Karl's Mortgage and Related Info Site

Ways to Raise Your Credit Score - And Fast If you are looking to improve your credit score quickly, now is the time to get started. Give us a call. We'll review your credit and find out exactly where you stand and where you need to get to. In the meantime, here are some great strategies you can utilize right away to give your score a little boost. Create Some Balance: While paying down installment debt (car, school, mortgage, etc.), on time, and as agreed, shows responsibility and will definitely boost your credit score, paying down or paying off revolving debt, such as credit cards, can cause a quick and significant jump in your credit score. The trick is to get and keep your balances below 30% of your credit limit on each card on your monthly statements. For faster results, attack those cards with balances closer to their respective credit limits first, as opposed to those cards with simply the highest debt. Remember, if you pay off any credit cards completely, do not close your accounts without discussing it with your mortgage professional first. Cancelling those cards may inadvertently undo all of your hard work. Know Your Limits: Make sure that your credit card issuers are reporting the correct limits on your accounts to the three major credit bureaus. Without an available limit, your account will appear to be maxed out at its highest reported balance each month. This could cost you up to 80 points in certain instances. Some creditors, such as American Express® and certain cards issued by Capital One®, actually have a policy of not reporting available credit. However, most companies will report your credit limits if you ask them in writing. Take Some Credit: If you have a credit card account in very good standing, make sure that all three credit bureaus know about it. Just like your credit limits, some creditors don't report your information to all three credit companies - this is why credit scores often vary between bureaus. If this is the case, give them a call to find out why. Correcting this oversight could provide a significant boost to your score. Also, if you're in very good standing, ask your creditor for a lower rate or higher credit limit. This will increase the gap in the debt you owe versus the credit you have available. Sometimes hinting about closing an account can suddenly bring out the generous spirit of certain card issuers. Give it a try. The worst they can say is no. Protect Your Interests: Your credit score is calculated based solely on the information available to the credit bureaus. If you have a HELOC, make sure it's listed as a mortgage or an installment account on your credit reports and not a revolving debt. If you had a bankruptcy, be sure that all items associated with the bankruptcy are being reported as included in the bankruptcy with a zero balance. This action could increase your score by 50-100 points. Because simple mistakes like these can wreak havoc on your credit score, it's important to monitor your credit every four to six months. Even the Score: If you find information on your credit report that you believe is inaccurate or incomplete, then you have the right to dispute it free of charge. For the fastest results, visit the appropriate credit bureau's website and file a dispute online. If supporting documents are necessary, you have to file your dispute by mail. If you'd like more information or a copy of our Sample Dispute Letter, give us a call right away. We'll be glad to help you in any way we can or, if it becomes necessary, refer you to credit professionals you can trust. If you or anyone you know has any questions about credit scores or what can be done to repair them, please don't hesitate to call. Karl Peidl Lincoln Mortgage Company 251 Bellevue Avenue, Suite 102 Hammonton, NJ 08037 kpeidl@linc-mort.com 609-878-7013 www.facebook.com/newjerseymortgages

Pennsylvania: Licensed by the PA Department of Banking as a First Mortgage Banker and licensed pursuant to the PA Secondary Mortgage Loan Act. New Jersey: Licensed by the N. J. Department of Banking and Insurance Maryland: Authorized Mortgage Lender by the State of Maryland Commissioner of Financial Regulation. Florida: Licensed Mortgage Lender by the Florida Office of Financial Regulation. Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.

© Copyright 2009. All About News, Inc.

Buying A Home - Step 2: The Nuances of Your Contract

The process of buying a home is often much more complex than the average individual expects it to be. Items involved in your purchase contract can have a significant impact not only on the success of your purchase transaction, but on your stress level as well. We have listed out some of the important items you should be aware of, that require you to make decisions as a buyer entering into a purchase contract.

Loan or Financing Contingency

Loan contingency is the period of time the seller is giving you to obtain full, formal loan approval. It is important to include a financing contingency in your offer, as it makes the transaction dependent on you receiving the mortgage you've applied for. It specifies your cancellation rights if you are unable to obtain financing.

This contingency is typically between 15 and 30 days depending on what has been negotiated in the contract. The earnest money deposit you make at the time the offer is accepted will be put in jeopardy once the contingency for the loan has expired. In fact, pursuant to the terms of the contract, if the loan contingency has expired and you fail to close the purchase transaction, you could lose your earnest money deposit and not have the failure of obtaining loan approval to lean on as an excuse. Written pre-approval will help to eliminate problems in this area. Please note: pre-approval is not the same as pre-qualification.

Pre-Approval

Seeking pre-approval for financing prior to making an offer on a property is a sound strategy that can help you get the best deal possible, especially if you plan to make a minimal down payment. The seller is often leery of the stability and reliability of the buyer if the buyer is only capable of making a down payment of 10% or less. This can cause the buyer to lose a significant amount of negotiating ability, by being perceived as a weak buyer rather than a strong one. This is why it is very important to get full loan credit approval in advance and provide a written confirmation of the loan approval when an offer is made. This shows it is a done deal and you are perceived to be a cash buyer.

Contract Period The contract period is the period of time in which all due diligence must be completed, including obtaining loan approval, property appraisal, home inspection reports, termite inspection, etc. Give yourself enough time for all due diligence to be completed for this very important purchase you are about to make. Typically, purchase contracts are drawn up for a period of 30, 45 or 60 days. However, while it is not typical, a purchase contract can be written for a term in excess of 60 days if the parties involved need that long of a period to complete all aspects of due diligence.

 

Home Inspection Contingency

 

As part of the negotiation in your purchase contract you and the seller will mutually agree upon the amount of time needed to complete all the home inspection procedures that are required. Utilizing an outside third party service to complete these inspections is highly recommended.

You will be provided with a report by the home inspection company that you should review very thoroughly to make sure there are no material defects in the property that you were not aware of, and which could subsequently have an impact on the value of the property. Once your home inspection contingency has expired, you no longer have the leverage to go back and renegotiate with the seller to resolve any issues revealed by the home inspection. If there are material defects, you and your real estate agent should renegotiate either a reduction in the purchase price to offset the cost of any necessary repairs or having the seller make the repairs prior to the close of the transaction. Buyers with limited cash reserves should most likely negotiate to have the repairs made prior to closing.

Termite Inspection

 

A termite inspection is required by the lender if it is listed in the purchase contract. The lender may also require an inspection if the appraisal states there is evidence of termite damage.

On FHA loans inspection is required only under the following circumstances: when there is evidence of active infestation, if mandated by the state or local jurisdiction, if customary to the area, or at the lender's discretion.

If termites are present it is up to both parties to determine who will be responsible for the remedy of the problem. When you negotiate your contract make sure you state up front whether you want the property checked for termites.

Seller Rent Back

 It is often the case that when the buyer and seller are unable to agree upon a specified closing date for the transaction, the real estate agents will negotiate a "rent back" period. This means the transaction closes, the loan funds and ownership of the property is transferred into the buyer's name, but the buyer does not take occupancy of the property until several days later. In this scenario, the buyer sets up a rental agreement, in which the property is leased back to the seller.

An important footnote to this somewhat common strategy is to make sure the seller is not occupying the property in a lease agreement for more than 30 days after the close of the purchase transaction. This would constitute a non-owner occupied purchase in the lender's eyes, and would cause the terms of the loan to change radically.

Seller Contributions

 Depending on the seller's eagerness to close the transaction, the seller of a property will often become aggressive and offer to pay some or all of the closing costs, origination points and/or pre-paid items (interest, hazard insurance, tax escrows) associated with the purchase on the buyer's behalf. This common strategy can be very beneficial to the buyer, particularly if the buyer is short on funds to close. It can also be the vehicle that effectively drives the interest rate down and provides the buyer with a more affordable monthly payment.

Note that there are limitations on how much the seller is permitted to contribute, depending on the loan-to-value ratio. The typical seller contribution is from 3% to 9% of the purchase price, based on the size of the down payment. Seller contributions may sometimes be isolated to non-recurring closing costs and/or origination points only. The lender will not permit the seller to contribute funds back to the buyer after the close of the transaction to accommodate repairs to the property. Items such as roof leakage or new carpet cannot be covered by any seller contribution clause.

Stay Tuned For Part 3: Origination Fees

Buying A Home - Part 1: Rate Shopping

Karl Peidl
Lincoln Mortgage Company
251 Bellevue Avenue, Suite 102
Hammonton, NJ 08037

kpeidl@supmort.com

609-878-7013

www.facebook.com/newjerseymortgages

 

Pennsylvania: Licensed by the PA Department of Banking as a First Mortgage Banker and licensed pursuant to the PA Secondary Mortgage Loan Act. New Jersey: Licensed by the N. J. Department of Banking and Insurance Maryland: Authorized Mortgage Lender by the State of Maryland Commissioner of Financial Regulation. Florida: Licensed Mortgage Lender by the Florida Office of Financial Regulation. Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.

© Copyright 2009. All About News, Inc

 

 Buying A Home - Step 1: Rate Shopping

 Introduction

The idea of purchasing a home, whether it be your first or last, is bound to bring many questions to mind. This is a natural reaction, as it is one of the biggest decisions you will ever make. Rest assured, my team and I are here to assist you in understanding the loan process with our goal being to make your experience a pleasant one. This series covers the basics about buying a home. It is designed to answer commonly asked questions and provide clear definitions of terms you may be unfamiliar with, even if you have been through the home-buying process before.

 Rate Shopping

Shopping for the best interest rate possible has always been the consumer's primary objective when borrowing money. As well it should be! The challenge with this strategy is that there is much misleading information released on the subject by various media. Internet web sites and email marketing, along with other media such as radio, television and billboard advertising, have brought the importance of interest rates to the forefront of consumers' minds.

The problem for the consumer with this type of marketing is that it is designed to make the lender's phone ring. Often, the advertiser offers a ridiculously low interest rate, with the intent of using a "bait-and-switch" technique once the client is reeled in. This is often done through short pricing. Short pricing is a term that is used when a lender offers an extremely attractive interest rate, but that rate is only locked-in for a very brief period of time.

The average consumer enters into a purchase contract to buy a home for at least 30 days. Pricing on an interest rate locked in for a 7-day period is of no use to most prospective home buyers. It simply isn't enough time to complete the transaction.

While the billboard advertising or Internet banner ad may boast a terrific rate, the lock-in period is often not realistic in terms of providing enough time to negotiate a purchase contract and close the deal. Be very careful when shopping for interest rates. Make sure that when you are quoted a rate, you are asking the broker what the lock duration is. Make sure that lock period allows you enough time to complete your purchase transaction.

Another common marketing ploy that makes interest rates appear attractive is geared around the manner in which fees are presented. All lenders are required by law to state the real cost of the financing through the Annual Percentage Rate (APR) each time an interest rate is quoted in advertising. APR takes many of the fees associated with the loan into consideration, and it is usually listed in fine print as a disclaimer.

Advertisers often list a low interest rate in large bold type, but the higher APR indicates in fine print that several points are being charged to get that rate. While APR can be helpful in comparing rates seen in advertising, it is important for consumers to know that lenders use different methods to calculate APR. Hence it is not an entirely failsafe method for comparing interest rates.    

Additionally, the consumer must take into consideration that the interest rate is not the only important factor in obtaining financing. Another equally important question to answer is, "How long do you need to borrow this money?" The length of time you need to borrow the money has a profound impact on whether or not you should be paying upfront fees (points), and likewise has bearing on your loan program selection.

Statistically, homeowners move every 7 to 10 years. One of the common mistakes made by home buyers is automatically selecting a 30-year fixed rate loan program for financing instead of evaluating other options. The chance of needing the financing for 30 years is actually slim-to-none. If the buyer is somewhat transient in their job or is planning a family in the near future, the home may not really meet their long-term needs.

Buyers are often solicited with programs that are contingent upon 30-year financing. The interest rates that are offered, regardless of how low they might be, are often irrelevant as rates are dependent upon several factors, including down payment and credit score.

Stay tuned for Part 2: The Nuamces of Your Contract

 

Karl Peidl

Senior Loan Officer

Lincoln Mortgage Company

609-878-7013

kpeidl@linc-mort.com

www.facebook.com/newjerseymortgages

 

                                                                                                             

 

 

 

Mortgage Rate Update How Does Inflation Impact Interest Rates? If you've seen the news lately, you know that inflation is a very serious issue that will likely be on the rise as the year proceeds. But What Does This Really Mean to You? The bottom line is that as inflation increases, mortgage rates will rise too. That's because lenders know that a rise in inflation actually diminishes the value of the money they receive over the life of a loan, as the money they receive for payment simply won't go as far. So when lenders see changes in inflation or even anticipate a rise, they increase their mortgage rates to make up for the loss in future buying power that will happen as a result of inflation. What Should You Do? Work with a home loan professional who pays close attention to what's going on with inflation-not only with the reports that come out, but also with the concerns that legislators and lenders express. After all, lenders may raise rates to protect their money as soon as they feel the tide turning. More importantly...if you or any of your family, friends, neighbors or co-workers have been considering a purchase or refinance, this is a great time to act as home loan rates could be on the rise.

Mortgage Interest Rates*

Rates as of Thursday, 13th August, 2009:

Conforming APR Payment per $1,000 Jumbo APR Payment per $1,000 30-Yr. fixed 5.500% 5.635% $5.68 5.875% 5.977% $5.92 15-Yr. fixed 5.000% 5.227% $7.91 5.375% 5.543% $8.10 7-Yr. fixed ARM 4.875% 5.005% $5.29 6.875% 6.983% $6.57 5-Yr. fixed ARM 4.250% 4.375% $4.92 6.500% 6.606% $6.32 3-Yr. fixed ARM 4.250% 4.375% $4.92 6.500% 6.606% $6.32 5-Yr. Interest Only 4.375% 4.501% $3.65 6.750% 6.857% $5.63 FHA 30-year fixed 5.500% 5.635% $5.68 5.750% 5.851% $5.84

*Rates are subject to change due to market fluctuations and borrower's eligibility.

Karl Peidl Lincoln Mortgage Company 251 Bellevue Avenue, Suite 102 Hammonton, NJ 08037 609-878-7013 kpeidl@linc-mort.com www.facebook.com/newjerseymortgages http://karltalksmortgages.com       Pennsylvania: Licensed by the PA Department of Banking as a First Mortgage Banker and licensed pursuant to the PA Secondary Mortgage Loan Act. New Jersey: Licensed by the N. J. Department of Banking and Insurance Maryland: Authorized Mortgage Lender by the State of Maryland Commissioner of Financial Regulation. Florida: Licensed Mortgage Lender by the Florida Office of Financial Regulation. Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.

© Copyright 2009. All About News, Inc.

Credit Report Dispute Letter - Sample If you have reviewed your credit report and believe that some of the information it contains may be inaccurate, you can legally dispute it via mail or, for faster results, the Internet. Once notified of a mistake on your report, a credit bureau has thirty days to investigate and respond. If the information can't be confirmed, then the item(s) should be removed. For items that cannot be resolved online or that require copies of official paperwork or other supporting documents, use the sample Credit Report Dispute Letter below as a guide. Be sure to mail your letter and documents via Certified Mail for your records. Word of Caution: Not all creditors report to all three credit bureaus; so be sure to only dispute a derogatory item to the credit bureau that is reporting that item. Otherwise you risk having that negative item added to the reports that are not currently showing them. If you need any help, don't hesitate to give us a call. We'll be glad to assist you or to provide a referral to credit repair professionals you can trust. Your Name Your Address Your City, State Zip Code Date Name of Credit Reporting Agency Dispute Department Address City, State Zip Code Re: (Social Security Number & Date of Birth) Dear Sir or Madam: I am writing to dispute the following information in my file: (Identify disputed items by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) The items I am disputing have also been circled on the attached copy of the credit report I received. This item is (inaccurate or incomplete) because (explain what is inaccurate or incomplete and why). I am requesting that the item be (deleted, changed, updated, etc.) to correct the information. (If you are enclosing any documents, send copies only.) Enclosed are copies of the following documents supporting my position: (List what you are enclosing, if applicable). I have also enclosed proof of my social security number and current address for your review. Please investigate and (delete or correct) the disputed item(s) as soon as possible, and inform me in writing of the outcome. Thank you for your time and consideration, Your name   Karl Peidl Lincoln Mortgage Company 251 Bellevue Avenue, Suite 102 Hammonton, NJ 08037 609-878-7013 kpeidl@linc-mort.com www.karltalksmortgages.com

Pennsylvania: Licensed by the PA Department of Banking as a First Mortgage Banker and licensed pursuant to the PA Secondary Mortgage Loan Act. New Jersey: Licensed by the N. J. Department of Banking and Insurance Maryland: Authorized Mortgage Lender by the State of Maryland Commissioner of Financial Regulation. Florida: Licensed Mortgage Lender by the Florida Office of Financial Regulation. Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.

© Copyright 2009. All About News, Inc

Mortgage Rates & Homebuyer Protection Alert! Recent Federal legislation can impact your closing date. When completing your Purchase Agreement, even if you are prepared to move forward and close quickly, a more conservative timeframe of at least 30-45 days from the time of the contract acceptance would be a more realistic expectation at this time. Listed below is information on two pieces of legislation that stand to impact your closing date, and a few bullet points that explain the reasoning behind and effects of each measure. HVCC: Home Valuation Code of Conduct HVCC was designed to ensure that appraisals are conducted objectively and without pressure from parties with an interest in the transaction. Under HVCC: The appraisal and selection of the appraiser will be ordered by someone not directly involved in the origination of the mortgage. This could be either someone else within the mortgage company or a third-party appraisal management company. A copy of the appraisal must be provided to the homebuyer/borrower no less than three days before closing. The minimum time expectations for receipt of the appraisal should be a few weeks and not days. (While receipt of the appraisal may be received in shorter timeframes, conservative expectations are warranted.) Communication between the appraiser and the originating mortgage professional is prohibited. It is imperative that the agents involved in the transaction be prepared at the time of inspection to offer supporting value information if warranted. HERA: Housing and Economic Recovery Act HERA was designed to ensure that the borrower(s) involved in the transaction are given accurate disclosure information (Truth in Lending Statement pertaining to Annual Percentage Rate or APR) regarding the loan they are applying for and adequate time to re-evaluate their decision to proceed in the event of any changes that would impact their costs to finance. Under HERA: No fees may be collected for the transaction other than those for running a credit report at the initial time of application. Additional fees may be collected only after four business days. Should the APR change by more than .125% on a fixed rate loan or .250% on an adjustable rate loan, the lender must disclose the new APR and the borrower must have a minimum of three business days to review the information before the transaction may proceed. Items that can trigger re-disclosure requirements include a change(s) in the loan amount, closing date, loan program, any fees that impact the APR or interest rate from the rate indicated on the original loan application. In cases where documents are sent by mail to the borrower related to re-disclosure of APR and/or providing a copy of the appraisal, anticipate six business days (three to allow for mailing and three to allow adequate time to review them) before a closing can occur.

Mortgage Interest Rates*

Rates as of Thursday, 6th August, 2009:

Conforming APR Payment per $1,000 Jumbo APR Payment per $1,000 30-Yr. fixed 5.375% 5.509% $5.60 5.750% 5.851% $5.84 15-Yr. fixed 4.875% 5.101% $7.84 5.375% 5.543% $8.10 7-Yr. fixed ARM 4.750% 4.879% $5.22 6.875% 6.983% $6.57 5-Yr. fixed ARM 4.250% 4.375% $4.92 6.500% 6.606% $6.32 3-Yr. fixed ARM 4.125% 4.250% $4.85 6.500% 6.606% $6.32 5-Yr. Interest Only 4.375% 4.501% $3.65 6.750% 6.857% $5.63 FHA 30-year fixed 5.375% 5.509% $5.60 5.75% 5.851% $5.84

*Rates are subject to change due to market fluctuations and borrower's eligibility.   Karl Peidl Lincoln Mortgage Company 251 Bellevue Avenue, Suite 102 Hammonton, NJ 08037 609-878-7013 kpeidl@linc-mort.com http://karltalksmortgages.com/ www.facebook.com/newjerseymortgages

Pennsylvania: Licensed by the PA Department of Banking as a First Mortgage Banker and licensed pursuant to the PA Secondary Mortgage Loan Act. New Jersey: Licensed by the N. J. Department of Banking and Insurance Maryland: Authorized Mortgage Lender by the State of Maryland Commissioner of Financial Regulation. Florida: Licensed Mortgage Lender by the Florida Office of Financial Regulation. Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.

© Copyright 2009. All About News, Inc.

Know Your Credit Score: Three Steps to Better Credit If you are looking to buy, invest in, or refinance real estate now or in the coming months, your credit is going to play a more significant role in today's tight-fisted credit environment than it has in the past. It's that simple. Would-be borrowers need to address any and all credit issues now to avoid having to pay for it later. But, here's the kicker. Nearly 80% of all credit reports contain errors of some kind. Recent studies also indicate that about one-fourth of these reports contain mistakes so egregious that applicants could actually be denied credit! Don't let this happen to you. Step One: Get Your Report The three main credit bureaus, Equifax, Experian®, and TransUnion®, are required by law to provide you with a free copy of your credit report once every 12 months. To request your free copy (one from each company) visit AnnualCreditReport.com or call 1-877-322-8228. (Note: free credit reports do not include credit scores. Scores can either be purchased online or pulled by your mortgage professional.) While you're online, be sure to visit  www.optoutprescreen.com as well. This will help you avoid the hassle of becoming a "trigger lead" and being bombarded with unsolicited mortgage offers, and make life a lot easier throughout the mortgage process. Step Two: Dispute Inaccuracies Study your credit reports and make sure everything is accurate. If you do find any discrepancies, you can legally dispute mistakes or outdated items for free. Once notified of a mistake on your report, a credit bureau has thirty days to investigate and respond. If the information can't be confirmed, then the item should be removed. (If you'd like more information on this process, give us a call. We'll send you our Sample Dispute Letter to help get you started). Step Three: Meet With Your Mortgage Professional Now that the information on your report is accurate, what if there are still some items in your credit history you would rather forget about? All is not lost. For some, small changes to your credit profile could yield big results that could save you thousands of dollars. For others, enlisting the services of a professional credit improvement company may be required. This important process can take up to six months or more, so don't wait. Give us a call. An experienced mortgage professional can share other insights into the ins and outs of credit scoring and credit repair. Stay tuned for more valuable credit tips. Karl Peidl Lincoln Mortgage Company 251 Bellevue Avenue, Suite 102 Hammonton, NJ 08037 kpeidl@linc-mort.com 609-878-7013 www.facebook.com/newjerseymortgages

Pennsylvania: Licensed by the PA Department of Banking as a First Mortgage Banker and licensed pursuant to the PA Secondary Mortgage Loan Act. New Jersey: Licensed by the N. J. Department of Banking and Insurance Maryland: Authorized Mortgage Lender by the State of Maryland Commissioner of Financial Regulation. Florida: Licensed Mortgage Lender by the Florida Office of Financial Regulation. Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.

 

© Copyright 2009. All About News, Inc.

Education may be priceless, but it sure isn't cheap. Financing tuition requires careful investment planning. If you or someone you know is preparing for this challenge, give us a call. We'll maximize the opportunities available and create a plan that's right for you.
Karl Peidl Senior Loan Officer Lincoln Mortgage Company Phone: 609-878-7013 Cell: 609-254-6687 kpeidl@linc-mort.com www.facebook.com/newjerseymortgages
Pennsylvania: Licensed by the PA Department of Banking as a First Mortgage Banker and licensed pursuant to the PA Secondary Mortgage Loan Act. New Jersey: Licensed by the N. J. Department of Banking and Insurance Maryland: Authorized Mortgage Lender by the State of Maryland Commissioner of Financial Regulation. Florida: Licensed Mortgage Lender by the Florida Office of Financial Regulation. Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.

Karl Peidl
Lincoln Mortgage Company
251 Bellevue Avenue, Suite 102
Hammonton, NJ 08037

© Copyright 2009. All About News, Inc.

Shopping For A Mortgage - The Inside Scoop On How To Do It Right (Part II)

Once you are satisfied that you are working with a top-quality professional mortgage advisor, here are the rules and secrets you must know to "shop" effectively for a mortgage.

 

First, IF IT SEEMS TOO GOOD TO BE TRUE, IT PROBABLY IS.  But you didn't really need us to tell you that, did you?  When shopping for a mortgage, keep in mind that mortgage money and interest rates all come from the same places, and if something sounds really unbelievable, better ask a few more questions and find the hook.  Is there a prepayment penalty?  If the rate seems incredible, are there extra fees?  What is the length of the lock-in?  If fees are discounted, is it built into a higher interest rate? 

 

Second, YOU GET WHAT YOU PAY FOR.  If you are shopping for the cheapest mortgage out there, understand that you are placing a hugely important process into the hands of the lowest bidder.  Best case, expect very little advice, experience and personal service.  Worst case, expect that you may not close at all.  All too often, you don't know until it's too late that cheapest isn't BEST.  But if you want the cheapest quote - head on out to the Internet, and we wish you good luck.  Just remember that if you've heard any horror stories from family members, friends or coworkers about missed closing dates, or big surprise changes at the last minute on interest rate or costs...these are often due to working with discount or internet lenders who may have a serious lack of experience.  Most importantly, remember that the cheapest rate on the wrong strategy can cost you thousands more in the long run.  This is the largest financial transaction most people will make in their lifetime.  That being said - we are not the cheapest.  Of course our rates and costs are very competitive, but we have also invested in the systems and team we need to ensure the top quality experience that you deserve.

 

Third, MAKE CORRECT COMPARISONS.  It's always a good idea to ask for the numbers in writing when shopping for a mortgage, but be careful.  When looking at estimates, don't simply look at the bottom line.  You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls.  And make sure lender fees are not "hidden" down amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan, but since they are third party fees - they are often under-quoted up front by a lender to make their bottom line appear lower, since they know that many consumers are not educated to NOT simply look at the bottom line!  APR?  Easily manipulated as well, and worthless as a tool of comparison.

 

Fourth, UNDERSTAND THAT INTEREST RATES AND CLOSING COSTS GO HAND IN HAND.  This means that you can have any interest rate that you want - but you may pay more in costs if the rate is lower than the norm.  On the other hand, you can pay discounted fees, reduced fees, or even no fees at all - but understand that this comes at the expense of a higher interest rate.  Either of these balances might be right for you, or perhaps somewhere in between.  It all depends on what your financial goals are.  A professional lender will be able to offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.

 

Fifth, UNDERSTAND THAT INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY.  This means that if you are comparing lender rates and fees - this is a moving target on an hourly basis.  For example, if you have two lenders that you just can't decide between and want a quote from each - you must get this quote at the exact same time on the exact same day with the exact same terms or it will not be an accurate comparison.  You also must know the length of the lock you are looking for, since longer rate locks typically have slightly higher rates.

  

Again, our advice to you is to be smart.  Ask questions.  Get answers.

  

As you can imagine, we wouldn't be encouraging you to shop around if we weren't pretty confident that we feel that we can give you a great value and serve you the very best.

 

Please call us with any further questions you may have at this time - we are ready to work for your best interest!

 

Click here to read Part I

  

Karl Peidl                  

Senior Loan Officer

Lincoln Mortgage Company

251 Bellevue Avenue, Suite 102

Hammonton, NJ 08037

  

1-609-878-7013

1-609-878-7008 (fax)

1-609-254-6687 (cell)

kpeidl@linc-mort.com

Referrals are the best thank you!!!

Shopping For A Mortgage - Here's The Inside Scoop On How To Do It Right!

 

First:  make sure you are working with an experienced, professional loan officer.  The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way.  But how can you tell? 

 

Here are FOUR SIMPLE QUESTIONS YOUR LENDER ABSOLUTELY MUST BE ABLE TO ANSWER CORRECTLY.  IF THEY DO NOT KNOW THE ANSWERS...RUN...DON'T WALK... RUN...TO A LENDER THAT DOES!

 

 

1) What are mortgage interest rates based on?  (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions.  DO NOT work with a lender who has their eyes on the wrong indicators.)

  

2) What is the next Economic Report or event that could cause interest rate movement?  (A professional lender will have this at their fingertips.  For a list of upcoming reports, please email your request to me at kpeidl@linc-mort.com)

  

3) When Bernanke and the Fed "change rates", what does this mean... and what impact does this have on mortgage interest rates?  (The answer may surprise you.  When the Fed makes a move, they can change a rate called the "Fed Funds Rate" or "Discount Rate".  These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like.  On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed change.  This is due to the dynamics within the financial markets in response to inflation.   For more information and explanation, just give us a call).

  

4) Do you have access to live, real time, mortgage bond quotes?  (If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday's newspaper, and probably not a professional with whom to entrust your home mortgage financing.  Would you work with a stockbroker who is only able to grab yesterday's paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future?  No way!)

  

  

Be smart...  Ask questions...  Get answers!

  

More than likely, this is one of the largest and most important financial transactions you will ever make.  You might do this only four or five times in your entire life... but we do this every single day.  It's your home and your future.  It's our profession and our passion.  We're ready to work for your best interest.

Click here for Part II

Karl Peidl                  

 Senior Loan Officer

Lincoln Mortgage Company

 251 Bellevue Avenue, Suite 102

Hammonton, NJ 08037

  

1-609-878-7013

1-609-878-7008 (fax)

1-609-254-6687 (cell)

kpeidl@linc-mort.com

Referrals are the best thank you!!!