YOUR Mortgage- Take It Seriously!

I just want to touch briefly on a couple points that we have harped on before, but hold much importance. When you are dealing with your lender selection, your mortgage application, your mortgage selection , or your mortgage payment you should be very attentive! Make sure you are on top of things at all times. Many times, people don't realize the importance of these things and they pay for it later. Lets look at each aspect:

Lender Selection

• Choose a lender that comes highly recommended
• Meet your lender in person if at all possible. If they wont do this and go over all disclosures, you should keep looking.
• Ask to see testimonials or for references. These are nice to see, although I doubt they will provide anything that isn't positive. Take it for what it is worth and make your own judgment. The word on the street is the most valuable.
• Is your lender knowledgeable and do they have the experience to back it up?
• After meeting them in person, choose a lender you trust!

Mortgage Application:

• Make sure you provide all pertinent information up front. Don't try to hide any details because they will be uncovered and it could totally change your product, rate, or your approval!
• Make sure you wait until after your loan has closed to make any major purchases or job changes. Believe it or not we have had a handful of people spend their money needed or reserves or changed jobs right before closing and it greatly affected their loan! This is just not worth it. If you know a major change is going to take place, let your broker know up front. Why waste your time and theirs if it can be avoided! That new Big Screen or Car can wait a couple weeks!

Mortgage Selection

• Make sure you know your financial goals and make this known to your lender. Your lender can then select the product that best fits your needs. Maybe you know you are moving in exactly 5 years. If this is the case, you may want to select a product that gives you a lower payment for this time period. If you know this is your final house, you would more than likely choose a more secure product! Everyone's situation is different and the different mortgage products all have a place.
• Ask if you have a pre-payment penalty.
• Any other questions, just ask. Who cares if you think it is a stupid question! Better to ask now instead of regret it later!

Mortgage Payment

• After your loan is closed you have your wonderful monthly mortgage payments. Don't underestimate the importance of these. I have dealt with 2 cases recently where clients could not obtain the financing they greatly needed to better their financial situation due to late payments! This is the #1 thing that will kill your credit score. What do you think lenders will scrutinize most? That's right, your mortgage history. Makes sense doesn't it? They are looking to lend you money and they can easily see your track record for mortgage repayment. You will get severely hit on your interest rate or you will lose the ability to borrow all together!
• This is your single most important payment so treat it that way. If your situation changes and you can't afford it, don't try to figure it out. Put you home for sale immediately. If you get that job or raise you need then great, take your home off the market. Don't be stubborn and ruin you financial history if it can be avoided.

From this you can see how critical this all can be. If you skip the first few steps, you could find yourself strapped with a uncomfortable mortgage situation and it could cost you. Just do your homework, ask the right questions and everything will be fine!

Brought to you by Professional Mortgage Group Inc.

"Your Columbia, Missouri Mortgage Broker"

Know Your Lender

With all of the "shake up" in the mortgage market right now it is critical that you deal with a lender you can trust! Since the mortgage market crash, 109 wholesale lenders are no longer in business and several more are teetering on the verge of not having enough liquidity to fund any future loans. Programs are changing daily as I witnessed just last week. A lender introduced a new 1-Year ARM loan and the very next day closed the program. If the loan was not locked , they would not honor any approvals. Fannie Mae and Freddie Mac are also adjusting their approval engines to more strict guidelines. They are wanting to see an established pay history over time and are wanting more in reserves. Stated income and stated asset programs to 100% loan-to-value (ltv) are all but gone. In fact, Argent formerly one of the largest sub-prime lenders is only offering 95% and under financing. Countrywide Sub-Prime Wholesale is no longer entertaining 100% ltv financing for borrowers.

The Sub-Prime market has also adjusted their rates significantly upward to help increase their margin on products for housing the riskier loans. In connection with this they are also increasing the QC (Quality Control) measures to help detect fraud! The mortgage market as a whole is in the worst slump in 16 years. New construction building permits are down, new construction home marketing is up, financing concessions are seen on almost every deal (i.e. increased realtor commission, giving away Plasma TVs, paying ALL closing costs etc.) and builders are slashing prices to hopefully decrease their inventory of homes, which also is at an all time high. Existing home sales are down, they are trying to compete with new construction and thus chopping prices which in effect are killing home values across the nation. Overall home sales in the Mid-West market are down almost 46% from the previous year!

What does all this mean? You need to get with a lender that knows the market, watches the market (i.e. rates, programs, guidelines, bonds, etc.) is honest, prepares you for the unknowns, and has references and testimonials! The market is littered with lenders who simply do not know their trade. We at Professional Mortgage Group, Inc. go above and beyond what our clients expect time and time again! We have satisfied strategic partners (i.e. Realtors, financial planners, bankers etc.) that continuously send us business. Why? Because we do things the right way. We offer constant continuing education, we hand deliver our well-known "Buyer's Guides" to help home buyers with all of the questions that arise throughout the mortgage process, we developed "loan tracker status" on our website to help both our clients and their Realtors track the "real time" status of their loan, we are rolling out a realtor forum during the winter months to help get some feedback and educate local housing individuals on the mortgage and lending market, we developed our "Service Guarantee" for both realtor and clients, we have testimonials and surveys to prove how well we do things and we do this all because we think it SHOULD be done! Your business, your home , and your well-being are why we are here!

Your Comments Are Welcomed!!!

Brought to you by your Columbia, Missouri Mortgage Broker

Professional Mortgage Group, Inc.
"The Industry Professionals"

Subprime Fallout

We are still feeling the effects of the subprime mortgage market fallout. Lenders are still tightening the standards and requirements for loan approval. Unfortunately, I believe that they may have now gone too far in overreaction to the defaults in the subprime market.

Some lenders are taking the extreme action of cutting off all alternative lending. Some have tightened the standards to ridiculous levels. In fact, at one lender if you had the documentation and credit score to qualify for an alternative loan you would be able to qualify for a standard one! All this goes to show that the lenders are currently spooked and not thinking before they act.

The subprime mortgage market was ripe for correction. Lenders had become too lax in standards and a change was needed. However, the thing that lenders seem to be forgetting is that the alternative lending and subprime loans were created to fill a need. The need for these types of loans has not gone away. We just need the lenders to take a deep breath and run the numbers the way they did when they first developed the alternative products.

I'll keep you posted to the changes as they happen.

As always, any comments or questions are welcome!

Brought to you by Professional Mortgage Group, Inc. in Columbia, Missouri.

Referral Partner Appreciation Night

Come join us for our 3rd quarter Referral Partner Appreciation Night at D. Rowe's Restaurant on August 16th from 6:00 -8:00. We simply use this time to socialize and take some time to say thank you to all of our referral partners for all that they do for Professional Mortgage Group, Inc.


Appetizers and Drinks will be provided. Be on the look out for you personal invitation. We hope to see everyone there!!!


Thank you again to all of our referral partners. You are truly valued.


Brought to you by Professional Mortgage Group, Inc.
Columbia, Missouri.

Incentives to Buy!

We have already mentioned in previous posts that it is a buyers market. Buyers are out and about getting great deals on real estate at this very moment. It also looks like this trend is not going away anytime soon. With this being the case, sellers are having to add incentives to make their property more appealing to prospective buyers. I am sure you have seen offers out there. Plasma TVs, lawnmowers, furniture, etc.. I recently read an article that detailed these incentives and they made some very good points. First, be leery of too good to be true offers. Many times these incentives are built into the asking price. This is not always the case and I recommend you do your homework and use common sense. They also pointed out that buyers want practical incentives. These are incentives they can use. A vacation package is nice, but not exactly the feature they are looking for in a home. In some ways this cheapens the way the property looks. Buyers really want their interest rate bought down by the seller or other value added incentives. Get the point! As a seller you should keep this in mind. As a buyer, you may want to think about what you want. Chances are you can get it!

Here is a list of the most commonly used incentives:

1. Price reduction - This is the most common. Everyone looks at the bottom dollar. If their budget is $200,000 and you are asking $225,000, a plasma TV is probably not going to make them go for it!


2. Paying points - This is a great tool. If you are willing to reduce the price of your home by $5000, think about using that money to buy down the buyers interest rate. This will allow them to get more bang for the buck. This also takes that person who has a $200,000 budget and lets them get into the house that is $225,000 for the same monthly payment! Remember, making the monthly payment comfortable for the buyer is key!


3. Down payment aid - Many times it is tough for buyers to come up with down payment money. If the seller carries a small down payment, a deal might be able to be struck!


4. Seller paid closing costs - This item is becoming more and more popular. Ask for this because you will most likely get it. If so, you can actually get into your dream home for "NO" money out of pocket!


5. Home Warranty - These are nice and can give a buyer the piece of mind they want. Just make sure it is a quality warranty and that all areas of concern would be covered.

These are the most common incentives used today, but there are others. Some choose to leave furniture or built in sound systems. There are all kinds of creative ways to entice buyers and as a buyer you can take advantage.

Happy Hunting!

Brought to you by

Professional Mortgage Group, Inc.

Your Columbia, Missouri Mortgage Broker

Furniture

Thanks to all who helped make our recent Ashley Furniture promotion a HUGE success! We had the pleasure of helping out a plethora of clients get into homes and at the same time furnish it as well. Perhaps in the future we will offer something similar to this!

A special thanks go out to the following realtor's; Tim Kuchta (3D Realty), Hayes Murray (Plaza Real Estate), Eric Miller (Central Missouri Real Estate), Jason Thornhill (Weichert Realtors-First Tier), Anna Garrison (Century 21 The Advantage), Sharon Chitwood (House of Brokers), Travis Kempf (Plaza Real Estate), Dennis Jordan (Weichert Realtors-First Tier), and Dennis Lynch (Remax Boone Realty).

I also want to thank the following individuals at Ashley Furniture for making this a success; Matt Snodgrass, Roger Snodgrass Jr, and Ed Franks without your help and dedication this would have not been possible.

As usual any feedback is welcomed!

Brought to you by The Professional Mortgage Group
Your Columbia Missouri Mortgage Broker

A Great Mortgage Experience

Many times I have used this space to educate on the mortgage process or let people know some of the pitfalls that come up in a mortgage loan transaction. Today I want to relate a good experience that I had as the broker in the transaction and why it was a good experience.

The borrower was young and recently out of college. They were working a full time job and felt it was time to buy a home. So, they got pre-qualified and began their search. They took their time to find a great buy (not too hard these days!!!) and we started in on the process. They were actively involved the whole way through, asking questions and providing the documentation almost as soon as I asked for it. All along they appreciated my constant contact and information about the status of their loan. In the end they got the loan they wanted and closed on time. A great experience for everyone!

Now let's examine why this worked as well as it did.

1) The buyer had kept their credit clean and was able to qualify for a conforming loan.
2) They had themselves pre-qualified to make sure they looked for a home that they could afford.
3) Taking the time to find a house that they could get a deal on will be a long term plus.
4) They understood that as a lender I needed to know about their finances and they were organized and able to document all their financial claims.
5) They knew that, in order to stay on top of their closing date, I needed to be in frequent communication with them and their realtor.
6) Finally, they kept the proper attitude that finding a home and buying it should be a FUN process.

If you keep all of these things in mind when you purchase your next home, your experience should be a great one too as long as you find a lender that you know and trust.

As always your questions are welcome!

Brought to you by Professional Mortgage Group, Inc. in Columbia, Missouri.