been traveling this gig. There may be and probably are more, but I've only witnessed one. If you want more info, contact me. Always remember though, you can do everything to make sure your credit is at it's best, yourself... it's a matter of being educated and persistence in your efforts. That takes time. Though time is a commodity not all of us have.
Below is info on the reporting agencies that you should contact to get started. Even if you have an above average credit score, you'll pay more than you should if your credit score is even 20 points lower than the next guy or gal. Save yourself money, put in the time and seek out the Mortgage Professionals to ensure that time is well spent. Your credit is crucial... our knowledge of the industry and mechanics involved... can save you money and fulfill your dreams of home-ownership. If you already are a homeowner, we can help you get on the path to make finances one less worry in this life.
Equifax
P.O. Box 740241
Atlanta, GA 30374
1-800-685-1111
www.equifax.com
TransUnion
P.O. Box 2000
Chester, PA 19022-2000
1-800-916-8800
www.transunion.com
Experian
P.O. Box 2104
Allen, TX 75013
1-888-397-3742
www.experian.com
Bear in mind, at this point, you're entitled to one free credit report a year. Or, and I'd personally recommend this, you can get the whole batch which is simply called the 'Annual Credit Report Request Form.' That's free as well! The following sites will lead you in the right direction:
http://ftc.gov/credit
www.annualcreditreport.com
The bottom line in all this, the status of your credit can either cost or save you money. Which option sounds better to you?
Talking about credit is about as much fun as chewing broken glass while watching Yanni's latest video on VH1, at least to most. Even for the most severe masochists or staunchest Yanni advocators, it's probably not a subject full of brim excitement.
So, I'll try to make this concise and simple. Educating yourself and working with professionals who can guide you along the way, to make sure your credit is worthy of a three course meal at the White House, is crucial. I'm not just talking about those whose credit is in the crapper. I'm also writing to folks whose credit may be moderate or maybe you've never made a late payment in your life but your score is low. The Credit Reporting Industry is wagging the dog, forget about whining... work and know the system.
Here are a few tips & quips:
* Get a copy of your Credit Report. It may not provide your actual credit score, but at least you can verify the accuracy of the information on your report. I've included information below that you can utilize to do this. Quick thing here, credit modules differ within industries. For example, the credit report a mortgage company pulls may differ from that of the institution giving you a car loan or credit card. Mortgage folks weigh heavy on student loans and car loans and even heavier on your Mortgage History, provided you have one.
* Communication is key with your credit. If you are experiencing rough financial times, call them before they WILL call you. Let your creditors know what is going on. It probably won't stop them from reporting you late to the credit agencies, but it probably will provide you one less of a headache. That's what life's all about... avoiding headaches:-)
* The only thing that may be just as bad or even worse than credit overload, is no credit at all. Establish yourself in the creditor's eyes. If you have no credit, get secured credit that reports to all three credit reporting agencies. This may mean making a deposit at your bank and taking out a loan against it or pre-paying on a credit card. If you are doing the latter, use that credit card and pay it off it off regularly.
...if you have a bankruptcy or foreclosure in your past, establishing 12-24 months worth of a good credit is absolutely crucial!
* Oh, those credit cards. I'll put it bluntly, the bigger the differential between what your current balance is and what your available balance is, the better for your Credit Score. Don't be afraid to call your credit card company and ask them to raise your available balance. Don't use it, just have it there to improve your credit standing and score.
...sidenote on credit cards. Don't be afraid to call your current credit holders and ask them to lower your interest rate. If the first person you talk to can't or won't, ask to speak with a manager. If unsuccessful in that endeavor, call back at a later date. Be persistent & professional in your efforts. Lowering your rate even the slightest bit can save you some serious money now and down the road.
* Pay your bills on time. Yeah, I know, this is a no-brainer to most. Yet, it doesn't report late to the credit bureaus until you fall 30 days late. Try to make sure you don't get 30 days late on anything. Sure, you may incur late fees if you are even a day behind on some credit, though Mortgage Companies typically give you a 15-day grace period before you incur any late fees. From my experience, make sure your mortgage/rent is paid on time first, then student & car loans, then credit cards. If you are a renter...
...pay your rent by check and keep copies of your canceled checks. Twelve months worth will do (pay month by month, pre-paid bulk payments won't do you any favors...create a consistent history). This establishes a housing history. While it doesn't do anything positive for your credit, it does wonders when you apply to buy a home.
* Settle delinquent accounts for pennies on the dollar. If you owe the International Bank of Jason Sardi a cool $5,000.00 and your account is charged off, you should call to arrange a settlement once it goes to collections. Often times, you can come to an agreement for a lump sum of $2,500.00 or less and you may even be able to work out a payment plan. Either case, make sure you pay that account satisfactory and get the paperwork of the agreement and the final pay-off to prove it. Paying off delinquent accounts will probably drop your score at first, but will do wonders for your score down the road (provided you keep paying everything else on time).
* Avoid 'Hard' Inquiries. Your current creditors may check your credit, but that is considered a 'Soft' inquiry and shouldn't affect your credit score. Yet, if you are applying for credit out the behind, those inquiries can adversely affect your score. It raises the red flag that you may be on your way to becoming credit dependent. Psychologically speaking, never give them that drift, make them know that their livelihood depends on you... not the other way around.
* Credit Restoration Companies may be able to help but avoid anything that says, "Consumer Credit Counseling." CCS is considered a form of bankruptcy in many lenders eyes and their ability to pay your debts at a 'consolidated interest rate & lower payment' is suspect and often times worsens the situation. On the other hand, I've only witnessed one Credit Restoration Company worth its weight in the seven years I've been traveling this gig. There may be and probably are more, but I've only witnessed one. If you want more info, contact me. Always remember though, you can do everything to make sure your credit is at it's best, yourself... it's a matter of being educated and persistence in your efforts. That takes time. Though time is a commodity not all of us have.
Below is info on the reporting agencies that you should contact to get started. Even if you have an above average credit score, you'll pay more than you should if your credit score is even 20 points lower than the next guy or gal. Save yourself money, put in the time and seek out the Mortgage Professionals to ensure that time is well spent. Your credit is crucial... our knowledge of the industry and mechanics involved... can save you money and fulfill your dreams of home-ownership. If you already are a homeowner, we can help you get on the path to make finances one less worry in this life.
Equifax
P.O. Box 740241
Atlanta, GA 30374
1-800-685-1111
www.equifax.com
TransUnion
P.O. Box 2000
Chester, PA 19022-2000
1-800-916-8800
www.transunion.com
Experian
P.O. Box 2104
Allen, TX 75013
1-888-397-3742
www.experian.com
Bear in mind, at this point, you're entitled to one free credit report a year. Or, and I'd personally recommend this, you can get the whole batch which is simply called the 'Annual Credit Report Request Form.' That's free as well! The following sites will lead you in the right direction:
http://ftc.gov/credit
www.annualcreditreport.com
The bottom line in all this, the status of your credit can either cost or save you money. Which option sounds better to you?
Momma Told Me, Be Careful Shopping For a Mortgage
This post was originally written in May of 2008 but I thought it was not a bad idea to re-post it now. Amidst the talk of rock-bottom rates, there will be a lot of folks out there shopping for a mortgage. So, from the synapses of my brain to your eyes... here's my recommendations when shopping for a mortgage:
I'm well aware that most of us fancy ourselves smart shoppers. Whether we are buying a car, groceries, looking for the next Gas Station, sorting through bids on our next Home Improvement Estimate, shopping cell phone carriers...etc... we want the best deal. We want it cheap and efficient.
After over 7 years of being in the Mortgage Business and learning from and being trained by folks who have been in the business since Jimmy Carter took office, I've learned two things. Like any job, this can be frustrating as hell, but I absolutely love what I do. I've also learned how to shop smart! I'm only licensed in Pennsylvania and have friends & family outside the confines of where I can lend, they count on me to guide them accordingly.
That written, I want to pass some of my own personal thoughts on how you as a consumer can shop smart to make certain you are getting the best Mortgage for your needs. I'd ask for a drum roll but realize you have better things to do ... so I'll get to it.
5 Ways of Shopping Smart For A Mortgage:
- Begin the conversation with any Mortgage Company/Direct Lender/Bank with the following question, "What's your Interest Rate?" If the person on the other end quotes you a rate, hang up! Well, don't hang up ... that's kind of rude, just say thank you and you'll get back in touch with them. If you are being quoted a rate without them knowing anything about your financial situation, credit score and history, short and long-term goals, they aren't doing their job and won't be doing your situation any justice at all.
- Education is always key. While I love to know the what's in what I'm shopping for, I demand to know the why's of what is available and at what price. Look for a teacher, not a preacher. If they use the two ears they have and listen, what comes out of their mouth becomes all that more important. Your goals and desires and needs are on the line, seek out an advocate of those very things.
- There's another question you should ask, "How do you make your money?" In any 'sales' occupation, this tends to throw some off if the consumer dares to ask that question of the Professional. Ask that question though, it's relevant. If they are doing right by you, they are earning every penny. The price you will be paying for this service will be worth its weight ten times over on one of the biggest financial transactions you will ever partake in.
- When narrowing down who you want to make application with, my suggestion is to narrow it down to three entities. Ask a family member, friend or co-worker to refer you someone they had a good experience with. Go to the bank you hold your depositories (checking & savings accounts) with. Finally, do your own leg work by making a few calls and Internet inquiries, you'll want to shop with at least one Mortgage Broker. Use your gut to get a feel for the guy or gal who just clicks with you and your needs.
- Service & Availability. This is a huge one! Answering emails, returning calls, meeting with you at their office, being there every step of the way and beyond your loan closing ... that's probably the person you'll want to deal with. Having someone to inform you every step of the way and call just to say, "How the heck are you?" is something special & human. I don't know about you, but I want to go shopping at a place that is special and quite human. In the end, those folks tend to treat you the exact same.
Don't ever be a statistic!
Jason Sardi
Mortgage Consultant
First Choice Equity Group Inc.
610-439-2166 ext. 229
Toll Free @ 1-866-262-8720 ext. 229
jsardi@fcegi.com
Licensed with the Pennsylvania Department of Banking
I'm well aware that most of us fancy ourselves smart shoppers. Whether we are buying a car, groceries, looking for the next Gas Station, sorting through bids on our next Home Improvement Estimate, shopping cell phone carriers...etc... we want the best deal. We want it cheap and efficient.
After over 7 years of being in the Mortgage Business and learning from and being trained by folks who have been in the business since Jimmy Carter took office, I've learned two things. Like any job, this can be frustrating as hell, but I absolutely love what I do. I've also learned how to shop smart! I'm only licensed in Pennsylvania and have friends & family outside the confines of where I can lend, they count on me to guide them accordingly.
That written, I want to pass some of my own personal thoughts on how you as a consumer can shop smart to make certain you are getting the best Mortgage for your needs. I'd ask for a drum roll but realize you have better things to do ... so I'll get to it.
5 Ways of Shopping Smart For A Mortgage:
- Begin the conversation with any Mortgage Company/Direct Lender/Bank with the following question, "What's your Interest Rate?" If the person on the other end quotes you a rate, hang up! Well, don't hang up ... that's kind of rude, just say thank you and you'll get back in touch with them. If you are being quoted a rate without them knowing anything about your financial situation, credit score and history, short and long-term goals, they aren't doing their job and won't be doing your situation any justice at all.
- Education is always key. While I love to know the what's in what I'm shopping for, I demand to know the why's of what is available and at what price. Look for a teacher, not a preacher. If they use the two ears they have and listen, what comes out of their mouth becomes all that more important. Your goals and desires and needs are on the line, seek out an advocate of those very things.
- There's another question you should ask, "How do you make your money?" In any 'sales' occupation, this tends to throw some off if the consumer dares to ask that question of the Professional. Ask that question though, it's relevant. If they are doing right by you, they are earning every penny. The price you will be paying for this service will be worth its weight ten times over on one of the biggest financial transactions you will ever partake in.
- When narrowing down who you want to make application with, my suggestion is to narrow it down to three entities. Ask a family member, friend or co-worker to refer you someone they had a good experience with. Go to the bank you hold your depositories (checking & savings accounts) with. Finally, do your own leg work by making a few calls and Internet inquiries, you'll want to shop with at least one Mortgage Broker. Use your gut to get a feel for the guy or gal who just clicks with you and your needs.
- Service & Availability. This is a huge one! Answering emails, returning calls, meeting with you at their office, being there every step of the way and beyond your loan closing ... that's probably the person you'll want to deal with. Having someone to inform you every step of the way and call just to say, "How the heck are you?" is something special & human. I don't know about you, but I want to go shopping at a place that is special and quite human. In the end, those folks tend to treat you the exact same.
Don't ever be a statistic!
Jason Sardi
Mortgage Consultant
First Choice Equity Group Inc.
610-439-2166 ext. 229
Toll Free @ 1-866-262-8720 ext. 229
jsardi@fcegi.com
Licensed with the Pennsylvania Department of Banking
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