First and foremost, remember all those
things that your parents taught you;
THERE IS NO FREE LUNCH
IF IT SEEMS TO BE TO GOOD TO BE TRUE, THEN
IT PROBABLY IS
ITíS NOT A BARGAIN IF YOU DONíT
RECEIVE WHATíS PROMISED
TREAT OTHERS AS YOU WOULD LIKE TO BE
TREATED, etc., etc.
A zero point loan is one where the Lender
is paying me for your loan. A zero cost loan (no out of
pocket cost to you) is a loan where the Lender is paying me
A LOT for your loan, so that I can afford to pay all the
little fees that add up to a tidy sum. In these cases you
get a higher interest rate for a lower (or no) cost. This
isnít the best route for everyone, read on for details.
Rate shoppers are vulnerable to inaccurate
interest rate quotes, price quotes and service promises.
There are unfortunately many fees to any loan and most will
not be revealed in a rate shopping phone call. Your loan is
serious business that should include LIFETIME service. It
begins a relationship that can serve you well long after
your loan is funded. It may be more valuable to pay 1/8th
more in rate (.125%) than to be old news when much later,
you need a copy of your closing statement or advice on how
to determine interest paid for taxes. If you grind your loan
agent, you probably will not get a very good value for your
efforts. Do it yourself lending is alive and well for those
who have the time, money, and patience to risk it.
All lenders are in business to make money,
but how they behave has more to do with how they feel about
themselves than what is best or fair to you. I would rather
do ten loans at a fair price than to soak someone once. We
must pity the liars, cheaters, and incompetents, and avoid
If you are buying a home, get your loan
approved before you even shop for a home.
You can get a pre-approval even if you are self-employed or
ďeasy qualify-stated incomeĒ. If you are looking for a
competitive fixed rate loan, or higher loan to value (more
that 80% of the purchase price), then you may need tax
returns, pay stubs, etc. If you are putting down 20% of the
purchase price or more, and you have decent credit, you just
need a pulse to qualify for most adjustable rate loans
today. I recommend adjustable rates for purchase loans
unless you cannot sleep at night without a fixed rate. Rates
change daily, sometimes more than once the same day. Trying
to float a rate (not lock) until you can be certain of the
closing date can be nerve racking. Since rates go in cycles,
why not lock the fixed rate of your dreams as a refinance
after you close your loan? Your real estate agent will love
Another alternative is a short term fixed,
like a 3, 5, or 7 year fixed period followed by an
adjustable period. Whatever you do, follow these rules;
UNLESS YOU ARE EXTREMELY SURE THAT YOU
WILL KEEP THE HOME OR THE LOAN FOR MORE THAN FIVE YEARS,
INVEST AS LITTLE AS POSSIBLE IN ďPOINTSĒ. POINTS ARE
PRE-PAID INTEREST TO BUY A LOWER RATE AND ARENíT WORTH IT
IF YOU DONíT KEEP THE LOAN LONG ENOUGH TO RE-COUPE THE
EXTRA COST. BE CAREFUL OF COSTS!
Example $100,000 x 8% = $8,000/year or
$666.67/month interest only
$100,000 x 8.25% = $8,250/year or
If you pay $1,000 to get 8% (one point)
you will save approximately $20.83/month in interest. It
will take you 48 months to re-coupe the one point.
$1,000/20.83 = 48.0077 months. Most people in our society
change homes that frequently. Even when they donít, other
life changes call for new financing. Do the math or I will
do it for you to determine which way is better for you.
AVOID PRE-PAYMENT PENALTIES. BE SURE TO
ASK IF THERE IS ONE AND HAVE IT POINTED OUT IN YOUR LOAN
DOCUMENTS BEFORE YOU SIGN. THE DOCUMENTS WILL ALWAYS STATE
THAT THERE IS OR ISNíT A PRE-PAYMENT PENALTY.
The cost of a loan with a pre-pay is less,
until you have to pay the penalty. Typically you pay more
than four times in penalties than what you have saved in
cost. Even if you feel certain that you are going to keep
your home forever, donít make this mistake. No one has a
crystal ball. Families suffer deaths, changes of job,
divorce, and other unpredictable events. Your lender will
not forgive a penalty. For some people, on some occasions a
short (one year or less) pre-pay might be acceptable. It
depends on your needs. Take time to think it out and talk it
ONCE YOUR LOAN HAS BEEN APPROVED, TRY TO
GET A COPY OF THE LOAN DOCUMENTS TO REVIEW IN ADVANCE. ON
REFINANCES YOU HAVE THREE DAYS TO CHANGE YOUR MIND AFTER
SIGNING BUT IN A PURCHASE THERE ISNíT A RECISSION PERIOD.
CHECK THE TERM, RATE, PAYMENT, AND PRE-PAY BEFORE SIGNING.
The sad truth is that some people will try
to take advantage of others. A real estate loan is a big
deal. Take your time to do it right.
We will be happy to chat with you as long
as you wish. You can reach us toll-free and very easily. My
job is to educate you to make the best kredit ohne schufa berlin decision to suit your
needs. I will ask you a lot questions. You can ask me even
more. THE MORE YOU KNOW, THE BETTER IT IS FOR BOTH OF US.
The loan process is as follows;
1. Consultation: talk to us about
what you want and who you are.
2. Application: mostly signing
paper, a few easy questions.
3. Processing: we order credit
report, appraisal, and title report.
4. Submission: we send your package
to the source that offers what you want.
5. Approval with conditions: believe
me, thereís almost always something.
6. More processing, order insurance.
7. Locking the program or rate: this
step can occur earlier if appropriate to your needs.
8. Ordering loan documents
9. Signing loan documents: done with
a notary, often at an escrow company.
10. Funding: the Lender wires the
funds to the closing agent.
11. Closing: your loan documents are
recorded and funds are distributed.
Normal turn around time is three weeks,
but can range from a few days, with private party loans, to
many months, in the case of newly built homes. Yes,
approvals can be same day, but they are therefore
conditional. Rates can be locked anytime, but better pricing
is available after approval.
We earn our fees by counseling you to find
the best fit to your individual needs and then preparing and
sheparding your application through the process. It is a
very creative occupation that seeks to overcome issues as we
go along. Certainly there are easier loans and harder loans.
We do whatever it takes to get the job done as quickly as
possible. We would rather quote high and deliver low,
estimate longer, and get done sooner, and manage your
expectations so that we are realistic and you are not
disappointed. It isnít that hard, if one is determined to
be good. And it pays us great dividends in repeat and