Ok, I am writing this  to try to put things into perspective.

Are you thinking about refinancing your home to pay-off some bills?

1 Credit - This is not your money. This is someone else's money that is willing to loan to you. The reason that they want to loan this to you is to make money from it.

2.In society today ,People use credit to buy groceries,gas, and things that they would not normally be able to afford. This isn't a good practice. Unless you pay it off at the end of the month and you do this for convenience.

3. Equity-This is not free money. Yes-it is your money and if you sell your home you are entitled to it. But if you take it out, you are going to have to pay for it to continue to live in the home. If you have over spent your limit, this is only a temporary fix. It will lower your monthly payment .But, you will pay for it for 15,20 to 30 yrs depending on how long your loan is.

I have customers that want to refinance and pay off their bills. Well there are two different things in that sentence, refinancing and paying off bills. You should refinance if you will save money by paying a lower interest rate. Also remember that there are closing costs associated with th refinance and it may cost you more to refinace than it would to continue to pay on the credit cards. The part about paying off your credit cards isn't true. You are not paying them off. You are only transferring them to a different line of credit so you will pay a lower interest rate.

I would never recommend for someone to refinance and pay a car off. The car will depreciate and you will still be paying for it for years to come.

Yes, the non-conforming and subprime markets have taken a hit. But the Full-doc loans are still ok. 100% financing is still available along with Down Payment Assistance. This is what I think. The lower priced homes will be the next big selling item. The reason I say this is because the stated income loans require more money down. They are still out there but for the investor to reduce risk, they are now requiring higher credit scores and lower ltv's. The full doc loan programs make us verify income. No more getting just a little bigger home. If the customer doesn't have great credit or a lot of money to put down, they will have to do a full doc loan. This means they may not qualify for as big of a home as they once did. So, If you are not selling lower priced homes, It may take longer to get a qualified borrower and your sales my be farther and farther apart.Are you looking yet

Are you upset with the fact that your Adjustable Rate Mortgage is going up? Hmmm. Lets see now, adjustable What does that mean? Well, if you didn't ask this question shame on you. When the rates started dropping, An arm was the way to go. But, who would have thought that the rates might go up? I say anyone that looked at the disclosures that you signed. I thnk that there are about 5 different disclosures that you sign that say the same thing. The rate may rise and your payment may go up. It is not the fault of the Mortgage Broker/Lender. They did there job. They gave you just what you asked for. The lowest payment possible. I watched people over the last couple of years quoting arms and said "Not Me". What happens when the economy gets better? The rates will go up and I don't want to put someone in a house that they will price themselves out of.

Don't blame the Broker. Blame yourself for not reading or understanding. If you asked what could happen, do you really think the lender would say rates are not going to rise?

Please note. I have only closed 1 ARM it was to an investor that was going to flip the property. he was very aware of the arm.  Rate isn't the only thing to consider when getting a mortgage.

Ok, I am writing this  to try to put things into perspective.

Are you thinking about refinancing your home to pay-off some bills?

1 Credit - This is not your money. This is someone else's money that is willing to loan to you. The reason that they want to loan this to you is to make money from it.

2.In society today ,People use credit to buy groceries,gas, and things that they would not normally be able to afford. This isn't a good practice. Unless you pay it off at the end of the month and you do this for convenience.

3. Equity-This is not free money. Yes-it is your money and if you sell your home you are entitled to it. But if you take it out, you are going to have to pay for it to continue to live in the home. If you have over spent your limit, this is only a temporary fix. It will lower your monthly payment .But, you will pay for it for 15,20 to 30 yrs depending on how long your loan is.

I have customers that want to refinance and pay off their bills. Well there are two different things in that sentence, refinancing and paying off bills. You should refinance if you will save money by paying a lower interest rate. Also remember that there are closing costs associated with th refinance and it may cost you more to refinace than it would to continue to pay on the credit cards. The part about paying off your credit cards isn't true. You are not paying them off. You are only transferring them to a different line of credit so you will pay a lower interest rate.

I would never recommend for someone to refinance and pay a car off. The car will depreciate and you will still be paying for it for years to come.

Here is another program that is often abused or manipulated. I think the general concept of this loan was this:

A self employed borrower owns his own business. He only takes a moderate paycheck so he can continue to grow his business. After a while, his company really starts to make a profit. He decides he wants to buy a nicer home, But the lender wants to see what he has made in the last 2 years. The owner then says "I have made a lot of money, But I have reinvested it into my company." This I believe is where stated came from. It gives the Underwriter the flexibility to say "Yes , it is likely that this could happen and that he could have made that much money doing that job.

Another great reason to use stated is if someone makes overtime, it hasn't been consistant for a full year and  it is expected to continue.

Now, We find that instead of telling John Doe "You really don't make enough money to buy this home," instead, Lets say you make enough so you can get the home. It doesn't matter that you don't really make that much. And we can just keep inflating your income until the ratios work.

The customer is happy because he gets the approval.

A bad time to use stated would be a single parent making $10.00 working as an assistant that has their credit cards maxed out. The borrower can't ratio because she is maxed out,But if you keep stating her income until the ratios work. Then some people would thing they have a loan because the ratios will work now. Just because you can make the ratios work doesn't make it right.

I am sorry, But I don't work this way. It would be hard for me to sleep at night knowing that I just helped someone get a loan that they didn't deserve and eventually won't be able to pay for it. Ratios are used for a reason. If the customer doesn't qualify. Then they Don't Qualify. Just because the numbers can be manipulated doesn't mean that they should. Unfortunately there are some people that only care about closing a deal. No matter what the cost. I think that is sad.

How do you put a dream team together? If you want to start your own group, how do you get started? I see many groups and some in my area are headed up by people that I have never heard of. Is it based on sales or by someone that is more motivated than others? I have never been on a Real Estate team so ,I am curious how they work. I wonder if a mortgage team would work? Why wouldn't a Real Estate team have their own Mortgage person on their team?

Do you know the difference? I see where some mortgage people are advertising that they can preapprove a client in 1 hour or less. Wow, I must be missing something. It takes me a little longer unless they bring in w2s,bank statements,paystubs and documentation of their investment accounts. I can say they are pre qualified but not preapproved until I see these things. I have to verify that the information they have said is correct based on the way we have to figure income and based on the guidelines. I guess a Realtor may be willing to wait until the information is verifeid to get a decision instead of guessing that their buyer will qualify.Would you want someone prequalified or preapproved. I will send a letter of approval. But only after I have verified all related documentation.

I am lookin for some land to lease for 1 week of the Hunting season. I would like to lease about 50-60 acres. It would be for the second full week in November. If you know anyone that has sopme property for lease please have them call me. I have been Hunting near Pennyrile for the last 3 years. The owner of the lease, did not renew this year. I don't need guide services and I have a place to sleep already.

America's Most Wanted has just captured it's 1000th fugitive. Congratulations and job well done. This is one of my favorite shows. I find it amazing how criminals feel that they are smarter than law enforcement. Mr. John Walsh has dedicated his life to the program. Thanks for your contribution to society.

This is a post that I posted in the carnival of content. Many people didn't agree with me then. What do you think now?

When you decide to buy a home there are a lot of decisions that you have to make. One of the most important decisions will be-"How will I pay for this home.?" Another important question would be"How long do I plan on living here?" These are very important because they will help you to determine what type of loan will be best for you. Although there are many loans to choose from, I am going to make it a little easier for you. I am going to narrow the field down to two type of loans.

First, lets start out with the ADJUSTABLE Rate Mortgage. Also know as an ARM.

Did you notice that I underlined the word Adjustable in the name of this loan? This is the single most important thing about this type of loan. You might ask,"What difference does it make if it is Adjustable or not?" Having and Arm can be like a two edged sword.By that, I mean that depending on what the market is doing will depend on if you rates are rising or falling. The best case scenario for you the consumer would be to Purchase a home with an adjustable rate and have the market going down. If this were the case , your payment would continue to go down. But, as most people have seen in the past 24 months that is not the case. People were promised low start rates that have went up and up . How does this affect you? As the rates increase, So, does your payment. Some people just barely qualified for loans at the lower rates. Now that the rates are rising they continue to see their payment go up. Eventually they will not be able to afford the payment and will be forced to refinance,sell, or ultimately face foreclosure. If you take the name of the loan, stop and think about it, You will realize that the loan payment will never remain the same. If you are buying the home for a short period of time this might be an option. Do You Feel Lucky?

Now we have my personal favorite, The FIXED Rate Loan.

98% of the loans I do are fixed rate loans. Unlike an Arm, This rate stays the same throughout the life of the loan. The principal and interest payment stays the same. I feel that this is the best loan to go with because you have no way to determine what may happen in the future. But you can be sure what your payment will be. Here is your worse case scenario with a fixed loan. If the rates drop, you can do what we call a rate and term refinance. This will allow you to take advantage of the lower interest rate and save even more money.

If you feel that you are lucky and the market will go down then try the Arm. I am betting that the rates will continue to go up and it will cost you in the end. If you want to take my advice and get your rate fixed, Give me a call.

Shaun Wren

WrenMB.com