The Haverhill Mortgage Blog

Keeping Score: The New Rules for Credit Scores and Mortgage Risks

Don Carter (All Star Mortgage, LLC) — Wed, 12 Mar 2008 11:25:27 -0700

Fannie Mae and Freddie Mac, the nation's two largest buyers of home mortgages, recently enacted changes in how they use credit scores to assess risk and price loans. If you have excellent credit so you think this may not affect you, think again! The latest announcement will affect borrowers with scores as high as 719, generally considered to be A credit.

Up until recently, borrowers who got Approval recommendations from either of the two Government Sponsored Entities (GSE's) would enjoy access to the same interest rates regardless of credit. In other words, it didn't matter if your credit score was a 610 or a 780; as long as the automated underwriting engine returned an Approve/Accept recommendation, your rate was the same. However, in response to turmoil in the secondary market, the GSE's are attempting to properly reflect the additional risk present with lower credit scores and higher loan-to-values.

The net result of these changes is that it will become more costly for borrowers with credit scores below 720 and LTV's above 60% to get a mortgage; it will become far morecostly for those with lower credit scores and higher LTV's. For example, those trying to borrow 90% of the value of their home with credit scores in the 620's will now pay a loan level price adjustment of 2.75%. In other words, it will cost you almost 3 points to get the same rate that a borrower with excellent will qualify for.

As you can see, your credit score is more important than ever before when it comes to obtaining a mortgage. And you can expect these additional risk adjustments to make their way into other credit markets, like car loans, credit cards, and even insurance. So what do you do if your score isn't where you want it to be? Well, the first thing to do is to understand how your credit scores are created. It's not simply just paying your bills on time, although that's certainly a big part of it. Managing your ratio of utilized credit to available credit, limiting credit inquiries, and the length of your credit history are all important factors as well.

If you know your score needs improvement, or you know somebody who needs some credit advice, give me a call at (978) 853-7066, or Click Here to send me an email, and I'll be happy to send you a free report entitled "Everything you Need to Know About Credit Scores".

Hope for the Best...Prepare for the Worst

Don Carter (All Star Mortgage, LLC) — Mon, 03 Mar 2008 16:16:45 -0800

The words get bandied about in the press, on TV, and at the water cooler. Recession. Inflation. Deflation. Stagflation. Depression. But what does it all mean? Are we really heading into a bad time for the economy? And if so, what can you do about it to protect yourself?

The truth is that whatever you want to call it, the economic forecast doesn't appear to be particularly sunny. Banks are losing billions of dollars in the value of the loan portfolios they hold, with further deterioration expected. This has lead to a tightening of credit standards across the board, making borrowing more difficult for individuals, companies, municipalities, and believe it or not, banks! Contrary to what you may have heard on the TV news, this issue is not isolated to those holding sub-prime mortgages.

The effect of this credit crunch has led to a downturn in economic growth, otherwise known as a "recession". Or as government economists would say, "A period of negative economic growth", (as if calling a pig by any other name causes it to cease being a pig). Some of the ways you'll see the impact of this credit crunch are:

Restricted access to credit - borrowers who've traditionally had little difficulty in borrowing funds will find it more and more difficult to do so, regardless of their credit history
Those that do qualify for borrowed funds will find the terms less favorable
Cities and towns will find it more expensive to borrow money through municipal bond issues, perhaps causing local budget issues and higher taxes
Employers will look to reduce costs - lay-offs are one of the most common methods used

Recessions are typically short lived downturns in the economic cycle. However, in the event that the recent Fed action to lower short term interest rates causes an inflationary environment within this recession, we'll have a much mortgage dangerous scenario, commonly known as "stagflation". Stagflation occurs when the factors common to a recession are coupled with rising prices. Consider that for a moment; money is hard to borrow, unemployment is up, asset values are down, and yet prices are rising. Think the 70's.

So what can you can do to protect yourself in the event the economy truly heads south? Here are some tips:

Priority #1 is to make sure you have an emergency cash fund sufficient to cover at least six months of living expenses if necessary. This is so important that if you need to borrow from home equity to establish this fund, you should consider it. Remember, CASH IS KING!
Assuming that you've got #1 covered, you may wish to explore whether or not paying off your mortgage faster is beneficial in your circumstances. (I don't normally advocate paying down mortgage balances any faster than necessary; in fact, I prefer interest only notes. However, given the current environment, I do believe some people will be best served with applying more cash to their principle balance.)
If you have a 401K, or other retirement fund, make sure you're talking with your financial advisor to make sure your portfolio is staying consistent with the changing economic landscape. In other words, if you're invested in bank stocks, you might want to look at something a little less exposed to the downturn.
Reduce or eliminate the use of consumer credit cards for purchases. The cost of carrying credit card balances is poised to skyrocket, despite the recent cuts in interest rates. Remember, banks are hemorrhaging cash, and they'll be looking to make it up where ever they can.

One of the primary causes of recession is the self-perpetuating phenomenon of expectancy. As consumers expect things to get worse economically, they begin buying less and saving more. And because the economy is so dependent on consumer spending, this behavior ends up perpetuating the very recession consumer's fear. So in the interests of potentially averting a recession, I encourage you to hope for the best, be positive, and make good decisions about spending. However, it makes sense to prepare for the worst by having some emergency cash, paying down debt, and managing your spending.

As always, I welcome your comments!

LENDERS FREEZING HELOCS: WHAT DOES IT MEAN TO YOU?

Don Carter (All Star Mortgage, LLC) — Thu, 28 Feb 2008 15:36:20 -0800

One of the consequences of the continuing decline in home values across the country is that lenders are beginning to feel a little uneasy about their portfolio of Home Equity Lines of Credit (HELOC). As a result, several major lenders have begun freezing access to the untapped portion of their borrower's HELOC's, which can be a major hardship for those using their HELOC as a regular part of their financial plan.

HELOC's are 2^nd mortgages taken out on a property that provide a revolving line of credit that homeowners can access as needed, much like a credit card. Many borrowers use these funds to bridge temporary gaps in income, or to cover expenses like college tuition, major home renovations, or repairs. Others use the line as an emergency cash fund, which allows them to place more of their savings into less liquid accounts, like 401K's, annuities, etc. However, once a lender freezes a HELOC, no additional draws on the line are allowed, eliminating the line as a means of borrowing additional funds as necessary.

The reason lenders are taking this action is somewhat complicated, but it has to do with the enormous liquidity problems the financial markets are dealing with, otherwise known as a "credit crunch". In a nutshell, banks are only required to carry around 10% of actual liquid reserves on hand, meaning that if you have a $50,000 available equity line balance (or for that matter, a savings account balance), the bank only needs to have $5,000 on hand because the assumption is that everyone isn't going to show up on the same day and ask for their money. However, given the enormous amount of write-downs banks have been forced to take recently (the composite total is in excess of $100 Billion!), they may be faced with the need to borrow funds to meet reserve requirements without the benefit of interest payments to offset the additional borrowing cost. It's far easier, and less costly to simply lower the liability by reducing the available line amount.

So far, this action has been largely confined to areas, such as large portions of California and Florida, as well as cities like Las Vegas and Phoenix. However, many areas of Massachusetts are now considered declining market areas as well. While to date I haven't heard of any lenders freezing HELOC's in our market, it appears to be only a matter of time before we can expect to see this sort of thing locally. (UPDATE: Since I originally wrote this column, I've heard from one of my clients in Amesbury, MA who had their HELOC chopped by $40,000 despite a perfect payment record, existing equity, and outstanding credit.)

So what can you do if you're dependent upon your HELOC to cover income or expenses in the near term? The first thing to do is to assess your risk of a freeze of your line of credit. Higher combined-loan-to-value (CLTV) properties are at the greatest risk, so try and find out what your total CLTV is. First, get a feel for what your home is actually worth. Look at what similar houses are selling for in your neighborhood in the last 3 to 6 months. (Check out zillow.com for some comparison numbers.) Next, add the outstanding balance on your first mortgage to the total line of credit on your HELOC; in other words, if you have a HELOC for $100,000 but only have a $50,000 balance, use the $100,000. Finally, take that number and divide by the estimated value of your house. This figure is your estimated HCLTV.

If your HCLTV is higher than 95%, your risk of having the line frozen at some point in the near future is relatively high. If your HCLTV is lower than 80%, then you're probably at low risk. And if you're in the middle, there's a moderate risk of losing the ability to draw on your HELOC.

If you're relying on the funds available in your HELOC for something really important to you, you may want to consider drawing those funds now and putting them in a safe, interest earning side account so you'll have the money available when you need it. Whether or not taking this action is warranted is dependent upon how important those funds are to your current planning, and what the costs of taking the funds now will be.

If you need advice on whether or not you should consider drawing on your HELOC, or you know someone who could use some sound advice, please don't hesitate to call me directly at (978) 853-7066, or email me at doncarter@myallstarmortgage.com.

Mortgage Market Meltdown: Are You At Risk?

Don Carter (All Star Mortgage, LLC) — Sat, 18 Aug 2007 14:07:37 -0700

Unless you've been vacationing on another planet for the last several months, you're no doubt aware of the crisis gripping the mortgage market. While most of the attention is being paid to the "sub-prime" and "Alt A" markets, the uncertainty within the secondary mortgage market is or will be felt throughout the entire real estate market. It's important to understand how all of this may affect you.

I won't attempt to explain how the secondary mortgage market works, and why it's in trouble. That subject has been amply covered elsewhere. Suffice to say that it is infinitely more difficult to obtain a mortgage today versus say December of 2006. The purpose of this article is to call attention to the fact that the conditions we're dealing with will affect almost everyone that owns a home, and accordingly, homeowners should assess their risk of loss and take appropriate steps to mitigage it.

If you're currently in an Adjustable Rate Mortgage set to recast within the next 12 to 18 months, you're at risk of not being able to refinance into an affordable fixed rate mortgage when your reset date comes up. This is because in many markets, property values are declining - in some cases, sharply. In addition, lenders are agressively tightening underwriting guidelines to address the diminishing confidence in mortgage backed securities on Wall Street. This will also lead to further interest rate increases to address the perceived higher risk associated with these investments. Taken together, they make for a tight and uncertain mortgage market in the near term, as lenders can be expected (and already have) to lower acceptable loan-to-value ratios, meaning refinancing may not be a viable alternative to a recasting Adjustable Rate Mortgage.

Another area of risk related to this confluence of events is liquidity. Many American homeowners have parked the majority of their wealth in their homes, considering home equity to be a safe place for their money. However, in a declining real estate market, home equity can disappear quickly. Relying on funds from future refinancing to pay for college, home improvement, retirement is very risky in the current environment because of the factors discussed previously. In addition, unless a homeowner has access to liquid assets sufficient to cover expenses for 6 months or so, there is significant risk to home equity if there's an interuption in income due to job loss, major illness, etc.

To summarize, if you are currently in an Adjustable Rate Mortgage with a low initial rate, it makes sense to seriously consider refinancing now rather than waiting until your re-cast date. Given the current uncertainty in the market, there's no guarantee that refinancing will be an option down the line. If you are depending on using home equity to finance any future endeavors, it makes sense to look at harvesting that equity now so that you have the cash in hand - if your property value declines significantly, that equity may not exist any longer when you plan on taking it.

Excuses for Failure

Don Carter (All Star Mortgage, LLC) — Fri, 06 Jul 2007 16:08:11 -0700

Football legend Bill Parcells is fond of saying "If you give a team an excuse for losing, they'll always use it." Is that what some of us are doing now? Latching on to the excuse that business is bad, rates are up, values are down, buyers aren't buying, sellers won't budge, blah, blah, blah? The fact of the matter is that while business is off, there are still millions of Americans buying, selling, and refinancing real estate right now! And most of us need only a very, very small percentage of that market to buy or sell with us to make a good living!

The next time you hear yourself answering the question "How's business?" with anything other than "Great!" (or some variation on that theme), call timeout, and start again. Business IS GREAT!! The market has a very healthy inventory of property, something for everyone, really. Interest rates are still very, very low when placed in a larger context than the last 4 years. Buyers can still buy with zero money down, and there has seldom been a time when there were more innovative solutions to meet your buyers lending needs than right now. The economy is strong, unemployment and inflation are stable non-factors, and new technology to make our jobs easier seems to come out every day!

You're in a business where you're required to invest very little capital in order make a great living. The barriers to entry are nominal, so when you've achieved enough experience and success, you can open your own shop with little trouble. You can choose when to work, when not to work, who to work with, and who not to work with. You can work where you want. And most of all, when you do work, you can make a meaningful difference in the lives of your clients and their families. How great is that!

So don't buy into the excuses. Refuse to accept them. And the next time you're asked, business is GREAT!!

Do You Experience Back Pain?

Don Carter (All Star Mortgage, LLC) — Fri, 06 Jul 2007 11:54:02 -0700

Over 80% of Americans experience some degree of back pain during their lifetime. While I would put myself in that category, having had a couple of bouts with some serious back pain, my wife happens to be among the unfortunate people that deal with debilitating back pain on a daily basis, such that she has been unable to lead a normal life for a number of years. Because of her condition, my reticular activator is constantly in tune to issues with the back, and as such, I came across the work of a controversial doctor who specializes in back pain.

Dr. John Sarno is controversial because he believes that most back pain is not the result of structrual damage to the body or injury, but due to a condition known as Tension Mysosistis Syndrome, or TMS. TMS is caused by emotional and psychological upheaval, and manifests itself as real pain, usually in the back, neck, shoulders, and some joints. Dr. Sarno has had excellent results treating patients for TMS, and often these are people who have gone through years of pain, mis-diagnosis, and surgery.

I recently picked up Dr. Sarno's book, "Healing Back Pain: The Mind Body Connection" and have been fascinated through the first half of the book. While I haven't completed it yet, I've read enough to feel comfortable in recommending it to others. I know how desparate people with chronic pain are for a solution to their problem, so I wanted to put this endorsement out there prior to completing the book. Once both my wife an I have finished the book, I will post a more thorough review.

Evaluating a Mortgage Cost

Don Carter (All Star Mortgage, LLC) — Fri, 06 Jul 2007 11:21:12 -0700

With the plethora of mortgage terms available today, including terms of 40, even 50 years, how do you compare the overall cost of one mortgage versus another? It's actually pretty simple - but before you do, you need to assess what the expectancy of the mortgage life is. In other words, how long do you plan on keeping the loan. For the purpose of demonstration, I'll use a 5 year term as that is about the average today.

Let's compare a 30 year fixed with a 40 year fixed, and assume that the loan amount, closing costs, etc., are all the same. The only variable will be the interest rate, as you will pay a higher rate for the longer term. The following chart illustrates the comparison:

Terms	30 Year	40 Year
Loan Amount	$300,000.00	$300,000.00
Interest Rate	6.50%	6.75%
P&I	$1,896.24	$1,810.07
Total of Payments	$113,772.24	$108,604.23
Remaining Balance	$280,832.93	$291,281.37
Equity	$19,167.07	$8,712.63
Total Cost	$94,555.17	$99,891.60

As you can see, the total cost of the 30 year option is over $5300 less than the 40 year option. If the $86 per month savings was consumed rather than invested, the savings is over $10,400! Naturally, as the term lengthens, the cost savings of the shorter term increase when compared to the 40 year option.

To make this type of comparison yourself, you simply need a calculator, and an amortization chart. Start with the loan amount, and calculate the payment for each of your scenarios. Next, multiply the total payment by the expected term of the mortgage (in this example, the term was 60 months). This will give you your total of payments over the term. Next, calculate your remaining balance of each loan scenario at 60 months by referring to your amortization table. Subtract this amount from your beginning loan amount to derive your equity gained. Finally, subtract your equity gained from the total of payments, and you have your total cost!

This calculation tool can also help you to assess whether or not refinancing is a good idea - you can easily adapt this to compare a new mortgage with your present loan.

Of course, the easiest thing you can do is to simply call a mortgage consultant and have the calculations run for you. If you're shopping for a mortgage in Massachusetts or New Hampshire, I'd be glad to run your numbers for you! Just call me at (978) 853-7066, or drop me an email at doncarter@myallstarmortgage.com.

What's in a Title?

Don Carter (All Star Mortgage, LLC) — Mon, 11 Jun 2007 10:06:37 -0700

I always get a little chuckle when I see "Senior Loan Officer" listed as someone's title. What exactly does that mean anyway? Are they eligible for Social Security payments? AARP benefits? Or are they looking to do business with those who are?

I remember not too long ago, a new Loan Officer joined the firm I was working with. She had a lot of experience in real estate, but had never worked in lending before. Over her first month or so, she came to me quite often with questions about how to do this or that, and I always tried to help; I couldn't help but notice, however, that she seemed to be asking the same sorts of questions over and over again, and some of them were quite elementary. Then one evening while helping her with a pricing issue, I noticed her business card on her desk and had to bite my tongue to keep from laughing out loud. Her title was listed as "Senior Loan Officer"!

My guess is that at some point in the past, titles actually had some meaning. You probably needed to have a certain level of experience and expertise to put something like "Senior" anything on your card. Today, it seems like you can put just about anything you want on your card. I've seen so many different titles, I can't keep track of them all. Mortgage Originator, Mortgage Planner, Mortgage Expert, Debt Specialist, Debt Manager, Equity Manager, Debt Reducer, Debt Consolidation Specialist, Mortgage Reducer, Mortgage Acceleration Specialist, Cash Flow Consultant...I could go on. In fact, take all of those titles and add the word "Senior" and you've got a whole new category!

The truth of the matter is that today, you really can't tell anything about someone based upon the title listed on their business card. I don't think you can infer a lot by the designations you see either, as most of us don't know what any of them mean. Ultimately, they're just a little ego blast for the card issuer, trumpeting their often overblown title, and telling you nothing about whether or not they're someone worthy of your trust - which is all you really need to know.

As for my card, it simply lists the name of my company, our address and phone numbers, and my name - no title! On the back, I've added a paragraph that describes how I work By Referral Only, and offers an 800# to call to learn a little more about me. Give it a listen, at 800-323-8625, extension 1. I think you'll find that it reveals a lot more about me than any title or designation ever could!

The Truth About "No Cost" Mortgage Loans

Don Carter (All Star Mortgage, LLC) — Tue, 05 Jun 2007 10:55:58 -0700

You've probably heard the pitch - "Refinance your existing mortgage with no points and no closing costs! It's the biggest no-brainer in the history of Earth!" But is it really? Why would some lenders choose to charge closing costs if there's an alternative with zero closing costs? The answer may surprise you.

Let's take a moment to discuss what closing costs actually are, and are not. Closing costs are those charges that are external of the loan itself, but are required in order to obtain the loan. In most cases, the fees are third party expenses, such as the appraisal, the legal fees, government recording fees, lender fees, and credit reports. In other words, closing costs are not just a way for lenders to stick you for more money; they are third party expenses that are paid for services necessary for your loan to be processed, and by law, must be treated as pass through expenses - whatever is listed on the HUD as being paid to a third party must reflect the actual cost of the service performed. Now this is not to say that some lenders don't try to take advantage by packing on "junk" fees to pump up their revenue. But that's very different than the blanket statement that closing costs are rip-off. In reality, there is no mortgage with zero closing costs; only mortgages where your closing costs are paid on your behalf. Why is that an important distinction?

The reason is that the people pushing the "No Closing Costs" mortgage want you to believe that because of their volume, or bargaining power, or out of the goodness of their heart, they've eliminated all of your closing costs. The reality is, they've just changed how you pay them. For example, compare the interest rate on a $250,000 mortgage with zero closing costs, to one with $2500 in closing costs (which would be typical in MA). Generally speaking, you'll see a difference of .375% on the interest rate, which equates to approximately $61 per month in payment. So in exchange for saving $2500 in closing costs, you agree to pay $61 more per month in payments. Is that a good deal? Maybe, maybe not - it depends on what happens next.

Let's say that you go with the higher payment, and elect to pay closing costs through higher payments. This will turn out to be a good decision if you decide to refinance or sell within in a few years of opening the loan. However, if you were to keep this mortgage for say 10 years (and many people that opt for this program are placed into 30 year fixed mortgages), you will have paid out $7320 in higher payments over those 10 years to save $2500 in closing costs. Even if you were to invest that $2500 at 8% over 10 years, that investment would only grow to approximately $5300 in 10 years. All in all, it doesn't look like a very sound decision.

Now, I'm not going to tell you that there's no Free Lunch, because you already know that. What I am going to suggest to you is that when evaluating whether or not a No Closing Cost loan is the correct choice for you, make sure you compare the total package to a full closing cost loan, and then measure those costs over the time you expect to keep the mortgage. I think you'll find that it's not the slam dunk the No Closing Cost guru's would have you believe!

Differences Between Brokers and Lenders: Another View

Don Carter (All Star Mortgage, LLC) — Thu, 31 May 2007 11:33:46 -0700

The difference between Mortgage Brokers and Mortgage Lenders is often times very subtle, and generally transparent to most borrowers. However, understanding how they differ is important when selecting a company to handle this very important aspect of your home buying process. Before we begin, let's take a moment to clarify the technical differences; then we can take a look at what those differences mean to you.

A simple definition for a lender is an organization that provides the funds being borrowed. Within that broad category, there are direct retail lenders (Bank of America, Wells Fargo, your local bank, etc.), and wholesale lenders. Retail lenders typically will offer only their bank's particular loan programs; a wholesale lender may have relationships established with dozens of lenders. Both will generally underwrite their own files, and maintain as much control over the process as possible. When your loan closes with a retail lender, they will generally be the servicer as well, meaning you'll make payments to them. When your loan closes with a wholesale lender, they will usually have an arrangement in place to sell your loan to the ultimate investor. Their fee structure can be convoluted as they can receive premium payments for delivering your loan at a higher rate without disclosing this information on the settlement documents.

Brokers, on the other hand, do not lend money, nor do they underwrite files. Their role in the process is to arrange financing for borrowers, utilizing their access to dozens of investors to select the best fit for the client. All of their fees are disclosed upfront, including any premium payments from the investor, and their accountability lies with the client. It's here where we see how the differences between lenders and brokers manifests itself for the client.

Brokers work directly for the client, with an implied fiduciary responsibility. With their fees disclosed in advance, brokers are free to negotiate with multiple investors to find the best fit for their clients needs. When working with a retail lender, it's not the lenders responsibility to inform you that the bank down the street is offering a better program for you, or lower rates and fees. The assumption is that as the client, you're responsible for shopping rates and fees; the Loan Officer's accountability rests with the bank, not the client. Wholesale lenders are a little different, but ultimately, when they shop through their list of lenders to place your loan, they are shopping for themselves, not you. In other words, they will place their loan with the lender that pays them back the highest premium, not necessarily the lender that's the best fit for you. And again, because this all happens in the background, most clients aren't aware.

Choosing whether or not a broker, retail lender, or wholesale lender is the right fit for you is a personal choice, based upon your own set of circumstances. Being more informed about the differences between these various options should help you make the best decision for you!

Having Trouble Selling in MA/NH?

Don Carter (All Star Mortgage, LLC) — Fri, 25 May 2007 09:35:40 -0700

If you're in the Merrimack Valley/North Shore/Rockingham County, NH area and having trouble moving your listings or attacting buyers, I have access to some programs that may be able to help you.

I'm a Mortgage Consultant looking for progressive real estate agents operating in my market area that are open to trying new things to help their business. The fact that you're here on AR proves to me that you aren't necessarily beholden to doing things this way or that way because "that's just the way everybody else does it." Do you have the courage to be just a little different? If so, check out some of my blogs (that will give you a little insight into who I am and how I work); if you like what you see, give me a call. I'll buy you a cup of coffee, and at the very least, you'll come a away with a new idea or two about how to increase your business!

I look forward to hearing from you!

AR Post Gets Surprise Response

Don Carter (All Star Mortgage, LLC) — Fri, 25 May 2007 07:52:10 -0700

About a week ago, I posted an article on ActiveRain that I had originally written for my newsletter. The article discusses my wife's experience with cancer, and can be seen here: http://activerain.com/blogsview/101718/Do-You-Know-Someone I received the following email from my neighbor:

You've received a contact message from your Contact Form on the ActiveRain network.

Message details:
From: John King
Email: beateking@comcast.net
Subject: Good neighbors

Don mentioned the Christmas lights we put up when Noreen was sick. He only tells half the story.

Here is the rest. Our daughter had already battled against cancer and was doing fine. When Noreen got sick we knew how consuming cancer can be. I mean cancer can consume the family and caregivers. I gave up the honey do list while Val was sick just in case I needed the energy to care for her in the middle of the night. (yes I gave up my chores what a sacrifice)

I saw Don in his driveway one winter morning and offered to do anything he asked. I meant get groceries drop the kids off or pick them up. Anything that would help. Don smiled and said sure you can put the lights on the tree I don't have the time or energy.

I remember thinking "he doesn't get it" I wanted to do something meaningful. We talked a few more minutes and I headed home. About 3 steps away I realized I had offered to do anything and when Don asked for something I blew him off.

Don and Noreen's tree has always been tastefully decorated with attractive white lights. I decided that hanging the lights might just be important in a different way so in a week or two, I grabbed my kids and headed to Don's house. His little boy answered the door and I asked if he knew where Mom and Dad keep the lights? He didn't know.

We decided to hang our own lights instead. Now I wasn't sure how this would go. You see I am a died in the wool colored light guy. I remember driving around as a kid seeing all the colored lights. I remember driving my kids around to see the colored lights.

Well I got to work, I had never put lights on an exterior tree. I learned quickly that this is harder than it looks. In the middle of putting up colored lights in what can only be described as lopsided and asymmetrical (ugly) Noreen pulled up in her car.

I looked down from the Ladder and waved, not sure how this would go. Noreen burst into tears and I knew I screwed up. I climbed down, and went to the car to tell her don't worry we will take them down and put up her white lights.

When I got to the car and wasn't sure what to say or what I would tell Don later, how this had all backfired and I caused problems rather than helped out. I knew I should have stayed home and that Don didn't really want me to put the lights up.

Nice job Ace you made Noreen cry Don isn't home, my kids feel stupid. and my wife is gonna murder me for sticking my nose in where it does not belong.

When I got to the car Noreen rolled down the window and sobbed "thank you."

I still felt foolish, but years later I got a flyer in the mail called Don's Home News. As I read through it I saw Don's mention of the lights. So while Don was reserving his energy just in case, I was able to do some frivolous task that made a good day for Noreen.

If you have ever cared for somebody with cancer the term good day has a lot more meaning than it used to. So I thank Don for giving me something to do that made a good day for Noreen.

On a side note, last week we had a lot of wind in the neighborhood on trash day. My neighbors trash can had blown into the street. I was going to pick it up but I saw Don's son pick it up as he walked home from school. Yesterday I noticed some other folks were out of town so I put their trash can away. Don Pulled up and asked if I had just put his neighbors trash can away, because he was going to do it.

Maybe I don't have the nicest lawn or biggest house, or live in the most expensive neighborhood, but I live in the best neighborhood. You can build houses and gardens but you can't buy neighbors like ours at any price.

My reason for posting my neighbor John's excellent email is two-fold. First, his message provides an additional perspective to an article that I felt had an important message when I wrote it; that sometimes the little things you do for people in need have a much larger and lasting impact than you could ever imagine.

The second reason for posting this is to illustrate the power of ActiveRain. Because of our very busy schedule at this time of year (baseball, softball, yard work, etc.) I haven't found the opportunity to have a personal conversation with John about his response, and at this moment, I have no idea how even found my post on ActiveRain. But the fact remains that he did, which illustrates that people WILL find you on this community! Thank you, AR!

Progress...A Matter of Perspective

Don Carter (All Star Mortgage, LLC) — Mon, 21 May 2007 20:43:51 -0700

I can remember being a little kid and being so impressed with cars that had power windows. Whenever I got a chance to ride in a car with those little buttons that made the windows go up and down, I simply couldn't resist the allure of playing with them. I would pull the silver switch back to make the window go down, and no sooner would the window reach the bottom, I would push the button forward causing the window to close again - this would continue of course until someone yelled "STOP PLAYING WITH THE WINDOW!" All of which made the followinga little more ironic.

My friend and neighbor was picking up my son Timmy for baseball practice (I coach the team but had the day off to take my daughter to Fenway), and when they were a few minutes from the house, Timmy asked Bob "What are these things?", referring to the cranks for his manual windows. Once told what they were, he was fascinated with the manual levers, cranking the windows down, then up, then down, until finally Bob calls out "STOP PLAYING WITH THE WINDOW!" It just goes to show you how sometimes what's old is new again!

Why Do Salespeople Quit?

Don Carter (All Star Mortgage, LLC) — Sat, 19 May 2007 09:17:20 -0700

Depending on who you talk to, the percentage of turnover among sales people entering the profession and then exiting within 3 years is somewhere between 65 and 85 percent. Why is it that a profession that offers virtually unlimited control over personal income and time have such a poor record of rentention? I think a big factor is sales training. Not lack of sales training, mind you, but the type of training most salespeople receive.

For decades, typical sales training has focused on learning tactics designed to "close", whether referring to closing on an appointment, a commitment, or a deal. Almost universally, these tactics employ some form of manipulation - sometimes subtle, often times overt. And at the heart of all of this is a certain level of dishonesty. Take for example the case of a very famous real estate "guru" who on his website offers a free script for approaching FSBO's. The script starts out by claiming that you're calling to take a "survey" of FSBO's in the area; however, by the end of the script it's clear that the purpose of the call is to secure an appointment to list the property. Now I don't doubt that by employing such a script, one can be successful - the guru's success is testament to that fact. The problem is that for most people, such disengenuous tactics cause cognitive dissonance because the underlying dishonesty/manipulation runs contrary to their personal values. For the majority of us, it becomes more and more difficult to function within our jobs as we instinctively avoid putting ourselves in position to continue doing things that deep down, make us feel bad. The most obvious manifestation is call relcutance.

So what can you do if you're one of those people who are bothered by dishonesty and manipulation? First, understand and believe that you can be successful in sales without resorting to manipulation. Believe it or not, studies indicate that upwards of 90% of the most successful sales people in the country are actually brutally honest in every aspect of their job. Resist training that asks you to tell "harmless white lies" like the survey example, or another ubiquitous tactic "I'm going to be in your neighborhood on Tuesday - which works better for you..." Again, while this stuff might work for some, it won't work for you if it makes you feel uncomfortable.

Another thing you can do is invest in sales training that addresses the problems inherently honest people face while trying to launch a career in sales. High Probability Sales is an excellent source for just such training. HP Selling is based on an unfailingly honest approach to sales based on developing deep, meaningful relationships with prospects, and disqualifying those who don't fit your ideal client profile. A central premise of HP Selling blows up another well-worn sales training cliche - that everyone is a prospect for you, if not now, then maybe in the future. HP Selling trains that there are two types of prospects, high probability, and low probability. Sales people should only spend time with high probability prospects - people that want what you do, are willing to get it from you under your terms, and are ready to do it now - and stop wasting time trying to convert low probability prospects.

Ultimately, being successful in sales is more dependent upon being true to your nature than anything else. Don't let somebody train you to do something that runs contrary to your personal values. The ultimate outcome of that is almost always unhappiness, failure, and the end of your career in sales.

Tick Scam Warning!!!

Don Carter (All Star Mortgage, LLC) — Fri, 18 May 2007 13:44:00 -0700

I hate it when people forward bogus warnings, and I
have even done it myself a couple times
unintentionally...but this one is real, and it's
important. So please send this warning to everyone on
your e- mail list.

If someone comes to your front door saying they are
checking for ticks due to the warm weather and asks
you to take your clothes off and dance around with
your arms up, DO NOT DO IT!! THIS IS A SCAM!! They
only want to see you naked.

I wish I'd gotten this yesterday. I feel so stupid

Do You Know Someone With Cancer?

Don Carter (All Star Mortgage, LLC) — Fri, 18 May 2007 08:57:02 -0700

There are few words in the English language that elicit a more visceral response than the word "cancer", yet there are few of us who haven't been touched by it, either directly through our own experience or that of a spouse, child or parent; or indirectly through the experience of a relative, friend, neighbor, or co-worker. In spite of the nearly ubiquitous nature of this disease, many of us are still at a loss as to what to say or do when someone we know receives this most frightening diagnosis. Here are some thoughts and ideas that I hope will help you to help someone you know that's going through this very scary time.

First, let me give you a little background. My wife was diagnosed with cancer in October of 2004. On the day we spoke with her doctor and he told us that she had cancer, we entered into a sort of parallel universe that had existed all around us for years, but of which we were completely unaware of. We had known people who had dealt with cancer; in fact, I lost an aunt to cancer about eight years earlier, and close friends had lost mothers, brothers, fathers, and sisters to cancer. But somehow, in spite of our awareness of cancer, we had arrived at this point in our journey completely unprepared for what happens to you when go through it personally.

Fortunately for us, we are blessed with a network of friends, relatives, and neighbors that knew precisely what to do, and what not to do, to help us through that difficult time. To this day, we are deeply humbled by the generosity we received as Noreen went through her ordeal. Speaking for myself, the experience was a real wake-up call as I became acutely aware of what I hadn't done for those people in my past that had battled cancer. I was ignorant, but hopefully through this article I can help someone overcome their fears and reach out to someone who needs help.

I think one of the most fascinating things we discovered was that it's not just the close friends and family that come out to help. As an example, we had a custom of decorating our house with lights at Christmas time that we decided to forego in 2004. After all, with the issues we were dealing with, who had time for that? You can only imagine our surprise when one morning we noticed our neighbors stringing Christmas lights on the tree on our front lawn! It was a wonderful gesture, and still moves me when I think of it. So, don't think you have to be best friends or close relatives to do something meaningful - sometimes it's the little things from unexpected places that make a big difference!

I can also tell you that as we dealt with the side effects of Noreen's treatment (fatigue, nausea, etc.), prepared meals were a very welcome gift! If you're in a position to provide a prepared meal to someone, it will be very much appreciated! A couple of things to remember - make sure that whatever you send over won't require a lot of clean-up work. For example, send lasagna in a throw-away plastic tray rather than a baking dish. Also, try to send over something that can be easily stored for a few days as someone else may have sent a meal too. Finally, don't sweat it if you don't know what everyone likes to eat - chances are the person going through treatment won't be able to taste much anyway, and the rest of the family is just happy it's not hot dogs and mac' & cheese again!

Our children, Rachael and Timmy, were 10 and 7 at the time and we did as much as we possibly could to make life around the house appear to be normal. However, you can't introduce that level of new stress into a family and not expect to see some consequence; and Noreen's illness certainly took a toll on our kids. When friends or family called to take the kids out to the movies, roller skating, or bowling, Noreen was thrilled because it gave her time to rest, but more importantly, gave the kids some of the time and attention that they were unavoidably getting less of at home. Remember, when someone has cancer the whole family has to deal with it. If there are children, and you're in position to do so, offer to take them out for a few hours for some fun. And if you can't do that, just being available to help with driving the kids to wherever they need to get to is a huge relief!

As wonderful as almost all of our friends and family were, some of the people we would have expected to hear from, seldom if ever called. We later learned that these people were just afraid; afraid to call because maybe Noreen was resting and they didn't want to wake her; afraid to offend our pride by offering to help with cleaning, cooking, or something. Don't let fear keep you from offering yourself - pick up the phone and call. You won't regret calling, but you may regret it if you don't.

If you have some other helpful advice, or would like to share your own experience with cancer, please drop me an email at doncarter@myallstarmortgage.com. I'd love to hear it.

Are You Eating Healthy?

Don Carter (All Star Mortgage, LLC) — Thu, 17 May 2007 12:34:45 -0700

If you want to spark a debate among friends, bring up the subject of healthy eating. There's so much contradictory information out there about what constitutes healthy eating, you're bound to touch a nerve. My own experience with healthy eating is perhaps a little counter-intuitive, but my results have been very positive. This whole subject in fact came about from a recent conversation I had with a client during her Mortgage Check-up & Review.

During my meeting with Laura, we got talking about the subject of diet and health; Laura told me that she had been dealing with a myriad of health issues, such as migraine headaches, bronchitis, and chronic fatigue, as well as high cholesterol, for years. She thought that some of these issues were caused by the stress of a major relocation. Then she met someone who suggested that she modify her diet to limit processed foods such as white bread, flour based foods, white rice, etc., and eat more protein like chicken, meat, and eggs, along with whole grains. Her results were life changing - her cholesterol dropped by 70 points, she lost weight, seldom gets bronchitis or migraines, has more energy, and feels more in control of her overall health. All of this from a modification of her eating habits!

Several years ago, I had a similar experience with my diet and health issues. Like so many people, I had been gradually gaining weight over a number of years until one day I realized that I was about 50 pounds overweight! In addition, I was chronically tired, often struggling to stay awake while driving home at the end of the workday. I also had some chronic health issues that I had just grown accustomed to, most notably, waking up every morning with a headache, and going to bed every night with a headache.

In February of 2003, I decided to make a change, and switched to a low carbohydrate lifestyle, which meant eliminating processed carbohydrates like white bread, sugars, etc., and moving toward a diet rich in protein and fats. After just three weeks, I noticed that my chronic headaches had disappeared, and I no longer had to fight "nodding off" while driving home from work. In fact, I had a lot more energy during the day, and I was less "moody". Ultimately, I lost 50 pounds! Today, I still maintain a low carb lifestyle, although I probably indulge a little more than I should. But like Laura, I can tell when I'm overdoing it, as my headaches return, and I have less energy.

If you're dealing with some chronic health issues, or generally feel tired, stressed, or moody, consider modifying your diet. Eliminate foods high in carbohydrates and processed sugars and replace them with foods like whole grains, fiber rich vegetables, meats, and proteins. (High carbohydrate foods and foods high in sugar play havoc with your production of insulin, causing your blood sugar to spike, and then crash, which in turn can cause mood swings, hunger attacks, binging, fatigue, and headaches.) Reduce your caffeine intake, and don't sweat it if you add some fat to your diet. Drink plenty of water. At the beginning, start an eating journal, and list the various health issues you're currently experiencing, along with your weight, and general mood and energy level.

Then modify your eating habits for the next 21 days, keeping complete, detailed notes about what you ate, and when. After 21 days, go back to the beginning of your journal, and compare how you felt then with how you feel now. That was the key for me, because although it was certainly painful for me to give up so much of what I liked to eat, I liked feeling better even more.

Naturally, before doing any major modification to your eating habits consult your physician first. And if you have any success stories to share, I'd love to hear it - just drop me an email to doncarter@myallstarmortgage.com.

How Much Home can You Afford?

Don Carter (All Star Mortgage, LLC) — Thu, 17 May 2007 12:10:18 -0700

I work with a lot of first time home buyers and have learned over the years that the one thing most of them have in common is they don't have a very solid understanding of what they can afford to spend on a new home. This is the first of a two part series to help you gain a better understanding of how to determine how much home you can afford.

Perhaps the most important thing to be aware of when trying to get a handle on this is that what you can afford, and what a lender is willing to lend you are often two very different things. In fact, you may be surprised to learn that most of the time, you can be approved for far more mortgage than you'll be comfortable paying. This is because lenders will use debt-to-income ratios to help determine how much of a mortgage payment you can handle, but the ratios don't usually include all of your additional household expenses. For example, if you have a gross income of $6000 per month (lenders base their ratios on before taxes income) car payments totaling $600 per month, and no other consumer debt, you may qualify for a total mortgage payment of approximately $3000 per month, including principle, interest, taxes, insurance, and mortgage insurance (if necessary). This is based on a total debt ratio of 60% ($6000/$3600 = .60); I've seen some loans approved with debt ratios as high as 65%!

Notice, however, that the debt ratio is only based on your prospective mortgage and your car payment. What's not included are other fixed ownership expenses, such as telephone, electricity, heat, water, cable, maintenance, etc. Also, living expenses like gasoline, health insurance, food, clothes, personal care, etc. are excluded from the ratio. Unfortunately, I've seen too many people over reach on their purchase price because they spoke with a mortgage consultant who told them that they "qualified" for much more mortgage than they could realistically afford.

So what can you do to gain a better understanding of your purchase budget? First, it's important to go through a complete budget work-up to get a thorough understanding of where all your money is currently being spent. The next step is to see if there's room to cut expenses, and decide whether you would be willing to change your lifestyle to accommodate those cuts. Next, make some educated estimates (ask friends and family about what they're paying) about unknown expenses like electricity, heat, etc., and come to a total monthly outlay exclusive of the mortgage payment. (Don't forget to include monthly savings.) You're now ready to start backing into a prospective mortgage payment. Subtract your total known and unknown monthly obligation totals from your total net monthly pay (weekly take home x 52 weeks ÷ 12 months) for your maximum monthly mortgage payment. Depending upon your income level and tax bracket, you'll want to pare the maximum figure down from anywhere between five and twenty percent.

Now that you have a working figure, it's time to put it to the test. I recommend that you actually begin making your mortgage payment months in advance by taking the difference between what you're paying in rent and what you believe you can afford for a mortgage payment (along with the other new expenses of homeownership) and putting it away in a savings account that you absolutely commit to leaving off limits. (After all, when you send the money to the bank to pay your mortgage, they're not giving some of it back if you happen to need it!) By doing this, you'll demonstrate to yourself whether or not you can actually live within the means of your new budget - this is not something you want to find about after you've purchased a home! Also, you will most likely have saved several thousand dollars in the process, which will come in handy once you've found a home.

Great Response to 60 Minutes!

Don Carter (All Star Mortgage, LLC) — Wed, 16 May 2007 07:45:21 -0700

Joe Stumpf, founder of By Referral Only has written an excellent response to the Leslie Stahl interview on his blog, Joe's Journal. Here is a link to his site: http://joesjournal.com.

Do You Use This Open House Strategy?

Don Carter (All Star Mortgage, LLC) — Tue, 15 May 2007 07:01:31 -0700

When talking with Real Estate agents I've found that a good percentage view Open Houses as generally ineffective, and conduct them only to placate the wishes of their clients. Here's an Open House strategy that may improve traffic to your open house, making them more productive and enjoyable.

When scheduling an open house, reserve the first two hours of the event for a private showing for neighbors of the seller. Then send personal invitations to all of the homeowners that live in a pre-determined radius of the listing. The invitation should be from the seller and should note how much they've enjoyed living in the neighborhood. It should also state how they wanted to give their neighbors the opportunity to choose their own neighbors by inviting them to bring along any of their friends or family that would like to live nearby. (Make sure you point out that the first two hours are reserved for them.) You can even include endorsement language from your seller about how happy they are with your service. Make sure to include that you'll be serving free premium coffee (Starbucks, Dunkin Donuts, etc.) and pastry (from a well known bakery if possible). If you're really ambitious, spend a few hours in the days leading up to the OH calling homes in the neighborhood to remind them of the OH and see if they plan on stopping by. Finally, follow-up the OH with personal handwritten thank-you notes to those neighbors that did attend. This is a good time to include a subtle offer to do a CMA if they happen to be wondering what their house is worth.

Now it's important to remember what the purpose of conducting an OH is. Naturally, your first goal is to increase exposure to your listing, and perhaps attract a buyer. But a secondary goal, and frankly a more likely outcome of your OH, is to gain additional exposure for yourself. After all, isn't farming the immediate neighborhood of a listing standard procedure? What better way to demonstrate to the neighbors what a great job you do for your clients? Many people living near your open house would love to walk through the home, but are too embarrassed to do so (I know because I used to think that way before getting into this business). But with a personal invitation from the homeowner, they are much more likely to do so. And of course free stuff that people like always seem to draw well too!

If you're already using a similar strategy, I'd love to get your input. If you're not, give it a try and let us know what your results are!

Should You Pre-Pay Your Mortgage?

Don Carter (All Star Mortgage, LLC) — Tue, 15 May 2007 05:20:34 -0700

One of the areas of mortgage planning that is often misunderstood is the concept of building equity. Generally, we're conditioned to view a mortgage as a necessary evil, something to be paid off as soon as possible. With that goal in mind, many people choose to take out a 15 year term instead of a 30 year term in order to get the house paid off sooner. Others take a 30 year term, but pay extra principle each month to help accelerate the pay-off. But what is the opportunity cost of this strategy?

A recent report released by the Federal Reserve Bank of Chicago titled "The Tradeoff Between Mortgage Pre-Payments and Tax Deferred Retirement Savings" makes the case that 38% of Americans who pre-pay their mortgage could build wealth faster by diverting those funds to a retirement savings plan. (The report defines pre-payment as any term less than 30 years, as well as the practice of making extra principle payments.) This is because your mortgage interest is typically tax deductible, while your retirement plan may include tax deferral benefits. In fact, the report indicates that people in this category are missing out on an opportunity to earn an additional 11 to 17 cents on the dollar by reallocating assets from a plan to pay down the mortgage, to a plan designed to build overall wealth.

I've had this conversation with many clients over the past several years, but it runs contrary to the general consensus about debt - that debt is bad and should be eliminated as quickly as possible. Instinctively, most of us would prefer to not have a mortgage at all. The truth, however, is that when managed properly some debt is good, and can be part of an overall plan to build wealth. After all, isn't that the real goal?

If you'd like a copy of this report, you can find it at www.chicagofed.org/publications/workingpapers/wp2006_05.pdf. Or you can just drop me an email at doncarter@myallstarmortgage and I'll be happy to forward a copy to you.

60 Minutes Strikes a Nerve on AR

Don Carter (All Star Mortgage, LLC) — Mon, 14 May 2007 12:14:41 -0700

Judging from the volume of Blog posts with "60 Minutes" in their title, and the volume of comments that follow, it seems as though Leslie Stahl has stuck her hand in the proverbial hornet's nest. But what's all the fuss about anyhow?

It seems to me that that piece, which aired on CBS' flagship news program last night, is much like everything else you see or hear in the news these days. In other words, sensationalized to draw an audience, but seldom anything more than that.

The gist of the story is that Realtors charge too much for the services they render, and have essentially squashed competitive business models from entering the market through the all powerful NAR. That is until Redfin arrives to change the way the real estate business works. However, with just a cursory look around practially any market, the facts don't seem to bear this out. There are countless options available to home sellers in just about any market, including everything from discount brokers who simply list on MLS to full service brokers with buy-out guarantees, to a typically robust FSBO segment. Ultimately, the choice for each consumer on which avenue to take to sell their home is uniquely individual, much like just about every major financial decision. So why are agents on AR so agitated?

My guess (and this may not be all that popular to say) is that many real estate agents are defensive because they don't really have a full grasp themselves of where they are on the value scale, and hence have trouble articulting that to the client. This doesn't mean they don't bring value, only that they struggle to articulate that value not only to the client, but to themselves.

Ultimately, it is the service provider's responsibility to understand and articulate the what's, why's, and how's of their business to themselves, and then target customers that are likely to respond to that model. The market will then determine whether or not their business model is viable, i.e., their fee structure conforms with the experience they're providing their clients. In most industries, there are low price, mid-price, and high-price options for consumers, and I think the real estate industry is no different. Which brings me back to my original question: What's all the full about?

Next week on 60 Minutes, Leslie Stahl will reveal that the Ritz-Carlton charges 6 times what Motel 6 does for essentially the same thing!

Family Reading Time

Don Carter (All Star Mortgage, LLC) — Sun, 13 May 2007 21:00:25 -0700

As the son of a school teacher, I've always enjoyed reading, however, like many people these days, I find it challenging to find the time for recreational reading. While discussing this recently with my wife, we came up with a plan that would give the two of us more time for reading, while reinforcing the value of reading to our two children, Rachael and Timmy.

We had always read to Rachael and Timmy as they were growing up, taking turns each night on who would read "Good Night Moon" to Rachael, and "Chick-a-Boom-Boom" to Timmy. But as they got older and began reading by themselves, story time quietly went away. Without even realizing it, we had lost a "together" activity that we had all really enjoyed! Then one day, I read about a family that had removed all televisions from their home, and lived a TV free existence. The mother said how much richer their lives were without spending hours of their time glued to the screen, and that they had rediscovered the joys of reading together. Now I knew I wasn't prepared to get rid of all the televisions, but it occurred to me that we could create a regular habit of turning them off at a scheduled time every night, and use that time for reading. And so a new tradition was born.

Now every night around 7:30PM at the Carter household is Reading Time. The TV, the Ipods, and the Nintendo's are all turned off, and we gather in the living room with a book for a quiet half hour of reading. When we first started this plan, we got quite a bit of resistance from Timmy, who's a good, but reluctant reader. He'd much rather watch SpongeBob, or play video games. But now that we've gotten into the routine, it's sometimes hard to get him to put his book down when Reading Time ends to get ready for bed!

The residual benefit of this is that I've gained more time for my own recreational reading. Some of the books I've read recently that I highly recommend are "Blind into Baghdad" by James Fallows; "A Good Walk Spoiled" by John Feinstein; "The Education of a Coach" by David Halberstam.

Here are some tips to follow if you're interested in developing your own Reading Time tradition:

Be consistent, but flexible - Set a specific time every night for reading, but be prepared to adjust it as circumstances dictate. For example, if your time is 7:30, but you don't get home from baseball practice until 7:15 and you haven't had dinner yet, putting it off until 8:00 is fine, just don't use it as an excuse to cancel for the evening.

Everyone participates - In order for this to be a family event, everyone has to participate, no exceptions! If there's something on TV that you must see, record it and watch it later. You'll probably find, as I did, that whatever it was that you have to see wasn't as important or enjoyable as the Reading Time was!

Be prepared - Make sure that you have adequate lighting, everyone has a book to read, a comfortable seat, and a book mark.

Set aside discussion time - Don't be too quick to turn on the TV after reading time is up, or it will seem like a chore. Take some time for conversation about what's being read.

Prioritize - If the dishes don't get done tonight, they'll get done tomorrow. Make this time together a priority!

If you have some tips or experiences with your own reading time rituals, I'd love to hear them!

Do You Know What's in Your Water?

Don Carter (All Star Mortgage, LLC) — Sat, 12 May 2007 07:44:04 -0700

If you have a well that supplies your home with water, or you know someone that does, you need to read this important article about the recent experience of one of my clients. Charlene and Daniel recently purchased their first new home. As they went through the purchase process, they had the home inspected for defects, discovering a couple of minor issues that were easily resolved. In addition, the house was appraised for the bank to determine it's fair market value. When the house passed both the inspection and the appraisal, Charlene and Daniel felt very confident about moving forward, and they closed on their new home.

Once they moved in, they noticed a noise coming from the cellar that they traced to their well water pump. Concerned, they called in a technician to inspect the pump, who quickly revealed that the noise they were hearing was just the normal cycling of the pump. The technician suggested that they perform routine preventative maintenance on the pump and test the water for contaminants, and Charlene and Dan agreed. What they found was startling.

When the tests came back, Dan & Charlene learned that their water source was contaminated with arsenic at levels higher than the federal guidelines allowed. In order to correct the problem, they needed to install a special filter designed to remove the arsenic, with a best case scenario of around $5000, and a worst case of over $15,000! After having just purchased the house, this was not an expense they had anticipated, but the alternative of living with a known contaminant that causes an elevated risk of skin, bladder, and lung cancer was unacceptable, so they are moving forward with the repairs.

If you have a well water system, you should arrange to have your water tested to ensure that it's safe. If you, or someone you know, is buying a home with a well, make sure that you request that the home inspection includes well water testing for contaminates. The cost for the testing is nominal, and it could save you thousands of dollars in unexpected repairs - more importantly, it could protect your family's health!

When You Assume...You Know the Rest

Don Carter (All Star Mortgage, LLC) — Fri, 11 May 2007 10:00:36 -0700

In a somewhat famous episode of The Odd Couple, Felix Unger explains to Oscar Madison that when you assume, you make an ass out of u and me. When it comes to assuming that our clients know that we depend upon referrals, we may be doing exactly what Felix warned about!

I was recently at a friends house celebrating their daughter's first birthday when I overheard a conversation among three guys who it seems were all friends with a fourth guy who wasn't at the party. One of the guys, "Dave", was talking about some work he recently had done to his house, and how "Joe" (the guy who wasn't there) was pretty sore with him because apparently whatever he had done at his house is precisely what Joe is in the business of providing! (I never heard clearly what the project was, but I think it was plumbing related). I heard Dave explain to the others that he thought that with all the stuff Joe had going on, he thought he would probably be too busy, and he didn't want to bother him with his little problem so he just called a guy out of the phone book. No wonder Joe is upset! Has this ever happened to you?

Today, I try not to assume that my clients know how important they are to me, and their referrals, because that's really what we're talking about, right? I know that nobody will take care of them as well as I will, and I would never want anything bad to happen to them or the people they care about. I try and remind them with every contact that I always have time for them, and for those they refer to me, and no problem is too small, or question too simple to bother me with - after all, that's why I'm in this business, to serve them!

Don't assume that your clients know this about you - with every conversation you have, be sure to remind them that they are the reason you do what you do, and that people important to them are important to you. Do this and you won't be an...well, you know the rest!