Do You Know Your Mortgage Terms? 1 in 4 don't!

Home owners are getting better at understanding mortgage terms, but according to a GfK Roper random survey of homeowners and others, 26% still don't know if they have a fixed rate, ARM or other kind of home mortgage. Still, the numbers are better than last year where 34% didn't know.
What kind do you have; are you sure?

I recently helped a client who wanted to purchase a duplex, the client insisted on using a particular lender because the lender "took care of everything last time", and they had already talked to this lender and the lender had told them this new property would be no problem.
I like to shop my buyer's good faith estimates around to our local financial institutions just making sure they get the best deal. Why, because as the survey above points out, people don't get mortgages often, they don't understand terms, and additionally as a Realtor I believe it is a service I can and should provide. The mortgage on the previous duplex had some red flags, the payment didn't match the "terms" the client said they had (payment amount too low to pay off the loan in the stated time period, loan was a fixed rate).
They brought the mortgage documents in to my office and guess what - it has a balloon! They were not happy, and once they understood they were barely paying on the principle they started looking for a local lender to refinance. But, they had obviously signed the documents- so what happened. Had they just forgotten; I don't think so but it is possible. What is more probable however is that they were intimidated by the jargon and the paperwork and just signed and initialed where they were told to.

Maybe you should pull out that paperwork and take a good look at it again, and if you are thinking about buying go on line and learn, learn, learn. Also, ask a person who should be very familiar with the various mortgage products and programs - your Realtor.

Silver Lining to this Housing Market - Yes Indeed!

Home prices are coming down and so are interest rates. That is a very good turn of events for potential home buyers. The difference between now and 2 years ago, it is much harder to qualify for a mortgage. Two years ago if you had a heart beat you could get a mortgage, no verifications of income or assets needed. If you are a potential first time home buyer - even better! You will need an income, good credit, a good down payment and your own closing costs.
The criteria listed above is not a bad thing, it is a very good thing. If you are preparing to buy a home you will need at the least fair money management skills. Keeping a job, saving for a down payment, paying your bills on time, living within a budget and planning for the future are all prerequisites for being a mature responsible member of society.
If you are one of those members of society now is quite possibly the best time of your life to buy a home.

Credit Score Hit - 30 points every time!

I learned something interesting at our MLS meeting last Wednesday, a lot of people are paying other bills before they are paying their mortgage. I can't imagine their priorities, cell phone - some where to live? When a mortgage payment is 30 days late it drops your critit score a full 30 points - it doesn't take too many late mortgage payments to devestate your precious credit score!
With the increase in the required credit score to be able to get a mortgage or qualify for PMI it is not ever a good idea to be late on your mortgage. Pay your mortgage as your first bill, and skimp on other things like cable, highspeed, entertainment, eating out, cell phone, gasoline etc....

Do You Have an Adjusting ARM? How do you know if You Qualify for Help

If you have gotten caught in the adjusting ARM nightmare, there is hope. Follow the link in the title to see if you qualify for the assistance program. Don't just stick your head in the sand! If you have missed one payment you may still qualify. Contact your lending institution or the company that services your loan and call 1-888-995-HOPE, which provides counseling to homeowners with mortgage problems.
There is HOPE, the best defense against getting into trouble is to educate yourself and don't keep your knowledge to yourself, pass it on.

Realtors and Consumers The Chairman of the Senate Banking Committee Needs Your Support

Sen. Christopher Dodd is expected today to introduce a bill that would require mortgage lenders to issue only loans that are beneficial to borrowers and that borrowers are able to repay. What a novel idea - What, you thought the banking industry had your best interests at heart????

This bill seeks better loans for consumers. The proposal by the chairman of the Senate Banking Committee would not only force mortgage lenders to act in the best interest of borrowers, it also would expose Wall Street firms to lawsuits (IT IS ABOUT TIME!!!!) as well as bar subprime mortgage lending practices such as prepayment penalties and yield spread premiums, (this should not be how a mortgage broker gets paid) can anyone say Major Conflict of Interest???
Dodd's proposal is in some ways similar to one from Rep. Barney Frank, which passed in the House by a wide margin in November.

Mortgage companies and banks are expected to come out in force against Dodd's bill. Really? well you as an American consumer can help get this measure in place ----CALL YOUR BANK, MORTGAGE COMPANY, SENATOR AND YELL - Get this legislation passed and implemented. "I'm Mad As Hell and I'm Not Going to Take it ANYMORE!"



Click on the title to link to Reuters article on the bill

Anti-Predatory Lending Bill Passes - Good or Bad?

Click on the title to read my opinion and please comment on how we can fix this broken system.