Minnesota Mortgage Blog - MN Mortgage and Real Estate News

I constantly receive requests for a No Cost loan. Sadly there is no such thing.

All loans have closing costs associated with putting the loan together.

Just like you, participants in the mortgage loan process don’t work for free. The Appraiser, Title Officer, Title Insurance, County Recording Fees, Minnesota Mortgage Registration Tax, as well as your lender all need to get paid as part of the process.

Each of these parties charge fees for their service in processing and funding your loan. The Lender’s responsibility is to explain to you what the services and costs are, and to give you an estimate of the total costs when you apply for a loan. This estimate comes in the form of a document titled Good Faith Estimate of Closing Costs. It is only an estimate, but it should be very close to your actual costs. Lenders are not allowed to pad, or add onto the costs charged by these other parties, but rather simply pass on what they charge. The vast majority of closing costs go to third parties, not your actual lender.

The real question is: How do I get a loan so I don’t have to pay for these required services? The simple answer is you can’t. What you can do is determine how they get paid.

Purchasing or refinancing, it basically works the same way. All of the costs associated with transaction are paid in one of four ways: By you in cash, by the Seller (in a purchase), by rolling it into the new loan amount (refinance), by the Lender, or a combination thereof.  The most common way in a refinance is by rolling the closing costs into the new loan amount.

Now you may be saying “Wooh-Hooh, let the lender pay”, but you need to know how the lender can do this, and why it may not always be such a smart move.

To have the lender pay your closing costs, you agree to accept an interest rate that is higher than what is considered a “Market Rate.” In doing this, the lender receives more cash than just the face amount of the mortgage loan when they sell it to an investor on the secondary market. This excess cash is what the lender uses to pay some or all of your closing costs. This means that over the life of the loan, you will be paying more interest to the lender than you otherwise could have.

Does this strategy make sense for you? Maybe. It depends on several factors. How much higher is the mortgage rate and what is the monthly cost to you in increased payment? How big or small is the loan? How long do you plan to stay in this loan? Do I have the cash to pay the costs out of pocket?

This is where it becomes important to work with a Licensed Mortgage Originator and not a bank employee. As I have said many times, A Mortgage Banker / Broker is required to be Trained, Tested and Licensed in all aspects of Mortgage Origination. A bank employee is usually just registered, not tested, not licensed, and not required to be educated, tested, or licensed.

A NO COST loan is not automatically good or bad.

A local licensed Loan Officer will do the math with you, and take the time to show you the pros and cons of each method of paying closing costs so you can choose the best option in your particular situation.

What is your home worth today? Wish you could get a free appraisal?

Many homeowners are curious about the appraised value of their home. An actual appraisal is expensive, and county tax records do NOT always reflect true market value. As you may be aware, home values are constantly fluctuating, and with the decline in average values, it is important to have an accurate idea of what your home is worth.

There are many sites that claim to give you are idea, including Zillow, Trulia, and more. It is also a well known fact those sites have very questionable data, giving values that range from close, to crazy far off. The big problem is, where is the data they use coming from and how accurate is it?

There is a better free tool to answer the estimated appraised value of your home question. This system uses the Freddie Mac Home Price Index ( FMHPI ). FMHPI is calculated using a repeat-transactions methodology. Repeat transactions indexes measure price appreciation while holding constant property type and location, by comparing the price of the same property over two or more transactions. The change in price of a given property measures the underlying rate of appreciation because basic factors such as physical location, climate, housing type, etc., are constant between transactions. Averages of appreciation rates for different geographic areas and time periods are calculated using statistical regressions and the index values are derived from these averages

While the estimate may not be the actual or appraised value of your property, it can be a much more accurate than Zillow to gauge fluctuations and trends in your market which affect your home’s value.

CLICK HERE FOR A FREE HOME VALUE ESTIMATE (MN and WI properties only)

Can you qualify for a home mortgage loan with bad credit?

What’s Your Credit Score?
Every lending facility uses guidelines to determine your credit worthiness. Upon reviewing your application, you’re given a credit grade and a determination regarding your loan’s approval or denial. Lenders DO NOT give loans to those with bruised credit anymore. If you are denied by a one lender, contacting 10 more probably won’t help.

What credit score do I need for a home loan?
Generally speaking, in today’s mortgage world, if your middle credit score is below 640, it is very unlikely that you will qualify for home loan financing no matter what anyone tells you or you see elsewhere on the internet. With a score below this level, you really should save yourself the hassle. Stop attempting to find mortgage loans, and work on improving your scores instead.

Review your credit score?
If you are not sure what your credit score is, you should officially find out. Apply for the mortgage loan, and let the mortgage lender review your exact situation. DON’T ASSUME YOU CAN’T QUALIFY!

CREDIT PROBLEMS & ANSWERS

Late Payments
If your credit has multiple RECENT 30, 60, or 90 plus day late payments, you probably won’t qualify. Especially if those late payments occurred LESS THAN than two years ago. Lenders want a clean recent payment history.

Collections, Judgements, Tax Liens
If your credit history indicates unpaid collection accounts, most “A” grade loan lenders will require these amounts to be paid off before the loan is funded. FHA typically will ignore them if they are under $500, and more than 2 years old. Medical collection “usually” are ignored. Judgments’ (you got taken to court & lost), are almost always REQUIRED to be paid off before approval.

Bankruptcy & Foreclosures

Is a debt consolidation loan for you?
If you have any late payments on your record, part of the reason may be because of high credit card debt. If you qualify, you can pay off all of your high-interest credit cards into a low debt reduction refinance loan which may be tax deductible (unlike credit cards, which are NOT tax deductible).

With millions of web sites to look at for home for sale listing, it is becoming more and more common for people to feel they don’t need the help of a licensed Real Estate Agent.

More specifically, people seem to ONLY be calling listing agents for the properties you want to see. The thought behind this I suppose is “I can get a better deal if I don’t involve another agent and contact the listing agent directly.”

While the listing agent loves you only calling them, here is why is is usually a costly mistake for home buyers.

Myth # 1- I will get a better deal if I call the listing agent directly.

That listing agent is contractually bound to do what is in the best interest of the seller, and that means getting the highest dollar amount for the sale of the home. NEVER disclose your top dollar or financial ability to get a bigger mortgage loan to them because by law they have to go back to the seller with this information.

Remember…your goal is to pay as little as possible, while the seller’s agent’s goal is to get as much as possible for the seller. No matter what a Real Estate agent claims, this is a clear conflict of interest.

Myth # 2- I can find more homes for sale by calling more than one agent, or looking at multiple web sites.

The days of each real estate office having big books of only their companies listing are long gone. It is mutually beneficial for all Real Estate Agents to have all properties in the same database (call the MLS – or Multiple Listing Service)

All Real Estate Agents in the same area therefore pull the same list of homes available  for sale from the same multiple listing service database. Local agent sites typically interface with the local MLS site a minimum of once per day. If a new house for sale gets added today, EVERYONE local should have it listed tomorrow.

If you saw a home on Zillow, or some other national site, but that particular home didn’t come up in the local agent’s site, remember sites like Zillow & Trulia are NOT updated as often as the local MLS database real estate agents can pull from are. If it is not on the local MLS…  chances are the house that you saw has already been sold or is already under contract.

The bottom line is the smart move for home buyers, and especially first time home buyers in MN and WI, is to use the services of a good, licensed local real estate agent in any home purchase transaction, and save yourself a lot of time by only looking at one web site.

FHA Extends Waiver of Anti-Flipping Regulations Through 2012.

In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, the Federal Housing Administration (FHA) will extend FHA’s temporary waiver of the anti-flipping regulations. 

With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days.  In 2010, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011.  The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA.  All other terms of the existing Waiver will remain the same.  The waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers. 

Too bad it doesn't really matter because of the difficulty in meeting the "strict guidelines" and lender overlays, MOST FHA lenders DO NOT offer this exception.

Remember, FHA does not lend money, lenders do. FHA only insures loans lender make. Regardless of what FHA says they will "allow", it is still up to the individual FHA lenders to decide their ultimate underwriting guidelines. Most FHA lenders find this exception too difficult to meet the strict guidelines, and too risky, so they simply WILL NOT ALLOW any FHA transaction less than 90-days.

While we are talking FHA here, lender overlays also are common on Fannie Mae and Freddie Mac programs.

The Waiver continues to be limited to sales meeting the following conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In all cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value.

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No more excuses. Go buy a home!

The housing market has changed dramatically, and everyone should be taking advantage of some of the most affordable home prices, and lowest mortgage rates in history. You may be hearing a lot in the news today that in some markets it is cheaper to own than it is do rent. It's true!

Stop listening to the doom and gloom drum beat the media plays. Bad news sell newspapers, so that is the spin they like to portray.

Common myths and misconceptions may be holding you back but shouldn't.

• My credit is not the best at this present moment: OK then stop delaying and start on the path to improve your credit scores. The vast majority of people can turn bad credit to good credit in less than a year - IF YOU WORK ON IT.
• I do not have money for a down payment. Did you know you can buy a home worth $100,000 with just $3500 down payment?  There are many acceptable sources of down payment. Savings, 401k retirement plan, sale something, tax refund, or even a gift from a relative.
• I do not feel comfortable with the economy:  WHO DOES?  But you have to live somewhere, so make that somewhere a place of your own?
• I don't think I will qualify for a mortgage: It takes just a few minutes for a licensed mortgage Loan Officer to review your basic information. There are no obligations, and you are committing yourself to nothing by talking to a Minneapolis, St Paul, or Duluth MN area mortgage lender. It really isn't  as scary as some people think being a first time home buyer.

The Federal Housing Finance Agency (FHFA), who oversees Fannie Mae and Freddie Mac, released the HARP 2.0 “Obama Refinance” guidance to lenders this week. The new HARP (Home Affordable Refinance Program) program is a concerted effort by the government to refinance more homes and reduce monthly payments for home owners that are underwater and can’t obtain a traditional refinance. This is being accomplished by expanding the guidelines to more accurately reflects the current state of the real estate market.

Now that lenders have guidance from FHFA they will develop their own guidelines, or “overlays”. An example of an overlay is Fannie Mae says an appraisal is not needed but the lender requires it to reduce their risk, or Fannie Mae says “this loan program is available to borrowers with credit scores down to 580? but the lender sets their threshold at 620.

This means while the program is “available” as of Dec 1, 2011, no lender has actually provided their guidelines – and the loan product is NOT officially available anywhere just yet (as of the day of this posting).

So here are the highlights of the new HARP 2.0 program as told by FHFA. These could change and requirements could be different from lender to lender, though.

• Applications for HARP 2.0 refinancing will be accepted after December 1, 2011.
• Deadline for application for a refinance under HARP has been extended to December 31, 2013.
• Most loans owned by Fannie Mae and Freddie Mac will be eligible for a HARP 2.0 refinance. Loans that are not are subprime loans and those that allow negative amortization, such as Option ARMS.
• Loan-to-value limits for all occupancy types:
• No maximum LTV for fixed-rate mortgages with terms up to 30 years.
  105% for fixed-rate loans with terms greater than 30 years and up to 40 years
  105% LTV for ARMs with initial fixed periods greater than or equal to five years and terms up to 40 years (as permitted by the ARM plan).
• Borrowers must not have any late mortgage payments in the past 6 months.
• One 30-day late mortgage payment is permitted in the prior 7 to 12 months.
• The waiting period to refinance after a bankruptcy and for reestablishment of credit has been lifted.
• The borrower must receive a benefit in the form of either a reduced monthly mortgage payment or a more stable loan product, such as refinancing a adjustable-rate mortgage into a fixed-rate mortgage.
• If the current loan has mortgage insurance, mortgage insurance will also be required on the new mortgage.
• If the current loan does not have mortgage insurance, mortgage insurance will not required on the new loan.
• Loans that currently have lender-paid mortgage insurance (LPMI) are eligible for HARP 2.0 based on some restrictions. I found under HARP 1.0 that loans with LPMI are eligible on a case-by-case basis determined by the terms of the loan set by the lender Fannie Mae or Freddie Mac bought the loan from. So check with a mortgage professional who will have to contact Fannie Mae or Freddie Mac in regards to the eligibility of your loan with lender-paid mortgage insurance being refinanced under HARP 2.0.
• Unless the payment is increasing by 20% or more (such as could happen by moving to a 20 or 15 year loan) or funds must be brought-in to the closing for some reason or another, the borrower should not have to re-qualify in regards to credit, income and assets to receive the mortgage refinance. In other words, no income and asset documentation will be needed in most cases. This could change by lender based on their overlays.
• An appraisal may not be needed, but as noted above, each lender will detail their guidelines for items such as this.
• Fannie Mae is significantly reducing the maximum amount of loan-level price adjustments that apply to “HARP” mortgage loans. Loan-level price adjustments, or LLPAs, are those factors that result in a borrower with lower credit scores and/or higher loan-to-value’s receiving a higher interest rate than borrowers with higher credit scores and/or lower loan-to-values. In short, they are “risk-adjusters”: The higher the risk to the lender, Fannie, Freddie and Wall Street, the higher the interest rate for the borrower. What this all means to you is that although you may qualify at a higher interest rate because of a lower FICO score, that rate won’t be as high as it was under HARP 1.0.

We’ll see how all this shakes-out with the loan servicers, banks and lenders in a couple of weeks.

What do you know about your Mortgage Loan Officer?

All Mortgage Loan Officers are required to register with the Nationwide Mortgage Licensing System (NMLS) & Registry. The Registry assigns each Loan Officer a unique identifier number that stays with them throughout their career. Using this number you can review professional background information for a Loan Officer through the NMLS database prior to doing business with them.

The display of an NMLS number tends to lead most people to believe all Loan Officers are licensed. This is far from the true. Only about 20% of Loan Officers are actually licensed, the rest are simple registered.

Licensed Loan Officers are required to have pre-employment mortgage education, must pass criminal background checks, must pass a difficult Federal Licensing test, must pass a difficult State Licensing test in EACH state they wish to do business, and must complete yearly continuing education requirements.

Simply registered Loan Officers could have been flipping burgers last week, and doing Loans today. While their employer may have some sort of internal hiring and training system, there are no mandatory state or federal licensing requirements, and no educational requirements.

Now I am not saying that simply registered Loan Officers are bad people, but when you are working on the largest financial transaction of the average persons life, who would you prefer? Licensed or unlicensed? Another way to look at it is to assume you are sick. Sure, you can go online to WebMD, self-diagnose your illness, go to the pharmacy, buy a scalpel, and attempt self surgery. Or you can go to the Doctor.

So how do you verify if a Loan Officer is Licensed or simply Registered? It only takes minute to find out.

1. Simply go to www.NMLSConsumerAccess.org.
2. Enter the Loan Officers Name, or their NMLS #
3. Click on their name

Scroll to the bottom of the page.

• If it says STATE LICENSES/REGISTRATIONS, then lists one or more States – They ARE A LICENSED Loan Officer
• If it says FEDERAL REGISTRATION, then says Federal Mortgage Loan Originator – They ARE NOT LICENSED.

Licensed or simply registered? I think the choice is clear for smart homeowners.

How to ELIMINATE or REDUCE your monthly PMI

Minneapolis, MN:  I call private mortgage insurance (PMI) the necessary evil of mortgage industry. If you have less than a 20% down payment to put toward your home purchase, or less than 20% equity when refinancing, you'll have to deal with mortgage insurance because of your increased risk to the mortgage lender. Not everyone has a 20% down payment, so paying PMI is very common. Even FHA loans require mortgage insurance. If your mortgage requires PMI, you’ll pay PMI until you refinance or until your Loan-to-Value in your property is 78%. Traditionally, you pay private mortgage insurance monthly as part of your mortgage payment. This can be expensive.

Would you be interested to know about less expensive mortgage insurance options? Has your Loan Officer discussed with you options to significantly reduce or eliminate PMI from your loan? Why not? Maybe because you are working with the wrong lender!

Our PMI Eliminator options can completely eliminate your monthly PMI payment so you never have to worry about it... ever!

Ask yourself these PMI Eliminator questions?

• Is your down payment more than 5%, but less than 20%?
• Is the equity in your home low enough to require you to still have to pay PMI on your refinance?
• Do you plan on staying in your home or mortgage for more than 3-years?
• Would you like to completely eliminate your monthly PMI payment?
• Are you getting a conventional mortgage loan (NOT FHA, VA, USDA, etc)?

If you answered “Yes” to these questions, the PMI Eliminator loan might be right for you!

How do our Two Basic PMI Elimination Options Work?

1. Take a slightly higher rate.
2. Pay slightly more in closing costs with a one time, cost effective PMI buy out option

Both options SAVE YOU A TON OF MONEY versus a loan with traditional private mortgage insurance. You end up with a significantly lower monthly mortgage payment, you are still getting a standard conventional loan, with standard great mortgage interest rates, you just don't have expensive monthly mortgage insurance to worry about! Another benefit, is because of the way the mortgage insurance is paid, you’ll maximize your tax deduction (remember to check with your tax advisor before making any tax-related decisions).

The HARP refinance option:

• Does your current loan NOT have PMI?
• Is your loan owned by Fannie Mae or Freddie Mac?  Who you make your payments to is not who owns your loan. Click here to find out if Fannie or Freddie own your loan.
• Are you afraid of trying to refinance because your home has lost value and would now be OVER 80% loan-to-value?

Don't worry. We have a special HARP (Home Affordable Refinance Program) option just for you.

We lend in MN and WI. Call (651) 552-3681, or APPLY online - and be sure to mention you want a no PMI loan option.

Are you searching for the lowest refinance mortgage rates?

Have you shopped and think you’ve found the lowest refinance mortgage rates and closing costs?

Are you sure you found a deal, or did you find the crooked bait-n-switch lender?

A lot of consumers like to “shop around” to find the best interest rate they can for their loan. As a result, white lies, factual omissions, and out-and-out misleading statements are commonplace among loan officers in today’s insanely competitive lending market. That’s why it’s important for you, as a consumer, to understand the classic bait-and-switch technique of many lenders and loan officers. It’s basic economics—if a bank or lending institution offers consistently uncompetitive interest rates, they won’t make any loans and they won’t make any money. Last time I checked, mortgage lenders and banks are not charitable organizations. What does this mean for borrowers? This means that if one lender is quoting you significantly better than everyone one else, buyer beware!

Bait & Switch is alive and well and still living in the mortgage industry, especially from the big online internet lenders. Wasted time, lost real interest rates, and money spent on upfront fees are some of the costs of dealing with the wrong lender – and that is if you DON’T use them.

THE REALITY: Shop til you drop. All mortgage lenders are basically the same. They all get their money from the same sources, the interest rates are based on the same bond market, transfer the loan to Fannie Mae Freddie Mac or FHA, and the third parties fees they need to collect and pass through (appraisal, credit report, underwriting, title company, etc) are all the same. True mortgage interest rate differences will never be more than 1/8th (0.125%) to 1/4 (0.25%) difference between all lender across the country.

THE GAME: If lenders advertised “We are the same as everyone else”, who would you use? Therefore the game is to capture your attention and get you to call them. This is done primarily with two claims.

• Super low rate. To quote the super low rate, these bad lenders usually are hiding in discount points and other fees in order to buy down the interest rate they are quoting, or the small print says you need a credit score over 800 something.
• Super low closing costs. To quote super low closing costs, they simply forget to tell you how much higher the interest rate will be to offset those low closing costs.

Here’s a classic example of how it works at the less-than-respectable mortgage company or bank. The bank simply takes advantage of YOUR IGNORANCE when you’ve “shopped” for the best mortgage rates.

The company (or loan officer) scans today’s REAL interest rates and sees that they can realistically offer a 4.25% rate at par (no points paid by borrower) and they know this is approximately what the competition is offering. The lender see’s that if the borrower pays 2.25 points (2.25% of the loan amount), the borrower could get a 3.75% interest rate. So the loan officer or the companies automated web site quote system will tell a consumer that is shopping interest rates that he can do 3.75%. Beating all others. The lender tells the client they can’t lock the interest rate until they get an appraisal and all their documents.

Excited, the borrower believes he or she has found a diamond in the rough and agrees to do business with that lender. The lender asks for the borrower’s credit card information and takes a $500 deposit for the appraisal and gets started. The borrower sends in all their documents.

Awesome… You think you are getting an amazing deal.  A week later, the appraisal has already been done, and your paperwork shows up to be signed.  Wait a minute. The closing costs are nowhere near the original quote.  Usually thousand of dollars higher. Then when the client is ready to lock his or her interest rate, the loan officer apologizes and says that the 3.75% rate is no longer available because interest rates have changed since the quote was made (the lender is not legally obliged to give any interest rate until a GFE has been produced and a rate lock has been entered into).

Pissed off borrowers usually at this point start calling other lenders again, only to find out that they are all quoting about the same as the company they are already working with is now really quoting. Since the borrower has already paid a $500 deposit, has made a tedious loan application, and has likely already produced documents for processing and underwriting, the borrower almost always grudgingly accepts that rates have simply risen and agrees to finish the loan process with that lender.

The classic bait-and-switch. Mislead the person shopping, rope him in with a ridiculous rate quote, and lock the person in with a substantial deposit for an appraisal. This bait-and-switch tactic is used thousands of times each day by lenders nationwide. 

CLUES: Most people don’t find out they are working with a predatory lender until well into the transaction, and usually after they’ve spend money on an appraisal, or non-refundable application fee.  There are some clues to look for:

• Requiring up-front money other than appraisal or a small amount for a credit report
• Not being able to lock your interest rate until AFTER you send in paperwork and the loan is approved
• Relying on ANY ONLINE SYSTEM that gives you any rate quote as a real quote

AVOID THE PERILS of mortgage rate shopping with a little homework.

• Get off the internet. No internet lender has anything better than the mortgage company down the street
• Google the name of the company plus the word fraud or scam. What do you find?
• Contact a local lender with an office you can drive to and do business with them.
• Check their reputation. Not just their advertised interest rates.

Want to see something scary? All over the internet are advertisements for amazing interest rates from an internet company called AmeriSave. Best mortgage rates anywhere that completely blow away the competition.  But before you jump, read this about them, and take my advice to Google their name plus the word fraud. Still want to work with them?

Oops – you just missed the mortgage interest rate boat… or did you?

St Paul, MN:  The headlines are screaming… Mortgage interest rates just hit historic lows again for the forth straight weak. The morning talk shows are asking if it is a good time to refinance your home?  So is it a good time to refinance? The answer is probably yes, but let’s find out the truth about interest rates and how they work.

The main item to understand is simple. Mortgage rates go up and down everyday.  Sometimes a lot. Sometimes a little. There are many factors that contribute to rate changes, but a simple one to understand is that negative stock market and negative economic news is good for long-term mortgage interest rates. Good news is bad for rates.

The next big item to understand is all lenders are virtually the same. If one lenders rates do down, so does everyone else. They all underwrite to the same basic guidelines, they have all the same third party fees (appraisal, title company, underwriting, etc), and they all are transferring your file to Fannie Mae, Freddie Mac, FHA, etc.

Rates Change: I was quoting rates at 3.875% on Monday (10/3/2011) for an under 80% loan-to-value 30-yr fixed loan for someone with over a 740 credit score. By Friday (10/7/2011), the same deal was 4.25%. The bottom dropped out of the bond market during the week, rates went up, and every shopper who got quoted a great deal but asked if I thought rates were going to go lower just got burned.

BE CAREFUL: I just heard hear this morning another report from America’s most misleading rate information site,  Bankrate.com. They just said that interest rates are in the 3's. Hmmmm….  Really now? Be careful. On what program? With how many points, and how much blood do I have to give?

Each Thursday, Freddie Mac reports interest rates. This information is picked up by all the media and spread across all the TV, radio, and newspaper. This is perhaps the most misleading piece of news that is placed into consumers hands on a regular basis. The full story is usually edited down to Twitter sized chunks, and we only see the blurb…”INTEREST RATES HIT ANOTHER LOW” or “INTEREST RATES REMAIN LOW” and reporting about what that indicator is.

This is LAST WEEK’s news. They are telling you what closed and what was already locked previously. If you want to buy Google stock, does it matter what the average of the stock was last week, or today’s price? If the nationwide average was 4.123% two weeks ago, and the average last week was 4.122% – I guess that does count as “INTEREST RATES WENT DOWN AGAIN“.

As many of you who see the news and call around about rates have found out, that rate is not always available and now you know why.

No lender can offer you yesterday rates today. Nobody can offer you what you were looking for in the beginning: Monday’s rates! Frustration, hassle, pestering, over promising, ignorance, lies, demands, promises, etc all take place and you likely throw your hands in the air and say. FORGET IT! I’ll STAY WHERE I’M AT! You missed the boat!

You didn’t miss the boat. You almost got suckered in today’s over hyped mass media world. The reality is it is almost impossible to pick the day interest rates hit a low. Pretty much dumb luck.  On the other hand, getting a mortgage interest rate that is NEAR the bottom of the market is super easy.

Partner with a professional Loan Officer, and get your mortgage application started!

A refinance is just as easy to get as your first mortgage… right?

St Paul, MN: Many people think that refinancing is easier than buying a home for two main reasons:

1) you already have a loan on the home, you make your payments, so it should be easy to refinance.
2) your current mortgage lender already has all their information, so they with easily refinance you, and they are the best place to call **

Sorry… Not true on either count.

There are many factors that might make it hard to refinance in MN:

First, understand that no matter who you call for the refinance – even your existing lender, you have to go through the full underwriting process again. With that said;

- Your financial situation could have changed. Do you have the same job, same income? Better or worse? How about credit. Better or worse?
- Mortgage loan Underwriting guidelines have changed. The crazy days of every getting a loan are long gone. Be are back to old school traditional financing guidelines. Did you buy the home on a program that no longer exists… like a no documentation loan?
- With all the foreclosures, your properties value probably went down. How does that play into your refinancing options?

Most people refinance for three main reasons.

1) Smaller payment
2) Shorter term
3) Cash out / consolidate debt

The good news is that mortgage rates in MN and WI are amazingly low right now, and lenders are still providing home loans everyday. If you are thinking of refinancing, but have been scared away by thinking you can’t for some of the reasons listed above, you are making a big mistake.

Contact a local MN or WI mortgage company with a licensed Loan Officer. Fill out a full application, and let them review your situation.

You may be very happy with the answer!

** WORD OF CAUTION: Many people make the mistake of just calling their existing lender. Almost exclusively, EVERY OTHER lender will have a better deal for you. Be sure to call more than just your current company.

St Paul, MN: Recent changes to the lending industry requires all loan officers to have a tracking number, known as an NMLS number (Nationwide Mortgage Licensing System and Registry). It should be displayed on their business cards, E-Mail, web sites, all correspondence, and most loan documents.

The display of the NMLS number may make many believe the Loan Officer is licensed. Sadly, this isn't true, and working with an unlicensed, untrained Loan Officer can cause you many headaches and hassles.

Simply put, Loan Officers at Banks, most Credit Unions, or Mortgage Companies owned by a bank are NOT REQUIRED to be licensed, take classes, pass any tests, take continuing education, or pass any state or federally mandated tests to be a Loan Officer!

What's the value of your home?

Many homeowners are curious about the appraised value of their home. An actual appraisal is expensive, and county tax records do NOT reflect true market value. As you may be aware, home values are constantly fluctuating, and with the decline in average values, it is important to have an accurate idea of what your home is worth.

There are many sites that claim to give you are idea, including Zillow, Trulia, and more.

The problem is, where is the data coming from and how accurate is it?

We have a different tool to answer the estimated appraised value of your home question. Our application uses the Freddie Mac Home Price Index ( FMHPI ). FMHPI is calculated using a repeat-transactions methodology. Repeat transactions indexes measure price appreciation while holding constant property type and location, by comparing the price of the same property over two or more transactions. The change in price of a given property measures the underlying rate of appreciation because basic factors such as physical location, climate, housing type, etc., are constant between transactions. Averages of appreciation rates for different geographic areas and time periods are calculated using statistical regressions and the index values are derived from these averages

While the estimate may not be the actual or appraised value of your property, it can be a useful tool to gauge fluctuations and trends in your market which affect your home's value.

Want to check your homes value? Simply click here to calculate an estimate of how much your home is worth now. (MN and WI homes only)

For best results, contact us. I can help with refinancing your existing MN or WI home, get you pre-approved for a new home, or put you in touch with a GOOD Real Estate Agent to help determine the best asking price for your home. We know the particulars of your neighborhood, the value of homes, and can help you discover what your home may really be worth.

All the mortgage brokers are gone, so is the housing industry is fixed?

NO! Not even close when you blame the wrong people, and "fix" the wrong problem...

The real estate industry is a mess… But who is to blame, and who is fixing it?

IN the panic and adolescent reaction to the sub prime mortgage meltdown, Congress led by two totally unknowledgeable politicians, Barney Frank and Chris Dodd, ran amok in Washington with a 2800 page bill to reform the world; we only hope more intelligent heads will begin to prevail and correct the mess those two have made. Part of that mess was a pathetic, thinly hidden attempt to get rid of mortgage brokers. Seems to have worked… Last I saw, mortgage brokers now only account for about 6% of the mortgage loan business, where in 2006 – it was something like 60%.

Has it works?
Watch another great video by Frank and Brian of TBWS

You've shopped a few lenders, gotten some quotes. You've narrowed your search, supplied a full application, and supporting documents. The lender has now pulled your credit report, and informed you everything looks great. You lock your interest rate, and move forward.

The good news is you can make it stop immediately.  The consumer credit reporting industry has provided a way to “opt out” and remove your name from these lists.  You can contact them by phone at 1-888-567-8688 or online at www.optoutprescreen.com.

Senators ask Bernanke to STOP Federal Reserve and Bad New Mortgage Lender Rules

Top reasons to refinance your mortgage today

New Mortgage Lender Rules to COST Consumers Significantly More after April 1, 2011

The Frank / Dodd financial reform law, and new rules forced upon lenders from the Federal Reserve are going to have serious negative impact on home buyers everywhere.  More costs, higher rates, less options, and poor service are all on the horizon.

Read one of many stories...  http://fb.me/VjOQ4KKP

DID YOU KNOW? Not all Loan Officers are Licensed!

Buying a home? Need a home loan? You call the various banks, brokers, and mortgage lenders shopping for the best deal, thinking this is the correct way to get a mortgage loan. Unfortunately, you've only did half of your homework, as the big issue is NOT where you get your mortgage from, but WHO you get your mortgage from. There are major differences in the quality, education, and experience between Loan Officers, and you DON'T want to be working with the wrong person.

Until recently, most Loan Officers got their training simply by being hired, given a desk, a telephone, and the employer saying "Watch and learn from this guy." There were no schools, no classes, no educational or background requirements. A very small number of Loan Officers would take voluntary classes to be the best they could be (like myself), but this was the exception, not the rule.

As of January 1, 2011, there are two distinct classes of Loan Officer. Those with or without a personal license. Those WITH a personal license must have pre-license education, pass a difficult Federal test, pass a difficult state test for every state they wish to conduct business, criminal background checks, personal credit report checks, and having continuing education every year thereafter. Those without? No requirements at all (yikes!)

Furthermore, those WITH a personal license, YOU CAN LOOKUP ONLINE to verify their license, the company they work for, the company license, what state(s) they are  license, any disciplinary action, and where they have worked for at least the past 10-years. The system is called The Nationwide Mortgage Licensing System and Registry (NMLS). The NMLS Consumer Access web site is a fully searchable website that allows the public to view information concerning state-licensed companies, branches, and individuals.

Those Loan Officers who have a personal license are required to place their NMLS number on all materials; web sites, brochures, business cards, E-Mail, etc.

Finally, THIS IS A CLEAR REASON why people should follow my other mortgage shopping rule: GOOGLE THE NAME OF YOUR LOAN OFFICER, and check them out in the public NMLS registry. What do you find before allowing them to handle the largest financial transaction of your life!

Be Smart - Get Answers. Your financial future is too important to gamble with than to simply use the guy at the bank, or the person giving you a low quote on some web site!

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Joe NMLS # is 274132.

IS YOUR REAL ESTATE AGENT WORKING FOR THEIR BEST INTEREST, OR YOURS?

You've been all over the internet looking at homes, you've gotten pre-approved with a great Loan Officer. Now it is time to get serious and start physically looking at homes. Real Estate Agents (just like Mortgage Loan Officers), come in all shapes, sizes, knowledge and experience. How do you know if they are really working for your best interest, or their best interest?

There are many web sites and articles giving you tips for picking a good agent. What I want to do is point is one identifier for an agent NOT working for your best interest, and that is when it relates to home loans.

In my humble opinion, any Real Estate Agent who gives any mortgage advice to any client is a poor agent!

Wow. What a statement. That is sure to get a response from the agents... But it is true. Very true. Real Estate Agents are NOT mortgage professionals. They have a real estate license. They do not have a mortgage originator license, and they generally do not know what is best for a buyer. Even if they are truly working for the clients best interest, they simply do not know all the programs and guidelines nuances in regards to financing. Everyday I have to correct a client error of some sort when they tell me, "my Real Estate Agent said."

I do lending full-time 50-hours a week, and have for 20-years. I can barely keep up with the program and guideline changes. I take a full and complete application, along with a detailed examination of the clients wants, needs, goals, along with their short-term and long-term payment and equity objectives. Telling a customer to take one program over another, to buy or not buy points, or anything else mortgage related when you are not a mortgage professional is simply doing your client a disservice.

I recently closed a transaction where the agent demanded the client use their in-house lender, and to NOT use conventional financing. By going with the conventional loan and single-premium PMI, I saved the customer just over $100 PER MONTH over the agents financial advice. Who's best interest was it to demand the buyer use the Real Estate Agent's in-house lender?

This is the actual quote from the buyer, which prompted me to right this today. "My Real Estate Agent was very upset we didn't use her company for our mortgage, and spoke very negatively about you, although she didn't even know you. Today, we will recommend YOU to everyone who needs a mortgage in Minnesota, but we will NEVER recommend our Real Estate Agent to anyone after she tried so hard to steer us to her mortgage company and away from your mortgage company."

Many buyers ask their Real Estate Agent financing questions. It happens everyday. Our opinion is that to be a great agent in this area, the agent should simply respond that they are not mortgage professionals, and refer all mortgage questions off to a lender. Any good agent will have established relationships with quality mortgage companies and great Loan Officers. They will respect both my profession, and my side of the business, as I respect their profession, and their side of the business.

The Real Estate business is all about relationships and as partners in the real estate industry, we should be cordial, respectful, and professional to each if we are all truly working for what is best for the client.

Joe Metzler is a Certified Minnesota Mortgage Specialist (MMS). His team has over 50-years mortgage lending experience in MN and WI. View his web site at www.JoeMetzler.com. Joe's NMLS  # is 274132

33 Wentworth Ave E #290, Saint Paul, MN 55118 Ph: (651) 552-3681

Mortgages Unlimited is a Full Eagle FHA Lender. We lend in MN, WI only
(C) Copyright 2011 - Joe Metzler. Re-Blog but don't steal.

Minneapolis Star Tribune reports that Mortgages Unlimited has the best rates. This isn't much of a surprise, as the company is a rarity in the business. In 2011, the company is celebrating 20 years of home loan lending as one of the areas top independent mortgage companies.

Mortgages Unlimited delivers value-added loan solutions that fit every clients needs. Our goal is simple—to offer the unlimited loan options of a major lender with the personal service and feel of a family-owned business. We take great pride in our corporate values—strong ethics, family values and teamwork. 

Mortgages Unlimited has a large and varied portfolio of lending options that allow us to match your specific borrowing needs. We view our clients as partners and we strive to make the entire loan process simple and stress free by:

• Communicating Throughout the Process
• Providing Honest and Ethical Solutions
• Building Trusting Relationships
• Exceeding Your Expectations

Read article: http://fb.me/MxiNSsWk

Apply online, or call (651) 552-3681 to get started.

Mortgages Unlimited, Inc. Nationwide Mortgage License (NMLS) #225504. We lend in MN and WI only. Equal Housing lender.

	Joseph Metzler, MLO, MMS 33 Wentworth Ave E #290, Saint Paul, MN 55118 Ph: (651) 552-3681 www.JoeMetzler.com

Licensed in MN and WI. Company NMLS # 225504. Originator NMLS # 274132.

Joe is also highly regarded in the mortgage industry, having been interviewed and quoted on TV, radio, and print press. Here are a couple of recent quotes from major publications:

See Joe Metzler on Fox 9 News
Read Joe Metzler quoted at BANKRATE.com
See what Joe Metzler has to say about current mortgage interest rates on MSNBC.com

** Rates as reported by Freddie Mac, who has been keeping records in 1971.

Think BEFORE you break the lock on that great mortgage interest rate or switch lenders

Minneapolis, MN: You've locked yourself into a good mortgage interest rate for 30 days and you're happy. You expect to close a month from now on the house you want at a payment you can afford. Suddenly, interest rates start to drop and the rate you've locked in doesn't look quite so good.

Why did you lock in the rate in the first place? Because a rate lock is a form of insurance to keep the interest rate from escalating to the point where monthly payments on your proposed loan become unaffordable. The only time such locks become an issue for cost-conscious consumers is when rates are dropping and each fraction of a percent represents a savings over the locked rate.

For example, take a $200,000 30-year fixed-rate loan. The monthly payment at 4.50% percent interest works out to $1,013.37. At 4.25% percent, it goes down $29.50 per month, to $983.88.

It's a scenario that many mortgage consumers have faced in recent months.

Pause before you break or switch
If you're tempted to break a rate lock and head for another lender, experts warn that you should tread carefully and consider the time and expense that breaking the lock can incur.

Breaking rate locks is easy to do. One simply walks away and does not close the loan. However, there could be expensive repercussions to that action.

The costs involved in chasing a lower interest rate ... could be numerous, from a forfeited application fee to the loss of nonrefundable fees paid up front, to being billed for expenses incurred by the lender, like an appraisal, to a variety of expenses to be reimbursed the seller, the real estate company, or both, as well as other vendors involved in the transaction, to being sued by a lender or other party to the transaction. Review your rate lock form. Most spell out exactly what the lender will do if you break the lock.

Be sure you'll benefit
There are other factors to consider, not the least of which is whether you will pay more in the short term than you'll save over the long haul. Few home buyers will own a house for 30 years. If you own a home for seven years, the $29.50 a month reduction in our example above amounts to only $2478, which could easily be eaten up in time, costs, and fees to break the lock

When purchasing a home, there's also the strong possibility that walking away from a lock can keep you from closing on time and thus may blow the whole deal.

What holds things up is getting verifications again. You have to do verifications to the new lender. You have to redo the appraisal to the new lender (and pay the cost again). There are a number of administrative things that take time, plus the whole file needs to go into underwriting again. You're looking at maybe at least 15 - 30 days or longer to redo everything.

Another issues, if you have good credit and a great overall file, you shouldn't have a problem getting a loan from another lender, but you take the risk of being turned down by a second lender if you have any special needs, weak credit, using a special program, etc.

Is the better deal really better? Over the years I've had plenty of customers switch to a different lender under the belief they were getting a better deal, only to find later it really wasn't. The great interest rate came loaded with a bunch of discount points they didn't want to pay. Maybe the closing costs were significantly higher, or I was quoting a 75 day lock, and the other guy was quoting a 15 day lock. I've even seen people leave for a better quote on a loan product they didn't qualify for, only to come running back weeks later.

Be sure you are comparing apples-to-apples, not apples to bowling balls.

Refinance rate locks
The least-risk scenario for breaking a rate lock is in a refinancing deal where there is no time constraint on the consumer seeking the loan.

In a refinance, the borrower can just wait to see what happens. If rates go down, he can threaten to walk away from the deal unless his rate is reduced ...

When a lot of borrowers start to do that, you're going to see is a rise in rates on refinance transactions relative to rates on purchase transactions. This already has happened. I have found a consistent tendency for refinance transactions to be priced almost a quarter of a percent higher than purchase transactions.

Float down options
For protection on both ends of the scale, some lenders have "float-down" provisions. In these contracts, the consumer locks in a rate, and if rates come down, the consumer has the opportunity to lock in a new lower rate before closing. But, take note, these loans are usually priced a little higher to begin with because the lender's taking that added risk.

From the Lenders Standpoint
The percentage of locked loans that never fund (fallout) is closely monitored. From the moment we lock a loan, we hedge our interest-rate risk to guarantee you that we will have the money to fund your loan at close. If market prices (our cost of money) improves during the lock period, we lose money on the hedge. If the loan never funds (closes), we are totally out the hedge money. This can (and does) add up to millions of dollars of losses that get passed on to you with higher rates.

The bottom line
I'm NOT saying don't shop lenders. I'm simply saying once you've selected the lender, stop shopping around. You have to lock sometime, and no one knows what day or time will have the "best" rates. It is extremely hard for anyone to catch the rock bottom of the interest rate cycles, but it is easy to get near the bottom.

Be realistic. If you are comfortable with the rate, lock. Then don't look back

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Be Smart - Get Answers

Joe Metzler is a Certified Minnesota Mortgage Specialist (MMS). His team has over 50-years mortgage lending experience in MN and WI. Joe's NMLS  # is 274132

33 Wentworth Ave E #290, Saint Paul, MN 55118
Ph: (651) 552-3681
         We Beat The Banks Everyday

Mortgages Unlimited is a Full Eagle FHA Lender. We lend in MN, WI only
(C) Copyright 2010 - Joe Metzler. Re-Blog but don't steal.