Entries from Dan Melson's La Mesa Real Estate and Mortgage Website tagged with 'rate/cost'
New Consumer Article: The 2010 Good Faith Estimate (Page Three)
Today we have the final installment in the series on the new Good Faith Estimate formThe 2010 Good Faith Estimate (Page Three). Your government that should be protecting you from the worst sort of mortgage provider lies is now actively...
New Consumer Article: The 2010 Good Faith Estimate (Page Two)
The second installment in the series The 2010 Good Faith Estimate (Page Two) is now up. Read it and weep - for consumers nationwide who were hoping the government would provide the solution to their troubles. Didn't happen. Instead, it's...
New Consumer Article: The 2010 Good Faith Estimate (Page One)
It's been a while, but the most recent Transaction From Hell (seller's tenants didn't want to move out - or even let inspectors in) is finally over and I've had a little bit of chance to recover. Today's new consumer...
New Consumer Article: The Loan Shopping Koan
The new consumer article for today is The Loan Shopping Koan, talking about the contradiction offered by dueling interests: The fact that while consumers want the best possible loan, against the opposing fact that it's very easy for loan providers...
New Consumer Article: 105% Refinancing With No PMI (Maybe)
The new consumer article for today is 105% Refinancing With No PMI (Maybe). It goes over the straight scoop on Fannie and Freddie's new programs aimed at loss mitigation by helping people who would be able to refinance if values...
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: Loan Fall-Out And The Effects Upon Consumers
The new consumer article for today is Loan Fall-Out And The Effects Upon Consumers. The days when loan officers are willing to lock loans with just a social and the identity of the property are ending, if not already over....
New Consumer Article: The Difference Between a Reliable and Unreliable Prequalification or Preapproval Letter
The new consumer article for today is The Difference Between a Reliable and Unreliable Prequalification or Preapproval Letter. Whether you're a buyer or a seller, having the right lender letter is a good thing. If you're a seller, you know...
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: Jumbo Loans and The Current Market (January 2009)
The new consumer article for today is Jumbo Loans and The Current Market (January 2009). There is always a tradeoff between rate and cost on mortgage loans, but lenders vary exactly what that tradeoff is in order to suit their...
New Consumer Article: Fifteen Year Loans
The new consumer article for today is Fifteen Year Loans: Are They A Good Idea?. Lots of nonsense gets put out there about fifteen year loans, and to many people there is a certain cachet to only needing fifteen years...
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: APR vs APY: What The Difference Between Note Rate and APR Tells You
Today's new consumer article is APR vs APY: What The Difference Between Note Rate and APR Tells You. I advise people to ignore APR as a means of shopping a loan. But there is some information in the difference between...
New Consumer Article: The Return of Portfolio Lending
Today's new consumer article is The Return of Portfolio Lending, on the subject of what a portfolio loan is and the differences between portfolio and security based lending, and what the return of portfolio lending means, even to those who...
New Consumer Article August 26th, 2008
Today's new consumer article is What If You Cannot Refinance Later?, which addresses a very real concern that there are many reasons why people may not be able to refinance their property at a later date, so even though the...
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....
How Can I Lower The Down Payment Requirements So I Can Buy Real Estate?
With a few lenders starting to loosen their requirements slightly in San Diego, it's becoming increasingly obvious that the bottom is behind us. However, the issue has now become, "I don't have much of a down payment. How do...
Why You Want The Lender to Assume Pricing Risk
In the last couple of years a movement has arisen, led by certain well meaning academics, that says negotiating a loan broker's total revenue is sufficient to get consumers a better loan. As far as they go, they are...
Mortgage Lenders Don't Want to Compete on Price
Yet that is exactly what you want them to do. To avoid competing on price, they have all kinds of distractions they offer to make life more convenient, but not cheaper. They offer automatic payment options, the convenience of having...
Why Is My Rate Higher Than My Lender Promised?
First off, neither the California Mortgage Loan Disclosure Statement nor the Federal Good Faith Estimate are promises, commitments, or anything more than your loan provider wants them to be. Quite often, they're nothing more than a fictional story told...
Why Cost Is As Important As Rate For Mortgage Loans
A few days ago I wrote an article explaining why borrowers should consider a 5/1 ARM, because the tradeoff between rate and cost is lower for that loan, and most people don't keep their loans 5 years anyway, so...
Zillow Post for First Time Buyers
Drew over at zillow asked me to do a short little Q & A piece for them. It went up a few days ago, and I thought I'd post my original piece here as well. What are some online resources...
Loan Assumption and Assumable Loans
Every once in a while, the subject of assumable loans comes up. An assumable loan is one where the owner of a property has the ability to pass the loan along with the property in a sale. In other...
April 2008: Why Loan Rates Are Cheap
Despite all the hype, rates (or, actually, the tradeoff between rate and cost) are pretty darned good right now. I'm at home right now, but yesterday, for someone with average credit (national median) and 20% down payment or equity, I...
My Thirty Second Public Service Announcement On Mortgage Loans
I usually write long articles, Part of that is because I've done all of the easy subjects, part because sound bites facilitate sloganeering, not serious thought that's likely to result in a better answer - or the realization that you've...
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...
Debunking the Money Merge Account Scam (Games Lenders Play, Part 8)
Mortgage Accelerators, or Money Merge Accounts, have become the thing that everyone's pushing of late. I have gotten so much junk mail about this from more originators (who don't know who I am) and wholesalers (who should) in the last...
Changing Rates and Streamline Refinancing - Reasons to Love Zero Cost Loans and Hybrid ARMs
Rates move up and down constantly. This is one of the strongest reasons both Intelligent consumers and intelligent loan officers love zero cost loans. Every time rates drop, I call or send an e-mail to those clients who signed...
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...
Is a VA Loan a Good Deal?
Veterans Administration, or VA loans, are government guaranteed loans available to veterans and active duty members of the armed services, that enable them to purchase homes for not money down. In fact, VA loans go up to 103 percent of...
When You Should Not Buy Real Estate
Okay, I did an article called Why Renting Really Is For Suckers (And What To Do About It). Fairness demands that I do a companion article on situations where buying is not a good idea. There actually are some. First...
Differences Between Loans Look Smaller Than They Are
One of the things I keep getting told by people is that my loans are the same as everybody else's. I quoted a 5.625% with no points a few days ago, and got told, "That's the same rate someone else...
"We'll Beat Any Quote" in Mortgage Loans
Just like "we'll beat any deal!" in any other competitive sales endeavor, this is a game. Actually, it's even more of a game for loans than it is anywhere else, used cars included. What they are hoping is that you'll...
"Should I Refinance?" - Consider Overall Cost of Money, Not Payment
With Rates having dropped again, many people are looking at refinancing their properties. With the state of financial education in this country, many people will shop for loans by payment, figuring the lowest payment is the best loan. As...
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...
Yield Spread is a Beneficial Tool That Can Be Misused
If you read the papers and the congressional record on the current housing crisis, you might think yield spread is the central culprit for the entire meltdown. You would be wrong. Yield spread is a beneficial tool, offered voluntarily by...
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...
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...
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...
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...
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...
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...
Debunking the Idea of "Lenders Are All The Same"
Just like Mohandas Gandhi and Genghis Khan and Attila the Hun were all human beings, lenders are all companies that make money by lending money to people who want it. That's about the limit of the truth in that statement....
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...
Larger Loan Amounts: Tighter Rules for Lending
Most of the time, I'm talking and writing about the sort of loan the average borrower is looking for. Up to 125% of the single unit conforming loan limit of $417,000, which works out to $521,250, A paper guidelines are...
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...
Why The Higher Rate Loan Is Often Better
The short answer is "Because it costs less" There is always a trade-off between rate and cost on a given loan type. If you want the thirty year fixed rate loan half a percent lower than everybody else is getting,...
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...
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...
The Tradeoff between Rate and Cost in Real Estate Loans
The question every good loan officer hates the most is "What is your lowest rate?" First off, everybody doesn't get the same choices. As I've said before, somebody who can prove they make enough money, has a history of paying...
One Loan Versus Two Loans
One of the questions we ask all the time is whether to do your financing as one loan or two loans. Until comparatively recently, one loan was the default option, but people have been learning that splitting their home financing...
Buying Off A Prepayment Penalty
Been reading some of your informative tips. I am looking at refinancing and getting a $378000 mortgage. Now in the case of having a 3 yr prepay penalty, vs paying 1.5% in points to make it a 1 yr...
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...
Questions You Should Ask Every Prospective Loan Provider
Mortgage - Questions you must ask every provider about every loan when you are shopping. Permission is hereby granted to print this out and use it for non-commercial purposes so long as no alterations are made and copyright is preserved....
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 Markets and Providers and Yield Spread Explained
There are actually several distinct marketplaces consumers can obtain their funds from, and several types of providers. John the wealthy highly salaried person with great credit and a substantial down payment should not and usually does not obtain his mortgage...
Why You Should Ignore APR
One of the things you get with every mortgage loan quote is an APR, or Annual Percentage Rate. There is even its own special form, the federal Truth-In-Lending (TILA) form. This was mandated by congress back in the early 1970s...
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...
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...
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