Philadelphia Area Mortgage Blog

This information on the $8000 Tax Credit for First Time Buyers was originally posted on my mortgage information blog.  I know the tax credit is generating a lot of inquiries so I am reposting the information here. This is a great incentive for those who may be looking to buy, but are still on the fence. 

 

If you are in the market to buy your first home you may be able to take advantage of a new federal tax credit for first time homebuyers.  Here are some facts about the tax credit:

 

• The tax credit is for first-time home buyers only, a first-time buyer is defined as someone who has not owned a home in the past three years .
• The tax credit does not have to be repaid. This is a change from last year's tax credit which was basically an interest-free loan, repaid over 15 years.
• The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.   So someone purchasing a $60,000 home would only receive a $6,000 credit, while someone purchasing a $300,000 home would only receive the $8,000 maximum.
• The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
• Single taxpayers with modified adjusted gross incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.  Those with incomes over that amount may still qualify for a partial tax credit.

As you can see this is a great incentive for those who are considering purchasing a home this year, but are unsure if now is the right time to take the path to homeownership.  For more reasons why 2009 may be a great time to buy,  please read:

Why 2009 is the Time to Buy

Why 2009 is the Time to Buy - Part 2

 

Remember, before you even begin to look at houses you should contact a mortgage professional to get pre-approved for a loan,  so that you will be sure you qualify and so you will know exactly how much home you can afford. 

Please contact us with any questions or to get started today.

                                                                                                                                                          

Information courtesy of Pennsylvania Mortgage Professional Michelle Chamberlain.  For more mortgage related information visit www.mortgage411center.com.  For information of small business loan alternatives visit www.ezmerchantadvance.com.

 

 

Many homeowners today are finding themselves in a situation where they can no longer afford to pay their mortgage.  Perhaps they lost their job or because of the economy their income has been greatly reduced.  Perhaps they had an adjustable rate mortgage and could no longer afford to make the payments once their interest rate increased.  Or perhaps they simply bought more home than they were realistically able to afford.   If you are a homeowner in this situation, where should you turn? 

In my opinion there are a lot of folks out there that are in over their heads and may not be able to keep their homes no matter how hard they try.  However, I also think there are a lot of homeowners who can be helped, but they just do not know who to contact or what to do. To read more about the different options available if you can no longer afford your home click here. 

                                                                                                                                                        

Written by Michelle Chamberlain

Homeowners who would like more information on mortgages please visit www.mortgage411center.com

Business owners who like information on small business loan alternatives visit www.ezmerchantadvance.com.

 

 

 

By now you are probably well aware of the massive spending stimulus bill that was just signed into law.   You also may have heard that the President also has a plan to help homeowners that cannot afford to pay their mortgage.  Known as The Homeowner Affordability and Stability Plan, the White House says that it contains 4 key goals:

1. Refinancing help for four to five million homeowners who receive their mortgages through Fannie Mae or Freddie Mac
2. New incentives for lenders to modify the terms of sub-prime loans at risk of default and foreclosure
3. Steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages
4. Additional reforms designed to help families stay in their homes

This plan has sparked outrage from responsible citizens who see this massive mortgage entitlement plan as unfair to homeowners who pay their bills on time, and who live within their means.  What is really outrageous about this plan however, is the rewards and incentives which are built into the program.  Yes, not only is the government (read: taxpayer) subsidizing the lower interest rates and principal reductions which will be given to borrowers under the program in order to mortgage payments more affordable, but also extra incentives such as:

 "Pay for Success" Incentives to Servicers: Servicers will receive an up-front fee of $1,000 for each eligible modification meeting guidelines established under this initiative. They will also receive "pay for success" fees - awarded monthly as long as the borrower stays current on the loan - of up to $1,000 each year for three years.   

Incentives to Help Borrowers Stay Current: To provide an extra incentive for borrowers to keep paying on time, the initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.

 

Yes, you are reading that correctly.  The government will now pay lenders $1,000 up-front to modify a loan, despite the fact that the government is also subisidizing the interest rate and principal reductions.   This is supposed to be an incentive for lenders to participate in the program, but isn't the fact that the government is now subsidizing any losses the lenders would be taking by modifying the loans incentive enough?  The lender also gets a $1000 a year bonus for up to three years if the borrower remains current on the loan because... Um, I really don't know what the rationale for this is other than the fact that the government likes spending OPM (Other People's Money).

But that's not all.  The borrower also gets an incentive to stay current on the mortgage, in the form of a $1000 per year principal reduction on the mortgage for the next five years.  Excuse me, but what happened to the old days when the incentive to stay current on the mortgage was that you get to keep your house?  Are we actually paying people not to be deadbeats?  What's next?  Free gas for life as long as you make your car payments on time?  Free groceries as long as you promise to feed your hungry children?  At some point aren't we crossing the line between helping to fix the economy and just being plain old stupid?

                                                                                                                                                       

Written by Michelle Chamberlain and originally posted at www.mortgage411center.com.

To apply for a mortgage online visit www.aboveallmortgage.com.

For an alternative to a small business loan visit www.ezmerchantadvance.com.

 

Personally I hate it when everyone in the real estate business talks about how "It's a great time to buy!".  Of course they are going to say that, they are trying to sell you a house or a mortgage loan, or they somehow make their money in Real Estate, what do you expect them to say?   (Donald Trump are you listening? Have you ever once stated that it was NOT the time to buy???)  However, I do think that those who are saying it this time, taking into account the combination of low interest rates and low home prices, may actually be right.   Here's why.

As a mortgage professional, I am seeing a large increase in the number of homeowners looking to refinance their mortgage loan.  They have all heard about the current low interest rates and want to take advantage of them.  Right now, I have enough refinances to keep me busy for the foreseeable future.   I have no need to market to prospective homebuyers, but I am.  There are a lot of great incentives to buy right now and I don't want anyone to miss out on these opportunites.  To learn why read the previous post,  A New Home For the New Year - Why 2009 is the Time to Buy.

However, I am not the only mortgage professional who thinks it is time to buy. Tennessee Mortgage Professional Danny Thornton thinks it is Time to get off the fence, and shares with us the new commercial from the National Association of Realtors with the same message.  I like the commercial so much I have posted it on my own website and am sharing it here as well. 

My only complaint is that the commercial should have advised potential homebuyers to get preapproved for a mortgage loan, before talking to a Realtor.  What good is convincing potential homebuyers to get off of the fence and buy a home only to find out they don't qualify for a mortgage loan in the first place?

 

If you think 2009 is the time to buy and are ready to get off the fence and into your own home visit www.aboveallmortgage.com.

 

Since, I previously posted on making refinancing your current mortgage a goal for the New Year, I now would like to address why those who are looking to purchase a home should do so in 2009.  First, let's be clear, the real estate market of today is a lot different than it was a few years ago, where almost anyone could get approved for a loan, regardless of credit, income, or assets.  However, assuming your credit is in good shape, you have a steady income which you can document, and you have sufficient savings there is still money to lend.  If you are not quite ready to buy, I will be writing next about coming up with a plan to help realize your dream of homeownership.

Why should you buy in 2009?

1) Mortgage interest rates are at an all time low and lower rates mean lower payments.

2) Home prices have dropped making homes more affordable.  In some areas there are real bargains.

3) Excess inventory make this a buyer's market, and sellers may be more willing to negotiate.

4) First time homebuyers may be eligible for a tax credit of up to $7500 on homes purchased before July 1, 2009.

5) The combination of these factors actually make buying a home now a wiser choice than at the peak of the market when there was a frenzy to outbid other potential buyers on already overpriced homes, no additional incentives to buy, and the lingering fear that the bubble would one day burst.

6) Waiting for the market to reach the bottom is a bad idea.  The only way to know when we've truly reached the bottom is when home prices start to go back up. 

For those who are thinking about  buying but may still be "on the fence", you may need to ask yourself "Is It Time to Develop a Sense of Urgency?", and consider taking advantage of these opportunities before it is too late.  For those who are ready to act,  the first step to purchasing your new home is to contact a mortgage professional to learn more about the loan process, find out how much you can afford, and to get pre-approved.  Getting pre-approved before you start looking for homes will show that you are a serious and qualified buyer and will give you an advantage when you decide to make an offer on a home. 

 

Visit www.aboveallmortgage.com to take the first step to becoming a homeowner in 2009.

 

It's the New Year again and that means lots of promises and plans to change for the better.  If you are like most Americans you are probably telling yourself that now that 2009 has arrived you will either: lose a few pounds, get back into shape, take up a new hobby, get organized,  take control of your finances, or some other resolution that will probably become abandoned before Valentine's Day.  This year, why not start the New Year off right and cross one of these items off the list right now?  If you have resolved to take control of your finances, then refinancing your mortgage loan may be in order, and there has never been a better time to do so then now. (If you don't yet own a home and would like to make homeownership a goal for 2009, stay tuned.  I'll be covering that next.)

Why refinance your mortgage in the New Year?  The reasons are many:

1) Mortgage interest rates are at an all time low and lower rates mean lower payments.

2) If you still have an Adjustable Rate Mortgage (ARM) you can refinance and enjoy a low fixed rate.

3) If you have equity in your home you can get cash out to use for other purposes.

4) Mortgage guidelines are tightening so you may not qualify for a loan progam when you finally do decide to refinance.

5) No one knows if home prices will continue to decline and waiting to refinance may mean losing equity and not being able to qualify in the future as well.

Visit www.aboveallmortgage.com to learn more about the loan process and to apply online.  Then with that out of the way, you'll have the rest of 2009 to work on achieving you other goals.  Happy New Year!

                                                                                                                                                                                           

Written by Michelle Chamberlain, Above All Financial Services

Homeowners, get the mortgage loan you need at www.aboveallmortgage.com

Business owners, get the cash you need at www.ezmerchantadvance.com

A few weeks ago I opened my front door to find a new larger recycling bin on my porch with a pamphlet inside introducing the new recycling program in Upper Darby Township.  Ironically, I received the exact same pamphlet in the mail a few days later (so much for wanting to save trees).  However, I was pleased to see that Upper Darby has expanded the recycling program to include glass and plastic bottles and that items to be recycled now can be placed all in the big blue container instead of having to separate everything.

Items to recycle now include:

• Cardboard
• Food Boxes
• Glass and Cans
• Plastic Bottles (numbers 1 and 2)
• Mail, Magazines & Newspaper
• Phone Books

Items NOT to be recycled are:

• Lightbulbs or Windows
• Dishes, Pyrex or Ceramics
• Foam Packing or Styrofoam
• Plastic Bags
• Unmarked Plastic, Toys, Chairs, Laundry Baskets.

Unfortunately, recycling is still collected every other week.  The schedule and map can be found in the 2009 calendar distributed by the township to residents.  Additional information on the Upper Darby Recycling Program can be found online, although the website is not yet updated to reflect all of the changes for 2009.

Additionally here are some other resources I've used for recycling in Upper Darby Township:

• Primos Elementary School collects paper (newspaper, mail, magazines) in a bin which is located in the side parking lot of the school.  The paper collected helps to raise money which benefits the school.  This is a great alternative to the every other week at home collection since you can drop off paper 24 hours a day and it benefits the students.  Check to see if your neighborhood school participates in this type of progam as well.
• The Clifton Heights Acme has a bin for the collection of plastic bags inside the front entrance.  Although I try to reuse plastic bags whenever I can I sometimes end up with more than I could ever use and drop them off here.  Other supermarkets in your area may possibly collect plastic bags as well.
• Also outside of the Clifton Heights Acme is a mailbox for the collection of eyeglasses that are no longer needed.  This collection bin is sponsored by the Lions Club , contact your local branch for a collection box nearest you..

A complete list of Pennsylvania Recycling Drop Off Locations can be found on the Pennsylvania Department of Environmental Protection website.

                                                                                                                                                                    

Information courtesy of Pennsylvania Mortgage Broker, Michelle Chamberlain.

To recycle your current mortgage into a low fixed rate visit www.aboveallmortgage.com

For small business financing visit www.ezmerchantadvance.com

 

 

When shopping for a mortgage loan to purchase or refinance a home, if the loan officer begins the application process asking  "What payment are you comfortable with?", don't walk away...  Run!  

Most of us know that the #1 rule of negotiating for a car is to NOT answer the "what can you afford" question.  Otherwise, when we answer $350 per month we end up driving off of the lot with a $350 per month payment for 36 months...  and a 10 year old Ford Escort.  Once the salesman knows what you are willing to pay, there is no incentive to give you the best deal and the difference between what you can qualify for  and what you are willing to pay,  equals BIG PROFIT.

Did you know however that it works the same way with mortgages?  Some loan officers want clients to believe that it doesn't matter what the interest rate is, as long as you are comfortable with the payment.  Therefore, if you are comfortable with a $2000 payment, then it shouldn't matter if you are charged 20% interest on the loan.  But the simple fact of the matter is that it does, and used car salesman tactics like this have no place in a mortgage transaction.  Why?  Because again the salesman pockets the difference between the rate for which you qualify and the rate for which you are willing to pay.  Now, don't get me wrong, I am not expecting anyone to work for free, but it seems to me that when a salesperson asks how much you are willing to pay it is not because he is taking your best interest into consideration, he is only trying to figure out  how much he can charge.  Not only that, but most first-time homebuyers and even some more experienced buyers have no idea what they realistically can afford and it is the responsibility of the mortgage professional to help walk them through the process so that they can figure out together what is in the best interest of the customer.

In his blog Jeff Belonger attempts to make a case that we shouldn't get too excited about a potential drop in interest rate to 4.5% based on his belief that we should focus on payment not rate.  Now I  do believe there is some validity to the point, but these reasons are not addressed in his post.  I have previously written about why we should not focus solely on rates when I wrote about adjustable rate mortgages which were being deceptively marketed  and about a customer who missed out on refinancing because she wanted a lower rate than what she qualified for.   And of course, the lowest rate in the world doesn't mean anything if you have to pay loads of fees and points in order to get it.  However, in this case, the sole argument against the lower rate seemed to be that the potential savings were "not that spectacular", which is a short-sighted argument at best.

I will use the example of the payment differences with a lower interest rate for a $120,000 loan even though I do think the $200,000 loan example is more accurate because it is closer to the median home price in the US.  When you look at the real advantages of a lower interest rate  on a $120,000 loan you will realize that the savings are significant and will be even more so as the loan amount increases.

EDIT: These are the same numbers that Jeff Belonger used in his blog which I linked to above.  I thought this was OBVIOUS due to the fact that I referenced Jeff's blog, linked to it, referred to it as "the example" instead of "my example" and made it clear that I didn't think using a loan amount of $120,000 was the best example due to the median home price in the US being much higher.  However, Jeff has accused me of plagiarism so it case it wasn't clear before, these are Jeff's numbers not mine!!!!

Furthermore, the point of this post was not to attack anyone professionally or to imply that anyone was less than honest or professional.  I was merely pointing out that applying for a mortgage loan, much like buying a car, buying a house, shopping at a flea market etc.  involves the art of negotiating.  While negotiating , the person who speaks first and lets the other know what he is willing to pay usually loses.  I prefer to use a consultative sales approach, where the client and I determine together what best meets their needs.  If you reference the chart below (again Jeff's numbers), if a client tells you initially that he is looking for a $720 payment on a $120,000 loan that would give him a 6% rate.  What incentive does the loan officer have to offer him the 5.5% rate should he qualify for that if he already knows you would pay $720? 

Mortgage Amount	$120,000	$120,000	$120,000
Interest Rate	6.00%	5.50%	4.50%
P & I Payment	$719.00	$681.00	$608.00
Difference in Payment	--	($38.00)	($111.00)

As you can see in the above chart, the difference in payment on a $120,000 loan with a 6% interest rate and a 4.5% rate is $111.00 per month.  Now some might say this savings is minimal or "nothing spectacular" but I beg to differ:

• First, with the economy the way it is, $111 per month is a huge savings for those on a tight budget and could possibly make the difference between someone being able to afford a home and continuing to rent. 

 

• Second, discounting the savings as only $111 per month ignores the effect of compounding interest over the life of the loan.  At 6% you will pay $139,005 in interest over the life of the loan, at 4.5% $98,888.  That is a savings of over $40,000 in interest alone!

 

• Third, let's look at the difference in  purchasing power.  Assuming our borrower only qualified for a $720 monthly payment (I am ignoring taxes and insurance).  At 6% they would qualify for a $120,000 loan, but at 4.5% they would qualify for $142,000, a difference of $22,000.  That may mean the difference between buying a fixer-upper and a home that has been completely remodeled, or a 3 bedroom home instead of 2.

 

• Last, one of the  things I try to do whenever I refinance a loan is try to show the client how to take the money they are saving, and pay the loan off early.  In this case our client is comfortable with the $719 monthly payment and the 6% interest but we take advantage of the 4.5% interest rate and take the $111 savings and apply it as an extra principal payment each month.  By doing this, the client can pay the loan off 7 years and 11 months earlier and save $30,000 in interest over the life of the loan.

You can see from the examples above that the potential savings with a drop in interest rate are far greater than the $111 per month.  Let's not forget that it is rate that brings customers through the door and makes our phone start ringing.  People love to get a bargain.  That's why we buy things at Walmart for $9.88 instead of $10.00 at other stores and while we'll drive 2 miles down the road to the $1.77 gas station instead of the one that charges $1.83, even though if you don't drive an SUV  the real price difference on a full tank of gas is less than a buck.  

It puzzles me why someone in the real estate/mortgage business would think that this proposed 4.5% rate program is not a good idea, especially after all the bad news we've been hearing lately, this may finally be what we need to get the housing market back on track.  Keep in mind that this was only a proposal and it is too early to know if or when this will actually occur or the specifics of the program.  I do  however think that with or without the 4.5% rate that interest rates are still considerably low and if you are looking to buy a new home or refinance your existing loan that it is a great time to get the ball rolling.  Contact me today to set up a consultation,  or visit www.aboveallmortgage.com.  I can promise you professional service, the best programs to meet your needs, and no used car salesman tactics!

 

 

 

(Photo courtesy of Flickr user riverspring)

                                                                                                                                                                           

Written by Michelle Chamberlain, Above All Financial Services

Homeowners, get the mortgage loan you need at www.aboveallmortgage.com and www.mortgage411center.com.

 

Business owners, get the cash you need at www.ezmerchantadvance.com

Real Estate and Mortgage Professionals are usually not too happy when the media chooses to report on the industry, since they feel that the media tends to emphasize the negative news (home prices falling, foreclosures increasing) instead of the more positive news (lower rates, more affordable housing).  While sometimes I wish that we could gag the media , I try not to get too upset over what's reported in the news about the real estate market or worry that the negative press is hurting my business.  I know that the only person who truly has the media in his backpocket just got elected president, so if I want to get the positive news out there to potential consumers or dispel the negative messages, I have to do it myself.  That's part of the reason why I blog.

While we can't expect the media to takeover as a PR representative for the real estate and mortgage industry, we should, however, expect at least a semblance of professional journalism.  This piece Are You an Idiot to Keep Paying Your Mortgage written by Kathleen Pender, ain't it.  The article, from the San Francisco Chronicle, basically reads like a how to guide on avoiding paying your obligations and sticking it to your lender.

Should you keep paying your mortgage?

If you have significant equity in your home, absolutely.

If you don't, it's getting harder to answer that question, especially when our government keeps giving people who owe more than their homes are worth so many reasons not to pay.

The article goes on to quote the campaign fact sheet of the president-elect which states "the real victims in the subprime mortgage crisis are not the lenders, but the millions of borrowers who followed the rules and whose only crime was taking out mortgages that lenders told them they could afford."  I guess if "The One" wrote it, and the reporter quotes it, it has to be true, right?  I mean should we really expect personal responsibility to come into play here?  If the greedy lender told you that you could get approved for a $2000 monthly mortgage payment, yet you only take home $500 per week, how were you supposed to know you wouldn't be able to make the payment?

While the article briefly discusses the other loan modification available from the FHA, it focuses mainly on the Streamlined Modification Program, for which you must be 90 days delinquent to qualify.  The reporter provides this helpful tip:

The streamlined process looks only at income, not assets. If you refinanced your home to buy a Mercedes or own another home, you won't be expected to sell them to pay your mortgage.

Whew!  That's a relief.  Wouldn't want anyone to have to sell the E-class or the shore house to have to pay their mortgage.  But there's more.  Like any good reporter, we have the requisite "expert" quotes and opinions such as:

Peter Schiff, president of Euro Pacific Capital, predicts that many homeowners who have little or no equity will stop paying their mortgage and then reduce their income to get the biggest payment cut possible. They could stop working overtime or, if two spouses work, one could quit. After the modification, they could try to boost their income again.

"This is a once-in-a-lifetime opportunity," Schiff says. "People are going to feel like complete morons if they don't participate. The people getting punished are the ones who never made an irresponsible decision to buy a house they couldn't afford."

Gee, I feel like a moron already.  I am one of those people who didn't make an irresponsible decision and is getting punished by not being able to take advantage of this deal.  But I can at least take solace in the fact that these people are gonna have screwed up credit for like the next  7-10 years , right?

Well um, not really:

Risking your credit score for a lower rate "sounds like a game of chicken on the lending highway," says Craig Watts, a spokesman for Fair Isaac, which markets the FICO credit score.

But then:

A 90-day delinquency will hurt your score, but not as badly as a foreclosure. How many points it takes off depends on other things in your credit file, such as the number and severity of late payments on other accounts.

In the latest version of FICO, which is just being rolled out, "one isolated delinquency will do less damage to your score than it has in the past," Watts says.

Consumers who suffer a severe delinquency can rebuild their scores over time by paying all credit accounts on time and keeping their balances low.

And then the priceless:

"If it was me and I was certain that I could keep my home even after missing a couple payments by working out a deal with the lender, I'd be for keeping the home," Watts says. "Your score will bounce back."

While, I know any competent mortgage professional would never dream of advising someone to stop paying their mortgage so that they may possibly get the loan modified, Ms. Pender's piece pretty much implies that not only should you do it, you'd be an idiot not to.  I look forward to her next responsible piece of reporting, which will probably be entitled "Are you an Idiot to Keep Making Payments on your Lexus?  The Repo Man Can't Find You if He Doesn't Know Where to Look."

                                                                                                                                                               

Written by Michelle Chamberlain of Above All Financial Services, a Pennsylvania Mortgage Broker.  To learn more about applying for a residential mortgage visit www.aboveallmortgage.com .  For information on Small Business Financing visit www.ezmerchantadvance.com.

Recently, I received an online request from a prospect who was looking on the internet for mortgage companies and found us in the search engines.  The good news, is this means my SEO is working, especially since I wasn't even aware that we ranked for that particular keyword.  The bad news is that I was unable to help her out.  Here's why:

The prospect requested that I email her a Good Faith Estimate (GFE) (not an unusual request, as most people who apply for mortgages are shoppers who typically like to compare rates and fees from competing lenders).  However, although she did provide me with some personal information (credit score, purchase price, downpayment) this was not enough information to provide her with the information she needed.  With no contact information other than an email address,  I responded back that we would need a completed full mortgage application, in order to provide her with an accurate GFE.  She never responded back.

Now, I'm not against sending a prospect a GFE, I do it all the time. In fact, it's required that you provide RESPA disclosures within three business days of an initial mortgage application. But the key word is "application".   There are many different criteria that go into pricing a mortgage loan; credit (of course), income, employment history, Loan to value (or % of down payments for purchases), and purpose of the loan, among other criteria. And while a Good Faith Estimate is just that, an estimate, any responsible mortgage professional does everything possible to make sure that their estimates are accurate (or at least very close). If I would have sent that customer a GFE for, say 6% on a 30 Year Fixed Mortgage, and she commited to doing the loan based on my estimate, only to find out later that the rate she qualifies for is actually significantly higher (or that she doesn't qualify at all), at best I would be looked at as incompetent; at worse, a dishonest loan officer that this industry is currently trying to shake out as we speak.  If I'm going to quote you a rate (especially in writing), I want to make sure it's an estimate I can stand by.  

There are other concerns here as well.  First, I'm relatively sure that we are probably not the only mortgage company that received the same request from this potential customer.  She was obviously shopping around and may have even been urged by another mortgage company or perhaps her real estate agent to get a few estimates.  The issue here is that although she was not going to get a GFE without completing a mortgage application from my company, I am pretty sure that she will manage to get one from someone else.  Afterall, most loan officers are hurting, business is down, and this client with her 720 credit score (according to her), money to put down, and good size loan amount would seem like an easy payday.  Some loan officer somewhere will toss out a few figures (which will be way lower than actual figures at closing) in order to get the prospect in the door.  However, this is a bad way to do business, for both the customer and the loan officer since they are both making decisions based on assumptions. 

The second concern is that because a mortgage can be a complicated transaction, there is no one size fits all scenario or price.  Shopping for a mortgage online is not like buying a book, or a camera.  You cannot just type what you are looking for into google and choose the merchant with the lowest price for the particular title or model that you need.  But, even if you could, shopping based on price alone is ignoring another important factor which is service.   If you are not taking time to speak to a loan officer, ask questions, and get to learn about how they do business, and you are choosing your mortgage company based on the lowest quoted price, you may be potentially making another mistake.  The company may be cheap, but are they competent and can they close your loan?   

 I can only hope that things work out for this customer, and that she doesn't have to learn the hard way that it's not Good, to put her all of your Faith, in an Estimate ... without submitting a full  application first.

                                                                                                                                                            

 

Written by Michelle Chamberlain of Above All Financial Services, a Pennsylvania Mortgage Broker.  To learn more about applying for a residential mortgage visit www.aboveallmortgage.com .  For information on Small Business Financing visit www.ezmerchantadvance.com.