“Converting Clients from One Loan to Another to Save Big Money”

“Converting Clients from One Loan to Another to Save Big Money”


These clients were referred by someone that I had done a FHA streamline mortgage for. During that process I saved their friend just over $200 per month, not bad with no out of pocket money and these folks wanted to accomplish the same goal.


As I was taking their application I was reviewing their income and noticed that one of them had a $1000 per month VA disability. I asked why we aren’t doing this refinance using your VA eligibility. They said they had no idea. I explained that there would be no monthly mortgage insurance and we could go to 100% loan to value.


If we paid off the current mortgage and their two credit cards, the net result was a savings of $786 per month. If we would have done a FHA streamline refinance, the savings would have been $188.


The truth is anyone could have gotten this FHA streamline refinance done, but most would have looked beyond the easy way to get the transaction done. To me, being able to use the VA eligibility was a no brainer and a right that should be taken advantage of.

Image courtesy of nixxphotograph/freedigitialphotos.net

“Shopping for a Mortgage”

“Shopping for a Mortgage”


Prospective borrowers are being encouraged to shop around for mortgages before committing to any lender. Sometimes you just can’t make this stuff up.


Brad indicated that he was referred by his Realtor and has been shopping around for a mortgage. I asked him how long he had been shopping and he let me know it had been 3 months. I asked him what he was shopping for. He told me that he had read that he is supposed to be shopping for the best deal. I asked him how he would know if it is the best deal. He told me he wasn’t sure. I asked him how many people he had spoken to, he told me at least a dozen but he couldn’t remember at this point. I then asked him how many times his credit was pulled. He told me most of the times he spoke to someone they pulled his credit. I asked him if he knew what his credit scores were and he said he had no clue.


So, what is the point to all of this? This is an extreme example, but there will be many Brad’s out there, almost aimlessly looking for the best deal. I explained to him that his credit scores have been affected, but he didn’t really understand why.


I did run his credit, he had a mid-score of 611, there were 14 pulls on his credit in the last 10 weeks. Not sure what his scores were before he got started. I gave him some coaching to get his scores up. He will probably need a few months before he gets his scores where they need to be to get to an appropriate level to do a conventional loan, which is what he wants. I explained that doing a conventional loan is not the right choice for him, but he read that it is the right loan for him.


My sense is the Government agencies think they are acting with good intension but they have NO clue the damage they are doing with this kind of advice.

 Image courtesy of stuartmiles/freedigitalphotos.net

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“New One on Me”

“New One on Me”


I have been doing business with this Realtor for a number of years, not much business but when there were challenges or something someone else couldn’t do he would send that business my way. I wish I could say that I got each opportunity done, but I did with a good percentage.


He wanted to meet for lunch and bring another loan officer with him. This was a new one on me, but so be it. I set up the lunch date to get together. It was quite the experience.


Originally, I thought the Realtor might have wanted to make the introduction in order for the loan officer to leave the company they were with and join Right Trac. This was not the case at all. He wanted me to give some pointers to this LO. As the Realtor spoke I could see the embarrassment, it was time for me to come to the rescue.


This LO worked for a company, actually a very good company that does only vanilla loans, nothing that has the slightest imperfection. They are good competition for these loans, but we have a number of lenders that will do only vanilla as well. For whatever reason this Realtor didn’t understand the system.


I enjoyed the conversation with the loan officer, as he seemed to be very knowledgeable and sincere. The best part about the lunch was meeting the LO as there is a future opportunity for referrals from him for loans that he can’t do. It also cemented my relationship with the Realtor. You just never know how things are going to work out. 


Image coutesy of hin/freedigitalphotos.net

“List First or Buy First?”

“List First or Buy First?”


As the spring market is in full swing and it is getting warmer in most parts of the country this question is showing up all of the time and the simple answer is there is NO simple answer.


I am seeing more contracts with Hubbard clauses, but it seems that most of the properties that involve this clause are properties that have been on the market for some time and not newly listed properties.


I’ve had two transactions that completed last week, both fit the scenario. Both my clients put deposits on homes that had been on the market for months. Both transactions had Hubbard clauses and both had their homes go on deposit very quickly as the prices were much lower than what was being purchased.


If you make the decision to list without any idea of what homes might be available, it is extremely important to work with a knowledgeable Realtor. Is it nerve racking for sure, but unless you are willing to end up owning two homes at the same time you need some really good coaching.


How do you handle these situations? 


Image courtesy of Jscreationszs/freedigitalphotos.net

“Vacation Home Market Very Strong in 2015”

“Vacation Home Market Very Strong in 2015”


So far this year our mortgage activity that involves vacation homes has been stronger than usual. Purchase prices have run from $55,000 to $915,000. As crazy as it seems, the mortgages were done in seven of the eight states I do business in. The only state I didn’t do a mortgage on a vacation home in is Connecticut.


One thing that I continue to learn about when it comes to vacation homes is the $55,000 property has just as much importance as the $915,000 property. The couple that purchased the $55,000 upper state New York cabin on 5 acres was from Florida, retired there but didn’t like the summer heat. They told me they got on my website because of a couple of previous blogs that I wrote on vacation homes.


There normally isn’t any difference in interest rates or down payment requirements for second/vacation homes. With rates as low as they are it is a great time to buy that vacation home and take it off your bucket list.

Image courtesy of jannoon/freedigitalphotos.net

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“Lender Doesn’t Like the Appraisal They Ordered”

“Lender Doesn’t Like the Appraisal They Ordered”

Sometimes you just can’t win. I have not been an advocate of the current appraisal system. First there was HVCC that took away the living of many wonderful appraisers in this country. A system was created where appraisals would be ordered through Appraisal Management Companies (AMC). Each lender made agreements with one or more AMC’s to handle the appraisals, which basically is who gets assigned the appraisal request.

HVCC had a sunset prevision and eventually got incorporated into Dodd-Frank and under this new act the same AMC system was continued. I have voiced many times how inefficient and more expensive this system is for the consumer. It is also unfortunate that appraisers can often end up with appraisal requests in markets they are not totally familiar with.

OK, now that I have shared some background, an AMC did an appraisal for a client that I am doing a mortgage for. The lender reviewed the appraisal that was done and indicated they didn’t like the appraisal, an appraisal that was ordered through their AMC. The intent was to have an independent appraiser do the appraisal to insure there is no undue influence as to value.

The lender then came back to us, wanted a new appraisal done and they want my client to pay for the new appraisal. Are you kidding me? I contacted my account rep to discuss the situation, she went ballistic. OK, that doesn’t help my client unless you get this problem fixed. If they want another appraisal, they need to pay for it.

I wish I could say this has never happened before, but that’s not the case. Hopefully this issue gets resolved. What would you do?
Image courtesy of stuartmiles/freedigitalphotos.net


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