Recently here at miamibeach411.com an on line mortgage application was added.

The purpose of an on line mortgage application is to condense specific personal data and match the data with a variety of mortgage products.

The borrower should determine if he/she has the capacity to repay the mortgage.  If the borrower in fact has the necessary “capacity”, the next step is to determine based on credit worthiness what products are available to them.

In most cases, an on line mortgage application should be completed (name, address, date of birth, and employment status).  Upon completion of the mortgage application; telephone contact should be made. 

When making contact with a mortgage professional, be prepared to release your social security number for free credit evaluation to be done.

Any questions or comments our on line mortgage application will be responded to promptly.

Related stories:
Florida Mortgage Application

They say the best things in life are free; here’s hoping our free credit reports fit in that catagory.

Starting September 1, consumers in 14 East Coast states join the rest of the country in qualifying for a free annual credit report from each of the three nationwide consumer reporting companies – Equifax, Experian, and TransUnion.

The free reports were mandated by Congress in The Fair and Accurate Credit Transactions Act of 2003 (FACTA), which requires the nationwide credit bureaus to provide consumers with a free copy of their credit report, at their request, once every 12 months.

Consumers who want to access their free credit file disclosure, commonly called a credit report,  can go to AnnualCreditReport.com.

“The right to receive a free credit report is an important new tool for consumers,” said Deborah Platt Majoras, Chairman of the Federal Trade Commission. “Not only does checking the credit report give consumers a valuable snapshot of their credit histories, it permits them to detect and correct errors, and spot and stop identity theft.”

I like what Chairperson Majoras says about decting errors and stopping identity theft.

When a bank runs your credit, you get the banks interpretation of the report, but if you run a credit report yourself, you can see the findings, and address any errors.

Questions and or comments regarding free credit reports will be answered promptly.

Since the chief here added a very handy home appraisal tool to the site; and since he asked me my opinion of it,  here is my review of the Miami home appraisal tool.

Perhaps in the future we can “review” other products or items of interest which could lead to contraversy/insight.

Anyway, back to the subject at hand. 

Here is what I like about this appraisal tool:  Lets say Mr. and Mrs. Buyer are out shopping for a home; and, as most home shoppers do, they’re driving by some properties which may be of interest to them.  As they drive by a beautiful property, they jot down the address. 

When they return to a computer, they enter the address of the beautiful property..and ..walla they now have: a legal description, square footage, year built, the date the property last sold, and very importantly the amount it last sold for.

Now, the Buyers can determine with some expertise whether or not they wish to contact the owner, or their real estate agent for a viewing.

The only down side to the appraisal tool is the fact that it cannot produce an appraised value.  Appraised values can only be done by comparison of the property to 3 sold properties and that’s a process unto itself. 

One other drawback is that this tool can only be used for properties in Miami-Dade County.

Any questions or comments concerning the home appraisal tool will be responded to promptly.

Since as a culture we’re dedicated to improvement, why not discuss: credit score improvement.

It’s important to note that raising your credit score is a bit like losing weight:  It takes time and there is no quick fix.  In fact, quick-fix efforts can backfire. 

Here is some credit score improvement information:

Payment History Tips
Pay your bills on time. Delinquent payments and collections can have a major negative impact on your score. If you have missed payments, get current and stay current

The longer you pay your bills on time the better your score.

Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.

If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This won’t improve your score immediately; but, if you begin to manage your credit and pay on time, your score will improve over time.

Amount Owed Tips
Keep balances low on credit cards and other “relvolving credit”. High outstanding balances can affect a credit score.

Pay off debt rather than moving it around. The most effective way to improve a score in this area is by paying down revolving credit. In fact, owing the
same amount but having fewer open accounts may reduce a credit score.

Do not close unused credit cards as a short-term strategy of rasing a credit score.

Do not open new credit cards that you don’t need (to increase your available credit). This approach can backfire and actually lower a credit score.

Length of History Tips
If you have managed credit for a short time, do not open numberous new accounts too rapidly. New accounts will lower an average account age which could have a negative effect on a score if there is not adequate amounts of other credit information.  Rapid account build up can be viewed as increased risk.

Note that closing an account does not make it disappear. A closed account will show up on a credit report.  It may be considered for scoring purposes.

It’s OK to request and check your own credit report. This will not affect a credit score as long as the report is ordered directly from the credit reporting agency.

Information and Questions regarding credit score improvement will be answered promptly.

Also see:
FTC - What is Credit Scoring

Whether you’re buying your first home, or trading up to a larger one, there are many costs - on top of the purchase price - that you must figure into your budget. These extra costs, could surprise you with an unwanted financial nightmare on closing day if you’re not prepared.

Read through the following checklist to make sure you’re budgeting properly for your next move.

1. Appraisal Fee - Your lending institution may request an appraisal of the property, which would be your responsibility to pay for. Appraisals can vary in price from approximately $175 -$ 300.

2. Property Taxes - Depending on your down payment, your lending institution may decide to include your property taxes in your monthly mortgage payments. If your property taxes are not added to your monthly payments, your lending institution may require annual proof that your taxes have been paid.

3. Survey Fee - When the home you purchase is a resale (vs. a new home), your lending institution may ask for an updated property survey. The cost for this survey can vary between $190 - $1,000.

4. Property Insurance - Home insurance covers the replacement value of your home (structure and contents). Your lending institution will request proof that you are insured as it protects their investment on the loan. Beware! Some homes may not be insurable. Make sure you have an insurability clause in your purchase contract.

5. Service Charges - Any new utility that services your hook up, such as telephone or cable, may require an installation fee.

6. Escrow and Document Preparation Fees - Escrow fees are split between the buyer and the seller in Colorado. However, additional fees will be charged for the buyer’s mortgage closing. This can include first and second mortgages. In addition to the “Doc Prep” fees charged by the lender, some lenders will e mail the loan documents and therefore the escrow or title company may charge a electric to paper fee.

7. Mortgage Loan Insurance Fee - Depending upon the equity in your home, some mortgages require mortgage loan insurance. This type of insurance will cost you between 0.5% -3.5% of the total amount of the mortgage. Usually payments are made monthly in addition to your mortgage and tax payment.

8. Mortgage Brokers Fee - A mortgage broker is entitled to charge you a fee in order to source a lender and organize the financing. However, it pays to shop around because many mortgage brokers will provide their services free to you by having the lending institution absorb the cost.

9. Moving Costs - The cost for a professional mover can cost you in the range of: $75-$200/hour for a van and 3 movers.

10. Maintenance or HOA Fees - Condos charge monthly Home Owners Association Fees for common area maintenance such as grounds keeping and carpet cleaning in hallways. Costs will vary depending on the building.

Interesting how major airlines are offering bushels of frequent flyer miles if you sell or purchase a home using their sources: American Airlines recently sent me this post and I would have a difficult time not checking it as it could be a free excursion and I love a freebie.  FYI a property which sells for 350,000 qualifies for 70,000 air miles.

American Home Miles provides a handy calculator which will determine how many miles are awarded based on the sales price of the property. 

Also see the American Airlines Advantage Program which specifies choices of awards.

Questions or comments regarding frequent flyer air miles in conjunction with the purchase or sale of a property will be responded to promptly

Interesting how major lenders are assisting with credit repair issues; aka, credit mortgage repair.

John Fitzgerald, my wholesale account rep, stopped by my office this week. While we were discussing service and program choices he directed me to a site that Countrywide makes available to brokers like me.

Interestingly, I navigate to a place called “Credit Reconciliation”. I am intrigued thinking:  “why would a lender be in the credit repair business”.  I decide to watch the video tutorial, and to my amazement find that this company has software which allows them to decision a person’s mortgage based on an elevated credit score even though the score won’t officially be posted onto the credit until said person provides proof of credit issue.

What’s all that mean to Mr. & Mrs. Borrower?  It means that if there are errors on his credit he doesn’t have to labor thru the arduous process of repair.  His credit will repair automatically, as long as “down the road” he provide to the Mortgage Broker (yours truly) the paperwork proving that which is being mis-reported is satisfied.

This is a one step process and it allows a person to get the best product and repair his credit discrepancies all in one move.

The Federal Trade Commission is also an excellent resource for Credit Repair Facts for Consumers.

Questions or comments regarding credit mortgage repair will be answered promptly.

Have you ever been taken in? 

Con artists have a way of making a person invest in a false reality.

One of the most frequently used con games that exists in mortgage lending is:  The Effective Interest Rate Presentation

Beware of effective interest rate proposals.

The typical scenario is that when the mortgage product is presented, it is supported by an amortization chart.  The bogus presentation is accompanied by a scenario whereby the borrower only adds a small additional amount to his/her monthly payment each time it is sent in, therby reducing the principal amount and unpaid balance.

If Mr and Mrs Borrower add a mere $100.00 each month to their mortgage, they will pay the mortgage off much sooner.

There is nothing wrong with this.  But the hook is:  If they person who is presenting the mortgage product conitinually refers to the “effective rate” rather than the APR (annual percentage rate) there is a good chance that the client is paying a higher rate than is available and in some cases is not “saving” but is really paying more.

Beware of the “effective interest rate” pitch, close scrutiny is helpful.

Questions and comments regarding effective interest rates will be answered promptly

Finding disaster mortgage information can aid those who wish to take the appropriate steps to rebuild.

Through Section 203 (H),  the Federal Government helps victims in Presidentially designated disaster areas recover by making it easier for them to with mortgage insurance for disaster victims, and re-establish themselves as homeowners.

Individuals are eligible for this program if their homes are located in an area that was designated by the President as a disaster area and if their homes were destroyed or damaged to such an extent that reconstruction or replacement is necessary.

If you need help, contact the HUD Homeownership Center that serves your state. Homebuyers can also find a list of HUD-approved lender, or call the FHA Mortgage Hotline, 1-800-483-7342.

Further assistance regarding disaster mortgage information will be responded to immediately.

Adjustable rate mortgages are normally written at lower interest rates than fixed rate mortgages.  Typical adjustable rate mortgages have a period of time that the rate is fixed and thereafter will adjust.  The normal ajustment periods that are offered are: 1 year, 3 year, 5 year, 7 year, and 10 year. 

Recently there has been a trend to shorter adjustables such as 1-month adjustables. 

The shorter the adjustment period the sooner the mortgage can begin to adjust to market swings. 

A 1 month adjustable can begin to adjust to market conditions almost immediately while a 10 year adjustable gives a stable interest rate for 10 years. 

It makes sense to accept an adjustable rate mortgage if a property will be sold in a short period of time.  If a person knows that within a certain period of time they are likely to move then adjustable rate mortgages are worth consideration.

Questions and comments regarding Adjustable rate mortgage information will be responded to promptly.

Getting a Home Equity Line of Credit (HELOC) is an option worth discussing.

There are a variety of HELOC mortgage products.  Most are 2nd mortgages that give the borrower a line of credit that they can utilize for a specific period of time (usually 10 to 15 years).  After the 10 or 15 year period, no more draws are available on the “line”, and the balance must be paid down (usually over an additional 15 years).

Here’s a different spin.  Most major lenders offer a first lien position HELOC (Home Equity Line of Credit) which may be utilized for as many years as the borrower wishes to have the line in place. 

Here’s a typical scenario: Mr. and Mrs. Borrower have a beautiful home worth 1.5 Million dollars.  Mr. and Mrs. Borrower owe $650,000 on a first mortgage on their beautiful home.  Mr. Borrower owns a business and sometimes the accounts payable are slow and Mr. Jones has to go to his own pocket to meet expenses.

Mr. and Mrs. Borrower decide to have a first lien position HELOC replace their old mortgage.  Mr. and Mrs. Borrower new HELOC is for $1,350,000. 

Now they have $700,000 cash available 24/7.  (Some lenders even re-evaluate the value of the property annualy and increase the line of credit porportinate to the value of the home). 

Information on Home Equity Lines of Credit will be responded to promptly.

A Non Conforming Mortgage can be an excellent product choice.  The reason is they are limitless in the arena of possibilities for clients with unique needs.  Unique needs are sometimes related to the amount borrowed in relation to the appraised value (LTV).

Other times those “needs” are about the “employment” (or lack thereof) or the “income” (or lack thereof).  And, sometimes they are about a previous credit issue which in most cases will be not that big a consideration in the “non conforming world” whereas it may have been a deal breaker for a “conforming” product.

The misconception prospective borrowers have is that non conforming means high interest rates.  This is not necessarily true. 

Earlier, I explained how Dino found easy mortgage financing—and got his cash, bills paid, and a lower interest rate.  (Dino’s mortgage was a 90% LTV with no proof of income and a 5.875 ARM).

Highlights of non conforming mortgages

• Don’t need a job
• Don’t need an income
• Borrow up to 107% of property value at low interest rate
• Don’t need excellent credit
• Licensed self employed borrowers do not have to prove income
• Bank statements can be used in liew of W-2’s or Tax Returns
• No Interest rate increase for large amounts of cash out.
• Great programs for borrowers who have larger cash flow, than income.
• PMI not required on non conforming mortgages

Dino called me.  Dino always wants something free and easy; and easy mortgage financing is what Dino always asks for.

Once again:  “Hey Jimmy, what’s up”.  “I need money”. (Same old Dino) (this is a true story).

Ok, Dino’s a mover and a shaker (but not a big money maker).  Sometimes he sells copiers, sometimes steel out buildings; right now, it’s granite and marble floors and countertops.

Dino’s changed jobs, and hasn’t been earned a paycheck in about six months;  but, he’s got “irons in the fire”.  He needs some operating capital.  He tells me $16,000 cash in hand will hold the line until the commissions get cut loose.

I am not sure if I can help Dino until my wholesale rep Kevin from a national well run lender drops by my office. 

Kevin tells me:  “If Dino can prove he’s been in the same line of employment for 2years he can simply state his income”  (That means Dino just tells us how much he usually earns and doesn’t have to back it up).

Of course, Dino wants the easy mortgage refinancing and with marginal credit and the tax savings of paying off his revolving credit and putting it under his mortgage he recognizes that this is good business.

Dino got his credit cards paid off and received $16000.00 cash.  He also got a lower interest rate than he was paying previously, and a lower monthly payment.

Question about easy mortgage financing will be responded to promptly

There are three basic catagories of home mortgages: 

• Conforming
• Non Conforming
• Government

Government loans are administered either by the Federal Housing Authority (FHA) or the Vetrans Administration (VA). 

Most people select a government loan because of the low down payment requirement. 

FHA will lend up to 97% of the appraised value of a single family residence (including mobile homes) with a maximum loan amount of approximately $360,000. 

VA will lend up to 100% for the purchase of a property up to a loan amount of $359,650 and with appropriate down payment there are no limits on loan amount.  Other Government Loan details include:

• VA only offers programs while FHA has both fixed and adjustable rates
• In some cases FHA waives appraisal requirements
• FHA maximum debt ratio is 43%.  VA maximum debt ratio is 41%
• Both VA and FHA have offerings for 2-4 Unit properties. 
• Both VA and FHA have offerings for approved condominiums

VA and FHA offer mortgages for:  rate and term refinancing, cash out refinancing, and for purchases.

Questions or concerns regarding Government Home Loans will be responded to with alacrity.

There are some rumors floating around Silicon Valley that Google is planning launch Google Finance sometime in September. Although this is unconfirmed, the word is Google wants to replicate the Yahoo Finance Portal, but do it even better. Goolge has been in talks with data vendor Revere Data, a San Francisco company—which provides the data and analytics on U.S. public companies for this type of service.

Paid Content says:

“Finance information is a very search and data centric operation, something that would fit well into the mix, and add to that alerting capabilities across the Google spectrum, and you can see the potential to push the limits here”.