Washington Mortgage Planner-straight up mortgage advice and commentary

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!