MortgagesUndressed

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Wish he would make up his mind is he going to continue with this blog or give up the ghost?

The Blog Ghost Writer

I don’t drink beer. But the tears are there anyhow. Tears of laughter. From the Seattle Times to Blogsville people are being told to compare lenders. PHHHHOOOEEEY, it doesn’t work folks. Here are 5 reasons why:

1- Rates change, sometimes by the hour, usually each day. So how fast do you do your shopping? Answer: This is not realistic.

2- Trickery. Lenders that know you are shopping will bait and switch, promise you the moon to get you to fill out an application, then of course the rate you were quoted is old. Answer: Calling people cold to get quotes is foolish.

3- Apples and Oranges: Oh you wanted a fixed rate, I quoted a Interest Only fixed rate. Answer same as 1 and 2 above.

4- Trust: They don’t trust you, don’t trust you will give them the business anyway so they are not that careful with the quote or their reputation. Answer: Who is kidding whom anyway?

5- Not referred: If they were referred as being honest and competitive you wouldn’t be shopping them, so you really were not given that big of a vote of confidence. Answer: Get an agent to refer you to the lender, tell the lender you are working with the agent to make sure you get the right kind of lender: one that will be fair in pricing and competent to do what they commit to.

I truly think it is Tom Foolery to follow the advice of those who tell you to go on a shopping spree. You aren’t qualified, you get those who can outsmart you, and you get those who are hungry for a deal. You don’t want to be outsmarted and those that are hungry for a deal should not be your lender. Larry Cragun

If the answer to that question is yes, be prepared for turbulance. Don’t take this as a fatal problem, but a turbulant one. For the last several days lenders that made these type of loans have annouced serious changes, some even bankruptcy.

You often overcome these problems by the size of downpayment.

However fixing your score is where I recommend you look first. Our FICO Dr. tool actually looks at your mortgage score and provides you various solutions that can immediatley raise your score. CLICK HERE: The same tool is available to most loan officers that have already pulled your report. If that is the case you should have them help you. Any questions - email larry@mortgagesundressed.com

Be careful however. these are turbulant waters. You don’t want to start the process with false hopes. Here are a few points to consider:

1- Usually a 20% gift make things totally acceptable.

2- The gift usually must come from a family member, non profit organization, or employer.

3- The gift must be accompanied by a letter stating it is not to be repaid.

4- Less than 20% gift means you probably will have to use some of your own money.

5- In some cases you are better using 100% financing and then after closing using to pay off some of the mortgage you took out. (Probably a second).

6- A gift of the home equity, can be done, but is scruitinized for inflated value.

7- Non profit gifts were popular but under fire. In these cases, the price was raised to cover the gift from the non profit. Read the following warning if you are considering going non profit:

HUD Cracking Down on Downpayment Assistance

The Department of Housing and Urban Development has initiated a rulemaking process to crack down on downpayment assistance programs that have bolstered Federal Housing Administration single-family loan originations but also led to rising FHA defaults and foreclosures, according to the HUD inspector general.

If all this sounds like it is full of maybes and what if’s, it is. That is another reason not to use someone that may be incompetent, like your friend who just got into the business. Sorry friend. Larry Cragun