Teaser Rates

I've seen a lot of advertising, either TV, radio or print about "teaser rates". For instance, I have seen a national company I believe it's DiTech.com advertising a $150,000 mortgage for $450.00 a month. How do they do this? Well the answer is simple, there are products out there that allow the homeowner to only pay a fraction of their interest. I do not and will not recommend this product to my clients. Why? Because in this case their (homeowner) balance will actually go up over time. Using the example above at a 4.5% interest rate the interest only payment is $558.37, what does this mean? First, your balance is going up significantly over time. Secondly, you are not going to get 4.5% rate in the market today!

Especially in today's housing environment where appreciation is slim to none, foreclosures are at an all-time high and overall mortgage delinquency is on the rise these types of loans simply do not make a whole lot of sense. I have outlined the following to make sure you get a quality mortgage product.

1) Ask and compare GFE (Good Faith Estimate): A GFE can be "sugar coated" any way you want it. Make sure the GFE will portray actual costs that you will see at closing.

2) Ask for references and testimonials: If you are with a reputable company and individual this should not be a problem and if it is you probably should not do business with them regardless of what they promise.

3) Disclosures: Make sure they go over ALL disclosures with you. To many times items are either not disclosed or forgotten about and this only hurts your understanding of the mortgage process, product and terms.

4) Trust and referrals: Do business with someone that you trust! For instance, Professional Mortgage Group's business is 100% referral. Realtors, builders, title agencies, inspectors and past clients continually feed our business on a daily basis. Why? Because this network of individuals trusts us to deliver a high quality mortgage experience and we have continually done this day in and day out, week after week, and month after month.

With these techniques as your guide you should be in fine shape to receive a quality mortgage product and experience!

Your Comments are Welcomed!

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

2nd Quarter Appreciation Function

We have finalized our 2nd quarter appreciation function. We hope everyone can attend and make this event as special as we know it can be. We know how hard our realtor's and other referral partners work and for one night we would like you to kick back and relax .


The function will be held at Boone Tavern on the courtyard between 6:00-8:00 on May 17th.

We will be sending out e-vite's and hand delivering invitations. Be on the look out!!!


See you there.


Brought to you by the Professional Mortgage Group
Columbia, Missouri

Good Credit Habits

Having worked as a lender in a bank for 6 years prior to joining Professional Mortgage Group, Inc., I have seen many ways people mess up their credit. Unfortunately, when it comes to credit, most people don't have a real appreciation of the consequences of their actions. Here is a list of the ways most people trip up when it comes to their credit.

1. Not paying mortgages or car loans or other installment loans on time. By not following through on commitments to pay installment loans you will hasten the decline of your credit score and reduce your ability to get further credit. Any credit you receive will become more and more expensive. The solution is, of course, make your payments on time.

2. Not making payments on time on credit cards. It may seem strange that I didn't just include this in number 1. However, if a person pays his/her installment loans on time regularly, a mortgage lender will often overlook or not be as harsh with one or a few late pays on credit cards. Remember that late payments on all forms of credit will reduce your credit score. And, as the number of times late increases your score will fall faster. The solution is, again, make payments on time.

3. Having too big a balance on credit cards. One of the items on which your credit score is based is the total debt outstanding compared to the maximum debt that can be accumulated. If you find that your credit cards are constantly "maxed" out, you can be sure that will have a negative affect on your credit score. Lenders look to see if a potential borrower is responsible with his/her credit decisions. Carrying a high balance on an expensive credit card is not viewed as a responsible decision. The solution is to pay down your credit cards as soon as possible and to not abuse them. If you are running up balances that you can not pay off in a reasonable time, you are spending too much.

4. Not paying bills (such as medical or cell phone bills) and having collections added to your credit report. A collection is a legal judgement that says you owe a certain amount. This is not good for your credit because even after you pay the bill, a collection will stay on your credit for up to 10 years. The key to staying out of this trouble is to make sure all your bills are paid on time.

5. Bankruptcy. I am continually surprised by the number of people that take bankruptcy who think that it just wipes the slate clean. Bankruptcy is and should be viewed as a drastic measure to stay afloat. People who take a bankruptcy, in general, must wait at least 2 years to get credit again. The notice of bankruptcy stays on your credit (and drags on the score) for 10 years. The solution is to only take bankruptcy as a last option and to understand that it will affect you for a long time.

6. Not monitoring credit on a regular basis. Identity fraud is a huge problem and can take a responsible individual's credit down quickly. The best way to combat this is to know what your credit report says about you. You can monitor your credit for free on an annual basis by going to http://www.annualcreditreport.com/. Take a look and make sure that all items listed are yours and correct. If you come across and item that isn't correct, contact the reporting company or the credit bureau to get it fixed.

Knowing what affects your credit in both good and bad ways will help you make responsible decisions. As your credit score improves you will enjoy better rates.

As always, your comments are welcome!

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

First Time Home Buyers

Be prepared when you are ready to purchase your first home. Do not listen to the commercials and radio on how you can get into a home without any costs. Someone is paying for the costs associated with the loan. If it is not the buyer it is either the seller or finance company. If the seller is paying the closing costs, generally they will sell the home for more. If the finance company is paying the closing costs, then the rate will be slightly higher.

The key is to prepare for a home purchase. Have money saved up for a down payment or your closing costs. Remember, everyone has pre-paids due at closing. These are insurance premiums for your first year and setting up your escrow account for taxes and insurance if you decide to escrow. If your lender and realtor are creative enough, they can work to structure a deal that minimizes what you must bring to closing. There are instances where you bring nothing, but these are rare. This only happens if the seller pays a $2500 plus in seller paid closing costs! As always your lender should work hard for you, but remember bringing money to the closing table is normal.

Get your credit scores in line by cleaning up any collections, judgements, delinquent accounts, or any other negative aspects on your credit report. Try to get pre-approved through a mortgage company prior to looking at homes. This will help the Realtor narrow down which homes are affordable to you. Be ready to put at least $500 down for earnest money and possibly pay for an appraisal and/or inspection upfront. Appraisal fees are typically $350-$450, depending on the size of the home and location. Inspection fees are relatively the same range as an appraisal.

Consult a Loan officer and Realtor prior to making an offer on a home. This will help you get the home you want and a loan that meets your needs.

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia Missouri Mortgage Broker"

Columbia Missourian

We were contacted by the Columbia Missourian yesterday to tap our expertise on the local mortgage market. The article has not been printed yet, but it was just a basic article about the market, what buyers should look for, and the sub-prime fall out.

We advised that the market was fairly strong for homes under $200k, but very weak on homes $250k and up.

Just like most of the mortgage articles lately, this interview focused on the sub-prime fall out and foreclosures. First off, only 25% of our loans are sub-prime. Based on our experience we gave them some feedback. There are brokers out there that put borrowers in bad situations, but if a broker does things the right way the borrower is fully aware of everything that is going on! We want to educate ALL of our borrowers every step of the way, especially our sub-prime borrowers. After we do this, the borrower must follow the plan.
Almost all sub-prime loans are on ARM's with a pre-payment penalty. This is not something that is done to intentionally hurt the borrower. The reason someone is considered to be a sub-prime borrower is because they have had past credit problems. They must go through a transition phase in order to get back on track. If a borrower in this situation must purchase a home or refinance, they will be given a sub-prime loan (also known as a band-aid loan). It is our job to find them the best sub-prime loan/rate that fits their particular situation. As we all know these loans have high rates. The only way to bring them down is with an ARM product that includes a pre-payment penalty. Now it is critical for the broker to educate the borrower about the product they are on and what they must do in the meantime to fix their credit problems. After this is done, the borrower must follow through. If the plan is followed, in a couple years we can come back and refinance them into a conforming product. We have done many of these and the borrower's are unbelievably happy. They fell under the misconception that they would be a sub-prime borrower forever! The reason you see so many foreclosures is because these borrowers don't follow the plan, an unfortunate circumstance comes up, or they shouldn't have purchased a home in the first place! If the broker does his job the majority of the blame comes back on the borrower. If the borrower isn't educated, I am fine with the blame being put on the broker!

Lastly, we were asked what a borrower can do to avoid many of the horror stories. Simply put, the borrower should have no worries if they can find a realtor and lender that is experienced and reputable. Make sure you do your homework. The realtor will listen to your needs and find you a home that fits you. They will make sure all inspections are done and that you aren't buying a lemon! The lender will provide you with the best loan for your situation and educate you on your product. The lender should also make sure your payment and closing costs are comfortable for your budget and that everything is disclosed.

Professional Mortgage Group is happy to see that publications like the Columbia Missourian and the Columbia Business Times see us as a reputable company with expertise. We have been asked to be used as a voice from time to time. This Missourian article will be our first experience and we hope nothing is taken out of context or mis-quoted. We will soon see. All in all I think it should be a good article.

Brought to you by
Professional Mortgage Group, Inc
"Your Columbia Missouri Mortgage Broker"

The Columbia Mall

Professional Mortgage Group will soon be seen at the Columbia Mall near the entrance to the food court. We have recently made a twelve month commitment to be the exclusive broker for Plasmedia Productions a marketing/advertising firm based out of Kansas City, Missouri. They will be installing a 7ft tall cylinder looking plasma television on May 1, 2007. Thirty-six exclusive companies were asked to participate in this advertising endeavor and for a nominal fee the spots were filled quickly!

We feel very fortunate to have the opportunity to be at Columbia's Mall. Over 14 million people travel to the Columbia Mall every year and they will soon see Professional Mortgage Group in the food court. We are trying to do everything possible to be Columbia's #1 mortgage broker and we truly think this will be a big part in our success.

Your comments are welcomed

Brought to you by Professional Mortgage Group Columbia, Missouri.

Mortgage Refinance

Should I refinance? We get this question all of the time. The answer varies based on your situation, but here are some common reasons:

1. Lower Rate - If you are one of the few who have not taken advantage of this low interest rate environment, you can refinance away from your high rate mortgage into a lower one. This option is especially attractive if you plan on staying in your home for the next few years or if you have had an improvement in your credit score.

2. Cash Out - You may need to tap your equity for a remodeling project or to consolidate some debts or even to take that dream vacation. In this low rate environment, sometimes it is better to refinance the whole loan to get the cash rather than add a second mortgage.

3. Change To A Fixed Rate - Many people took advantage of the lower interest rates of adjustable rate mortgages (ARM) a few years ago. Those rates will be coming up for adjustment soon, if they haven't already done so. This can cause your payment to go up if rates have gone up since the loan was taken out. This is a perfect time to go to a fixed rate loan and stop the chance of further or future adjustments.

4. Lower Payments - If you have owned a property for some time and have built up some equity, you may want to refinance to re-amortize your loan over thirty years to lower the payments that you are required to make each month.

As you can see, there are many reasons to refinance your mortgage. You should talk to someone you trust to find out if it is right for you.

You comments, as always, are welcome!

Brought to you by Professional Mortgage Group, Columbia MO