The Margaret & Mortgage Group

Adjustable Rate Mortgage Loan (ARM Loan)

2009-02-20T06:24:00.000-08:00

The ARM loan is one type of refinancing loan that comes with the adjustable rate of interest and payments which depends upon certain criteria or variables. It's fixed that the rate of interest of ARM loan will rise, but it has got a certain limitation that it can not cross. This ARM loan can also be utilized for refinancing a mortgage. When an ARM loan can be beneficial for those people who are having poor credit, but it is not a well solution to a debt problem. Before you go for an ARM loan it is advisable to check all the parameters first.

The interest rate that needs to be paid is always variable. Because it depends upon the prime index in the economy. The interest rates always go up and down depending upon the economic condition of a market. In that case the borrower needs to bear the extra cost because of the change in the interest rate.

When You Should Look For A Mortgage?

2008-12-05T06:50:00.000-08:00

When you are going for a mortgage then you either should go for Fixed Rate Mortgage or Adjustable Rate Mortgage. If you are going for an ARM the how much you need to pay that will depend upon the interest rate. This very amount may vary according to the present financial condition. It may be very high or low rate too. Just make a note of that whether economy is doing well or not that will be reflected upon the payment that you will make.

If you will choose FRM then the interest rate will always remain the same through out your life. It might be good in the present condition of recession, because now the rate of interest will be low. But when the economic graph will move upward then also you will continue to pay the present low rate. But it may also be different when you are taking FRM an the interest rate is high and suddenly after few months economy drops then the rate also should drop, but that will not happen in case of FRM, so here this option might not seem great to you.

The best thing is the competitive market. You don't have only one mortgage lender available in the market. Just keep your eyes open. You will find many option coming in your way. Surf the online rate charts that are being offered at free of cost. You will be no more at the mercy of your local Bank. This will enable you to get the best mortgage.

Should you get a mortgage while the housing market is so volatile?

2008-12-01T06:07:00.000-08:00

Please reply in affirmative. You will get the mortgage for sure.

I would suggest you to do the research first. Know the Mortgage Industry & the professionals who work in this industry. May the offer that is in your hand now seems to be good, but please don't think that it's the best offer that you have got. Visit the total market. It may happen that you will get the best one from any other source at much cheaper rate. You can get all the data online at My FICO. By acquainting yourself with all these things you are protecting from being the victim of scams.

Mortgage scams have become a huge problem, but they can be restricted. Just remember one thing that mortgages that seem too good to be true probably are. In a research the Mortgage Asset Research Institute reported that 26 states have very serious issues with mortgage fraud or scam.

Finally, you should consider using a professional mortgage broker. As pros, they have the knowledge and resources to find great loans quickly and easily. Using a broker will cost you some up front money, but will save you time and stress.

Video on Mortgage Comparison

2008-11-29T01:01:00.001-08:00

Utility of Mortgage Comparison

2008-11-29T00:57:00.000-08:00

If any one will use the mortgage comparison site then incredibly it will help you to find the right mortgage option for you. When you will start to use the comparison tools then it may happen that you are being asked several questions and that will help the potential lender to check or generate the overview of your real financial capability and the repayment capability and also it will help the lender about the personal verification. After that you might be asked by the calculator that the mortgage amount that you are applying. They even may ask that why you are applying for the mortgage loan, after that the question may arise like whether you will become a home owner or proprietor or not? Are you buying to let or joint possession customer? After that they might ask you to submit your income details as well as the expenditure list or the employee status. All these details are collected to ascertain the ability of yours to pay back the mortgage amount. Without asking all these questions the mortgage comparison site cannot link your conditions to lenders that might be able to offer you a mortgage.

Once you will complete the total form fill up formalities then you will be given a list mortgage lenders who are potential. After that through that list you will get the brief idea of all the offers that may come in your way. Then you can choose the right option for you.

Mortgage Comparison

2008-11-29T00:56:00.001-08:00

If you are looking for a mortgage then it's required to know that whether the mortgage that you are gonna choose would really suit your circumstances or not. It may seem very alluring to go for the first deal that seems to befairish. But this is nothing but a trap for the buyers or specially for those who are first time buyers. So if you wanna go for an option & you want the full information about that then it's advisable that you should use a mortgage comparison site.

Interest Only Mortgage Video

2008-11-28T00:43:00.000-08:00

The Advantages & Disadvantages of Interest Only Mortgage

2008-11-28T00:22:00.000-08:00

Interest-only mortgage is similar to other home loans. But in case of other home loans, you pay monthly installment but here you pay only the interest for a period of 5-10 years, often for the whole term.

Advantages of interest only mortgage:

1) If you are a regular and practiced investor then this loan will be benificial for you. If you are sure that investing this money into stock or in any small business can give you a good return in the long run and you would be capable to repay the principal amount in fixed term; then go for it.

2) Interest only mortgage can be blessing for you if you get revenue out of it in the form of commission or bonuses. You can easily pay your monthly interest with your monthly salary and make money with principal amount by investing it in stock market.

3) Because of low initial payment you can qualify for a loan of a big figure.

4) If your financial condition is crucial and credit score is negative then low interest mortgage rates gives you a chance to improve your credit history.

Cons of interest only mortgage:

1) If it is an ARM, then there might be a risk of increase in the interest rate.

2) A fall in expected income growth can cause problems in paying off your emi.

3) If you are not disciplined enough in spending money then this mortgage will not be the right option for you.

4) Decline in property value will lead you to many financial problem.

Be Your Own Broker

2008-11-26T00:51:00.000-08:00

When you have decided that you are going to purchase a home then you can assume that probably it's the most big decision that you have taken in your life. You are not only gonna be the proprietor of your dream home, you also are going to be dependent on the mortgage lender who will help you by providing the loan. As the present mortgage market is full of competition, and various lenders are there to provide you the right mortgage, so you need to be little wise while selecting the right person or right lender for your dream home. Because in this case you are going to put your future on the hand of the lender. So if you will make a minor mistake then you will totally become the looser. Visit the total mortgage market, get the information of mortgage rates. If you feel that you are totally puzzled up then don't waste your time. Take the help of the professionals. If you will surf in the internet then lots of Mortgage rate providers you will find who will help you in getting the proper rate charts absolutely at free of cost. So what are you waiting for. Just go and click the button of mouse. Within the fraction of seconds you will discover a whole new world. Even it may happen that you will avail the best mortgage loan scheme available in market and also that in much cheaper rate. So ultimately you will be the gainer.

The Case Of The Missing Information On The Mortgage 1003

2008-11-17T04:01:00.000-08:00

Everywhere that I go today it seems like I run into mournful loan officers lamenting on the state of the mortgage industry. Unfortunately, most of these LO's do not realize that the mortgage industry has changed and that they have will need to change their old ways as well if they are going to succeed.

The last 6 months to a year, the mortgage industry is different than it has ever been before. In fact, it is so different; many people don't understand their job anymore. I believe that as an LO, you have to have an understanding of what your actual job is and at least some basic training requirements necessary to succeed in the industry before you can set yourself up to actually be a loan officer.

Before you can hang up a sign that says, "I'm a mortgage broker or I'm a loan officer", ...thinking that because it's easy to get a license and to become a loan officer, you need to realize that in the mortgage industry it's not always easy to know what is required of you, unless you have the proper training.

It used to be straightforward to be a "loan officer" and the industry formerly would support people who didn't have a concept of what they were doing. This was because the mortgage industry simply could not hire enough people to take all of the mortgage applications. There were millions and millions of loans being written and virtually any "warm body" could write them.

The AE's helped the new LO's, their lenders helped them; when they needed help, they had someone that they could call to "bail them out”.

Because two-hundred thirty-six lenders have dropped by the wayside in the last year and the market is as tight as it has been in years, most companies cannot afford to pay for AE's or Reps to do the work that the LO's should be doing.

These companies have a fraction of the mortgage activity that they use to have. Consequently, they have underwriters who are completely overwhelmed by the influx of government loans because this seems to be the product more of our lenders are encouraging.

The real problem comes when you couple the emphasis on FHA and VA government loans in the industry with LO's who are trying to submit government loan applications and think they can submit them like they did during the sub-prime era. This is absolutely not possible.

So what you have are people who have no experience submitting government loans that are presenting documents to more than one lender because they may have been denied previously. Quite often the LO needs to restructure and re-submit the loan, basically because the loan officer doesn't really understand how to properly submit the 1003.

They don't understand because they were never forced to learn during the crazy days of the sub-prime marketplace.

History has thrust us into a position where our loan officers now need to know how to originate loans. LO's all over the country are sitting by themselves with a very limited support system, which is made up of fewer "support" people than it ever has had in the past.

You have mortgage company's like ours who are adding additional support personnel for our LO's because we have recognized the drop in the vendor support. But unfortunately, our company is in the minority of mortgage companies that are actually expanding and growing during this downturn of business and can afford to provide sufficient support personnel to assist our LO's.

For many LO's, it appears that they need some of the most basic training, like for instance, how to simply complete an application and the 1003. I know that it sounds silly that it would take any training to fill out forms or to ask questions, but in my opinion, it is even more necessary today than in the past.

We see thousands and thousands of loans. Of those coming from the general population of the new LO's that we hire off the street, I would not be surprised to learn that 90% of them send in applications to processing incomplete.

With the new, stringent requirements imposed by most mortgage companies today, the loan officer needs to understand that they now have to complete all fields on the 1003 and also with correct dates that comply with regulations.

Let me provide you several examples of what we are not seeing completed on the 1003 today;

*Years of schooling isn't completed

*Borrowers birthdays aren't given

*Documentation necessary if there were less than 2 years of employment is not provided

*History of ownership

*Rent history

*How many children in the family

*Correct mailing address

*Correct dates that are in compliance with regulations

*The list goes on and on...

These may have been completed in the past by the lender's Rep or AE, and they may seem like little things reflecting back on the past days of the "Wild West sub-prime years", but today, your declaration has to be perfect if you want the application to get past underwriting.

In today's demanding marketplace, the HMDA section has to be perfect and the REO has to be done, and has to be done correctly. These are items that often may have been left blank a year ago, and "slipped by" because someone would have completed it for the LO.

When we were in the subprime heyday, 1003 applications quite often were written haphazardly and unfortunately nobody really cared because the LO had an AE doing follow up for them.

Occasionally, a lender would force the LO to complete the information and would end up telling the LO exactly what to put on the 1003. The lender would end up contacting the client for information, and in turn, create a photocopy of the application in which they had written exactly what the LO was to put in the blanks. The lender would then mail the documents back to the loan officer and would require the loan officer to correct the missing data. They would then have the borrower sign it and send it back to them.

Obviously, while we all know of companies that used to do this, it was never an acceptable practice. I'm not implying that it was fraudulent from the standpoint that they were falsifying information, but they did tell the LO exactly what they needed to put into the 1003 and we all know that is in violation of our industry's most basic compliance regulations.

While our company never allowed this practice, and I do not have a lot of interaction outside of our company, I doubt that there are any reps left who are going to provide this "service" for the LO...that century doesn't exist any more.

Those lenders who had that level of "service", or at least, what loan officers perceived as service, were basically good lenders that regarded their "services" to the loan officers as a necessary evil to get their loans closed; sadly, they knew that they would not be able to close many mortgages if they did not provide these "services”.

Well, let me tell you; that environment no longer exists. What you have now are conventional lenders like Flagstar, Chase, Citi Banks; people who never thought of providing "services" like these because they assume that the loan officer knows what their responsibilities are and as conventional lenders they simply will not offer to do the LO's work for them.

My position is that at this historical point in the mortgage industry, we need all mortgage companies to focus on providing their loan officers' more basic training. We need to recognize and correct this egregious training shortcoming BEFORE new regulations and compliance issues are "slapped" on LO's by an industry that is already regulated to the hilt.

If we as an industry start providing the proper support and training, and insist on higher standards of training and compliance, we will see more professional LO's providing proper paperwork and as a result closing more mortgage loans in a fraction of the time it is currently taking due to incomplete 1003's and unfinished documentation.

After all, isn't this why we are in the mortgage business?