Entries from Dan Melson's La Mesa Real Estate and Mortgage Website tagged with 'closing costs'
New Consumer Article: There Is No Fairy Godmother for Loans
The new consumer article for today is There Is No Fairy Godmother for Loans. To avoid becoming a government statistic, ask prospective loan providers the hard questions before you sign on the bottom line - or better yet, before you...
New Consumer Article: Shopping For The Best Loan In The New Lending Environment
The new consumer article for today is Shopping For The Best Loan In The New Lending Environment. There have been changes in the lending environment in the last few months, changes that are practically designed to make loan officers with...
New Consumer Article: The Home Valuation Code of Conduct (New Appraisal Standards)
The new consumer article for today is The Home Valuation Code of Conduct (New Appraisal Standards) that are going to be taking effect (appropriately enough) on May 1 ("May Day" or "MAYDAY"). It is going to be almost impossible for...
New Consumer Article: Why It May Be Costly to Reject Paying Points
The new consumer article for today is Why It May Be Costly to Reject Paying Points. The advice "never pay points" actually started out as misleading advertising intending to keep consumers away from what in fact were better loans, but...
New Consumer Article: Games with Mortgage Loan Rate Locks (Games Lenders Play Part 10)
The new consumer article for today is Games with Mortgage Loan Rate Locks (Games Lenders Play Part 10), talking about how you can be told your rate is locked when it isn't, what the benefits of playing this game are...
New Consumer Article: Cash to Close - A Basic Primer
The new consumer article for today is Cash to Close - A Basic Primer. The article discusses how much cash a buyer of real estate has to have in order to make the transaction happen. Proving that you have this...
New Consumer Article: You've Got a Great Offer, But Can The Buyer Consummate It? (Cash to Close)
The new consumer article for the day is You've Got a Great Offer, But Can The Buyer Consummate It? (Cash to Close). These days, you have to pay attention to details like the limits of how much lenders are willing...
New Consumer Article: New Good Faith Estimate and HUD 1 Form Approved
The new consumer article for the day is New Good Faith Estimate and HUD 1 Form Approved. The government has come up with new regulations on the Good Faith Estimate (Mortgage Loan Disclosure Statement in California) and HUD 1 Form....
New Consumer Article: Second Trust Deeds: Home Equity Loans and Home Equity Lines of Credit
Today's new consumer article is Second Trust Deeds: Home Equity Loans and Home Equity Lines of Credit, talking about the basics of what forms that these loans take, the Home Equity Loan and Home Equity Line of Credit....
New Consumer Article August 13, 2008
Today's new consumer article is Why Lenders Don't and Won't Tell Borrowers Their Loan Was Turned Down, which discusses why most lenders don't make this very simple disclosure. Basically, it's because they lose money by being honest....
New Consumer Article: August 6th, 2008
Today's new consumer article is How Do I Know If I've Been Lowballed on a Mortgage Quote?, which talks about how to nail down lenders on their quotes so that they actually deliver what you expect at loan sign up....
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...
What Do I Really Need To Know To Buy a House and Get A Loan?
While I have been reading the site for about a year, I have tended to gloss over or completely ignore the posts regarding real estate and purchasing a home. That is, until about two weeks ago when I had...
How Soon After You Purchase A Home Can You Refinance?
Legally, immediately. 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 lot of money to make it...
Zero Cost Refinances
Got a question asking if zero cost loans really exist. They do. I've done several dozen myself, for clients who listened to me about the nature of the market. Let me define what a zero cost loan is. It is...
Loan Quote Guarantees
Because most loan providers will not guarantee their Federal Good Faith Estimates or California MLDS forms, I've been telling folks that the best suggestion (other than doing their loans myself, of course!) that I can give them is apply for...
Saving Money by Refinancing Your Mortgage
pfadvice talks about debunking a money myth and perpetuates one of his own. He took issue with someone refinancing to lower their monthly payment, insisting instead that the term of the loan was all important. His point is understandable in...
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
HR 3915 is not the answer. 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 we expect it to work this time? Among many...
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...
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...
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...
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...
Seller Paid Closing Costs (or, When Your Prospective Buyer Has No Money)
In many transactions these days, the buyer has absolutely no money, or an amount that is not sufficient to pay the costs that they would traditionally be expected to pay in order to close the transaction. Nonetheless, in today's buyer...
Refinancing Out of A Negative Amortization Loan Before The Penalty Expires
HI, My name is DELETED and my husband and I are searching for a way to get out of our Negative ARM loan before we get upside down. Our problem right now is our loan to value. Our loan...
Recurring and Nonrecurring Closing Costs
Many people are uncertain as to what closing costs are. Basically, they relate to the costs of doing the transaction. There are people who work on getting your loan through the process of approval and funding, and those people have...
Special Programs Means Potential Special Problems
An e-mail I got from a single mother I spent two months working with before she found a special low income program for a property she wouldn't have been able to afford through me. The first paragraph is her addition...
Mortgage Loan Rate Buydowns
Every so often I run across a reference to a "rate buydown" I don't like to use them because they don't benefit the client, but I should explain them, what they are, and how they work. A rate buydown is...
Just Because Compensation for a Loan Isn't Disclosed Doesn't Mean It's Free
I am continually confirming that a large percentage of people can't handle negotiations like an adult. They focus in on garbage and ignore what's really important. I recently was going to deliver a loan that cost less, as well as...
Real Estate Loan Pre-Qualification
One of the most useless and overworked items in the real estate industry today is the pre-qualification for a loan. Sellers want buyers to be "pre-qualified", and buyers are seeking "pre-qualification" to convince buyers they are serious. The level of...
Don't Roll Mortgage Refinance Costs Into Your Balance If You Wouldn't Pay Them Cash
One thing that is very common in the mortgage industry is masking loan costs by rolling them into your loan balance. People are less sensitive to being asked to roll this money into their loan balance than they are about...
Mortgage Loan Rate Locks
One of the most true sayings in the mortgage business is, "If you can't lock it right now, it's not real." But many mortgage providers will play a game of wait and hope. They tell you they have a certain...
Making Prepayment Penalties Illegal
I got a search for "which states allow prepayment penalties". I'm not aware of any that don't. If you are, I'd like to know. Any such states should immediately be renamed "Denial". I really hate prepayment penalties, for a large...
The Best Way To Create Problems In Real Estate
Have a "looking for cheap" attitude, especially on services meant to protect you. It's great to have a "looking for value" attitude. If I cost more than someone else, it is in your best interest to ask why, and ask...
Weighted Average Cost Of Capital
or Figures don't lie, but Liars Sure do Figure! With the loan rates being significantly higher than they were a couple of years ago, we've got a lot of people with loans in the low fives, interest rate wise. One...
What Are Points and How Do They Work?
I got a search hit for that and, amazingly enough after 150+ articles, I've never dealt with this subject head on. So here goes. One point, either discount or origination, is one percent of the final loan amount. After all...
Mortgage Loan Advertisements: Horrible and Getting Worse
Recently, a couple of mortgage places have been advertising "30 year fixed rate loan at 5.65%" like that's the lowest rate out there and it's some kind of great loan. It's not. I have 5.375% available to me. If you...
Prepayment Penalty Now or Wait to Refinance Until It Expires?
I have an adustable rate mortgage (5.875) which is set to adjust in 8/2008. My prepayment penalty I'm told expires 7/2008. My first goal is to lock in a fixed rate asap. My second goal is to cash out...
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 outside companies. RESPA also prohibits an agent from accepting payment (kickbacks) from third party service providers. Nonetheless, these are major problems in...
Mortgage Closing Costs: What is Real and What is Junk?
The easy, general rule is that legitimate expenses all have easily understood explanations in plain english, they are all for specific services, and if they are performed by third parties, there are associated invoices or receipts that you can see....
What to look for at Loan Closing
I've said upon more than one occasion that the factors at closing are all in the loan provider's favor. Unless they signed up for multiple loans, the typical consumer has no leverage to get the loan provider to play it...
Mortgage Rate, Points, and Closing Costs
Everybody knows that you want the lowest rate, and everybody knows that you don't want to pay any money you don't have to, in order to get it. However, not everybody makes the connection that it is always a tradeoff...
Why Refinances Tend To Have Lower Payments
I keep talking with people who don't understand that a higher interest rate on a refinance can result in a lower payment. In fact, they don't understand why refinancing tends to lower the payment at all. Before I go any...
The HUD-1 Form
I have mentioned this form several times in the past as the only form in the entire mortgage process which is actually required to be accurate. Department of Housing and Urban Development form 1, the so-called HUD 1 form, is...
Truth In Lending and APR
The Truth-In-Lending is a form that can or does provide some useful information, but the useful information it provides is both smaller than most people think, and not in the numbers everybody looks at. The first thing to be aware...
The California Mortgage Loan Disclosure Statement (MLDS) Part II
(Continued from Part I) Below the "Estimated Closing Costs" line, there are three more sections. The first is "Items required by lender to be paid in advance." These are not negotiable - they are what they are, and except for...
How To Effectively Shop for A Real Estate Loan
This is a little harder than shopping for buyer's agents, so congress critters might not be able to do it. But it's nowhere near as tough as high school algebra, so even if you're a politician you can just get...
The California Mortgage Loan Disclosure Statement (MLDS) Part I
California has just replaced the one page federal Good Faith Estimate with a two page Mortgage Loan Disclosure Statement. Regulations for filling it out are similar to the federal Good Faith Estimate, especially as the only thing a recent seminar...
How Are You Going To Compare Loans Without Specific Numbers?
Well? You would be amazed how often I encounter people who are certain they're getting a great deal on this loan that's in process, but they have no idea what that that deal is. All they really know is that...
What Lenders Talk About Isn't Important, It's What They Deliver
I'll keep hitting this and hitting this until everybody understands this critical point. From email: First of all, I love your website. It is just a plethora of information for first time buyers like me who wants to be an...
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