Government Loans!

As many of you already know the mortgage world has shifted greatly toward Government programs. Quite awhile ago Flat Branch Mortgage made a concerted effort to specialize in these very programs. These great products are FHA, VA, and USDA. All are top notch and carry great rates. I will briefly highlight a few items on each program.

FHA

• Low Rates - This program does not carry with it the hefty rate hits that conventional programs do. (5.5% as of today)
• 3.5% Down payment (Gifts allowed)
• Non-Occupant Co-Borrowers Allowed
• Upfront MIP fee is financed into the loan and a reduced monthly MI fee is charged.
• No Pre-Payment Penalty
• Fixed Rate

USDA

• Property Must be USDA Eligible (Click Here to Run an Address)
• Household Income Must be Eligible (Click Here to Run Income)
• NO Down Payment (102% Program)
• Cosmetic Repairs Can Be Built Into The Sales Price (As Long as Home Appraises)
• Low Rates - This program does not carry with it the hefty rate hits that conventional programs do. (5.25% as of today)
• 2% Upfront USDA Funding Fee Is Rolled Into the Loan, but NO monthly MI is charged!
• No Pre-Payment Penalty
• Fixed Rate

VA

• You Must Be An Eligible Veteran
• Low Rates - This program does not carry with it the hefty rate hits that conventional programs do. (5.50% as of today).
• Upfront MIP Fee is charged, but NO monthly MI is charged.
• No Pre-Payment Penalty
• Mortgage can be taken over (or “assumed”) by the buyer when a home is sold.
• Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their loan.

Learn More About VA Loans Here: http://www.yourvahomeloan.com/Home

Flat Branch Mortgage can lend using these products as well as all standard conventional programs. Our Main office is located in Columbia, MO, but we have 2 VA Branches as well as a Branch in Moberly, MO.

Please visit www.flatbranchmortgage.com for more information or to Apply for a loan. You many also call our office (573-442-3850) to speak to one of our Mortgage Professionals!

Brought to you by:

Flat Branch Mortgage, Inc.

Rate Locking and Floating Basics

In today’s interest rate environment the decision of when to lock and when to float is very important. It is also very difficult to monitor the market and make predictions on what will happen. The market is so volatile these days and playing the interest rate game is very risky! I wanted to talk briefly about interest rate locks and some of the different approaches one can take.

First the whole point of a lock is to secure a particular interest rate for a set time period. These range from 7 days and go up from there. The most common lock period is 30 or 45 days. You will receive a pricing hit that increases with the term of the lock. This is why you see some people continue to float to try and incur the smallest hit.

Floating is choosing not to lock in order to try and catch the market on a good day to lock. Most customers like this idea because it is music to their ears that they could possibly get a lower rate. What they don’t like is the possibility that they could get a higher rate if the market goes the other way!

Consumers want the best of both worlds. They want to take advantage of a drop in rates, but they want the security of a lock. This simply cannot be done.

As you begin your loan process there are two approaches you can take.
The first is to shop around and find a lender that you can trust that offers you a fair price. If you are happy with the rate and do not want to mess with it any further, just lock!

Second, after discussing your rate and the current rate environment you can decide to float. If you choose this option you better feel comfortable with who you are dealing with and make sure they know their stuff. Very few lenders have the knowledge or spend the time and money necessary to monitor the market in order to form their own market analysis. .Floating is never perfect and the market can change in the blink of an eye. Your loan officer can have the best intentions and still not get you locked. This is because unforeseen variables can be thrown at us from time to time. Case in point was Mid-December 2008. Rates hit all time lows on December 17th and all of the lenders websites began to crash while everyone tried to lock. The end result was that by the time the sites came back up, rates had already shot back up! Many people missed out! So you can see how difficult this is. Keep this in mind. Give your loan officer your target rate and they can tell you if it is realistic. It is also best to give them the green light to lock at a given rate you would be happy with if rates begin to shoot up. They may not have time to reach you via phone to discuss the situation. Remember the only sure thing is to lock, but this information should help you if you choose to float. A couple other important things to note are as follows.
If you lock with Investor A and rates drop considerably you are not out of options. Worst case scenario we can switch investors, but we are penalized for this. So the investors have put in a few policies to help. Each investor has their own renegotiation process. If the market has moved enough we can possibly renegotiate to that days going rate or close to it. Some lenders are offering more lenient rate extensions as well. Every situation is different, so be sure to ask. The whole point it to get you what you want as long as the current rate environment allows it. We are working for you. Just realize that there is no perfect science and if anyone tells you they are smarter than the market, they are wrong. There is always risk and you must be aware. Most people do not have a large enough loan balance that makes holding out for an extra .125% worth it. The monthly savings difference really isn't that much is most scenarios. However, rates shoot up much faster than they go down so the extra .50% you might end up paying if the market goes the wrong way fast will surely be noticed! Floating isn't always bad, just be aware of how the process works and the pros and cons so you can make your own decision.

Brought to you by:
Flat Branch Mortgage

Credit Repair and its Importance.

Credit Repair has always been out there. During the Mortgage Boom its importance was decreased because there were so many programs that allowed people with past credit problems to get into homes. Since all of these programs went bye bye, it is starting to creep back into the picture. On top of this the programs that remain are continuing to evolve. Recently a new wave of changes came down the pipe and 620 is the new standard minimum score. With this we are now taking apps every single day the fall just below this threshold. Just last month they could qualify, but no longer. With this being the case, all loan officers have to step up their game and their services. Let me state this first, we are NOT credit repair specialists. We just simply deal with credit on a daily basis to know how to help in certain instances. For those of you that fall just below the 620 minimum, there is hope. We can run a credit program that will evaluate your score and detail a plan to raise your score. We only do this if we feel there is a realistic chance of helping you get above the 620 mark. Many times we find there is nothing that can be done. However, there has been numerous times where it does work. We can sometimes find that a borrower needs to address a couple accounts, provide us proof of the action, and then we can submit this documentation to re-score your credit report. This process is fast and it works. This is just one more way we are here to help. For those situations that are more severe and messy I recommend you check around and find a good credit repair company to do the work for you. This can be expensive, but it is worth it since it is so tough to clean up messy credit reports. We do not have the time or resources to tackle such projects, but we can help on more minor issues and put you in a better position to purchase a home!

If you are one of the many people that need to rebuild your credit let me just mention a couple quick tips you can try. When your score is low it is very tough to walk into a bank and ask for a loan to help rebuild your credit. During these tough times they may just laugh at you. Don’t get discouraged. Take a proactive approach and propose something to them.

Tip #1:
Ask the bank if they will allow you to take $500 and purchase a CD at the bank and then take out a $500 loan against that CD using it as collateral. Set it up for 1 year at $50 a month or so. Take the $500 loan proceeds and put it in the bank and use this money to make the monthly payment. What this does is give you an active account on your credit and as you pay it establishes positive pay history for you Once you pay it off, do it again.

Tip #2:
Contact a credit card company and do something similar to #1. Ask them if you can open a secured credit card. Send them $500 and they will put it into a savings account and issue you a credit card with a $500 limit. If you default, they just keep the money like they would on the CD. Take this card and make a few minor purchases on it. Say $100 or so (i.e. gas or meals). When you get your first bill pay a portion of the balance and continue this method. Never borrow more than 50% of the credit limit and of course always pay on time. You can’t use it and pay it off in full each time you get the bill or it will not work. Remember you are looking to establish payment history and you have to carry a balance month to month to do this.

I know you probably have a negative view of credit cards or debt for that matter, but you have to do something to re-establish your score. If you have zero debt, it is great in real life but your credit score will just sit where it is until some sort of activity is on your report. If you have any further questions, please do not hesitate to contact us.

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Flat Branch Mortgage

My Trip To Washington D.C.

Washington D.C., what else can be said about what takes place on Capital Hill these days? Well, from the 21st through the 24th of February I got to experience first hand what our Congressmen and women do on Capital Hill. The experience was priceless. The people I met, spoke with, and bounced ideas off of was unbelievable. Through my four days there a couple of things were made clear to me. First, the economic crisis that we all are experiencing is real and it's far worse than many people anticipated. Second, our state representatives are extremely aware of the issues at hand and are diligently trying to come up with ways to fix the problem(s). Third, even though in order to tackle this mess a bi-partisan approach must be met the feelings are not mutual behind closed doors. Fourth, it was clear to me that our Representatives and Senators are really feeling the heat from their constituents that something must be done and fast! To that affect they passed a huge stimulus bill (almost $900 billion) to try and ease the current economic woes. My consensus was no one thought the package would truly "fix" the economy. By the time the affects of this plan will be felt, the money would already be spent. What if we find it didn't work? Guess what, too late the money is gone!

I received a "crash course" on lobbying and one thing must be said……it's hard work! Our state representatives have their own areas of expertise so when one individuals expertise is defense, another's could be finance. So when an area is discussed that is outside their area of comfortability or expertise they rely heavily on their counterparts for input on the matter. No one individual can be or is an expert in all the areas that are affecting the economy. The biggest problem with this approach is that we have constituents who may or may not like the view point or opinions felt on that particular matter. I did gain new found respect on just how hard our congressmen and women work. It's not all dining and mingling up there! They (Representatives and Senators) are constantly meeting with groups and individuals about their concerns or initiatives. They are constantly in conferences and committee meetings. They are constantly fielding phone calls and moving from place to place. All in all their daily schedule can be pretty taxing. Time will tell whether or not things will change and the moves being made will actually be felt in the "private sector".

Brought to you by: Flat Branch Mortgage
Posted by: Shawn Von Talge