Wednesday, 12 August 2020

What Is A Mortgage - (The Beginners Guide)


Today we're going to discuss what is a mortgage. If you've been hearing the word and you've been seeing a different article on this site about mortgages, and you want to know what really is a mortgage?. Well, in this article, that's what we're going to discuss. The word mortgage actually comes from a French word, the French word is "Mort". Meaning, "Death". So technically, it means engaged until death. That's a little bit of a depressing background to the word mortgage. Now, what's interesting to take away from that is, a mortgage is one of the biggest things that we as humans on this earth will ever do anything with, purchase, buy, or be affiliated with in some way. Mortgages are the biggest decisions that we as adults will make in our lifetime. So it's always very important to do a lot of homework and make sure you're doing the right one.


What Is A Mortgage?


First and foremost, a mortgage comes with the starting and the looking to get into a home. So if you're going to be buying a house, you want to own a house rather than rent an apartment, you need to purchase it. so in buying a house oftentimes it requires a lot of money. It requires a lot of money in order to buy a house. Oftentimes, it requires more money than you have. So what has to happen in real-life people have to go to something called a "bank". And a bank will provide that person or a couple or the family the house that they want. Now, they're not just going to give them the house, the way it works is, they provide something called a "loan" And we'll discuss the loan in just a little bit. But the type of loan that they're going to give these people is identified as a "mortgage". Because there are other types of loans out there, there are numerous types, you can have a student loan, you have a loan for your car, you could have a home improvement loan, there are thousands and thousands of loans out there. 

But a very specific type of loan from a bank is called a mortgage, and that helps you purchase a house or a home. The bank actually has an interest in the house, they want this house and they want to make sure that you pay for this house. So when you are buying a home they set up this mortgage, this loan for you, and they charge you interest on that loan. A bank would give someone money so that they give that money back which is a nice thing to do, but when a bank gives people money, they expect more money than they give. If the bank gives someone a certain amount of money for a home, they're not doing out the kindness of their hearts, they're doing it so that they can receive something in return.

Actual interesting fact, the national average here in the United States of America. For a home loan is approximately $222,261. That's the average home loan with approximately $1,061 as your average monthly payment for a 30-year mortgage at 4% interest, according to LendingTree. Think about this really quickly, if you're looking at buying a house, $1,061 is approximately how much you have to pay.

Here's a question that I asked. 

Do you have to pay that daily, weekly, monthly, or yearly? $1,061 is that a day, week, month, or a yearly type of payment. That is an amount that is paid on a monthly basis. So you're making that payment every single month to the bank. If you want to pay it off quicker, you can pay weekly if you prefer, but the more you pay. The faster you can pay that house off, but the requirement is at least initially every single month.


Fun And Exciting Terms

We talked about some terms, let's define a little bit more. There are four other types of terms that you're going to hear a lot when it involves a bank.

  1. Loan
  2. Interest
  3. Downpayment
  4. Escrow

Let's talk about those four types of terms really quick.



Loan

A loan is simply by definition when a company or a person loans you money for something. Whatever that might be. A loan is always something that you should take very seriously, and make sure, that you payback. So if you receive money from a person, or a company you want to take that very seriously, and you want to make sure that you pay that loan back.


Interest

Interest is the reason that a company or person will loan you money. Interest is what we pay when we are borrowing money. So we borrow money from a person or a company, they're often going to charge a specific interest on that loan. For example, if they loan you $10,000 at 10% interest for a year. So you have $10,000 at 10% interest for 1-year. The actual amount of money that you receive is $10,000, but the amount of money that the person or the company receives who loaned you the money is actually $11,000. So they get an additional $1,000 back from you because they allowed you the convenience of having their money. So you get $10,000, you do something with that $10,000, and then you have to pay back $10,000, plus, an additional $1,000, totaling $11,000. Obviously, the higher the number of interest, the more you have to pay back. And the lower the number, the less you have to pay back. 

here's a quick question 

Would you prefer a lower interest rate or a higher interest rate when borrowing money? You would prefer a lower interest rate, exactly, so the lower the better. If you're borrowing money because that means that is a less amount of money that you have to pay out of your pocket and to pay it back that loan. 


Downpayment

A down payment is a certain amount of money required to get a loan. So it's not like you can just walk up to a bank or a company, and say, hey, I want a loan, please. A down payment is actually an amount of cash that you have to have before you can even get a loan, and it's a percentage of the total amount. For example, if you borrow $1,000, what would a 10% down payment be?. So 10% of $1,000 is $100. That'll be the amount of money that you would have to pay initially as a down payment.


Escrow

There's a term escrow, that's a type of account where your money is held in order to make automatic payments toward your loan. That's what an escrow is. When you're putting your money into an account for your loan, the escrow is the holding party that makes sure that your loan gets paid. And if your loan doesn't get paid, people are gonna be very upset with you, and it's not a good position to be in. So if this escrow doesn't have money in there all times. it's going to be a bad day. They're going to come after you and they're going to make sure that they get their money. So an escrow is an account like a holding party, a third party holding location.


The 3 Main Types Of Mortgage 

There are three types of mortgages. You have a mortgage as a review it's something that a bank gives you, it's a loan so that you can buy a house. There are three main types. There are many other ones. We're not going to get into those today. The three main types that you will be interacting within your life more than likely


  1. Fixed-Rate Mortgage
  2. Adjustable-Rate Mortgage
  3. Federal Housing Administration Mortgage (FHA)


So these are the three types of mortgages. Now, let break it down



Fixed-Rate Mortgage

The fixed-rate mortgage is the most popular this is what most people in life get. This is the most common type of mortgage. You pay a certain percentage of money over a long period of time. A mortgage is something that lasts for a very very long time. For example, most mortgages are a 30-year mortgage. So you're borrowing a large sum of money, and you're paying it over a very very long period of time. Now, some of you might be thinking can you pay off a mortgage early? the answer to that question is absolute. yes. in fact, I always encourage you to pay it off early because this is what it looks like. If you borrow $200,000 from a bank, you have to pay that money back. So if you have an interest rate of only 5% which is actually pretty low, if you pay that for over 30 years, you actually pay more on interest than your original mortgage was for. So you pay $208,482 in just interest.

The funny thing is that if you do everything the way you're supposed to do, meaning, you pay on time, the amount of money you're supposed to pay on time. It's often encouraged if you get a mortgage to make sure that you can comfortably and easily afford to pay more than the mortgage continuously. It's often noted to take your mortgage number so let's say your mortgage number is $1,000, and divide that number by 2, so have $500, and then add some money to that, so whatever you're comfortable with. Let's just say you want to add $50 to that number. So instead of $500, it's $550. So you pay $550 on your mortgage every two weeks. So you give your bank that mortgage payment every two weeks and that will drastically reduce the amount of interest that you pay, and how long end up paying. In fact, doing that exact strategy can cut down the cost of a mortgage by over 35%, and can cut down the amount of time that you pay a mortgage on from 30-years to 22-years. That's a very very important strategy to make sure that you can pay off that mortgage as quickly as possible because for most people, the mortgage is their biggest expense that they have, and if that can be totally wiped out quickly, it's a huge pressure.


Adjustable-Rate Mortgage

This is an adjustable-rate mortgage also called an "Arm"


If you ever heard the term arm, it's an adjustable-rate mortgage. When you have an adjustable-rate mortgage, you have lower payments to start off with, but over time they can fluctuate drastically. So you might start off with, let's say a $400 a month payment, and you're like, oh, man, I can easily afford this, this is so simple I'm paying off my house like $400 a month. Well, 4-years from then, it could go up to $1,800. It depends on a lot of different factors, but the interest rate is one of them, not to mention if your home is going up or going down in value, what your credit score is doing, there's a lot of factors that can go into an adjustable-rate mortgage. Most people say that adjustable rates should be avoided if at all possible. Here's like a little bit of a graphic for you. The pros and cons if you will.

The fixed mortgage gives you something that's more predictable, and when you take an adjustable-rate mortgage you assume the risk that your interest rates are gonna go up and you actually pay more than you initially thought that you had to.


FHA

Stands for Federal Housing Administration, and this is my personal opinion, but I personally think FHA's is a great way for first-time homebuyers to purchase a house because oftentimes you need little or no down payment in order to get an FHA loan. If you get a Federal Housing Administration loan you have to pay private mortgage insurance or something called "PMI", because if you don't have a down payment then you have what's called private mortgage insurance "PMI' that you have to pay. And honestly, this number is so small, it comes up being the exact same or a little bit more than you would have saved up for a down payment, but if you're a younger person, let's say you're 18 19 20, you can get it home right now for almost no downpayment, and so, if you know for sure that you make it your absolute utmost importance to pay that mortgage every single two weeks, not every single month, put it in your mind that you're gonna pay it every single two weeks, you can get home and instead of going to college and renting and paying enormous large sums of rent that you're never going to get that money back, you can buy a home at a young age living it, pay less far less than you pay in rent. And then once you leave for college you can go and rent that house out and now you are becoming an owner rather than just a buyer. So personally I really like the FHA approach. For younger people or traders or people from around the world that might not have that much cash on hand, FHA is a great loan.







Okay, now you understand what a mortgage. I hope I explain it clearly. 

Sunday, 9 August 2020

3 Things You Should Not Do Before Filing Bankruptcy

Filing Bankruptcy

In this article, I wanted to talk about three things you should not do if you anticipate needing to file for bankruptcy. Now, at the time that I'm writing this, we're dealing with this coronavirus, Covid-19 pandemic and there's a lot of uncertainty when it comes to jobs and income and being able to deal with debts you may have incurred in the past. Many people are considering the possibility that they may have to file bankruptcy down the road and if that's your situation, I want to give you advice on three areas of things that you should not do if you anticipate needing to file for bankruptcy. 


1. Don't Pay Family Or Friends

This is a natural thing that a lot of people have when they're getting ready to file for bankruptcy is they start to think about the debts that they owe to family or friends who've loaned them money over the years, they don't want to hurt them. Obviously, that's natural. We don't want to hurt those that we love and our friends. So what they do is they think I'm going to pay them back so that they don't get hurt by me filing for bankruptcy. This can cause huge problems and not only for you and your bankruptcy but for the person who loaned you the money. 

Here's how it works. 

If you owe money to a family member or a friend or even like a business partner or somebody who's close to you, who you have some connection to, the court calls these "insiders", and if you owe money to an insider and you repay them within the 12 months prior to the filing your bankruptcy, it's considered a preference. Meaning you're preferring that family member, you're preferring that friend over your other creditors. So what will happen is if you then file, particularly chapter 7 bankruptcy, but any of the chapters of bankruptcy, a bankruptcy trustee will go back to that family member or a friend that you've been repaying and they're going to say, give us the money back, which is going to make things scheming super awkward for years to come. So the best way to avoid this is to not pay them back at this point. If you want to voluntarily pay them back after your bankruptcy case is over, that's fine. You'll be okay there. But paying them back in the year prior to the filing of your bankruptcy can cause some significant issues. 

Now you may be saying to yourself, that's great advice, but I've been paying them back for the last year what do I do now? In those types of situations where there have been ongoing payments over the last 12 months, you have a couple options. One is to wait a year from the time the last payment was made until you file for bankruptcy. This is often difficult to do because most people are filing bankruptcy because things have reached a crisis point where there's a wage garnishment or a lawsuit and something like that. If you can wait, that's going to make it the easiest as far as not having to deal with it at all. If you can't wait to file for bankruptcy, then you need to go in knowing one of two things. One, that the person you paid the money to is going to have to pay those funds back to the bankruptcy court for the bankruptcy trustee for distribution to your creditors. 

Alternatively, here in Arizona, many of the trustees will work out some type of payment arrangement where you as the person who is going through the bankruptcy process can pay some of those funds back over time. Now, they don't give you a whole lot of time. We're talking two to maybe four or five, six months' timeframe where you could actually pay those funds back instead of the person that you paid them to. You can make some type of arrangement so that your bankruptcy case can still be processed but they don't go after the family member or the friend that you've been repaying. 


2. Don't Give Away Assets

The thing you need to avoid is just giving away assets. I've heard this one a lot. Some people I know, they need to file for bankruptcy. They have an asset that they're worried about losing during the bankruptcy process. Let's say that they had a boat and that the boat was paid for and they think I have an idea, I'm going to transfer the title to this boat to my brother. My brother can hold the boat while I go through bankruptcy and then when I get done my brother can transfer it back to me. The problem with that whole idea is it's a crime, a legitimate crime, it's a felony, it's a federal offense. You can't intentionally transfer assets out of your name in an effort to hide them from the bankruptcy court. Not only that, but they're also going to find out, you've got to realize that there are millions of people that have filed for bankruptcy in the United States and they know all the tricks. They know this transferring of assets can cause issues. A lot of times though, it's not done with an intent to do fraud, but there may be a situation where, the one that I see quite often is where a family has teenage children, the teenage son or daughter has a vehicle that they purchased but it was purchased in mom and dad's name, whether it be for insurance reasons or whatever and so they transfer the title to the son or daughter prior to going into bankruptcy. That can still cause problems. 

The bankruptcy trustee can go and reverse that transaction if you sold or transferred something in the two years prior to filing for bankruptcy for less than what it was actually worth. That last part is super important. If you sold a car to somebody and you sold it for approximately what it's worth, that's fine. As long as it was an actual transaction and money actually changed hands. It's totally different if you just transferred an asset out of your name and you didn't receive anything in exchange for it. So those are the types of issues that you're going to have to deal with when it comes to transferring assets. You've got to be very careful if there have been any transfers of property out of your name in the last two years prior to filing bankruptcy where you didn't receive the value of that asset back to you. 


3. Don't Use Credit Cards Before Filing Bankruptcy

The third thing you got to be careful of is credit card use or cash advances within a 70 to 90-day window prior to filing bankruptcy. The first thing we'll talk about is the credit card used within the 90 days prior to filing for bankruptcy. If you charge something that the court considers to be a luxury item and the bankruptcy code doesn't define what a luxury item is, there are some court decisions that have given their input on it. Generally, things, if you're buying diapers or groceries on credit cards, those are not considered luxury items. However, if you're buying vacations or jewelry or they're really big dollar items, those could be considered luxury items. If you purchase luxury items within the 90 days prior to the filing of your bankruptcy on a credit card and the total of the transaction is more than $725, you could run into an issue where the creditor could come in and object to those specific charges from being discharged in your bankruptcy. It's important to know the creditor actually has to come in and raise this objection. It's not something that the court raises.

 I can tell you in general in practice,  I haven't seen that happen that often, but the safest way to go is to not use your credit cards once you make that decision that you're going to file for bankruptcy. This also applies to cash advances. $1000 is the limit that they look at within the 70 days prior to filing bankruptcy. You can't go and take a bunch of cash advances on your credit card and then look to file for bankruptcy. The creditor could come in and object to those specific charges from going away. 







Conclusion

Bankruptcy's a powerful tool. It's absolutely necessary sometimes particularly in tough times like this, it'll help you to get rid of most debts, most credit cards, medical bills, all those types of things can go away. But you got to be careful as far as transactions that happen in the time period prior to filing or that could cause you some big issues. I

3 Tips To Win A Debt Collection Lawsuit


In this article, I'm going to share with you three tips on how to win your debt collection lawsuit. Now, when I talk about debt collection lawsuits in general, I'm going to be talking about junk debt buyer lawsuits. Junk debt buyers are companies like Midland Funding, Portfolio Recovery, Unifund, LVNV.  These large companies that go out and buy old charged-off debts from companies like Wells Fargo, Chase, just your typical credit cards. However, even though I'm going to be focused on debt buyer type lawsuits in this particular article, the principles I'm going to talk about are pretty much universal. And so if you're getting sued by an original creditor like an American Express, Capital One, this article is still going to help you out. 

Now the three tips that I'm going to give you, I'm going to take them out of order a bit. The first one I'm going to share with you is really a game-changer. 


1. Be Careful What You Ask For

When I hear people who are getting sued by a junk debt buyer or even an original creditor, and they've been representing themselves in the lawsuit, one thing that's consistent amongst all of them that I see that they do is they often go and they put together a bunch of written discovery requests and send it over to the attorney for the creditor. And they're asking for things like, they want original contracts, they want the terms and conditions, they want monthly statements. And I totally understand where it is that you're coming from in wanting all of that information, particularly if you're being sued by a junk debt buyer. Because you're in this situation where they didn't loan you any money, you didn't agree to pay them any money, yet they're suing you, and they want you to write them a check and they're coming at it with almost no evidence whatsoever. And so you're saying, "Hey, if you're wanting me to write you a check, "you've got to provide this evidence to me." And so you're like, "I'm going to force them to do it. "I'm going to send this written discovery "requests over to them, if they don't respond to it, "I'm going to go in and file a motion to compel with the court. "I'm going to force them to give me the information "that proves that I owe this money to them." 

The reason why I'm labeling this one, be careful what you ask for is because you need to really, while I understand where you're coming from on this, you really need to look at how the court views this. And if you're actually hurting yourself by doing so much discovery. So the junk debt buyer, they come in, they're the plaintiff. You, you're the defendant. 

As the plaintiff, the creditor or the collector, or the junk debt buyer, whoever it is that's suing you, they are required to prove to the court a number of things. They have to prove that you had the original account. They're going to have to prove the amount owed. They're going to have to show what the terms of the agreement were. They're going to show that you breached the terms of that agreement. And then they're going to have to show an additional step of how it is that they got it. They're going to have to show that it was transferred, assigned, somehow that they got this account, and now that's why they have the ability to collect on it is because it was assigned to them. They've to prove all of those things, whereas you as the defendant, you don't have to disprove anything. You don't have to come in and prove that it wasn't you, or prove that it was the original creditor and that they've got their numbers wrong. 


  • You don't have to do any of that. As the defendant, your job is just to kick back and pick apart their case. They've got to prove all of those things. And so if you come in there and request all of this types of documentation, and I should tell you this, here's the dirty little secret when it comes to junk debt buyer cases when they go out and purchase these huge portfolios of charged-off accounts and they pay $0.3, $0.4 for them, the dirty little secret is they don't get a lot of documentation at that point. They might get a couple of statements, or a generic bill of sale, but they don't get a whole lot of information or evidence that they can present to the court. And the reason why they don't care is that 94% of junk debt buyer cases end up in a default, meaning that the person that they sued didn't even bother responding to it. 

Now, if a case goes through a default, generally the court's just going to give them what they're asking for. They're not going to require them to come in with a bunch of monthly statements, or really parse through the assignment documents, and make sure that they're the actual owners of it. The court's not generally going to require that. So from the junk debt buyer's perspective, they're thinking, "Why to bother, why go to the extra expense "of getting all of these additional documents "when we don't need them because almost everybody, "94% of these people aren't even going to respond to it, "and we're going to be able to get a default judgment." So that's why they don't have a lot. And so most of their contracts allow them to get additional documentation if they go back later and ask for it. They often have to pay extra for it, so they don't want to incur those extra costs. So if you come in though with a formal written discovery request asking for additional documentation, they may actually have to go back to the original creditor and get that documentation, even if they have to pay for it. And then they come in and they're providing you with years of monthly statements. 

They're providing you with the original contract or whatever it is that they're providing you that they got from the original creditor and in essence, you've made the case against you against yourself. If that makes sense. You went out and got the evidence that they're going to use against you. They didn't have it, they probably weren't going to go get it. But because you're forcing their hand with written discovery requests, they had to go get it, and now they are going to use it against you, and it's going to make your case a lot tougher. So remember your role. Essentially in this legal proceeding, you're the defendant. You don't have to prove or disprove anything. You can pick apart and punch holes in their case. They've got to come through, and prove each and every one of those steps. 


2. Answer The Lawsuit

Let's go back to the very beginning where I cited that statistic that over 94% of these cases end in a default judgment. You have to file a response to the complaint. In most jurisdictions, if you want to avoid a default, you're going to have to file a written response to the allegations and the complaint. If you don't take that first step, which is one of the easiest steps in dealing with a debt collection lawsuit, you're going to lose and you're going to lose big. They're going to give them everything that they're asking for and they're likely going to throw on some attorney's fees, court costs, and interest on top of it. And then all of a sudden this $2,000 credit card is going to turn into this $7,000 judgment. They're going to start garnishing your wages, they're going to levy your bank accounts and make life miserable. So answer the complaint. Make sure you do that. It's a fairly straightforward step. Make sure that you answer the complaint. That's the first step to being able to win your lawsuit. 


3. Show Up

The third thing is another fairly simple thing but a lot of people don't do, and it just involves showing up. In most of these cases, there's going to be relatively few hearings. There might be a trial. There's something called a pretrial conference. Sometimes there are little hearings where they require you to show up to like a mediation conference. If you don't show up, most of these courts will enter a judgment against you. I can tell you, like in Arizona, the Justice Courts that handle most of these cases, they're just itching to get rid of these cases. They don't need another one of them. Thousands of them get filed in their courts every single year. They want this off their docket. And so if you don't show up, even if you're five minutes late, that five minutes may cost you big time. So make sure if there's any type of hearing set up with the court whether it's over the phone or in person, however, it is that they're doing it, make sure that you're there. On the flip side of that, if they don't show up, you should ask the court to hold them accountable. 










Conclusion

So those are my three really big tips on how to win a debt collection lawsuit. Be careful what you ask for. Don't go in and ask for a bunch of discovery. You don't need it, make them prove their case. You don't need to prove it for them. The second one is to make sure you timely file an answer with the court. That's the first step to being able to get this thing dealt with. And the third thing is simply just showing up. If there's a hearing, if there's a trial, make sure you're there, even if you're not sure exactly what you're supposed to say or do. Make sure that you show up. 

4 Different Types Of Closing Costs


Homeownership is the biggest investment you're going to make in your whole life. But this investment people don't trust lenders. There's no trust, and I understand, it's so many rules out there that are being bent back and forth to allow certain loan officers to charge or not charge or because it companies aren't big. So I understand, closing costs play a big part in people not trusting lenders. You're not asking for a couple dollars you're asking for thousands of dollars when you're asking for closing costs cuz they blend in the closing costs into the downpayment, there's this fee, that fee, it could be very confusing. So I understand 


let's go over closing costs. Before we get into the closing cost you have to understand there are four different types of closing costs. Some fees are shoppable, some fees aren't shoppable, some fees just change because of times change.



1. Title Insurance

  • Protects you against previous owners' debt and other claims of ownership prior to buying the home.

There are two policies


  • Owner Policy
Paid by the seller, the person you're buying the house from traditionally pays for your owner's policy.


  • Lender Policy
Paid by you, you're getting a policy because you're financing the home. If you were paying cash, there's only an owner's policy there's no lender policy.


What Is Title Insurance?

It protects you from any other liens that are on the house. When you buy the house, the title insurance makes sure there are no other liens when you purchase the home. Liens can happen while you own the home because life happens and things happen, like judgments, taxes, stuff like that, but when you buy the home there are no other liens on it. So when you get that insurance policy it's guaranteeing you and the lender, there are no other liens if there is a lien on there all those liens must be released or paid off by the seller or whoever's wants to pay it before you buy the home. But when you buy the home these policies protect you from any other leads. The owner policy covers the purchase price, and the lender policy covers the loan amount. And these fees normally are very reasonable, title insurance companies are very big companies there's no hanky-panky, the fees are very reasonable when it comes to title fees. When you look at title insurance don't stress about title insurance too much, because the fees are very fair.



2. Escrow

  • An escrow fee is paid to the title, escrow company, or attorney for conducting the closing of real estate transactions.


  • Seller Price
Based on the purchase price


  • Buyer Price 
Based on the loan amount

Escrow fees, when you buy a house there's the seller, the buyer, the lender, and the title insurance company. What escrow does escrow is the mediator that controls all the fees to make sure everybody gets what they want and no one's getting ripped off. So with escrow fees, the seller pays their own fee, and the buyer pays their own fee. The seller fee is based on the purchase price, and the buyer's fee is based on the loan amount. So when you're doing escrow fees rather about $2-$2.50 per $1,000. Everyone is responsible for their fees. The one thing you want to look into when you look into these fees, the seller. A lot of times small escrow company they work out deals with the selling agent, hey, use me I'll drop your fees and I'll raise it on the buyer. 

This is where the johnny-come-lately Realtors don't catch it, these deals still happen especially with when you're buying a flip. When you're flipping a house the investors they want to pay the least amount of fees, they want to maximize their dollar, sometimes the Realtors that list those properties, they already have deals worked out with other escrow company. Hey, keep our fees low, put it on the buyer's side. This is where you need that Jedi real estate agent, the Jedi Lender, hey, these fees are high. But when you catch them, of course, everyone drops it because they should be paying their own fees they can't put all the fees on the buyer that's against law. But a lot of times people don't catch it, so pay attention to those.


3. Miscellaneous

  1. Home Warranty* (Once A Year)
  2. Flood Certificate
  3. Notary
  4. Wire
  5. Recording
  6. Home Inspection
  7. Termite Inspection
  8. Endorsement 
  9. Sub-Escrow
  10. HOA Questionaire
  11. Upfront Mortgage Insurance (FHA Loans)
  12. VA Funding Fee (VA Loans)   *= Optional


If you do buy a home, I do recommend you get a home warranty its renewed every year. Certain things are covered under the home warranty that you want to get. You can waive termite unless it's VA, if it's VA you cannot waive termite. Upfront MI, upfront VA funding fee, even though it's on-page section B, of page 2 of the loan estimate, these are miscellaneous things that do pop up, but it's finance. Just know that upfront MI and the VA funding fee is financed. It does not charge even though you look at the receipt it shows charge, but they raise the purchase price or the loan amount to cover the front MI and the VA funding fee. On VA if there are termite issues, those issues have to be fixed that's why they called miscellaneously. 


4. Pre-paid

  • Hazard Insurance:
  1. 1 Year + 2 Months Reserves
  2. Loan balance x .15% x 14 months

Your hazard insurance, normally it's 14 months, you pay 1-year upfront for hazard insurance, and they collect two months and reserves, and every time you make a mortgage payment they collect another month, and when your hazard insurance due again, they already collected reserves and your lender pays your house insurance. Hazard insurance is only 14 months, that .15%. A lot of time it's the loan amount, times, .15% divided by 12, times it, by 14 months, that's how much in hazard insurance. 


  • Property Tax:
  1. (Follow Impound Schedule)
  2. Purchase price x 1.25%

This is where people get crazy, the property tax impounds. It's a purchase price times 1.25% divided by 12. unless your area has some crazy property taxes which can't happen, and it's not the lender's fault. Oh my god, my lender tricked me. He didn't trick you, you picked an area, and you picked a johnny-come-lately realtor. What happens is they don't realize you picked a property with crazy property taxes. So make sure that you don't work with these johnny-come-lately, when I say johnny-come-lately, the guys that just get paid salary, they take low Commission they're not paying attention to these things. They don't need referrals they're working for cheap. Make sure that you understand the impounds. When you understand the impounds, right now, depends on what month you're collecting, let's say right now everyone's doing 10 months, sometimes these lenders will do 6 months. In your mind you're thinking, well, this guy's fees are less. Well, fees aren't less, he's just showing six months, he's just trying to trick the fees so he can charge other fees or he just tricked the fees on you. You know what I mean, so you have to make sure you have to tell them, hey, are these impounds correct? Or do these impounds match the month I am closing escrow?.


  • Interest
  • Interest rate x Loan amount  x Days left in the month

It's the interest rate, times, the loan amount, divided by 365, times it by if you fund on the 25th, there are 5 days left, you fund on the 29th, there are 1 or 2 days left. So it's like prorated just like renting, you move in on the 15th, you have 15 days of interest till the end of the month, you move in on the 20th, you have five or six days. So those are your prepaid. 








Conclusion

Hopefully, you understand the four categories of closing costs, how they work, what's shoppable, what's not shoppable, what to look out for, and how to compare it, and how to time it to bind in the right time, hopefully, you can understand what the fee.  

How To Shop A Mortgage The Right Way - Step By Step



In life. Let me tell you something. Business is business. In business, you're always chasing the best deal. So in this article, we are going to go over how to shop your mortgage the right way. There are wrong ways to do it, and today we're going to teach you the right way to do it. Homeownership is the biggest investment you will make in your life. The last thing you can afford is mistakes, or to overpay. We also want to help you minimize your out-of-pocket expense and maximize your monthly savings. I'm going to show you how to shop for your mortgage. Remember this. It's not easy, why is it not easy? Because they've made this process so convoluted. Don't you hate that, especially when you go out there buying a car, you pick a car, but you don't know what the financing is in the car? Think about a house, how crazy is that biggest investment you about to make. You want to make sure you get the best deal because every dollar counts.



Let get into the article


If you go to Google and search for how to shop for a mortgage. All you're going to see is a bunch of interest rates. But that interest rates don't make sense. How does that apply to you?. I see people all the time, I do myself, and shop for mortgage rates. A bunch of ads start popping up, all these people start following you, which one should you take. But the question is, how do they know the answer to what mortgage to get you when they haven't spoken of you yet. They don't even know your credit yet. That's insane. Just remember, they're just baiting you. They can't give you accurate information until you give them accurate information. 

Always remember this

  • Your Realtor is not making your mortgage payment
  • your lender is not making your mortgage payment
  • You are making your mortgage payment 


You should shop for the best deal. Because you are making your mortgage payment. Remember that when you're out there looking for a home, the person you need to be loyal to the most is you, and your family. So remember that as you're out shopping to buy a home.


How Do You Shop For A Mortgage? 

Do you go online? Do you run a bunch of numbers? Everyone's quoting you, but they don't know the figures, when you're putting in let's say 5% down, they're giving you a figure. If they don't have an accurate score, they can't give you an accurate quote. Say you're doing FHA, but depending on the loan amount, depending on the area, they don't know enough about it, but they're just throwing numbers. They're throwing these low-interest rates at you to get you to reach through to call them. it's called a "bait-and-switch". Or it's a teaser rate. If you read the fine print, you're like man, you gave me this smoking deal, especially companies like Oni. Some of these lenders online you'll see that advertising on TV. If you read the fine print, you got to have 30% equity. They're throwing all this rate at you with, you need 30% equity, you need a specific credit score, what happens if you don't have that score. If they're not that upfront, how can they be upfront later on? You want to know, hey, if you work with the lender, they know what rates or average that you at, but they can't give you a quote until they see the numbers. 

The question is how?. And this is how you do it.


1. Run Your Credit

  1. You need to have at least 1 lender run your credit so you can shop your loan.
  2. You cannot get accurate quotes without an accurate score
  3. Your credit report is good for 90-120 days


The first thing is you want to make sure you run your credit. You cannot use Credit Karma to validate your credit. Why is that? Credit Karma uses something called "VantageScore 3". When you're running credit for a mortgage, you have to use TransUnion, Experian, and Equifax to validate your credit. And these credit bureaus use FICO score 2, FICO score 4, and FICO scores 5, to validate your credit. Depending on who you're borrowing money from is through that industry you have to run credit through their credit models. So if you're buying a home you cannot use VantageScore 3, which is Credit Karma. You can use your credit card company, your credit card company uses FICO score 8 to validate your credit. Remember, wherever you're borrowing money from, whatever industry, make sure you use their credit report model. A lender has to run your credit. You have to run your credit score at least once by a lender. Your credit report is good for 90 to 120 days. 

Without the right credit score, you can't shop for your loan. You may need one lender to run it, and you can use that credit score to shop your loan. When you get your credit rent, you're going to get three credit scores, you pick the middle score as your score. They're going to use the middle lowest score. So each person will have a middle score, whoever has the lowest of that middle score that's whose credit score profile they're going to use to judge to give you a loan estimate. Once you run your credit, and you know your credit score, your credit is good for 90 to 120 days. Let go to the next step


2. Create Your Profile


What do I mean by creating your profile, it's easier to shop your loan, it's faster to shop your loan, and it's more accurate to shop your loan, once you created your profile.


  • Your Goal:
  • Is it a purchase
  • Rate & Term refinance
  • Cashout
  • Streamline


  • Property Profile:
  • Is it a single-family home
  • Duplex
  • Triplex
  • Four-Plex

  • Loan Type:
  • Conventional 
  • FHA
  • USDA
  • VA
  • Jumbo loan
  • DPA loan

When the first lender gives you a quote, make sure you know the loan type. Write down the loan program. They're going to be multiple loan programs, write it down as well.


  • Occupancy:
  • Is it an owner occupy
  • 2nd home
  • Investment

Typically when you go with a conventional loan, then you can go second home or investment. But VA, FHA, USDA, down payment system. Typically they're gonna be owner-occupied properties, but when you get into second home or investment they will be conventional loans. Remember, conventions can also go owner-occupied as well.  

Once you fill out the information, you create your profile, you to want to be put in your,

  • Purchase Price Or Appraised Value_________________

  • Loan Amount___________________________

If it's a refinance, the appraised value, if it's a refinance, it's the new loan amount. If it's a purchase, it's the loan amount after the down payment.
  • County you're buying in_________________

  • Middle Credit Score_________________

One that people forget a lot, and even I make these mistakes, the county you're buying the house in. That's really important special you're buying in Southern California, Riverside, and San Bernardino, how completely different FHA loan limit. So it's really important. The next one. The middle score. They're right there is the perfect profile.



  • Remember these things when you're out there shopping for a mortgage. That's why I do not like these pre cause or these estimates from other lenders or from these websites, because they're not asking you the information I just asked you. Once you can get down to the nitty-gritty of that information, then you can get an accurate quote. Don't get excited about a home, and do all this crazy excitement jumping and dancing, and you realize, they priced you incorrectly, and now you're taking a higher rate which you didn't want, or you would have bought a house a little bit cheaper. That's why you got to make sure that the profile is money.



3. Shop Different Lenders

  • Shop 2-3 lenders on the same day so the pricing is accurate.
  • Remember, rates changes every day!

When you shop two or three different lenders, it's important you do that. You want to get a quote from everybody, but when you shop, do me a favor, make sure you shop everybody on the same day. why is that important?. Rates change every day. So one day you shop a lender, the next day you shop other lenders, let's say rates were worse that day, but the old lender probably couldn't give you that pricing anymore, the price was worse than the other two that you got that day that you priced. So shop everybody the same day, you want the same day loan estimate. If you're shopping for a home, get two or three quotes on the same day. If you don't get them on the same day, it's almost worthless. Get them on the same day cuz rates change daily.


4. Ask For A Loan Estimate

  • The LE is 3 pages. You want to pay attention to pages 1 & 2

Once they gave you the numbers, what do you want?. You want to get that loan estimate. It's called "LE". If you ask the lender for a loan estimate. If you say, can I get a LE from you? trust me, they're not going to get crazy with you. If you say the word LE, they know you've been reading roadtosuccesse.com article. Also, they know that you're educated. If you have your profile, trust me, they're going to know, I can't pull one over on this person. Say with courage, this is my profile, send me the loan estimate. The loan estimate is three pages long.


When you get the loan estimate, make sure the loan estimate matches what they give you. That's the first test to see who's gonna be honest with you, who's gonna be upfront with you, make sure what they said, matches the paper. 

Page 1: Make sure the profile of the loan matches the profile you created


The purchase price. You know you're comparing apples to apples with other lenders. The loan amount, if it's FHA, VA, down payment system. whatever it is, make sure it's on there. Make sure the new loan amount on there. If you're going VA or FHA, make sure it's the complete loan amount with the funding fee in there or the upfront MIP. Make sure the interest rate is the same, make sure everything matches so when you're comparing with other lenders, a lot of times all of that information can be off, so if it's off, it can change the numbers. If other lenders are sending you especially conventional, conventional loan the purchase price is the same, the loan amounts are the same, the rates are the same, but be careful. On conventional, every lender's mortgage insurance for conventional is different.  they're shopping for different mortgage insurance as well. So if you're looking to chase the best deal, pay attention to page one for the mortgage insurance for conventional. on FHA, it should be identical. But on conventional, you want to make sure they match identically. Once you confirm the complete mortgage payment and make sure everything is fine.

Page 2: You want to look at sections A, B, and J.


You want to look on page-2, section A, section B, and section J on a purchase, or refinance. A lender control section A, B, and J. All the other sections are third part or their impounds. No matter what the lender puts in there when you go into escrow, the impound can change. That's why I really want you to pay attention to page 2- section A, of the loan estimate. why is that? because of those fees the lender's control. Page 2, Section B, it's the miscellaneous lender fee. If you're brokering, that's where they charge processing. The appraisal should be in there, the MIP should be in there, the funding fee should be in there if there's a flood cert, credit report, any application, they're all in there. So you want to look on page 2- section A, Section B, and then section J, the lender credit, to see how much their credit towards your closing costs. Those are the three main sections to look at. The reason why all the other sections, they don't control. They should be around the same price.






Conclusion 

Out of the 2 to 3 lenders you see out there, whoever you're most comfortable with, this is what I would do. Sometimes lenders don't have control of their fees, the loan officer does it because they work for a company, or they work for a broker. So sometimes once you get your loan estimate, and let's say, that one loan officer wasn't the best deal on the block, but you got the two-three other ones, give them the final chance. Hey loan officer, I trust you, I enjoy working with you, but you don't get the best deal on the block. This right here is the best deal on the block. Because of that, I'm willing to go with you because I like your service, I like that you explain everything to me, just match the rate in the fees, and I'm yours. That's what I would do. I wouldn't go with the best deal cuz sometimes the best deal loan officer is just selling rate, they're dealing with too many loans they have no time for you. But if someone is able to take it to upper management, and match it, give them the business. That's what I would do. 

Because homeownership is stressful, you want someone that has your back, that is transparent, that talks to you all the time, yes, if you got the same question 50 times, it doesn't matter. They should answer it because it's the biggest investment you're gonna make. 

Thursday, 6 August 2020

How To Pick The Right Lender Or Bank When Buying A Home


You want to buy a house, and you're thinking where do I look, who do I pick, how many types of a lending institution is there out. This article is about how to pick a lender, how many different institutions they are, how each institution operates, and in the end, I'm going to give you my opinion for each institution. So this works nationwide, no matter where you are in the United States if you're going to pick a mortgage lender, if you're going to buy a home, definitely read this article.


let's get into it

There are lenders, mortgage banks, banks, and the most important thing to know that there are four types of lending institutions. We're going to tell you the four types of lending institutions, break them down, and then I'm going to give you my opinion about each institution.

  1. Mortgage Brokers
  2. Direct Lenders
  3. Mortgage Bankers
  4. Brick-and-Mortar Banks

Even though, it can be the same loan officer, the same mortgage consultant, working at the same lender, guess what? They're going to be treated differently. One's gonna have better rates than the other one, or they call it "concessions' there's a little trick way to say it. 


Let's get into the article



1. Mortgage Broker

  • Shop Your Loans
  • Deals W/Banks That You Can't
  • Generally Always Good Rates

What do I like about mortgage brokers, they shop your loan. There are wholesale banks, the stock market. People trading on the market for loans. Different companies, so the mortgage brokers the reason why their costs are so low, they don't have their own funders, their own underwriting, they don't have a lot of costs, they don't have warehouse line costs. Because of all that, they're able to offer you a lower interest rate. With mortgage brokers, they're going to go shop your loan, offer you a better interest rate, and they deal with banks that you can't deal with as a consumer, and I even give you a list below


  • 4 Main Banks Their Loans Are Sent To:
  • United Wholesale Mortgage 
  • Quicken Loans 
  • Planet Mortgage 
  • Freedom Mortgage 

Except for Quicken, some of these banks that are wholesalers, they also do direct lending as well. United wholesale mortgage, they only deal with these brokers. You have heard a quicken loan, planet mortgage, freedom, they are wholesalers as well. Mortgage brokers rates are smoking, they'll be direct lenders. But their fees are little heavier because, like United wholesale, quicken, planet, and freedom, they'll charge an underwriting fee about $1,000 maybe a little bit more, then there'll be a processing fee from the broker for another $1,000. Direct lender, mortgage bankers, brick-and-mortar, might be between $1,000 or $1,500, but if you pay a little more in the fees, their rates are lower. You can either go with the lower fees or go at a higher rate. For long-term investment, you want to go with the higher fees, but take a lower rate because you are paying interest over 30-years.

Going back to mortgage brokers. Also, if you have funky programs. They're good when it comes to the common loans like the FHA, the conventional, the VA. They will give you good pricing. But when it comes to thinking outside the box to get a loan done, a lot of times mortgage brokers because it's not their underwriter, it's not their funder, they have to wait in line with other brokers. Sometimes the speed and the service are not there, but the pricing is definitely there. Of course, they are improving. United wholesale right now has double their business, they're providing good service for these brokers. But also with brokers, if you have ITIN, (identification tax ID numbers). If you have an ITIN, brokering is great. If you didn't file your tax return you would have to go with a non-QM product, brokering is great. Commercial lender, brokering is great. So brokering has more programs because I said, they don't do your loans directly, they shop up with different banks, wholesale banks, mortgage banks, that buy these loans or buy these products. Mortgage broker's rates are good because there's more time to underwrite loans.


2. Direct Lenders

  • Fund Loans With Their Own Money
  • Smoother Internal Process (Own Staff)
  • Decent Rates (Not As Good As Broker)
  • Take Riskier Loans Than Brokers

It's a smoother transaction, they fund their loan with their own money so they can make the judgment call on riskier loans. They have their own staff, they have their own processors, they have their own underwriters, they have their own setup, their own disclosures. Everything under the Sun to make that judgment call themselves. So they take riskier loans, especially if you're cutting very close to qualifying, direct lenders are great. The rates aren't as good as brokering, but they're taking higher risk, don't forget when a bank takes, or anyone who takes a higher risk, normally, rates are a little bit higher, fees are a little bit higher, but the rates are still better than mortgage banks which we'll go through in a second.

Direct lenders are normally small, they're not that small in the lending institution, but they're smaller than mortgage banks, but they're bigger than them brokers. I like them for different specific programs, when they fund their loan they use something called their warehouse line, they'll fund it with their own money, their own credit card, and they'll sell it to list below

  • Loans Sold To:
  • Wells Fargo 
  • Pacific Union
  • Caliber
  • Ditech

Direct lenders take more risk, they talk within their people to make the loans work. That's why I like them so much. If you're going to go with government loans, and you have very suspect credit, suspect income, direct lenders are great to pound your loans through. A lot of Realtors like direct lenders, they don't like brokers as much because realtors are looking out for their own Commission they want to make sure they're getting paid. So they normally will refer you to a direct lender.


3. Mortgage Bankers

  • Acts Similar To Direct Lenders
  • No Overlays
  • Service Their Own Loans

Mortgage Bankers and direct lenders are very similar. They have their own money, they fund their loan. But direct lenders use a warehouse line, mortgage banks can either use their own money to fund the loan, or they also use a warehouse line. Mortgage bankers act similarly, they have no overlays. So direct lenders, when they underwrite the file, follow the guidelines of whoever is going to buy their loan they try their best to follow their guidelines. Sometimes these wholesalers or anyone who's buying the loans, they have overlays. They might add an overlay or risk overlay that they don't like because they're taking a lot more risk. Mortgage bankers have no overlay they sell to list below

  • Loans Sold To:
  • Fred Fannie
  • Freddie
  • Ginnie Mae

They like three big government institutions that design guidelines that probably have no overlays. Mortgage bankers will slam your loans out. Realtors like mortgage bankers, and direct lenders because they have more control, they're talking within the people within, they have underwriters, doctrines, funders because they have more overhead, their rates tend to be a little bit higher, but they will slam the deal out. If you pick a realtor who's going to refer you to a place that's gonna wax you on rate, I would think twice. Like I said, the Realtors think about out of their own pocket, and we're going to write another article on how to pick a realtor.  

Let's go back to Mortgage Bankers. So they sell it so Fannie, Freddie, and Ginnie Mae

  • Example:
  • Loan Depot
  • Quicken Loan
  • Caliber
  • New American Funding
  • Mr cooper

You'll notice that, if banks have really good rates, they're stricter on guidelines because they can't afford a fallout, they can't afford risk because they give you such a low-interest rate. I'm not the biggest fan of it, we'll talk about that in a second. But they get the job done. A lot of Realtors like them. If you look at Scotsman guide top 100, a lot of topics cussing at the top 100 loan officers work for mortgage banks, the reason why, because they're doing such high volume, they're treating you like a factory loan fragment.


4. Brick-and-Mortar Banks

  • Very Conservative 
  • Low Risk, Low Rates, Low Fees
  • Unlikely To Get Any Special Treatment
  • Mortgage Isn't Main Source Of Income

This is traditional, once the people think about getting a loan. They're going to go to brick and mortar bank


  • Types Of Brick & Morta Banks
  • Wells Fargo
  • BOA
  • Credit Unions
  • Chase
  • US Bank

These are your brick and mortars, you can go there, and you can make a deposit. You can open a checking account, a savings account, a money market account, a CD. They have other types of retirement, they also have all these cool apps. Those are brick-and-mortar banks. Remember, they're conservative, they're low risk, low rates, low fees. Why is that? Brick-and-mortar banks have other sources of income. They make their money in different sectors. Their executives make money as a company as a whole, with other ways of making money. Mortgage bank executives make money on mortgages that's why their rates are a little bit higher, and that's why I don't like them, but brick-and-mortar have managers too, but their salary and they're getting money from other sources. Because they don't make their money solely on mortgages, a lot of them don't heavily staff. So if you do use a brick and mortar bank, depending on to the loan officer you might not get the service you want, they take longer to close, a lot of realtors don't like it when you go to big brick-and-mortar banks sometimes, because they might not have the service, but you know what? If they have the rate and the fees, and right now every dollar counts. I like that. But it all depends on the loan officer.

When it comes to brick-and-mortar, I hate to say this, if you're with the right loan officer, it's like direct lending. You get low fees, and you get low costs. It all depends on the loan. But good luck when you go with the wrong loan officer.






My Opinion

Let me tell you what I think. Hopefully. I earned the trust to give you my opinion. 

Down Payment Assistance
Go for direct lender or mortgage bank

VA Or FHA Loan 
Go for the direct lender and brokering

Conventional (Under 680 Credit)
Go for the direct lender and brokering
Above 680 - broker or brick & mortar

Jumbo
Go for brick & mortar

Self Employed
Go for brokering & direct lending 

ITIN, (Identification Tax ID Numbers)
Go for brokering 

How To Choose A Mortgage Lender - For Home Buyer


In this article, I want to talk about how to choose a mortgage lender, and I'm going more specifically over mortgage brokers, versus, banks, versus, credit unions. Tell you the difference between those. Tell you the pros. Tell you the cons, and then we're going to go over a little bit about what questions you need to ask the lender to make sure you get a really good mortgage lender for you. So let me start off talking about different types of institutions where you could get home loans through. A lot of times when people think about buying a home they think. Hey, let me just give my local bank. Bank of America, Wells Fargo a caller, let me give my credit union a call, or what's the whole thing with mortgage brokers? What's a mortgage broker? How does that work? What's the difference between a mortgage broker, and a bank? The difference between that, and a credit union. 





Credit Unions

I'm not a big fan of the credit union. I think credit unions are great. They do car loans, they do checking account, savings, CDs, much like a bank. They have really good customer service. They care about their members, and I think that's great. The problem is I don't really think the training there, and I'm a person that believes in knowledge. I'm not saying that if you work with a credit union, or you know someone with the credit union, or have gone through a credit union. I'm not saying this about all credit unions. I'm using this in a general sense. They just don't have the best training in the world. The other problem with credit unions is the people who are doing the loans. The loan officer the credit union, a lot of them are strict salary, and if they're not strict salary, their salary, plus, bonuses. And I'll get to this in a little bit later. So that's why I'm not really a big fan.


Banks

Nope, they're not like that. This is one of the things with banks. Banks have a lot of good advantages. As a matter of fact, if you're going to be using bond money. You're probably going to be using banks. If you need construction loans you're probably going to be using banks. But here is the thing. If you work with a bank, don't get mad, but I know a lot of people that have worked for banks, and what happens is they get what's called the "foot traffic". They're not going out there hitting the pavement every day. A lot of the loan officers with the banks are just sitting in the bank and just waiting for the business to come to them. They're not going out. It's sort of like I always look at our industry. You have the lion, and you have the gazelle. There are a lot of lions with banks, but most of them are gazelles. They're sitting back. Again, banks pretty much most of the loan officers are on a salary, plus a Bonus. So they're not straight commission. That's one of the things. 

Now, when it comes to banks you have to understand that they're only lending their money. This could be a problem if you go in and maybe figure on an FHA loan and maybe that's not really very good in their wheelhouse. They might tell you, well, you're not qualified for a loan. They're not going to say, well, you could probably get a loan, but you just can't get one through us. That's the problem because you're only using their money. If you're a square peg, and they have a round hole, you're going to have a hard time fitting in that. And that's the unfortunate thing. 

There's a lot of fallout. There’s a lot of people, banks tend to want the cream of the crop buyers. If you're walking in with 750 credit scores. Putting down 20%, your salary, and employee, great. But what happens if you don't fit into that? You may be working with a bank. You may not. The thing about banks is they're generally a little higher on the interest rates than, say a mortgage broker, but they're a little bit lower on closing costs because everybody's in-house, and that's the nice thing about banks, is their in-house. Now I will say this if you are going to use a bank. If you’re going to use a credit union, if you are going to use a mortgage broker, "get someone local"

You want someone local. Out of sight out of mind. You want someone if things aren't going your way you could go in there and pound on their desk and say, what the heck's going on. So just keep that in mind. Generally, everybody's in a localized area. You'll have your underwriter there. You have your processor there. They do have some programs that they have a little bit more flexibility on, because, they could just decide not to sell that, but they might keep it, they might keep it in their portfolio.


Mortgage Brokers

All of them out there. It's sink or swim. They don't get paid unless they find a way to say "yes". So If you walked in, and you were on an FHA loan program I'm probably going to have one lender for that. That it's going to be focused on FHA. If you're VA you're probably going to have one lender for that. If you're on maybe a conventional in a 5% down, you're over here. If it's a 20% down you're over here. If it's a jumbo it's this linker if you go in, and maybe you have low credit scores you're over with this lender right here. So they don't have just their money. They have everybody's money. I know you go into these brokers and they're like, we have 50 lenders. Let’s face it, most mortgage brokers will only use two or three. They'll probably have five to seven at any one time, but they are very efficient because this is all they do, and they don't get paid unless they find a way to say "yes" that's why I sort of break it up. Is there are the lions and there are the gazelles, and I would have rather have someone that is on a straight 100% commission. That, if they don't find a way to say "yes" they don't get paid. That's a huge motivator.

So there is the thing with a little bit different like the banks. Keep in mind. Brokers, broker out, they're going to broker out to a bank. They could even be broken out to the same bank you're getting the quote from. It's pretty rare, but it could happen, but they get their pricing, wholesale pricing, not retail like a bank. It’s usually going to equal out. And if you're looking at going with bond money you pretty much never going to go with a broker. If you're looking to get in a construction loan. You're probably not going to go with the broker, but again, it's all about choosing the right broker. It's all about choosing the right loan officer, and that's what you need to do. You need to choose the right person.


Choosing A Loan Officer

let's go over what you really need to do when it comes to choosing a loan officer. You want to always start off with your real estate agent first. know maybe you could get a recommendation from your real estate agent, you could get a recommendation from friends, co-workers, but dig a little deeper. Don't just get that recommendation. Ask enough to say, why you think this loan officer is so good?. Why are you referring me to this person? What is it about them that makes them so good? You can also go, and take a look at sites like Yelp. Go to their LinkedIn page, check their website. Read up on them, but overall loan officers are horrible at marketing. So don't hold that against them. But you definitely want to dig a little deeper, and ask him, and then when you're talking to them just like an interview in a real estate agent. You need to ask them two questions at least. These two questions. Why should I work for you? And why should I work for your company? 

Basically, let them tell you what makes them good. Let them tell you why you should be working with them. If they don't have an answer to those questions you really have to wonder, but definitely talk to your real estate agent. That's a good source, and just make sure the loan officer knows what they're doing. I mean, feel free to ask them, what training you have? If you go into the better business bureau, and they don't have a good rating. You really have to wonder, is that someone who you want to work with. So do these and you're going to be good to go, but definitely pick loan officer. At the end of the day, get someone you trust. Get someone that you know is knowledgeable. Who's been in the business that you feel has the proper training.




Conclusion

Hopefully, this article will help you to choose a good loan officer