Washington Mortgage Planner-straight up mortgage advice and commentary

Good afternoon! Today I thought I'd talk about my commitment to you as a loan officer.

 1) I will be honest and ethical in all my communications with you.  For example, if I tell you I will do a certain type of loan  for you at a certain rate, that's what will happen even if things change during the loan process. 

2) I will underpromise and overdeliver.  I won't guarantee something that I can't follow through on.

3) I will return all your phone calls, good and bad.  I am ultimately responsible for getting the loan done.

4) If a mistake occurs during the loan process, it's my fault.  As tough as it is to admit and easy to point fingers elsewhere, if something goes wrong it's because I missed something.

5) I will be available to you whenever you need me.  I will focus on your loan until it gets done.

The above are my promises to you.  Have a great day!

Paul

I was thinking yesterday how important your credit score is, especially now with the loan world being so much tougher.  Your credit score determines everything including how much your mortgage will cost, your car, your insurance, and even your ability to rent a place if you're not a buyer yet.  All the more reason to make your payments on time (one late payment can impact your score by 40 points or more) and to use your credit wisely (make sure your accounts aren't all maxed out).  These 2 factors account for 65% of your credit score.  If you are remiss in either one of these two areas (or both), expect to pay a much higher rate to borrow money.

So what is a good credit score?  Ideally, it's 680 or above.  720 is better still.  If you don't know your credit score, you can check it free once/year at www.annualcreditreport.com.  My friend Tyrone Dye at Dye Financial Services can also help.  He can be reached at (360) 721-3776.  A lot of times, there is erroneous information on your credit report.  It's worth it to correct it.  Again, it could be the difference between a mortgage in the 6-7% range and one in the 8's or above.  Realize that if you think you won't be able to make your payments, you can always call the lender.  They may be able to work with you.  Adverse credit information stays on your report for up to 10 years.  Although a steady pyament history within the last year will help your credit score, you want to make sure you're on top of it.  It shows the lender that you're a responsible borrower.  I hope this helps.  Have a great day!

Paul

Good morning!  The loan environment these days is much tougher than it was even last year.  It used to be that anyone with a pulse (lol) could get a loan.  Unfortunately, that led to a lot of loans that were given to borrowers who probably couldn't afford them.  We could spread blame all around if we wanted to.  I'd prefer to say that money gets easier to borrow when times are good.  It's capitalism at its finest.  Now, the real estate market has cooled and, with it, it's tougher to get a loan.

With the above in mind, there are two things you can do to make sure you qualify for a loan.  One, have a great credit score.  You can check your credit free once a year at www.annualcreditscore.com. A great credit score is over 700.  This will get you the most favorable pricing on your loan.  if you're under 680 these days, expect to pay more.  The other option is to repair your credit. My man, Tyrone Dye at Dye Financial Sevices, can help.  He can be reached at (360) 721-3776.

The second thing you want to have is money in the bank.  This can be in the form of savings or retirement accounts.  The more the better. It also helps if you're not looking to borrow 100% of your home's value.  All this shows the lender is that you're willing to take some of the risk.  It's not over if you don't have good credit and savings.  Just expect to pay quite a bit more for your loan.  I hope this helps!  Have a great 4th.

Paul

Hello all:  I hope you had a nice weekend and have big plans for the Fourth!  I'm curious as to your thoughts about us, your mortgage lender.  How did we do for you?  I'd like you to share your experiences good and bad on your last loan, all loans, etc. etc.  I'd like to think that most of us are dedicated to bringing you the very best and getting you a loan that meets your needs and criteria.  But I know that we work in a very confusing world and I'm not sure you'll ever fully understand our business.  All the more reason to communicate often with you to ensure a smooth transaction.

Again, I welcome your comments here.  They are very much appreciated as we strive to be all a loan officer should be according to you.  Have a great day!

Paul

Good morning!  I wanted to take a few moments to thank you for allowing us to serve you!  It's a real pleasure.  We have a difficult job at times and, typically, if things go awry it's our fault.  Throughout the loan process, thank you for having the patience to get us all the stuff we need.  I explain to all my clients that in our business it's all about compliance.  You may not always like all the conditions needed to satisfy  your loan but it's important to get you a loan that works for you. 

I promise that all of us will communicate with you and all the parties involved.  If we're not returning your phone calls, you have every right to call us on it.  We should also expect that maybe we won't be recommended again. So to all my fellow real estate professionals who are practicing top-notch customer service I salute you.  You deserve all that you have sowed and I'm sure your customer feels the same way!  I'd like to hear some exemplary customer service stories here when you get a minute.  Have a great weekend!

Paul 

I was asked recently by a realtor why every deal we did had a different HUD, set of charges, etc. etc.  She indicated she always knew what she was paid-3%.  I explained to her that what we charged depended on the loan size and also if the lender was offering a rebate in addition to our origination fee.  It made me think as I believe in being honest and upfront with everyone. It seemed to work with the realtor-all she wanted to know was the truth.  Why is it that we feel like we can't justify what we charge?  Like we need to keep it a mystery.  In fact, I've decided that I charge 1% on all my loans (unless it's a larger loan amount) and I communicate that upfront with all my borrowers.

The message to everyone here should be that it's best to communicate fully with our borrowers and to answer all their questions.  After all, hopefully this is what we expect when we do business with someone else.  Why should it be any different when we're doing the transaction?  I encourage everyone to operate their business this way.  You'll sleep better at night.  Have a nice weekend!

Paul

Good day!  As the mortgage market tightens every day, I think it's important for us think of other avenues in order to keep our business operable.  No longer is everyone a prospect and it doesn't work to justify that since the market is less busy, we can stop working as hard as we used to.  I think we as mortgage brokers must work harder than ever to source our clients.  We are now officially in the consulting business where we need to become experts on credit repair, what loan makes the most sense for our client, etc. etc.

I don't foresee much help from the Federal Reserve regarding rate relief this year.  We should instead be selling our service and delivery to our clients.  Our goal should be to build long-term relationships, not just move from one transaction to the next.  Here's a thought.  Have you considered FHA loans to help your client?  I know the paperwork can be arduous but the guidelines for lending can be as little as 3% down and they're working hard to bring it to 0.  When was the last time you networked with other businesspeople?  How much are you getting out of the office to build your professional and personal relationships?

 Eventually the market will improve and times will be robust like they were up until 2006.  But I don't foresee that happening until beyond next year.  In the meantime, it's time for us to roll up our sleeves and get to work.  I wish all of you the best of luck in your business.  Have a great day!

Paul

Good morning!  I'm curious how my fellow competitors are doing in what has become a much more challenging environment.  I seem to be doing just fine although I'm newer to the business and thus, still growing it.  It seems to me a lot of very senior loan officers are scratching their heads as loans are getting harder to do and not everyone qualifies anymore.  I don't think this is necessarily a bad thing.  I always say that we can be found on every street corner and if there has to be a little attrition, so be it.  I do believe that if a loan officer follows a tried and true system and remembers what got them to where they are currently, they will do just fine.  Good luck to all of you out there. Have a great day!

Paul

Good morning!  Today I'd like to talk about all the different mortgages out there that are available to you.  In the old days, you pretty much had two choices, a 30 year or a 15 year fixed mortgage.  There were a few adjustable rate mortgages (specifically a 5/1 ARM-fixed for the first five years of your loan) but not many.  Today, your choices run the gamut.  the number one question you should ask yourself is how long do you plan on staying in your home.  If the answer is a while, a 30 year fixed mortgage may be for you.  Also consider what your tolerance for risk is.  If you want something safe and secure where you'll be able to sleep at night, again a 30 year fixed mortgage may be your ticket.  On the other hand, if you know you're only going to be in your home for a few years or so, and your tolerance for risk is o.k., then an adjustable rate mortgage may make sense for you.

With the above in mind, rates for 30 year fixed mortgages versus ARM's are almost identical.  I'm seeing more clients interested in the 30 year fixed rate these days.  If one type of loan starts to have a lower rate, I'm sure that that will be the loan of choice.  These days, there's been a lot of negative press about interest only and pay option (negative amortization) loans.  It's true that these types of loans have gotten many homeowners in trouble, especially if they financed 100% of their loan.  The way to avoid this is to make sure you have some equity in your house whether you're buying or refinancing.  I tend to take a conservative approach with everyone I work with.  I definitely don't want anyone to get in trouble.  I think interest only loans, for example, can make sense if someone has a tremendous amount of equity in their property.  A friend of mine called me recently and suggested he wanted to do an interest only loan.  His rationale was  he had a lot of equity in his place and was probably going to sell in a couple of years anyway.  It didn't matter to him if he made $600,000 or $620,000 on the proceeds of the sale.  This was good, smart thinking.  Interest only and negative am. loans can also make sense for investors who don't typically hold their property forever.  The bottom line is if you have equity in your property, it behooves you to consider all your loan options.  Thanks for reading!  I'll talk to you soon.

Welcome!  I hope you enjoy this.  My goal is to educate you about our business so you can make an intelligent decision and understand what at times can be an extremely confusing process.  With that in mind, your goal should be the lowest payment you can get on your mortgage.  Coupled with that would be the type of loan you're comfortable with.  If you're not a risk-taker, perhaps a 30 year fixed mortgage is best for you.  If you're an investor or you don't plan on owning your property forever, perhaps an ARM (Adjustable Rate Mortgage typically fixed for the first 2,3, 5, 7 or 10 years) makes more sense.  Currently, fixed rates are as good as adjustable rates. This was not the case a couple of years ago and could change in the future.

So now you're ready to shop for a mortgage.  Most people (70%) do this online these days.  Be sure you're comparing apples-to-apples.  A lot of advertising these days focuses on no points and no fees.  What a great deal for you-but be wary!  Understand that the lender you choose needs to make money on every loan they do.  The bottom line is this.  If the rate is low or competitive, you are probably going to pay some fees to the lender.  If the rate you're quoted is higher, chances are all or most of your fees on the loan are being waived.  If there are no points and no fees, the chances are great that you are being sold a loan that has a large rebate from the lender to the broker.  That's not a bad thing-the loan may make sense for you.  Then again, it may not.  There's a tremendous amount of money to be made in our business.  I personally abhor it when I hear about a loan officer who has made a lot of money on a loan.  First and foremost, we should be about customer service and long-term relationships.

When you're shopping for a lender, I believe it's best to call a few and work with someone local who you can meet if at all possible.  If all you're after is the lowest rate, etc., then you can use a lender out-of state.  Otherwise, most of us are wired to work with someone we either know or are referred to.  Do your homework, take your time, and best of luck to you in your home purchase or refinance.  I'm always available to answer any question you may have.  Talk to you next week!