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Posts Tagged ‘Credit Tips’

Fannie Mae and Freddie Mac announced recently that they would be changing mortgage rate pricing due to increased losses in the mortgage industry. That has now gone into effect with majority of the major lenders.

If you put less that 30% down on a home purchase and have a credit score below 680, you will have a higher mortgage rate. How does this play out? Here is an example:

$200,000 Purchase with 5% down (full income documentation)

Standard Rate: 680 score and above: 6.25

If score was 660: 6.50

640 score would be: 6.75

620, rate would be: 7.0

This is just an example, and not a rate “quote”, but as you can see, credit score can make close to a 1% difference. (in some cases, it could end up as more than 1%)

So what does this mean? Well, getting with the right lender for one makes even more sense. Someone that understands credit and scoring and can help you determine if you need to improve your credit, and if so… HOW. Be careful… if the person you are talking to does not know how credit scoring works, the simple advice they give may hurt your score!

Let us take a look and see where you stand. We are experts in credit and mortgages and know what needs to be done.

Now, more that ever, when time and money really matter, call the Carolina Mortgage Connection.

877-411-9327

The reality of real estate is that real estate is really local.

This basically means that you can’t judge what’s going on in your neighborhood by what you see on the nightly news in California! If you live in Charlotte, NC and the surrounding areas, you will want to read this!

Forbes Magazine ranked Charlotte, NC as the 14th most affordable housing market in the nation! That means that Charlotte homes are some of the most reasonably valued homes! With the solid job market and the great wages available, buying a home in Charlotte is very affordbale!

More good news! Forbes Magazine has also ranked the Charlotte Real Estate Market the 4th strongest market in America! This means that you are currently in one of the strongest markets in the country. Now before you discredit this ranking, Charlotte, NC is the 4th strongest real estate market in growth with and average growth of over 8%! HELLO! Charlotte real estate is still strong!

So if you have been putting off taking advantage of what is a buyer’s market for fear of what has been in the media, now is the time to turn off that tv and start looking for a home in Charlotte! You can’t afford to let this opportunity pass you buy! With Charlotte mortgage rates at their all time lows, you simply need to act now!

Let the experts of the Carolina Mortgage Connection help you get qualified to buy a home today! We know home loans in Charlotte!

This week, Inside the Money:

• Rates fluctuate, but remain steady

• Media still Focused on Negative “news”

• Charlotte area Mortgage Broker does Stupid Thing

• Rates to change very soon

• It’s the best time in our lifetime to buy a home in Charlotte

 

Rates fluctuate, but remain steady

Mortgage rates for Charlotteand the local area remained steady in the lower 6% range over the past week. Rates are still fluctuating from day to day, usually about 1/8 a point at a time. This is good news as buyers look to cash in on a great buyers market in Charlotte!

Media still Focused on Negative “news”

While the national news is still focused on mortgage failings across the country, good news came out of the Charlotte area real estate market. Home prices are holding and foreclosures are not as bad as it seems. According to the Charlotte Observer on Saturday, the National Association of REALTORS issued a press release in which they stated the Charlotte real estatemarket was still strong and that home values in Charlotte were 11% higher this year than last! Add to a previous article that informed us that while foreclosures were up across the US, the Charlotte area was doing quite well. Yes, Mecklenburg county has the highest foreclosure rate in NC, but when you have the highest growth in the state, those numbers will also seem as dramatic. The good news is that in all reality foreclosures are only up a slight bit over last year, but when you factor in that a higher percentage of homes were bought, the Charlotte housing market comes out on top!

Remember folks, the news media is all about selling ads. Bad news gets attention, good news does not. Don’t believe all you see and hear with the media.

Charlotte area Mortgage Broker does Stupid Thing

I am the first to want to ignore these reports, because it only gives our industry another black eye. And it seems that we have been dealt enough of those. However, when someone does something this stupid, it needs to be acknowledged. A local mortgage broker was advertising a “dream home” for sale in a local paper. When people would call, he would not tell them where the home was unless he got some information from them… pre-qualification information. Turns out the home never existed and this was a ruse to try and get more potential buyers.

PROFESSIONAL MORTGAGE BROKERS IN CHARLOTTE NC will not use such deceptive ads. As a mortgage professional in Charlotte, I am upfront with my clients. They are trusting me with one of the most important decisions of their life. Why in the world would I start that relationship off with lies and deceit? Kudos to the real estate agent that reported this! My fellow mortgage professionals, we must behave as professionals in what we do. It only takes a couple idiots like this to give us all a bad image and with the negative press going around (that should not be directed towards us, but is) we really need to be on our toes! Do everything above board and always, ALWAYS be honest with your clients!

Rates to change very soon

With Freddie Mac and Fannie Mae’s announcments of additional delivery charges to the lender for certain loans beginning March 2008, we need to begin getting ready for rate changes. These changes will happen prior to March. We will see Jan and Feb rates increase for those with scores below 680 as these loans will be the ones sold to Fannie and Freddie in March. So for all the Charlotte area home buyers, if you do not know where you stand with your credit, its time to allow a professional to review your creditand counsel you to improve your credit score if needed. Better yet, get pre-approved to buy a home in Charlotte NOW and get the low rates that still exist NOW.

It’s the best time in our lifetime to buy a home in Charlotte

Mortgage rates are still low. Home loans in Charlotte are still full of options. The Charlotte real estate market currently offers a better selection of homes for sale than we have seen in a very long time. If you are thinking about buying a home, now is the time. Don’t delay… get pre-approved for a home loan in Charlotte, NC today and get out there! You can find the home of your dreams!

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For more information on mortgage and home financing, or for help in the Charlotte NCarea, please contact Ed Nailor with 1st Metropolitan Mortgage- your Mortgage Loan Specialist.

_________________________________________________

Ed Nailor
Home Loans in Charlotte

1st Metropolitan Mortgage
10801 Johnston Rd Suite 213
Charlotte, NC 28226

704-248-8694 Phone
visit http://carolinamortgageconnection.foundbydesign.net/

Get pre-approved to buy a home in Charlotte NC today

An interesting article appeared in Friday’s Charlotte Observer. Due to copyright laws, I can not do a simple copy/paste, so I will do my best to summarize for you. The article can be found online at www.Charlotte.com, at least for the time being.

In an article titled “Price trends? Area stats among nation’s best”, columnist Allen Norwood brings out some very interesting details. According to this article, the National Association of REALTORS (NAR) issued a press release that had said that in the South, the Charlotte region (known as Charlotte-Gastonia-Concord) had the strongest SFR price increase. The current average according to the information was at $220,100 which is UP 11% from a year ago. According to the article, the press release was from earlier last week, and covered the third quarter of 2007 compared to the third quarter of 2006!

The article goes on to say that median home prices in most major metropolitan areas held steady or even climbed slightly.  A quote from Lawrence Yun, the REALTOR’s top economist, was published in this article as “Some metro areas are hot, while others are experiencing localized problems.” In other words, real estate is local.

My friends, that is great news! Amidst all the negative headlines declaring the housing market to be dead, the fact is that Charlotte housing is still strong. And while there is an indication that the market may be soft, prices are holding! For sellers, that’s great news.

Even for buyers, that’s a good thing! While there are a ton of homes to choose from, you can be confident that you won’t buy something today that will lose value tomorrow!

Now is the best time to make a move. If you are considering buying or selling, do it now. Rates are still low, but will be climbing soon… very soon. Home lending options are still available for most buyers, even those with less than perfect credit! So, now is the time.

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Let me help you in the Charlotte area by getting pre-approved for a home loan today. From there we can get you in touch with the right REALTOR to help you sort through the big stack of housing options you have before you! Take advantage of this now, while the time is right!

“Ask and ye shall receive”

I recently posted about the delivery fees that Freddie Mac will be imposing on loans with score below 680 and LTV’s above 70%. With that report, I have been asked several times how this will work… Will the borrower need to have an additional 2% for closing? Will this be paid in the rate? How will this work?

I do not have any “official” word, but here is how it should play out…

The delivery fee is charged to the seller of the loan… i.e. the lender. So, for example, if the lender is Wachovia or Countrywide, when they sell the loan to Freddie Mac (and even Fannie Mae) they will have to pay a delivery fee according to the borrower’s score and LTV. I assume this will be deducted from the money they earn when selling the loan back to Freddie / Fannie.

This will apply to all loans sent to Freddie / Fannie regardless of who originates the loan.. in other words, brokers and bankers alike will have to deal with this. It all comes down to when the lender sells it to Freddie or Fannie on the wholesale end after it is closed.

Now, how will it be addressed? The cost will most likely be included in the rate. The feedback I am getting is that when a loan is priced and locked, the delivery fee that the lender will need to pay will be included in the lender’s yield from the rate. So if Wachovia, for example,  is getting 2% in yield when they sell to Freddie, but the new fee will eat up 1% of that yield, they will lock the rate to the borrower with a higher yield to net the same money. This would result in a higher rate to the borrower.

In other words, a better credit score will now definitely yield a better rate to the borrower! And those with moderate credit (640-680) will be impacted by this. Below 640 has already felt the crunch and will feel it even more so.

Now, one thing to consider… and please pay attention to this: The delivery fee will be imposed on lenders selling their loans to Freddie / Fannie after March 1, 2008. HOWEVER, we will start seeing the rates increase sooner than March 2008, maybe as early as DECEMBER because the loans closed in December/January may not actually get delivered until around March! So NOW IS THE TIME FOR BUYERS TO GET OFF THE FENCE!

For more information on mortgage and home financing, or for help in the Charlotte NC area, please contact Ed Nailor with 1st Metropolitan Mortgage- your Mortgage Loan Specialist.

_________________________________________________

Ed Nailor
Home Loans in Charlotte

1st Metropolitan Mortgage
10801 Johnston Rd Suite 213
Charlotte, NC 28226

704-248-8694 Phone
visit http://carolinamortgageconnection.foundbydesign.net/

Get pre-approved to buy a home in Charlotte NC today

This week Inside the Money:

• Freddie Mac announces Higher Costs for Mortgages
• Rates remained relatively level
• Subprime is making strides
• It’s still a great time to buy or refinance!

Freddie Mac announces Higher Costs for Mortgages

Freddie Mac announced that beginning March of 2008, it will impose “delivery fees” to lenders that write loans with credit scores below 680 and with loan to values over 70%. The fees will range from 0.75% to 2% of the loan amount on a sliding scale of credit score ranges. No word yet as to the ability to “roll” these fees into closing costs, or if the lender itself will just charge a higher rate to provide greater yeild to pay this fee. We will see as we get closer.

Rates remained relatively level

Rates over the past week have held fairly steady. The average 30 year fixed mortgages were hanging in the low to mid 6% range (including FHA). With recent announcements of Freddie Mac and Fannie Mae losses, one can only expect that these rates may begin to move upward soon, however I would expect it to be a gradual move if this happens.

Subprime is making strides

Believe it or not, the lenders still in the subprime market are beginning to make strides. Rates are falling, although very slowly. And credit score requirements are beginning to come back down. For a while you needed to have a 680 score to get 90% with many subprime lenders, and then you were looking in the 9-10% range with many of them. Pricing is slowly coming back and minimum scores are being lowered, however most subprime lenders are still shying off from 95-100% loans. There are a few, but most of these buyers can also qualify for a Fannie Mae type loan and save money there.

It’s still a great time to buy or refinance!

Even with the “mortgage crisis” and the tightening of liquidity in the market, rates are still near record lows and holding fairly steady. There are a ton of mortgage products for nearly any buyer, although those with major credit issues may need some work before buying. And home selection could not be better. For anyone thinking about buying a home, now is the time to make your move. Opportunity is knocking very loudly.. don’t ignore it!

For more information on mortgage and home financing, or for help in the Charlotte NC area, please contact Ed Nailor with 1st Metropolitan Mortgage- your Mortgage Loan Specialist.

_________________________________________________

Ed Nailor
Home Loans in Charlotte

1st Metropolitan Mortgage
10801 Johnston Rd Suite 213
Charlotte, NC 28226

704-248-8694 Phone
visit http://carolinamortgageconnection.foundbydesign.net/

Get pre-approved to buy a home in Charlotte NC today

ATTENTION 

I just got word that Fannie Mae and Freddie Mac are about to raise the cost of obtaining a mortgage! This is not a normal rate fluctuation we are talking about. What is being proposed and expected is that there will be a add-on “delivery fee” charged by Fannie and Freddie to accept a loan from the lender.

What I have been told to expect is that there may be a significant cost add on that would apply to any borrower that is borrowing over 70% of the property’s value and has a credit score below 680. The borrowers below this score with the higher LTV are in a class of borrowers that Fannie and Freddie are considering a bit more risky. When this becomes a reality it could change not only who can buy, but how much they can qualify for. It doesn’t matter what bank, lender or mortgage broker the loan is originated with, if it is your typical conforming (also known as Prime) mortgage loan, the delivery fee will apply.

In a letter posted on their website, Freddie Mac said they will be charging from .75% up to 2.0% depending on the borrower’s credit score for loans submitted with less than a 70% LTV and credit scores below 680.

The following table illustrates the rates and costs for a borrower with a loan amount of $300,000.

So the long and the short of it is, if you have anyone on the fence, tell them to make a move NOW! Rates and programs will stay as great as they have been only so long! It’s time to make a move and get into that home they are only thinking about!

I will do my best to keep you updated as more infomation becomes available.

Thanks,
Ed

According to federal guidelines, lenders are required to provide mortgage loan applicants with certain documents within 3 days of application. Some of these basic documents include a Good Faith Estimate and a Truth in Lending Statement. These forms are to disclose to the potential borrower estimated costs and rates associated with that lender’s program.

The question is, when is this required? When does an application actually become an application?

Calling a lender and giving name, address and social security number is not an application. In order for an application to be made and considered, a lender must be able to make a decision… in other words, they need all the information. Personal information like the name, address and social security number of the borrower; Financial information like work history, income documents (such as W2’s and paystubs) and bank / investment statements; credit information like a credit report or alternative credit if needed… these are just the basics. Oh.. there is one more very important item needed… a house.

If you are refinaning a mortgage and have submitted the other items needed, then this is an application. However, if you are thinking of buying a home, you will need a offer to purchase to complete your application. At this point, your lender will be required to provide you the disclosures required by law.

This being said… if you, as the borrower, would like this information earlier in the process, simply ask for it. If your lender has enough information to have a good idea as to the direction of your loan, they should be able to give something to you. If your lender does not have enough information yet, they can tell you what is still needed in order to provide this.

Beware of lenders that give Good Faith Estimates and Truth in Lending statements with limited information. Without the proper information, a lender can not give you solid information on which to base any decision. What they give you with limited information will be just as limited in its reality.

So how do you know if they are being straight with you? The bottom line is this… talk to your lender. Actually talk and feel them out. If you are not feeling secure in them after the conversation, try another lender. Even in todays world of technology, talking to someone will still tell you what you need to know… if you will listen.

As many people have heard, Bank of America has decided to exit the wholesale marketplace to pursue a stronger retail presence in the mortgage industry. This is not considered to be a major blow to wholesale. While BOA is a big name bank, their presence in the wholesale market was very small. Many of the brokers I know and have spoken to that were signed up with BOA rarely used them because they were finding better rates with other lenders!

Regardless of that, the mortgage industry is still plugging along strong. While news media and the internet continue to pour out their “the sky is falling” coverage, mortgage rates are still near all time lows and despite the subprime industry woes, there are still plenty of programs out there to service your first time home buyers, low to moderate income borrowers and even those with credit issues! And with the selection of homes available, your message to people on the fence is to jump in NOW!

Rates right now are still hovering in the lower 6% range (have seen them vary between 6.25-6.5% all week) and with programs like My Community Mortgage, House America, as well as the FHA government programs, there is no reason not to have a hot holiday season!

The soft market is the result of fear my friend. With the news media coverage of the “worst collapse in the mortgage market”, people have held still because they are afraid they can not buy. While the news media in my opinion is no longer really news, they are competing for advertising dollars, so big scary headlines help capture audiences. I doubt they will let this go for quite some time… even after all the dust clears, there will be continuing coverage of all the players that caused it to begin with.

Our job as professionals is to let people know that now is one of the best times EVER to buy a home. You can negotiate more than ever, buy more home for the money and RATES ARE STILL AMAZING!

If there is anything I can do to help you achieve this goal, please let me know. I honestly want to be a partner in your success!

_______________________________________

Ed Nailor
Mortgage Specialist
1st Metropolitan Mortgage
10801 Johnston Rd Suite 213
Charlotte, NC 28226

704-248-8694 Phone
704-644-0258 Fax

Visit www.EdNailor.com

I love to watch the experts tell everyone how its going to be down the road. They bring in all their data and details and paint the picture. That was the case today with the Fed Reserve Board Chairman, Ben Bernanke. He made comments that the economy will slow this quarter and that will be due largely to housing. However, once this financial crunch shakes out, we should be looking better by spring.

I will give Mr. Bernanke  credit and throw him a thank you. This is one of the first voices that has said that this is coming to an end. I hope he is right.

Personally, the past 2 weeks I have seen a marked increase in activity. More people are looking to get qualified to buy a home. If this keeps up, December may be the best month of the year! So what has caused the change?

I think the increase in activity has alot to do with the media’s decrease of mortage related headlines. Over the summer, every news media on the planet could not go a day without big headline stories about foreclosures, bank closings, mortgage fraud and every othet possible negative thing they could find. Even our beloved Charlotte Observer played into it, placing every negative headline it had on the front page, while burying news stating it wasn’t as bad in Charlotte about 5 sections in.

The reality is that the news media is now just media. Nicloe Richie and Paris Hilton have become CNN’s favorite topics… since when did teen girls acting stupid become national news? Its not… it’s entertainment. It sells ad slots and ad space. So keep that in mind when you read or watch all the gloom and doom… are they giving you news, or trying to get your attention so you will stick around for the ads?

Today is the best time to buy a home. Yes, the market is soft, supply is great and sellers are willing to negotiate. The news that its impossible to get financing is false! There are still many options to buy a home with no money down, and you don’t need perfect credit to do so! If you have been on the fence waiting to see what happens, you need to make your move now. Waiting till Spring could cost you not only the home you wanted, but also a price that would surprise you!

How do I know all of this? I asked the Magic 8 Ball of course!

Call Ed at 704-248-8694

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