tcurranmortgage: Trevor Curran: Mortgages, Real Estate and First Time Buyers

You’re buying a home and shopping around for a mortgage. You’re inquiring of different Lenders for rate quotes. But you’re discovering that while rates might be very similar from one Lender to another, the fees charged by the Lenders can vary greatly.

Consumers can be easily confused by varying rate/fee quotes when shopping around and comparing one Lender to the next. The recently revised Good Faith Estimate that HUD instituted encourages exactly this type of behavior on the part of consumers.

Here are three key points to guide you in comparing rates and fees from one Lender to another:

1. POINTS: if the points are true “Discount” points then by paying points you are obtaining a lower interest rate with that Lender because you’re effectively paying some interest at closing and thus “discounting” your interest rate for the term of the loan. Question the Loan Originators if “Points” being disclosed to you are Discount, or not. If they ARE Discount, ask the same L.O. for the Zero-Points option. You should see a slightly higher interest rate. Traditionally when a Borrower pays ONE Discount Point (One percent of the loan amount) the interest rate is lower by .25% (assuming market conditions are stable and tranquil). Therefore, if you are quoted 3.625% 30yr Fixed with 1 Point, the ZERO Points option should be .25% higher in the rate or 3.875% 30yr Fixed.

2. FEES: Each Lender has unique fees. These include, but are not limited to, Origination fee (which can equal in some cases 1% or One Point), Bank Attorney fee (for New York purchases/refinances), Application fees, Document prep fees, Underwriting and Processing fees, and etc. When comparing fees from one Lender to another it’s important to have all the fees broken down. For example, you may have an estimate from one mortgage Lender with an origination fee of $650. But they then pile on a bunch of the smaller fees which in the end totals out to about $1500. By comparison, another lender may charge only an origination fee of $1800 but NOT the smaller fees. Get a breakdown from the Loan Officer. NOTE: These fees are separate and apart from the DISCOUNT Points described above in section 1.

3. APR: Annual Percentage Rate. The BEST way to compare fees is to check the APR. REQUIRED by Federal regulations is this: if a Loan Officer sends you a rate quote she MUST include an APR in equal font-size and immediately next to the interest rate quoted (in other words, NOT in the fine print). APR includes all the Lender’s fees added to the actual interest rate of the loan (the effective rate) and calculated over the term of the loan to derive an Annual Percentage Rate. When you compare the APR from one Lender with the APR of a different Lender that is the best way to see the difference in fees charged by each Lender. NOTE: The APR will include unique fees charged by the Lender (Application fee, Underwriting fee, etc. as cited above in section 2) AND DISCOUNT Points (if any).

I Hope that helps!

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I cannot explain nor can I understand the cause of this tragedy.  I can stand silently in support of those families, friends and fellow townspeople of the victims  in Newtown, Connecticut; I can witness their suffering and honor their pain by taking some to my heart.  Because I cannot imagine the depth of their sorrow, I doubt my desire to honor that pain will have much effect.

I feel the same today as I did on and in the days after another tragic day, September 11th, 2001.

I remember how many of us came together in peace and a recognition of our fragile humanity at that time.  There was a spirit of honesty when the goodness that potentially resides within each one of us rose to the surface.  A smile or an act of simple kindness meant so very, very much in easing our suffering.

And now this terrible thing happens.  We are reminded how terribly cruel the world, the universe, and humans can be.

No matter your religion, you cannot help, I think, to be touched by the season of kindness, giving, and sharing of joy at this time of year.  Maybe it is a deep-seated need embedded in our human culture, and not just the result of one religion’s celebration.

I think the best we can do to honor those who have lost their lives and those who suffer as a result is to reach down into that deep reserve of kindness and, yes, love, within our human selves.  Truly, ’tis the season.  Reach out to your fellow human and remember kindness and love.  Do it not for the personal joy you will experience as a result; do it instead to honor this tragedy, to remember the depth of human suffering that exists in this cruel world everyday and for hope.  Because hope in our human goodness is all that we really have left.

Today is my 22nd Anniversary as a Mortgage Banker. I started in Novmeber 1989 after having been laid off from a great job as a Regional Manager for a large electronics retailer.  I loved my job, and I was an expert at it.  But the company ran aground and I found myself adrift searching for new employment opportunities.  I wanted to become a Homeowner so I chose a path which would get me there: Mortgage Professional.

Times were tough back in that market.  Interest rates were high and property values had dropped dramatically.  The employment picture for many Americans wasn’t very promising.  There were a lot of foreclosures and homeowners had a hard time refinancing their mortgages due to lost equity.  Sounds very similar to today’s market with the exception of the interest rates (11% in 1989 compared with 4% today).

I received a valuable part of my education early on in my career as I dealt with purchase transactions where the appraisal came in for less than the purchase price.  Buyers, Sellers and their respective Realtors are all “IN IT TO WIN IT” and make the deal happen.

I carry that education with me to this day when my HomeBuyer clients ask me at application time, “What happens if the appraisal comes in for less than the Purchase Price?”   I know many HomeBuyers may think it’s a NO-BRAINER: the Seller will automatically reduce the price.  But that is NOT the case right out of the gate.  Here’s what I learned all those years ago about appraisals that come in short:

When the bank appraisal comes in for less than the contract price

there are FOUR ways to proceed with the transaction.

1. The Purchaser comes up with the difference in cash. If the appraisal is less than the Purchase price, the Seller basically assumes the Purchaser wishes to buy the house according to the terms of the contract, including the agree upon Purchase Price and therefore will come up with the cash necessary to complete the transaction.
2. The Purchaser and the Seller meet in the middle. The Purchaser comes up with some cash but the Seller also agrees to reduce the price enough to meet the Purchaser somewhere “in the middle.”  Both sides want to complete the transaction and so they work it out.  This is compromise at its best.
3. The Seller reduces the Purchase Price to equal the Appraised value. This is the least likely scenario.  Sellers often want to complete the purchase transaction on the original terms of the contract, including the price. 
4. Nothing happens and the deal is cancelled. The Purchaser either cannot or will not come up with the extra cash and the Seller refuses to reduce the price completely or even a little bit to meet the Purchaser.  In this case the transaction is cancelled, the Down Payment is returned, and everyone goes home unhappy.  The Purchaser has to begin all over again and the Seller has to put the house on the market and try to find a new Purchaser.

In the end, the motivations of all parties to make the deal happen and close the transaction rule the day.  Those motivations drive everyone to find a solution and get the deal closed.  Or not.

I welcome Comments for all my blog entries. I will be happy to review and approve all legitimate comments provided by readers of tcurranmortgage.com. I do not permit unfettered access to comments for obvious reasons: mortgage spammers and their ilk. If you wish to Comment on any entry, please do so and I will quickly review and approve.

Thanks for reading tcurranmortgage.com.

Hope that helps!

The buzz in the news today is that, since 11-11-11 only happens ONCE in a century, today is a special day altogether. And it’s Veterans Day.

Take a moment and say to a Veteran you know, “Thank YOU for your service to our great nation!” It’s simple to do and doesn’t require any more elaboration. Saying “Thank You” is enough. Believe me, Veterans appreciate when someone takes those few seconds to say a simple “Thank You.”

There are many Veterans who have performed extraordinary feats in the service of our nation: they were and are the living recipients of the highest honor our nation can bestow: The Congressional Medal of Honor. The CMOH website is HERE.

Many of the recipients of the CMOH lost their lives in the action that earned them the respect and gratitude of a nation. But many recipients survived as Veterans.

Here are some Medal of Honor statistics:
Total Recipients: 3,458
Living Recipients: 85
Double Recipients: 19
Most Recent:
DAKOTA MEYER

Dakota Meyer is a living recipient of the CMOH and a Veteran. President Obama presented the Medal of Honor to Sgt. Dakota L. Meyer on September 15, 2011. “His unwavering courage and steadfast devotion to his U.S. and Afghan comrades in the face of almost certain death reflected great credit upon himself and upheld the highest traditions of the Marine Corps and the United States Naval Service.”

Another recent, and living Veteran presented with the Medal of Honor is Staff Sergeant Leroy Petry. When you read his citation you can’t be anything but moved by the bravery of this young American. Here is an excerpt:

“Still under enemy fire, and wounded in both legs, Staff Sergeant Petry led the other Ranger to cover. He then reported the situation and engaged the enemy with a hand grenade, providing suppression as another Ranger moved to his position. The enemy quickly responded by maneuvering closer and throwing grenades. The first grenade explosion knocked his two fellow Rangers to the ground and wounded both with shrapnel. A second grenade then landed only a few feet away from them. Instantly realizing the danger, Staff Sergeant Petry, unhesitatingly and with complete disregard for his safety, deliberately and selflessly moved forward, picked up the grenade, and in an effort to clear the immediate threat, threw the grenade away from his fellow Rangers. As he was releasing the grenade it detonated, amputating his right hand at the wrist and further injuring him with multiple shrapnel wounds. Although picking up and throwing the live grenade grievously wounded Staff Sergeant Petry, his gallant act undeniably saved his fellow Rangers from being severely wounded or killed.”

Take a moment to read the citations for these and other CMOH recipients, both living and dead. After you do, you’ll realize the extent to which these brave Americans have gone to preserve our American way of life.

You’ll be inspired to say, “Thank YOU,” to a Veteran.

I guarantee it.

I welcome Comments for all my blog entries. I will be happy to review and approve all legitimate comments provided by readers of tcurranmortgage.com. I do not permit unfettered access to comments for obvious reasons: mortgage spammers and their ilk. If you wish to Comment on any entry, please do so and I will quickly review and approve.

Thanks for reading tcurranmortgage.com.

Hope that helps!