closing costs: Closing Points, Origination Points, Discount Points ... What are points? - 10/29/09 10:38 PM
"I'm not paying any points!"
Well, okay then. I guess you're paying cash because everybody who borrows money from a broker, lender or bank (regardless of their misleading advertisement) pays points. Simply defined the word points means a percentage. What they are a percentage of is the next question. And, in this case, they are a percentage of the loan amount.
For example if we are talking about $100,000 and we say "one point" we mean "one percent" or $1,000 (one thousand dollars). If we say "two points" we mean "two percent" or $2,000 (two thousand dollars).
Since we know what … (35 comments)
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closing costs: Interest Rate and Annual Percentage Rate (APR) - What you need to know. - 10/27/09 02:38 PM
Every loan officer who has done their job for more than a week or so has heard the question. Some loan officers avoid it altogether by simply not sending the Truth In Lending (TIL) until they absolutely are required by law to do so. Why? Because in the top left corner in prominent font is a number that confuses almost every borrower and non-financial insider - the Annual Percentage Rate (APR).
The APR disclosure requirement was sort of a good idea when it came out back in 1968 when there was pretty much just one type of home loan: a 30 … (1 comments)
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closing costs: Finance Challenge: Reserves - the right amount, the right type, the right timing - 10/16/09 09:31 PM
So you have the down payment - sourced and seasoned just like it needs to be. All saved up, stored away nicely in the bank for the last 60 days, and ready to be invested into a home. The closing costs are there, too, and all perfectly documented for the last two months. Great job! Your down payment and closing costs are in order. This is something to be proud of!
It's always something that needs to be covered right up front. When the loan officer is taking the application and they know what it requires for down payment and the … (6 comments)
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closing costs: Hey Builders - Let Me Make "RESPA" and "Fair Trade" Clear To You - 10/13/09 10:23 PM
Some years ago I had an agent to whom I referred a lot of business ... seriously a couple every month. She got in with "Dr. Morton" on their close-out list and we were moving a couple of units per month to clients I had generated with my advertising. Suddenly it became a problem for MY BUYERS whom I had created as clients with my efforts and my free training classes to use my mortgages and "Dr. Morton" decided they would no longer honor their closing cost contribution unless the buyer used their preferred/inhouse lender.
Woah.
I'm not that great of … (5 comments)
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closing costs: Here We Go Again, DC Empowering the Big Banks (YSP Wars) - 04/29/09 03:10 PM
Say it isn't so! H.R. 1728 (did not get passed in the Senate the last time)
Let me explain this to you One More Time Brad Miller and Mel Watt. Side question: How does such an obviously beneficial to big banks and destructive to mortgage brokers legislation get introduced by Congressmen from a notorious big banking area?
What Yield Spread Premium is NOT
Yield Spread Premium is not a unique and only way for loan officers to rip off home owners and home buyers (any more than any other way).Yield Spread Premium is not something a mortgage broker can make up … (27 comments)
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closing costs: What Are "Discount" Points? - 02/23/09 10:46 PM
Be careful when you answer because you may not exactly know the full answer. As an agent it is something you hear and something you learn about in CE classes from time to time but do you know exactly how they are determined? You will in five minutes. Some of you already do so you may be excused to continue Rain surfing but thanks for stopping in! There are also several readers who are not in the industry and really want and need to know this answer!
When you hear "discount" you automatically think of "something for sale which can be … (4 comments)
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closing costs: National Banks and Mortgage Insurance Conspire Against YOU - 02/13/09 03:15 PM
So basically I am the RantMan this week - but I am doing it all for you my clients and my friends. Seriously - it's not like I get paid for these blog posts :)
Not a conspiracy theory ... an actual conspiracy. This is not so much about the inner workings of the conspiracy itself but more about why it is bad for you as a borrower with average credit and average down payment or equity (less than 20%). I have written several articles and blog posts over the last few months about how mortgage insurance companies control the mortgage … (7 comments)
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closing costs: What is "PAR" rate and how can I meet or beat it? (Using golf as an example.) - 01/22/09 12:20 PM
Golfers already know - par is when you reach balance with the score on the golf course. Many golfers instead of writing down the total number of strokes record the number of strokes over or under the par. In golf par is the standard to aim for. The same applies in mortgage lending and investment borrowing.
Not every golf player "shoots at par". Others actually beat par - they beat the standard. Tiger Woods has a bad day when he shoots a par score on the golf course and I am joyous when I'm within 15 points over par. In fact … (34 comments)
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closing costs: What They Don't Tell You About Their "No Fee Mortgage" - 12/01/08 11:04 AM
They are big. They have millions to spend on advertising. In fact, they don't pay for that advertising at all -their customers do. Since we started back in 2001 we have fought giants and we have always beaten them and we will continue to do so. Currently there is a very large bank offering what they call the "No Fee Mortgage". Now if you visit the website you will see rates advertised in the mid 5% range. If you click on the link to take you to their super special you will not see any rate changes when they show you … (12 comments)
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closing costs: Want To Create Your Own GFE - Why Not? - 11/17/08 03:41 PM
Excuse me if I sound a little agitated. I'm still trying to figure out why a "respected real estate expert" would encourage a seller to create their own GFE. What possible good could even come from it? Is the buyer going to show up at the closing table and say, "all these numbers on the HUD1 are wrong - here is what the seller gave me and this is what I made an offer on"? And now the post ...
We all understand the feeling of being out of control or not being satisfied with how an industry operates. Sometimes we … (4 comments)
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closing costs: The Greatest Attribute of Active Rain is "Open Source" Education - 02/21/08 01:42 PM
I have learned many things on Active Rain and also had my thoughts confirmed here. That has some of the highest value of anything I can attribute to AR. Yes, the networking is phenomenal but if we were all just talking about American Idol or NASCAR we wouldn't be growing as a community of real estate business people and leaders. So, keeping in that vain let's talk about the myriad different types of POINTS on a mortgage and why you, whether you are a loan officer or real estate agent, need to understand the differences.
What's the POINT? Basis, spread, yield, BIPs, … (10 comments)
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closing costs: How To Compare Mortgage Quotes - 11/17/07 12:22 PM
First let me show you how to get burned: 1. Believe the ads you see, hear and read. Especially the "no closing costs" ads or the "it's a racket, it's a rip-off" or "no one else can do what we do" ads. 2. Let someone else such as a real estate agent (use the services of an Active Rain member to help get the most educated and experienced agent to avoid problems like this) or builder set up the loan for you or offer some "special incentive" for using "their lender". 3. Refuse or fail to become educated as most people … (11 comments)
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closing costs: Bait And Switch!!! Wait, what do you mean it's my fault??? - 06/05/07 01:09 PM
Today we have a client who called for a no closing cost refi. Since everyone should know and we tell everyone the way that is done is by slightly raising the rate to cover those costs from something called Service Release Premium (or Yield Spread Premium on brokered loans) where we take the Par rate (a loan that has no profit in it for us) and move the rate up just high enough to cover the closing costs and pay our commission. Depending on the size of the loan that could be as little as 1/2 point or as high as … (9 comments)
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closing costs: Who Can You Trust? - 03/09/07 01:49 PM
Evidence is mounting that the larger lenders seem to have been the most deceptive and are now suffering the greatest consequences. AS a small lender we know that our clients have been repeatedly victimized through being snared by bait and switch tactics from large national lenders who advertise regularly during shows of mass audience including Rush Limbaugh, the Super Bowl and American Idol.
Some even repeat: No one can do what we can do.
Really? Looks like your delinquency rate just cost your founder (who evidently wants to retire) millions or billions of dollars in a sell-out/merger opportunity.
Not too long ago I blogged … (3 comments)
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closing costs: (Un)Fair Lending Acts And Your Loss of Rights (Also Called Predatory Lending Laws) - 01/11/07 05:17 PM
Back in 2001 we changed directions. Originally we had been known as "Home of the American Dream". We enjoyed our reign as champion of purchases for homebuyers who could not find an affordable loan for which they could qualify. Following the challenge by President Bush to put 10,000,000 new families in homes by the end of the decade through providing lower closing cost, lower interest rate loans with down payment assistance our advertisement had our phone rang "off the hook".
Then came the "Georgia Fair Lending Act" designed to protect the ignorant borrower from the unethical lender. We were forced to end … (5 comments)
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closing costs: Hard Money Basics - What, When, Why, and Where? - 12/27/06 10:22 AM
One of the more frequently asked questions from new investors and real estate agents is, "What is hard money?" The answer is much less mysterious than when and why to use hard money. Hard simply means it is tied to a "hard" asset such as real estate, gold, silver, etc. For our purposes it will be tied to ... real estate.
Hard money, since it is tied to real estate and not so much the borrower, is generally loaned at a lower LTV (Loan To Value) than conventional funding but does not place as much weight on the borrower's strengths. It is … (4 comments)
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closing costs: If You Can't Beat Your Competition, Lie To Your Clients - 10/30/06 04:38 PM
Why does it seem this has become the motto of my own industry? If you live in one of the towns where JS from LF advertises heavily on the radio you've heard him say "Don't give a broker another penny of closing costs to refinance! It's a racket! It's a rip-off! Refinance with LF today and we'll pay your closing costs. Your closing costs won't cost you one penny and we don't roll it into the loan!" (paraphrased)
Raise your hand if you believe this is remotely true - I mean that it won't cost you one penny.
Okay, John, put your hand … (1 comments)
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closing costs: But I HAVE to laugh! - 07/30/06 12:55 AM
"I am having trouble getting to the closing table with the current broker I went with (dont laugh), can you get me a 100% LTV on this Porterdale property, and how quickly can you close? The contract close date is (in less than 10 days). Can you close by this date? All the title work has been done and appraisal."I quoted that because it was an email that came to one of my team members while several of us were talking about how often people call us, talk to us, learn how to do this and then go someplace else usually … (0 comments)
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closing costs: "Junk Fees" versus Compiled Fees - 07/28/06 02:06 PM
Okay - I got that comment to my other post about $15 for your current lender to fax a one page payoff to your new lender. It does, indeed, sound absorbitant. But let's look at it from a personal perspective. Let's say you have 800 clients you manage. Let's call you an Account Specialist.
Let's say of those 800 clients you have about 10 minutes of work each month to perform as a standard part of your job. That will require roughly 34 hours per week. Now let's throw in that maybe 10 percent of them caused a variation in the amount … (0 comments)
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closing costs: The Truth About "No Closing Cost" Loans - 07/24/06 06:37 PM
There is, in my town, a particularly obnoxious mortgage broker who uses phrases like, "no brainer", "rip-off", "racket" about his own industry. Well, I'll agree with him on one thing: He's hoping you're the no brainer because what he offers is not necessarily good and how he sells it is an absolute lie.Normally I have only good things to say about even my competition but in this case let's call it like it is - misleading. However it has stirred up a lot of talk and I get a lot of phone calls about this particular service of No Closing Cost … (8 comments)
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