Archives

November 2008

The New Good Faith Estimate

Posted at 10:22 AM, Nov. 18, 2008

How exciting, as of January 2010, the Federal Government will issue a new, easier to read and understand version of the Good Faith Estimate provided to mortgage applicants.  This new version promises to put into clear and concise terms the break down of the program(s) the applicant is interested in and what the bottom line will be.  Great news!!

Read courtesy of Steven Levitt (Guaranteed Rate):

Latest From : The Levitt Report

How The New Good Faith Estimate Form Can Help You Save Money On Your Mortgage Posted: 14 Nov 2008 09:45 AM CST To help demystify the mortgage process, the federal government is giving the much-maligned Good Faith Estimate document a makeover. Effective January 1, 2010, the current, 2-page form will be replaced by a new, easier-to-understand version, spanning 3 pages. The biggest strength of the new Good Faith Estimate is that it uses everyday English to explain how the mortgage works. For example, in one section titled "Loan Summary", the Good Faith Estimate specifically answers: What is your interest rate? Can your interest rate rise? Does your loan have a prepayment penalty? Using today's disclosures, the answers are spread across 3 separate forms. In addition, the new-look Good Faith Estimate identifies what charges are legally allowed change at the time of settlement, and how a mortgage applicant can opt for higher fees in exchange for a lower mortgage rate, and vice versa. These educational elements are lacking from the current model. But for all of its clarity, the Good Faith Estimate doesn't address the issue of suitability. As in, is this the right loan for the right borrower? The new Good Faith Estimate won't prevent homeowners from choosing "bad loans" -- it will only educate them about the loan's facts. For suitable advice -- as always -- talk with a trusted mortgage professional who will both listen to your needs and help you make plans for them. Getting the "best terms" on an unsuitable loan can be far worse that getting great terms on a loan that fits.

Energy Saving Tip #10

Posted at 12:02 PM, Nov. 14, 2008

Dial Down- You may have to bundle up, but lowering your thermostat about 10% can also lower your heating bill by 10% (for example, reducing your home's temperature from 74 degrees to 68 degrees).  A programmable thermostat is highly recommended and can also help lower heat bills tremendously.

www.homeimprovementmag.com

The Audacity of Some People

Posted at 5:36 AM, Nov. 13, 2008

Now I know that there is a market out there that encourages buyers to take advantage of opportunities.  Heck, there are several sellers who will entertain anything, but I think the key here is to identify which properties those might be.  For example, properties that have had several price drops and seem to be market chasing.  This would also include properties with extremely high market time.

However, what I do not think is acceptable is that there are buyers out there looking at homes WELL beyond their price range and figure every and any seller must be desperate.  What I find worse is, what agent is putting these buyers in their cars without knowing what they truly can afford?  I have had several showings in the last couple of weeks that involved buyers who could not qualify to purchase the listings they were looking at!  We are not even talking in the ball park. 

The best is, last night I received a verbal offer via an agent from his client who offered $120K less than the asking price.  Now bear in mind, we are already very competitively priced and just dropped it $20K.  As if trying  to make it plausible, the agent said that this is all the buyer could afford.  Which leads me to the big question, "WHY are you showing your client homes that are CLEARLY out of their price range????" 

Can the garbage-pickers of buyers and agents kindly step aside?  Apparently we have reached a time that I will need to pre-screen buyers AND their agents since those agents don't seem to be doing the job, or care for that matter.

Energy Saving Tip #9

Posted at 12:00 PM, Nov. 7, 2008

Schedule Seasonal Check-Ups- Have your heating and cooling system checked seasonally.  The cost for a typical service call to clean a unit and change filters is about $75-$100.  Maintaining the "health" and extending the life of your heating and cooling system will be well worth the service fee.

www.homeimprovementmag.com

Getting a Loan Will Get Even Harder for Buyers

Posted at 10:11 AM, Nov. 6, 2008

If you are among the many buyers who are waiting things out, you are in for rude awakening.  Opportunity with great real estate prices may continue, but obtaining a mortgage will not.  If you are not considered a prime buyer, now is the time to act and get your foot in the door before it's too late.  Read the latest from Steven Levitt, Vice President of Lending at Guaranteed Rate.

Latest From : The Levitt Report

Planning To Buy A Home In 2009? Expect A Tougher Mortgage Road Ahead. Posted: 05 Nov 2008 09:45 AM CST The Federal Reserve confirmed what most of us already knew -- getting qualified for a "prime mortgage" is increasingly more difficult. In a quarterly survey of 84 banks, 75 percent of respondent banks tightened mortgage guidelines over the last 3 months for the most qualified of home loan applicants. "Prime" is a vague term when it comes to mortgages, but, historically, a prime borrower is one that can document: A well-documented credit history Very high credit scores Very low debt-to-incomes Historically, banks bent over backwards to lend money to this class of borrower. Today, they're thinking twice. The chart's steep ascent reinforces that members of all tax brackets face consequences from the current credit market turmoil. And, although some corners of credit looked poised to recover -- interbank lending, for one -- the mortgage market is yet unaffected and should be among the last to thaw. All prospective home buyers should prepare for the likelihood that mortgage guidelines continue to toughen before they start to ease. Mortgage applicants on the cusp of being approved today will almost certainly be turned down for a mortgage in 2009. Owning real estate can require a tremendous amount of advance planning and, sometimes, looking at the past is the best way to prepare for what's coming ahead. According to the Federal Reserve's survey, what's coming ahead is more mortgage application scrutiny.