Posted by Anne/IL on 11/14/05 9:53am
Msg #76333

Recommendations about Mortgage Cos.

A friend of mine *thinks* I'm now an expert in mortgage companies since I see their docs and that I should know the best out there...Hmmm, I don't think I've been doing this long enough to come up with a good answer. She and her DH are looking for HELOC on their current home and mortgage on investment property.

Any ideas ??

Reply by Charles_Ca on 11/14/05 10:05am
Msg #76336

A tough question without some details

When I am not wearing my notary hat I represent Windsor Capitol Mortgage and the Pacific Real Estate Network. I frequently get calls asking what is the best mortgage company, what are today's rates, what are the best rates I can get etc. Having over 300 lenders at my beck and call those questions are not easy to answer unless there are some additional details. The first question should be what is your goal for getting a loan. Many of you have hear everything from buying a Hummer to debt consolidation and each of those has a different answer. HELOCs aren't best for everyone, maybe a cash out re-fi might be more appropriate. Goals should be pretty specific. After the goal is established the next question should be how much money does one want to get out of the financing and then finally we get to the BIG question, what kind of a loan can the individual qualify for. Their credit ratings will determine their terms largely and without those items any discussion of best loan is meaningless.

Reply by Anne/IL on 11/14/05 10:23am
Msg #76338

Some details...

From what I know they have been homeowners for about 5 years and have some good equity in their home (about $50k) and her DH has always wanted to invest in properties like a 3-4 units. They do have some money saved up but not enough to put 10%-20% down on an investment property. I'm not sure if they want to flip the building or actually have tenants and hold on to it for a while. They don't have much debt, maybe one or two credit cards on top of the mortgage, no car loans (that I know for sure because she bragged about the great deal they had on their van and how it was paid for right away..lol) and their credit is pretty good, they both work and have been on the job for 10 years each, very stable and pretty frugal over all...LOL

Reply by celeste pafford on 11/14/05 11:02am
Msg #76350

Re: Some details...

I love the topic of interest rates, refinancing, and trying to find the best loan. I have tried many websites, and I always go back to www.bestrate.com You enter your state, and if it is a purchase or refi, and the amount you are doing this for, and it brings up a ton of great options. I always find that mortgage capital always had the lowest interest rate, with 0 points, and less than a 1000.00 in closing costs, excluding title fees. Everytime I see someone who has a terrible loan, I have to bite my lip, because I want to explain to them to shop around, there are better loan programs than what they are doing.

Reply by Charles_Ca on 11/14/05 11:37am
Msg #76361

Yes, but!

Goals are good and appearances are relative however we still don't have the concrete information that is necessary. When you start looking at credit scores it is amazing at the diferences between what appears to be the case and what actually is the case. I see terrible loans as a notary, I also see those same terrible loans as potential lifesavers in my capacity as a loan officer. Unfortunately we tend to see good and bad in the context of our own experience. I recently notarized an 11% ARM with a lifetime cap of 17% and wondered why anyone at that time would be settling for such a horrible interest rate but when you saw their credit ratings and they were in the low 500 FICO and then you realized that they were re-financing 22% credit card and consumer debt all of a sudden it wasn't such a bad deal. You have to remember that many things are relative all you need to determine is relative to what.

Reply by celeste pafford on 11/14/05 12:51pm
Msg #76401

Re: Yes, but!

Yes, usually bad credit produces bad loans, but I am amazed that people settle without looking for the best option. Case in point, when we bought our first house, I went along with the realtor/mortgage company with a rate, because I had no clue about what I could do. Looking back, it was a terrible loan, and when I finally discovered things on the internet, I educated myself, and shopped around. That is what people in my opinion don't do.

Reply by Charles_Ca on 11/14/05 1:31pm
Msg #76410

Re: Yes, Celeste, but!

I agree with you completely. I find that many people in our business have a better than average understanding of documentation in general and financial and real estate documentation in particular. There are many factors involved in why people don't get good loans. Sometimes they can't unfortunately other times they are victims of less than scrupulous loan agents. We recently had laws passed regarding predatory practices. I don't know how long you have been in this business but I am sure at one time or another veterans in this business have run across those who don't really understand and don't care. I try to get the best loan possible for my clients because this business is my life. I don't really care about how much I make from each loan. I find that if I take care of the clients my income pretty much takes care of itself. However I know of other loan officers whose only interest is origination points, rebate and Yield Spread Percentage all things that contribute to their direct income. These bottom line types are only interested in how much can they extract from the transaction and not what is best for the client. If the client is not comfortable with figures and doesn't really care or understand they are in a position to get an expensive loan. I have been in the business for almost 40 years now and have survived numerous economic cycles and because I am an active investor I had 10% and 12% loans on income property (while others were paying up to 17%) I refinanced those properties as the percentages have come down. However it needs to be noted that even at 10% or 12% I made purchases that made sense (economically, I wound up with a nightclub in one that made no sense at all and still doesn't but I have the IRS to thank for that) and provided me with income even at those costs. Now at 4% and 5% my income has increased proportionately. When you come right down to it however you never know what friends and neighbors are actually doing without seeing their income tax returns so it is extremely difficult to give loan advice without the figures.

Reply by taxpro on 11/14/05 1:49pm
Msg #76417

Re:Some details...

I went to Bankrate.com to look up current best interest rates for a projection I was working on for a client. You put in your name, phone, email, loan amount you want, reason for loan, and a little more basic info. I went along with it, thinking after filling out that screen that it would give me some rates and names of companies. No such luck. Instead, it said something like "Someone will be in touch with you soon." Next thing I knew, three different brokers were calling, emailing, and harrassing me to no end. When I told one of them that I am not interested in a loan, that I was just trying to research rates, he got mad and said, "I pay between $40 and $50 for each lead I get from Bankrate.com. I hate it when someone wastes my time and money like this!!!" I had no idea this would happen, and I'm sorry to have "wasted" someone's time and money, but I felt deceived too. Bankrate.com sold my information, without my knowledge, to three brokers. I'm sure that's what the other so-called mortgage websites, like Lending Tree and E-Loan do, too. They are just selling leads, and they are not necessarily going to have the best deal.

Reply by celeste pafford on 11/14/05 1:59pm
Msg #76419

Re: Re:Some details...

Charles, exacltly right. Until you see what someone is making, debt to income ratio, and credit, it is hard to determine the right loan. I to taxpro have tried bankrate.com, but I like bestrate.com better. Noone has your information, you just look at rates, who has the best one for your need, and if you like, then give them a call.