Coach Bill Hart discusses specific, real world examples of mortgage lenders working together in today’s market.
“Better Together – Part TWO” from Building Champions on Vimeo.
Blog
Archive for April, 2010
Better Together Part 2
Monday, April 19th, 2010• • •
It’s A Good Time To Look At Adjustable Rate Mortgages
Friday, April 16th, 2010
Each week, government-led Freddie Mac publishes a weekly mortgage rate survey based on data from 125 banks across the country. According to this week’s results, the relative rate of a 5-year ARM in Utah is extremely low versus its 30-year fixed-rate cousin.
Consider this comparison:
- In April 2009, the two products ran neck-and-neck with respect to rates
- In April 2010, the two products are split by 0.99 percent
On a $200,000 home loan, that’s a difference of $117 per month to a mortgage payment.
Adjustable-rate mortgages aren’t suitable for everyone, but they can be a terrific fit given your individual circumstance. For example, any one of the following scenarios could warrant a 5-year ARM:
- Buying a home with an intent to sell within 5 years
- Currently financed with a 30-year fixed mortgage with plans to sell within 5 years
- Interested in low payments and comfortable with longer-term interest rate and payment uncertainty
Additionally, homeowners with existing ARMs may want to refinance into a brand-new ARM, if only to extend the initial change date on the current note.
Before opting an ARM or a fixed, speak with your loan officer about how adjustable-rate mortgages work, and what longer-term risks may exist. The savings may be tempting, but there’s more to consider than just the payment.
• • •
Why You Shouldn’t Schedule Your Closing For May 28, 2010
Wednesday, April 14th, 2010The federal home buyer tax credit expires April 30 and the deadline is sparking a home sale surge. It figures to burden real estate, mortgage and title offices nationwide over the next 60 days so it may be wise to remind your clients and plan closing dates accordingly.
Especially because the last Friday in May is the Friday before Memorial Day. 
Now, if the connection between the tax credit and Memorial Day is not immediately clear, think of your own office on a 3-day weekend’s Friday. Some of your colleagues take a half-day at work; others take the entire day off.
The same is true in the real estate field. Offices are short-handed ahead of a holiday so, planning a closing in May, consider a closing date other than Friday May 28, 2010.
And meanwhile, with 6 weeks until Memorial Day, here are some steps you can take with your clients today to help prepare for other people’s time off later.
- Notify the lender of planned vacation time for yourself or your client between now and your scheduled closing
- Advise your client to purchase a homeowners insurance policy and prepay the first year. Send proof of payment to your lender.
- Have Power of Attorney forms lender-approved and signed by all parties in advance, if applicable.
- Remind the client to deposit gift monies and/or retirement fund withdrawals into an acceptable bank account, if applicable.
- Schedule the final walk-through as far in advance as is realistic so there’s time to make “fixes”, if needed.
- Remind your client to have your closing funds ready at least 1 day in advance.
The tax credit’s expiration is around the corner and as it gets closer, real estate-related businesses are taking on more work. Basic title and mortgage tasks are taking longer to complete and that should persist for a while.
Get ahead of the curve and beat your contract dates handily. Use the checklist above and be responsive to the lender’s requests.
• • •
It’s Time To Re-Approve Your Pre-Approval
Friday, April 9th, 2010
As the federal home buyer tax credit nears its April 30 end-date, there’s a lot of would-be home buyers still working to get under contract.
A piece of advice for all of them : If your client’s pre-qualification and/or pre-approval letter is more than 8 weeks old, it would be prudent to have me “re-pre-approve” you. Mortgage guidelines have been in flux and your original lender letter may now be invalid.
For example, over the past half-dozen months, the majority of mortgage lenders have reduced their risk tolerance with respect to:
- Maximum debt-to-income ratios
- Minimum allowable credit scores
- Calculation of “assets in reserve”
For buyers of condominiums and co-ops, even the subject property itself is coming under tougher scrutiny.
Today’s mortgage applicants need to be a complete package. It takes more than just good income and credit to get approved anymore and today’s buyers should revisit their qualifications. What passed underwriting in January may not pass in May.
Being pro-active brings other advantages, too. If a mortgage re-pre-approval does unearth an issue, it’ll be easier for every party to the transaction to address and correct it up-front versus trying to clean up a mess once a home’s already under contract.
• • •