Friday, February 24, 2012

Does Your Loan Officer Wear Lime Green Polka Dotted Underwear?

Okay, perhaps that’s a little TOO much information! Perhaps you really don’t need to know what splash of color your loan officer is bestowing on his or her bloomers on any given day.

But what you SHOULD know is who your loan officer IS.

Let’s see….scum bucket, slime ball, scammer, fraud frog…any of these ring a bell? They do to a whole lot of people, as our industry has been historically speckled with less than scrupulous loan officers committing fraud and scamming the innocent. Unfortunately, those LO endearments have, in many cases, been very well founded. (And how embarrassing that Minnesota and the rest of the Midwest have some of highest percentages of all this nastiness.)

What do you do? Protect yourself by doing your homework.

You have never been in a better position to check out the color of your loan officer’s undies. With social media, licensing requirements and the good ole world wide web, you can get a pretty good recon on the LO you intend on working with. Pure attrition (as I wrote about on Who is Going To Write These Loans?) has definitely wiped out much of the riff raff, but those little stinkers still loom. Whether you are a consumer or real estate agent, it is imperative to check ‘em out.

To that end, here is a list of ways to get that done:

  • NMLS. Is your loan officer licensed? Remember, as of January 1, 2011, it is REQUIRED. No license, no ability to write a mortgage.
  • Linked In. Great place to check out your loan officer’s resume.
  • Facebook. Whoa! This is a real “personal” insight into your LO’s world.
  • Google. For heaven sakes, this is one of the easiest ways to check out your loan officer…just type in his/her name on the search box. What pages come up? If you see your loan officer’s name right next to the words San Quentin, you may wanna think twice.
  • Ripoff Report. This says it all.
  • FHA Neigborhood Watchlist. This is a policing site that allows HUD/FHA to oversee lender activities and performance and publish this information to the public. Good stuff!
  • BBB. Who does your loan officer work for? What is their company’s rating? More importantly, check to see if there is a list of consumer complaints.
  • Twitter. Is your loan officer tweeting about the next local club they are partying at or are they providing tweets that would be relevant to our profession?
There. That should give you a robust start into your loan officer recon search. I just showed the colors of my knickers! Can yours? And nope, mine are not the lime green polka-dotted kind, either.

Sherri Sherpy
Cell: 612-363-1106
Fax: 651-964-2722
Apply Online or Check Status of Your Loan:
NMLS 287770

Friday, January 13, 2012

FHA Mortgages: Enough Already!

Borrowers are going to pay more for an FHA loan in 2012.  FHA mortgage insurance premiums are going up AGAIN.  This change could possibly take an approved loan file straight to the DENIED bin.

The recent, signed legislation to extend the payroll tax deduction means an increase in FHA’s mortgage insurance premium.  The FHA (Federal Housing Administration) has 2 charges to the borrower:

·         Up Front Mortgage Insurance, which is currently 1% of the loan amount

·         Annual Mortgage Insurance, currently at 1.15% and slated to increase to 1.25%

 How could this affect you?

It could end in loan denial.  Namely, if as a borrower, you are near the limits of allowable debt-to-income ratios.  For example, on a $250,000 loan, this increase will add another $26.04 per month in additional mortgage insurance which also gets added into the debt-to-income ratios.  This increase couple topple the peak of allowable ratios and result in a denied status on your loan.

What do you do?

We Are All About Solutions!

Two things:

1.       If you are an FHA buyer, get off the fence, find your home and CLOSE on your loan…now rather than later.   Push that spring market today!  Heck, even if you do still qualify after the increase, who wants to pay extra mortgage insurance?  Pew.

2.       Convert your financing goals to conventional financing.  With as little as 5% down (good credit needed), you can get a loan with NO monthly MI.  HUGE advantages:

a.       No monthly MI means your purchase power just increased dramatically (see illustration below).

b.      Sellers and banks LOVE conventional offers!

c.       Many lenders will tell you that there is a rate increase for doing this “flavor” of conventional financing (called single premium financed MI).  DON’T LISTEN.  You can get the SAME rates as those borrowers paying monthly mortgage insurance.  You just need to ask and shop around for it.

Happy House Hunting!


Wednesday, January 11, 2012

Mortgage Interest Rates, Closing Costs and Calculators

You are in your jammies, its 1:00 AM and visions of new homes are dancing in your head.  How much is this going to cost?  What interest rate will you get?  Who are you gonna call?  No need, my friend…the internet has got you covered!

Information is GOLDEN.  And if you are like most, you are a do-it-yourself-er (DIY).  You want and expect information at your fingertips until you reach a certain point in the home buying process.


Most people prefer to browse and learn online before shopping with the aid of a real estate or lending professional.  We GUARD and PROTECT our privacy.  Anonymity rules.  But where do you start?  Well, bookmark this blog because The MN Mortgage Mom has just dialed in for you.

1)      Interest Rates

Cool.  You can find “estimated” interest rates all over the net.  I say, “Not so cool.”  Why?  Because interest rates, to some extent are derived from credit scores, loan-to-value and other criteria.  Typically, the posted rates you find on the internet are for those with a minimum of a 740 credit score with 20% down, conventional financing.  Maybe you are an FHA borrower/buyer?  VA or Rural Housing?  Maybe your credit scores are around 680?  You need LIVE rates based on YOUR INDIVIDUAL criteria.  You can get that HERE.  (Disclaimer:  Don’t be sending me nasty grams at 1:00 AM that the rates aren’t LIVE.  Yep, markets close just like businesses.  If you want real live rates, you’re going to have to check them during business hours.)

2)      Closing Costs

How much is this mortgage going to cost?  (First, if you are buying a home there may be a possibility of getting seller paid closing costs.  If you are refinancing, there is a possibility of rolling the costs into the mortgage, thereby reducing your cash-to-close.  But, that is a whole new blog…I will get into that another day.)  I have never seen a web site that offers the public real closing cost estimates.  But, fear none, I got this one.  Same link as the one above:  Closing CostCalculator.  Enter your criteria and you will receive the interest rates and closing costs specific to your deal.  Real Estate Agents!  This tool can be invaluable for you and your clients when working up an offer.

3)      Calculating Monthly Payment

This is fairly self-explanatory.  To incorporate the rates you see into a monthly payment, you can use the mortgage calculator on the right side of our website (about half way down) by clicking here.  All you’ll need to do is add the rate,estimated purchase price, estimated down payment, property taxes, estimated homeowners insurance and (if applicable)mortgage insurance. 

a.       Property Taxes and Homeowner’s Insurance?

Yes.  You do not want to forget about these.  In most cases, your total monthly mortgage payment will include PITI (principal, interest, taxes and insurance).  If you have your eye set on a property or two, you can readily check the current property taxes right here.  Click on your state and find the appropriate County link to search by property address.  You can get a broad idea of your homeowner’s insurance premium by multiplying the price of the home by .006.  Then, divide that number by 12.

b.  Mortgage Insurance!

Oh pew, you say.  Yep, if you are putting less than 20% down on a conventional mortgage, you will be contending with MI (exception with VA financing).  Mortgage insurance is simply insurance that aides in covering a lender’s losses after foreclosure and sale of the property….and you get to pay that premium.  Use this resource to learn and compare MI products, options and costs.  If this looks like hieroglyphic mumbo jumbo, you may need to pick up the phone and call your loan officer.  There are many options and he/she can detail what makes most sense for your needs.  Want to jump right to an MI calculator?  Jump!

For 30 year fixed FHA financing with minimum down payment, the MI calculation is quite simple:  Loan amount x 1.15% / 12. 

4)      But How Much Can I Afford?

Final step!  You have your interest rate, you understand the closing costs and you have worked up the monthly mortgage payment.  Can you afford it?  Take the Pre-Qualification Test Drive!  This is a simple spreadsheet that will allow you to enter your debt and income information and get a general idea if you can qualify for that dream home dancing around inside your cranium.  Download the worksheet and off you go.

Woot!  The numbers look great!  This just may be the home!  It’s 2:00 AM and you are chompin at your fingers wanting confirmation of all your hard work.  Aw heck, pick up that phone and call (or email)  The MN Mortgage Mom.  I just “may” pick up the phone.  After all, I’m most likely working up the loan for your neighbor who just called me at midnight.

Happy House Hunting!