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Mortgage Rate Shopping

brian_alg — Wed, 01 Apr 2009 23:33:18 +0000

While there is a lot of publicity about the current historic mortgage rates, it is not as easy to shop for the best product as comparing rates. The Georgia and Florida loan markets are commonly quoted with 1 origination point. This is not always the case, but it is customary for the majority of mortgage companies to charge this fee.

The origination point is a commission to the mortgage company, and is negotiable. If you are being offered the absolute wholesale price that the mortgage company is able to get the money for, then a 1% fee is fair. What you need to keep in mind is that many companies commonly mark up the rate and are being paid by the underlying investor and from you — in essence double-dipping at your expense! Beyond origination fees, be sure to look at the total cost of the fees included in the “800″ section of your GFE. This is typically where most of the junk fees and other items are added.

In the current economy, you should be targeting a total compensation to your mortgage company of 1% – whether in the form of an origination point or in the form of accepting a slightly higher rate, which allows the mortgage company to be paid by their investor.

An important takeaway – Do not mortgage shop by asking only about rates.

Peachtree City Mortgage Loans in 2009

brian_alg — Wed, 01 Apr 2009 00:47:07 +0000

Many people ask us regularly about their ability to obtain mortgage loans on their homes here in Peachtree City in the current recession. We should consider ourselves to be quite fortunate, as the values here have only dropped a small amount. That being said — mortgage financing in Peachtree in today’s market is all about the appraised value of your home.

You should always keep these things in mind as you plan what your home is worth in this market for a refinance or even to sell it. Peachtree City mortgage loans are based on several factors:

income
credit
collateral — this is your house

Most people understand their income and credit, but seem to be less sure about how the values are calculated on an appraisal. In Peachtree City, the appraiser will identify 3-4 comparison homes that have sold recently – ideally in the past 60-90 days. In the current market, the only way lenders can get a true indication of value are recent sales. So….even though your neighbors home in Smokerise sold for $850k 10 mos. ago, your value is going to be based on the most recent sales. If there are good comps to your home more recently…say 2-4 months, your value in terms of the “sales comparison method” will be based on these comps.
This one fact catches many Peachtree City residents offguard when they are running basic analysis on the prospective new mortgage loan. If there is a takeaway – always estimate low. Banks are extremely conservative right now, and you will avoid significant heartache if you don’t set yourself up with an unrealistic value of your home. Remember, an appraisal is only an indication of what the market value of your home is at that point in time. In 6 months, the value may possibly be completely different.

Atlanta Mortgage Rates today – 3/30/2009

brian_alg — Tue, 31 Mar 2009 06:01:09 +0000

The 30-year fixed rate today was again at 4.625%. This assumes you are a well qualified borrower – credit score of 720+ and a LTV (loan-to-value) of 80% or less.

Can I qualify?

brian_alg — Sun, 29 Mar 2009 14:46:54 +0000

The media is full of information about how great the loan rates are and how bad the housing market is. What is not covered as often is the more strenous qualification process that Fannie/Freddie have imposed. Whereas before it was quite easy to be approved for your new loan wtih credit scores down to the low 600’s, this is no longer the case. If your credit score is below 680, you will find it difficult to qualify for the low rates that are advertised.

You greatly improve your chances of qualifying for the best rate on your mortgage with the following credentials:

Low debt to income ratio
Credit score over 720
If a refinance, at least 20% equity in your home and if a purchase a 20% down payment
Job Stability – whether you are an employee or own your own business, the length of time is now an important factor