Entries from Searchlight Crusade tagged with 'closing costs'
What to Beware in Third Party Services
RESPA (Real Estate Settlement Procedures Act) prohibits an agent from requiring you to have other services performed by specified outside companies, or by a particular associated company either. RESPA also prohibits an agent from accepting payment (kickbacks) from third party...
Loan Rate Sheets: The Games Lenders Play With Rate and Cost Adjustments
This is part and parcel of the system that's abused. Here are sample rates from one A paper lender, picked at random, that were in effect when I originally wrote this. Rates are lower now, but it's a good example...
Seller Paid Closing Costs (or, When Your Prospective Buyer Has No Money)
In many transactions when I originally wrote this, the buyer has absolutely no money, or an amount that was not sufficient to pay the costs that they would traditionally be expected to pay in order to close the transaction. Today,...
The Difference Between Note Rate (APY) and APR
I am continually horrified how many people shop their loans by APR, just as I am by people shopping their loan based upon payment. Why? Because in either case, you're setting yourself up to spend a lot of money in...
The HUD-1 Form
I have mentioned this form several times in the past as the only form in the entire real estate loan process which is actually required to be accurate. Department of Housing and Urban development form 1, the so-called HUD 1...
Mortgages and Reverse Mortgages (RAMs) after Retirement
"Should People in their sixties take out a mortgage?" The short answer is "Not if you don't have to." Now if I suddenly vanish, the explanation will be that the loan industry put a contract out on me. Success...
Never Choose A Loan (or a Property) Based Upon Payment
For years when the market was hot, in all of my conversations on mortgages with prospects, there was one subject that came up over and over and over again (and still does), and that is the subject of payment. "But...
In Real Estate, You're Better Off Doing One Thing At A Time
Hi--I just found your site today. The best I've ever seen/read, etc. Thank You!! I do have a question I didn't see addressed regarding our current situation/dilemma: Our present home, which we've lived in for 8 years, is worth...
How Loan Providers Make Money
In an attempt to debunk some of the slanders that are floating around out there, this article is an itemization of how lenders and brokers make money on loans. The first method is obvious: Origination or discount points charged to...
Looking For Loans In All The Wrong Places
No, I'm not turning into a country western singer. Just got a search for "no closing costs no points loan cheapest rates loan". The visit (to this article) lasted less than a full second. The obvious implication was that it...
Lender Paid Mortgage Insurance or Regular PMI?
If I am buying a foreclosed home for 220k of which 200k is being financed, and the home comes back at being valued at 285k from my mortgage company, am I still required to pay PMI? If so, how in...
How to Avoid A Repeat of the Housing Market Mess
Scapegoating mortgage brokers or anyone else is not the answer, nor is prohibiting yield spread. We've been here before (in the early 1990s), congress did something remarkably similar except a little bit more sane. It didn't work then. Why would...
Payment, Interest Rate and Up Front Costs: Choosing a loan intelligently
Most people tend to shop for a mortgage based upon the payment. They figure the lowest payment will be the cheapest loan. This is the way most people make banks rich. Because they are looking for the loan with the...
Bridge Loans
One of the things I'm seeing a lot of these days is blanket advice on bridge loans. A bridge loan is a loan that you take out with the explicit intention of having it be short term. The most common...
There Is No Fairy Godmother for Loans
Really. I know that most people who read that title are replying "no kidding" but you would be amazed at how many people act like there is such a fairy godmother. I got an email yesterday that said, basically, "Help...
How Soon After You Purchase A Home Can You Refinance?
Legally, immediately. This also applies to refinance loans. With that said, there are economic reasons why it may not be a good idea for you to refinance. If you have a prepayment penalty, you're going to have to save a...
Why the Real Estate Buyers Agent's Commission is Paid by the Seller
I have to admit I'm uncomfortable with it and don't like it. As a buyer's agent, here I am getting paid by someone who not only is not my client, but whose interests are aligned, in most issues, opposite to...
Loans with Stealth "Cash Out"
One of the things I hear a lot is that people are getting cash in their pocket from a refinance rate where there is no rebate. "I'm not paying any closing costs!" they proudly tell me, "The bank is putting...
Shopping For The Best Loan In The Changed Lending Environment
It shouldn't be any surprise to anyone with the headlines of the last few years that shopping for a mortgage loan has radically changed. Indeed, a lot of the regulatory changes seem directly aimed at what were the best...
The Tradeoff between Rate and Cost in Real Estate Loans
The question every good loan officer hates is "What is your lowest rate?", usually the first thing in a phone conversation. People think that this sort of rate shopping is going to help them. The fact is that it almost...
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