In the wake of declining interest rates this week, the phones are starting to heat up. Borrowers looking to refinance are surfacing and I wanted to point out one very critical item. Credit score is becoming more and more important. In the past you could have a 680 score (in some cases even lower) and you could get the best rate. Heck 580 could even get you a respectable rate during the high times! Since then changes have been coming down the line that are constantly adjusting this criteria. Now pricing hits are given as your score drops below each pricing threshold. These levels are 740, 720,700,680,640,and below 620. With each level comes a new hit and they get much more severe the lower the score is. For example 740 is eligible for 5.875%, 720 gets 6%, and this goes on until you get to 640 where the rate is 7%. More hits come after 640, but then you run into lenders not offering your broker compensation for doing the loan and they might be forced to charge you an origination fee in order to do the loan at the 7% rate.
It makes perfect sense why changes have been made. They needed to be made in a big way, but I feel they have gone to the extreme! Nevertheless we must cope with these changes and march forward. Just keep this in mind when you see rates advertised and you are shopping around. 5.875% sounds great, but that may not even be on the table for you. You just have to find out. It isn't your broker trying to pull a fast one. This is just the environment we are working and living in. The more knowledge you have on this subject will allow you to be a smart shopper!
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
Thursday, September 11, 2008
Wednesday, September 10, 2008
You Get What You Pay For
We all know how the saying goes "you always get what you pay for". For example, drive a Hyundai Sonata (not a bad car I actually own one) then drive a Lexus GS and you will see where the extra money goes. More horsepower, stability, and without stating the obvious it is simply a higher quality automobile. This can be experienced with one test drive. The price tag on the Hyundai is $23K while the Lexus hovers around $49K. Where did the whopping $26K go? As stated earlier, drive the Lexus and you will see . On top of that, a certain level of prestige and class comes with this automobile.
The same holds true for a home, lawn mower, rake, and even a mortgage broker. At some point in our lives we all deal with purchasing some or all of the above items; well perhaps not the mortgage broker but hopefully you will have the pleasure of using their services. What's my point? When you choose a mortgage broker you typically "get what you pay for". For instance, are you going to choose a lender because they are $500.00 less in closing costs? If you base your decision solely on this scenario then you will more than likely be making the wrong choice! This is not always the case but what if the broker who was $500.00 higher in costs was able to get you a .25% better rate because of his expertise, knowledge, and drive? Take this .25% and apply it to a $200K loan and your savings would be almost $1,500.00 through five years after you deduct the $500 in additional costs.
A professional, ethical, and honest mortgage broker will do everything in his or her power to get you the best possible loan at the best possible rate and deliver it in the best possible way. Although the cost may be slightly higher, the overall end result will save you money, time, and energy. Look past the "nuts and bolts" and dig deep into what you are getting and make an educated choice.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
The same holds true for a home, lawn mower, rake, and even a mortgage broker. At some point in our lives we all deal with purchasing some or all of the above items; well perhaps not the mortgage broker but hopefully you will have the pleasure of using their services. What's my point? When you choose a mortgage broker you typically "get what you pay for". For instance, are you going to choose a lender because they are $500.00 less in closing costs? If you base your decision solely on this scenario then you will more than likely be making the wrong choice! This is not always the case but what if the broker who was $500.00 higher in costs was able to get you a .25% better rate because of his expertise, knowledge, and drive? Take this .25% and apply it to a $200K loan and your savings would be almost $1,500.00 through five years after you deduct the $500 in additional costs.
A professional, ethical, and honest mortgage broker will do everything in his or her power to get you the best possible loan at the best possible rate and deliver it in the best possible way. Although the cost may be slightly higher, the overall end result will save you money, time, and energy. Look past the "nuts and bolts" and dig deep into what you are getting and make an educated choice.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Tuesday, September 9, 2008
Could Refinancing Be An Option Now?
As the market goes up and down over time, the option of refinancing shifts in and out of the picture as a viable option for many of us. If you were lucky to get locked in on a fixed product a few years ago at 4.75%-5.875%, you are still sitting tight at the moment. People in your situation really need to have a huge positive swing to make refinancing worth it. You are sitting so good that it is hard to improve. Even if you can improve slightly, you must look at the closing costs to get the new rate. Are they worth it? You have to run the math and compare that to your goals to answer the question.
If you are one of the many people who do not have rates this low, then refinancing is back in the picture. With the Bailout of Fannie and Freddie, Mortgage Backed Securities have made a nice rebound. Confidence is up in these bonds and this results in lower mortgage rates. At this moment, 5.75% on a 30 year fixed and 5.5% on a 15 year fixed are the going rates. Not too bad! Especially compared to the rates we have been dealing with lately.
Now keep in mind, the tighter lending standards have not changed. These are still in place and these rates and not attainable by everyone. You must qualify, but this doesn't change the fact that they are available!
Refinancing is a very important financial move and one that requires some thought. You need to evaluate how long you will be staying in the home. Are you taking cash out? If so, will the cash out you take make it even harder to sell the home in the future? Will the new loan give you PMI or take it away? How much monthly savings will you get? How much are closing costs? These are all important questions. Professional Mortgage Group will be happy to do a free analysis of your situation and offer a recommendation. If it makes sense then go for it. If it doesn't make sense, then don't refinance. It is that simple. We aren't in the business of offering bad loans that don't fit!
We will be watching the rates with a careful eye as always. The last time we saw a dip like this, it didn't last long. We must be ready to lock fast. However, I have a feeling this rally will sustain itself a bit longer. For the housing and mortgage markets, I truly hope so. Our economy really needs the boost!
If you are in the market for a refinance, please call or go online to apply. We can act fast and give you the analysis you need.
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
If you are one of the many people who do not have rates this low, then refinancing is back in the picture. With the Bailout of Fannie and Freddie, Mortgage Backed Securities have made a nice rebound. Confidence is up in these bonds and this results in lower mortgage rates. At this moment, 5.75% on a 30 year fixed and 5.5% on a 15 year fixed are the going rates. Not too bad! Especially compared to the rates we have been dealing with lately.
Now keep in mind, the tighter lending standards have not changed. These are still in place and these rates and not attainable by everyone. You must qualify, but this doesn't change the fact that they are available!
Refinancing is a very important financial move and one that requires some thought. You need to evaluate how long you will be staying in the home. Are you taking cash out? If so, will the cash out you take make it even harder to sell the home in the future? Will the new loan give you PMI or take it away? How much monthly savings will you get? How much are closing costs? These are all important questions. Professional Mortgage Group will be happy to do a free analysis of your situation and offer a recommendation. If it makes sense then go for it. If it doesn't make sense, then don't refinance. It is that simple. We aren't in the business of offering bad loans that don't fit!
We will be watching the rates with a careful eye as always. The last time we saw a dip like this, it didn't last long. We must be ready to lock fast. However, I have a feeling this rally will sustain itself a bit longer. For the housing and mortgage markets, I truly hope so. Our economy really needs the boost!
If you are in the market for a refinance, please call or go online to apply. We can act fast and give you the analysis you need.
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
Monday, September 8, 2008
Fannie & Freddie Seizure To Help Mortgage Rates!
Some of you may have heard Fannie Mae & Freddie Mac are now under the control of the government and more specifically the Federal Housing Finance Agency. Another bailout? YES, however the decision making and "strings" behind this one were necessary. Fannie Mae & Freddie Mac guarantee almost half of the mortgages on the secondary market, therefore a collapse to these giants would have spelled "lights out" on the already shaky housing market.
The simple fact is these two companies were in big trouble and everyone in the room with the exception of the two most influential men; Fannie's CEO Daniel Mudd and Freddie's CEO Syron were aware of it. By the way Mudd and Syron will more than likely be dismissed from there positions but don't worry Mudd could receive $9.3M in a severance package and Syron $14.1M. Fannie Mae & Freddie Mac rely heavily on the selling of their bonds to finance the one's about to mature (i.e. mortgage loans). However Fannie & Freddie have found extremely difficulty in the market's appetite for their bonds given the ailing housing market. So to further enhance buyer's interest they began offering higher yields however they couldn't just go back and hike the interest rates on their portfolio to cover the increased payouts and this resulted in further profit losses. The end result a government bailout and more than likely up to $100 billion in each firm to keep them afloat and liquid.
This will be BIG for interest rates moving forward as we have already seen rates come down by up to .50%. Why? Now that the government is involved the bonds that Fannie and Freddie ensure are basically prone to zero risk with a very good rate of return. Much like the T-bills offered only with much greater returns! This has prompted gross buying from U.S. companies, foreign investors, banks and some private entities. I truly see this rally being sustained and really helping mortgage rates moving forward!
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
The simple fact is these two companies were in big trouble and everyone in the room with the exception of the two most influential men; Fannie's CEO Daniel Mudd and Freddie's CEO Syron were aware of it. By the way Mudd and Syron will more than likely be dismissed from there positions but don't worry Mudd could receive $9.3M in a severance package and Syron $14.1M. Fannie Mae & Freddie Mac rely heavily on the selling of their bonds to finance the one's about to mature (i.e. mortgage loans). However Fannie & Freddie have found extremely difficulty in the market's appetite for their bonds given the ailing housing market. So to further enhance buyer's interest they began offering higher yields however they couldn't just go back and hike the interest rates on their portfolio to cover the increased payouts and this resulted in further profit losses. The end result a government bailout and more than likely up to $100 billion in each firm to keep them afloat and liquid.
This will be BIG for interest rates moving forward as we have already seen rates come down by up to .50%. Why? Now that the government is involved the bonds that Fannie and Freddie ensure are basically prone to zero risk with a very good rate of return. Much like the T-bills offered only with much greater returns! This has prompted gross buying from U.S. companies, foreign investors, banks and some private entities. I truly see this rally being sustained and really helping mortgage rates moving forward!
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Thursday, September 4, 2008
Prepayment Penalties... What A Joke!
In the crazy market that is today's reality, each new day can bring a new challenge. This has come in the form of product changes, product elimination, rate changes, companies going under, and the list goes on and on! There has been considerable debate, change, and legislation put in place during the past 2 years. It has been a roller coaster to say the least! At the same time that there is enormous pressure on lenders to work with buyers on loan modifications and refinances to fight of foreclosure, there are still millions of people out there stuck in a loan with a hefty prepayment penalty. I am working with a customer right now that is stuck in a subprime loan. He is sitting at 12.65% and I am trying to refinance him into a conforming loan. His lender is charging him a $3600 prepayment penalty to payoff his loan of $72,000! I have tried working with the lender on his behalf to get it waived, but no luck. All of these lenders know good and well what is going on in the economy and you would think they would be willing to do their part. After all, it seems they will just seek a bailout if times get tough! The frustrating part is that this lender is one of the major players and they are also one who received assistance from the FED not too long ago! When they need help, someone was there for them. When a lonely customer needs a measly $3600 waived by a BILLION dollar company to better his financial situation, NO help is given! This sure seems out of whack. What do you think? One other tidbit of information on this borrower that doesn't help his case is this. They are current on their Mortgage and have never been late. This seems like a positive and not a negative, but it isn't.
I wonder if any help would be given to them if they were at risk of foreclosure? We will never know, but it is sad that they will not help someone out who could really use it. They may been in good shape and current now, but bad occurrence that puts them out of work etc and their situation could spiral out of control in a hurry at that astronomical interest rate! The good news is that I still think we will be able to get this loan done for them. It is just going to be much harder with this penalty! Keep your fingers crossed for them and lets all hope some new legislation goes into effect that puts an end to these horrible penalties!
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
I wonder if any help would be given to them if they were at risk of foreclosure? We will never know, but it is sad that they will not help someone out who could really use it. They may been in good shape and current now, but bad occurrence that puts them out of work etc and their situation could spiral out of control in a hurry at that astronomical interest rate! The good news is that I still think we will be able to get this loan done for them. It is just going to be much harder with this penalty! Keep your fingers crossed for them and lets all hope some new legislation goes into effect that puts an end to these horrible penalties!
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
Wednesday, September 3, 2008
Driving Business through Friends
Through my years as a mortgage professional I have tried numerous avenues to increase business using every source imaginable; television, radio, print, tail gates, lunches, etc. The commonality to what I learned (thankfully) years ago is that relationships are the key to any fruitful business endeavor. The relationships we build through our business will be the ever driving force behind anything we do in the future. I am proud to say that many of my friends today are directly correlated to my work in the mortgage profession. I have friends that are competitors, realtor's, appraisers, closers, inspectors and most of all clients.
The great thing about building and nurturing these relationships is that it truly makes our job fun! To get to spend time doing something you love with people that you respect and that are your friends is truly unlike any other feeling that most of us experience through the normal course of a professional career. When the dust settles and we pull out of the housing down turn the relationships will always be there. Hopefully you have been doing the right things to keep your "friends" in good spirits!
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
The great thing about building and nurturing these relationships is that it truly makes our job fun! To get to spend time doing something you love with people that you respect and that are your friends is truly unlike any other feeling that most of us experience through the normal course of a professional career. When the dust settles and we pull out of the housing down turn the relationships will always be there. Hopefully you have been doing the right things to keep your "friends" in good spirits!
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Tuesday, September 2, 2008
Upcoming Election!
As most of you know, we are in the midst of a fierce presidential election. The Democratic Party and their Candidate Barack Obama just wrapped up their Convention and the Republican Party and their Candidate John McCain are in the middle of theirs. If anyone watched Barack Obama's speech the other night, you could clearly see that this is going to get interesting!
With our Country at war and our economy in shambles, this election is enormously important! Whether you are Republican, Democrat, or Independent it is painfully obvious that the last 8 years have been a complete debacle! I can't recall a more messy presidency! I am confident that whoever is elected, times will get better. However, I think we all need to take a hard look at the issues and who we want to vote for. We are at a major crossroads and the direction we take is in the voters hands. It is far too important to just sit back and not care. Do your homework and decide who you want to lead this country! We will all be better off for it. I know which way I am leaning and I will keep that to myself for now. I don't want to use this Blog as a platform for political controversy. There is enough out there already, I don't need to add to it. I just wanted to point out how important this time is for all of us. Most people reading this are tied to the Real Estate Community in some way. With this being the case, we should watch this election with an even closer eye. The Economy will be greatly influenced by this election and I for one want this to be a positive change!
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
With our Country at war and our economy in shambles, this election is enormously important! Whether you are Republican, Democrat, or Independent it is painfully obvious that the last 8 years have been a complete debacle! I can't recall a more messy presidency! I am confident that whoever is elected, times will get better. However, I think we all need to take a hard look at the issues and who we want to vote for. We are at a major crossroads and the direction we take is in the voters hands. It is far too important to just sit back and not care. Do your homework and decide who you want to lead this country! We will all be better off for it. I know which way I am leaning and I will keep that to myself for now. I don't want to use this Blog as a platform for political controversy. There is enough out there already, I don't need to add to it. I just wanted to point out how important this time is for all of us. Most people reading this are tied to the Real Estate Community in some way. With this being the case, we should watch this election with an even closer eye. The Economy will be greatly influenced by this election and I for one want this to be a positive change!
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
Subscribe to:
Posts (Atom)
