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 »
Justin: We are on. Hey, Brian. This is Justin and we’re here with the Mortgage Market Minute. What do you have for me today?
Brian Martucci: Well, I think the topic of the day is probably going to be interest rates and the odd thing to me is that a lot of people do not realize that interest rates are up a little bit, not a lot, but people, when the media starts to hammer the public with the fact that rates are down, rates are down and they repeat it all the time. 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 »
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 »
So the debt ceiling is all fixed? Too bad. What else will generate so much hyperbole from our politicians? There were stories of terrorism, global disaster, and economic meltdown. My favorite was this one from Nancy Pelosi who insisted the debt limit be raised massively, "We're trying to save life on this planet as we know it today." Rep. Michelle Bachmann worried that raising the debt limit at all would be "like saying we embrace being Greece." It was fun to watch. Rep. Maxine Waters said the final compromise bill "may be the single-worst piece of policy to ever come out of this institution." Maxine needs to brush up on her history, this comes nowhere close.
Read the rest of this entry »
Everyone wants to get the best deal reasonably possible when getting a mortgage. I say reasonable, because although some lending sources advertise what seem like unreal rates, most consumers are smart enough to discount what appears to be a free lunch. The reality is that even with hundreds of competitors, rates never vary by much more than 1/8% in rate. But hey, who does not want every 1/8% to be in their favor?! I do. So go for it. But here is the problem with shopping for that best 1/8% deal online: Read the rest of this entry »