Going dark. All salespeople have experienced this, no matter how good. You educate a potential client, you spend hours and hours with them answering questions, you create a relationship, and you truly seek to help them to earn your commission. And then it happens, they go dark. No contact. No return calls. No email reply. No nothing. It is eerie. You start to wonder what you did wrong. Read the rest of this entry »
The Good Faith Estimate (GFE) is one of the worst ways to compare lenders. I must get asked for a GFE 10 times a week, and 10 times a week I try and explain that using a GFE is the wrong way to compare lenders. Below are a few reasons why: Read the rest of this entry »
It seems we are doomed to repeat our mistakes. Mankind has been jumping over bushels of hundred dollar bills to reach the quarter in the corner, since the dawn of currency. I have a number of new stories every week, of consumers who look so very hard for the best deal, they overlook the fact that they may be dealing with a disreputable provider, or may not get what they expect, or may be getting a promise that won't be kept, or even worse; Read the rest of this entry »
When you buy a new home, or refinance, it can be a nervous and exciting time. And getting excited and nervous causes people to over analyze and sometimes make poor decisions. Sometimes a client will ask for a lower rate, by paying discount points. Each discount point is 1% of the loan amount, or $1,000 per $100,000 in mortgage. It sounds great to get a rate that is a half percent lower than what you hear about in the news or see online (and shopping for rates online is not accurate, see this story for more on that), but what about the costs? Read the rest of this entry »
Anyone that reads my blog knows that in general I am not a fan of Interest Only (IO) loans. I have said before that an IO loan is like putting your mortgage on a credit card. But on a refinance it may make sense if you have already built a lot of equity, are more interested in savings than equity building, and know you are not going to live in the property forever so have no interest in getting the mortgage paid off.
I had a client tell me recently Read the rest of this entry »
Most people are not aware that Fannie Mae and Freddie Mac have a whole chart of pricing "add-ons". Add-ons are an amount (usually expressed in points) which are added on to the "base rate" in certain situations. Each 1.00 point is 1.00% of the loan amount. Another example is that a .25 point is a .25% of the loan amount. On a $400,000 loan a .25% is $1,000.
Some examples of situations when add-ons are required: Read the rest of this entry »
It's that time again, the time when people seem to think a government edict can control a massive market. I have gotten dozens of calls and emails that go something like this:
"I hear Ben Bernanke is pushing rates down again."
"I hear the government is pushing rates down."
"I hear rates just dropped yesterday."
The government does not control interest rates, unemployment, economic growth, etc. Read the rest of this entry »
A large, well known bank, who the client described as "well established with comparable rates, so we are going with them", has rejected a home buyer's loan after almost 90 days in process. The seller has already given extension after extension. Now the sellers are furious, the buyer's are literally in tears, and are asking me to take over the loan and get them to settlement in 7 days. That is impossible, no one can get a new loan done that fast. The husband told me, in tears, that he had to have this house to move into, and that he was desperate for more space for he and his growing family. This little boy should not cry just because his parents made a poor choice in mortgage lender. His parents simply need to make better choices, and not shop by price alone. Read the rest of this entry »
Who is this clown? Why, it's Ben Bernanke, that's who! He just said that he was going to keep interest rates low through 2013. Thanks a lot Ben, we all appreciate it. The problem is, the general public has taken that to mean that interest rates on mortgages are going to stay low through 2013. Not so. Read the rest of this entry »
Often times a Realtor will suggest to a homebuyer that they use the real estate company's "in-house" lender. Realtors don't usually push these lenders on their buyers, but they are definitely suggested many times. Every wonder why? It is important to know how these lenders are structured, and how they operate. Read the rest of this entry »