APR and FBI, CIA, USDA, FDIC, ATF, USPS, SEC, NASA, HUD. A lot of terms and abbreviations these days seem like alphabet soup! Interest Rate and APR (Annual Percentage Rate) are two of the most commonly confused terms in the mortgage business. Read More
One motto I follow in life is: do not be sold, be educated. One of the favorite t-shirts that I have is an old, tattered blue t-shirt that has the words “I Need Advertising To Help Me Decide” written across the front. I love the sarcasm and the not so subtle message. It is discomforting that so many people let themselves get sold, as opposed to taking the time to learn, study, analyze and decide using proper business analytics. I see this in the mortgage world more than you would think. Read More
Why do I feel like when someone calls me to talk about interest rates, they are calling multiple people, scouring the internet, and getting a lot of misinformation? I have a good friend who works at Freddie Mac (FHLMC) who I met for dinner recently. Over dinner conversation she mentioned that when FHLMC sends out their report on average interest rates. They get calls daily from homebuyers and people interested in refinancing. These people ask how to apply with FHLMC for that rate! My friend says the callers will say, “Can I get that rate from you that you guys reported, I can’t find it anywhere else!” They then have to explain that FHLMC is not a lender. FHLMC is a corporation authorized by Congress to provide a secondary market for residential mortgages. Read More
FHA loan facts. FHA, known as the Federal Housing Administration, offers a mortgage loan requiring borrowers to have mortgage insurance on the loan. The FHA loan originated during the great depression and has contributed to the growth of the housing market ever since. Read More
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 very hard for the best deal. Read More
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 More
Getting a mortgage is easy, right? You apply for the loan, you send in some paperwork, someone appraises the home, if your credit is OK, a little bit later you get a mortgage. Right? It should be that easy, I agree. We have the technology and desire in place to make the mortgage process easy, I believe. But getting a mortgage has become the most arcane, complicated, minutia filled experience ever. It is worse than going to the Department of Motor Vehicles, by far. Read More
When comparing mortgage lenders there are many things to consider. If you want to save time follow the below steps on how to compare mortgage lenders. Time is valuable and these six steps should help you find a good mortgage lender: Read More
Going dark on your salesperson. 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 More
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 More
One motto of Lending Tree is, “when lenders compete, you win.” Yes, I agree. But that should be expanded to be considered even somewhat accurate. If Lending Tree were my company I’d say, “when experienced, legitimate, local lenders compete, you win.” But then , I’d have just put myself out of business. So I guess I would not say that if I owned Lending Tree or some other “lead generation” website. Read More
Is paying points on a loan a good idea? 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. This is $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 (shopping for rates online is not accurate, see this story for more on that), but what about the costs? Read More
Do the fattest pigs get slaughtered first? There seems to be an epidemic of greed amongst today’s mortgage consumer. I am going to try and outline why it is not a birthright to get a lower interest rate if you have locked into an interest rate, and then rates drop a little during your transaction. Read More
Are we really that gullible to believe the old saw that someone else can price a product or service cheaper than everyone else? Apparently so, it is a gimmick that has been working for centuries. But if you really take a hard look, the lowest price is not always the lowest price. Read More
