Archive for February, 2012

Getting a Mortgage Loan and Securing It Made Easy

Posted by in Mortgage Refinance on February 3, 2012

By Manuel Manolo

It is every person’s dream to purchase a home, as soon as they are settled in life. In the economic market that we live in, getting a home without a home loan is a difficult task. For a first time buyer, it will be an overwhelming choice to make. Here is a basic overview that will help make an informed decision. The loan is generally granted by lenders like a high street bank. A few salient factors of a mortgage comprise the amount of the mortgage, period of the loan, interest rate and pay back choices. Every bank has its own terms and conditions on which they offer you money. They can take the home as a security for the loan as well.

Taking a mortgage is a responsibility and if the repayments are not paid duly, then the bank would seize and resell the property to retrieve the loan amount which had been borrowed. Choosing a dream home does not have to go overboard your budget, you have to determine the mortgage you can afford. It will reduce the financial stress if you can settle the installments effortlessly. There are conditions which he has to take care of so as to secure a loan. To confirm that his request is accepted, he should make an effort to meet all the conditions furnished by the loan provider.

Whenever a person has a decent relationship with the loan provider he contacts, then acquiring a home loan could be rather painless. The first criterion the bank might hunt for is the time period an individual has been doing work with the same establishment. An official declaration would be necessary from the management in which the duration of work, wage details and other details could be needed.

Whenever you ask for a property loan confirm that you will be able to deal with your liability. In case the property loan value required far exceeds salary levels, then the person’s mortgage proposal would be rejected. People investing in a house for the very first time will like to know what price he could begin at and roughly how much he may pay for. Loan representative at a loan company if not an online mortgage calculator will assist him estimate how much he will be able to spend. Retaining this information available before hunting for house would help anyone to find the best property to fit in his resources.

Once you discover a home and make an offer, the bank will put together the complete papers for the mortgage loan. In the end both a past record and credit verification of the applicant will be completed. In case the information the lender receives is not accurate, the mortgage might be denied. Additionally they figure out the sum of initial down payment a person could handle. The bigger the down payment, the lesser shall be the mortgage repayments. Future property buyers ought to make sure they have saved a considerable sum ahead of purchasing a property for this will save them considerably through interest payments in the future.

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Your Future In The Mortgage Business

Posted by in Mortgage Refinance on February 2, 2012

By Micheal C Price

Last week I sat back and reflected on my mortgage career and what it has been. I also thought of all the colleagues I have in the business as well. One thing I noticed something I have seen in nearly every group of mortgage professionals; people are stressed, they are tired-and they aren’t getting any younger.

I hit the 35 in two months and with that my 10th year in the mortgage business. Most people I know in this business that are my age were smart enough to get out when they could. The frenzied and challenging mortgage market has taken its toll on many people, and it’s no secret our ranks are fewer and aging rapidly. Fact: The industry you work in is smaller and dwindling by the day. People are getting out of this business!

1. For years, the bigger banks have operated university-type formats for entering the business. They hired from 100 to 500 “newbies” a year, gave them about 2 weeks’ worth of training and they hit the floor boiler room style. These 20-some-year-old kids and hustlers kept the industry hip and fun.

2. The mortgage industry is no longer the money printing press it once was. There was a time when if you were young and energetic, you could almost guaranteed yourself a 6 figure income. That type of income attracted several you and eager “Go-Getters” into the industry. Today if you don’t have experience in the mortgage business you will be lucky to make 30k a year. Unfortunately that is not enough to attract the young talent and energy the business needs.

3. Today it’s much harder to enter the mortgage business. New brokers have to be screened, tested and licensed. The Big Banks are no longer interested in training or internally promoting their own, opting to hire only established, experienced originators from other banks with a track record of proven production and success.

4. Not sure if you have noticed, But there is less business out there; meaning the industry does not need so many originators. In 2005, 7.1 million residential units sold. This year the projection is for 4.7 million units. From a business perspective, if the market demand for new loans is a full 33% less-and expected to decline even further in the coming months and years. Why would a company hire more originators when there is not enough business for the ones they currently have?

5. Most of us in the business today have nowhere else to go in our tight economy and shrinking job market or have no desire at this point to make a move. If you’ve been originating for over 10 years, what else are you qualified to do at this point? Some People are “Chained” to the business today; they aren’t making a lot of money and they are burned out, but change is not an options. So they stay.

The industry is getting older. But, on the upside, there are still a number of originators at every age level doing well, pushing forward, and making great money. What does it take to continue to succeed as you mature in this profession?

My ties in the industry are pretty deep. I’ve worked with some awesome people and built some great relationships. I’m lucky enough to know quite a few sales managers, directors etc… I’ve spoken with several of them to find out what traits they notice of top producers and what they are looking for when hiring new people? What habits, practices and skills did they think makes one originator better than the other.

Obviously they all built an impressive list of characteristics, but one word…”intensity” seemed to top the list. Most of them say their top producers are intense day in and day out. This intensity translates directly into more contacts, more relationships, stellar customer service, high loan application volume, more closings and more income. Intensity seems to be important in the mortgage business as we know it.

It should be known that as we age, our levels of intensity will decrease. Think about it; if you are 40 or 50 years old, do you really have the same intensity and zest for business and life that you did when you were 25? We know you would like to have it, but unfortunately you can’t get it if you wanted to pay for it. Intensity is the by-product of two factors: energy and a positive forward focus.

Most originators in the industry can’t muster the intensity they once had. Age is a factor, but mostly they have been beat up by a sagging housing market, new rules and regulations, (for the most part) and making less money than they once did.

Experience in this business is not a good thing, there is no benefit. (If this week you wrote your 935th loan application of your career, it’s probably all running together and getting pretty boring.) As your energy goes down, your intensity follows in kind.

Most originators who have been in the business for some time are looking to wind down their careers and not ramp them up. Many originators I talk with today only want to talk about how much money they used to make, and how awesome things were at one point. One originator I spoke with is 51 years old and has made great money over the years. He says he’s “spent.” “Just help get me through another five or six years,” he told me, “and then I’m out of here for good.” He’s a great guy, but his interest in learning new products, approaching new markets and implementing new business strategies has left his body. Basically he’s saying the business just isn’t fun anymore.

He’s 51 years old and I hit the big 35 in a few months. Sad things is, I’m already feeling the same feelings he’s felt almost 20 years earlier…THAT CAN’T BE GOOD FOR ME!!!

Personally, I know the answer to that statement and have felt it for over the past few years. If you are having those same feelings, you owe it to yourself and the industry to get out. I’d love to show you my exit strategy and the plan I have to free me from this business that has probably already taken a few years of my life. Last I heard doing the same thing and expecting different results was the definition of insanity. The only insanity I need in my life right now is the home workout vide. Let’s embark on a journey together.

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Changes on the Horizon for Seniors Seeking a Reverse Mortgage

Posted by in Mortgage Refinance on February 2, 2012

By Christopher Beard

Seniors seem to be gaining clarity of the purpose for a reverse mortgage with over 72,000 FHA Home Equity Conversion Mortgage loan units completed in 2010 and close to that for 2011 expected, which is low compared to 2006-2009 when the industry peaked. Industry wide changes are on the horizon for senior homeowners who want to take out a reverse loan in the coming year though here are a few of the changes that can be expected in the coming year. Here are a few changes to expect:

    • Home Values & Equity - Home prices could continue to drop due to highest foreclosure high ever hitting in October of 2011 therefore likely to further reduce senior’s home equity, according to National Reverse Mortgage lenders Association (NRMLA) American seniors home equity dropped by 63 billion between the 1st and 2nd Quarters of this year. Equity is the base for determining if a senior homeowner qualifies and partially determines how much cash they will receive.
    • Income Qualification - While the home equity conversion mortgage has been primarily equity based loan with little documentation of income; changes are on the horizon due to the default rates on reverse mortgages. According to the NRMLA’s endorsed guidelines seniors will need to document sufficient income with tax returns to document capacity to cover the annual homeowners insurance and property taxes. While the qualifying is still much more liberal than a forward mortgage where you must have income to cover the new mortgage debt, some seniors just may not qualify as before.
    • Credit history - Borrowers with some credit dings won’t necessarily be eliminated, but underwriters will review mortgage payment history and those homeowners with bankruptcies, recent foreclosure’s and tax liens may not qualify. Tax liens will need to be paid off through the reverse loan proceeds making the loan not work or as beneficial for some.
  • Rates - Rates are historically low, it is unlikely that they will remain this low indefinitely and at some point begin to increase again. Higher rates erode equity quicker making a reverse loan less attractive to provide sufficient funding to last through a seniors remaining years of life. Now is the time to act on these low rates.

Why the Change

Prevention of defaults and establishing the reverse mortgage as a stable and effective option for senior homeowners primarily is the reason for the change. Approximately 5% of all reverse’s are speculated to be in default on taxes and insurance which is a requirement for borrowers of reverse mortgages. Set aside are not required for HECM reverse loans and while the option is available most borrowers choose to pay them on their own to receive the most funds back at closing. On a positive note In late November 2011 Congress and President Obama signed a bill appropriating approximately $45 million toward Housing counseling which will provide consumer safeguards for seniors looking into the suitability of a reverse loan, this counseling which is required for all borrowers prior to closing on the reverse loan. A portion will also be applied to those who are defaulting as a measure of prevention to stop the foreclosure process.

The Federal Housing Administration (FHA) has not established any regulation changes but they have confirmed lenders may establish additional financial assessment or qualification’s to help avoid further defaults and make the reverse programs succeed.

Several big reverse lenders like MetLife have already began a new implementation of this financial assessment, the guidelines were endorsed by the National Reverse Mortgage Lenders Association but each lender can establish their own criteria for underwriting these loans.. Anticipating these changes will eventually spread across the top reverse mortgage lenders. With these changes underway now may be the best opportunity to take advantage of a reverse mortgage.

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