Tom's Blog

100% Financing is available in FL!

Tom Engelhardt (First Choice Mortgage) — Mon, 17 Mar 2008 10:12:52 -0500

There are many people still looking for 100% financing in FL. It is still available! Will everyone qualify? No. But many people will. When I first heard of the program I thought it would be great for about 2 out of every 20. I was very wrong and actually impressed with how many people fit into this criteria. Unfortunately, the company I work for isn't set up to do FHA loans so I was eager to find a comparable program to help my clients instead of referring them out. This program is USDA Rural Development. The two biggest factors are where the property is located and the borrowers have income limits. Unlike the name, the properties that are eligible are not necessarily rural. As for the income limits, they are fairly close to the guidelines for Home Possible or My Community. Here are some of the highlights.

No downpayment: True 100% product even in declining market

No monthly mortgage insurance: Clients can afford more!

No cash reserves required.

No minimum credit score. Lenders do have ability to cap scores though

Adverse credit on exception based only with circumstance explained

Expanded qualifying ratios: 29/41%.

Exceptions may be made to accommodate qualifying clients.

No asset limits: Clients may keep liquid cash savings and other investments.

NOT just for first time buyers: Anyone may apply.

No purchase price limits: Clients may purchase home that meets their needs.

Loans up to 102% of the appraised value not contract price.

Repairs may be financed up to 100% of the appraised or "as improved" value.

Up to 6% Seller Concessions to pay for closing costs and/or rate reduction.

Competitive 30 year fixed interest rates, capped at .60 basis points over the FNMA 90 day delivery rate.

No Rural Development prior approval of appraisers or builders.

Prompt review of Complete Loan Packages:24 - 48 hour turnaround time.

In this market we can all use an extra tool in our toolbox! Give me a call or shoot me an email if you need more information or have questions.

DOZER DAY in North Central Florida Sat. March 15 9am-4pm

Tom Engelhardt (First Choice Mortgage) — Fri, 14 Mar 2008 14:37:35 -0500

If you're wondering what to do this weekend, look no farther. Great fun for kids and adults. Come by and experience the thrill of riding on huge construction equipment. Take a turn at operating front end loaders, excavators, bulldozers, and much more! Also at the event will be military equipment, fire-fighting equipment and vehicles, helicopters, and police vehicles. Afterward, the kids can get their faces painted, take a hayride, make cement handprints, and even dig for treasure at the "Big Dig". It is a Construction Theme Park. There will be over 100 pcs of equipment, plus K-9 demonstrations, fire safety demos, swat members, and even water drops performed by helicopters.

All of the fun starts at 9am and continues til 4pm. Cost is $10 donation. Proceeds go to Childrens Home Society. For $10 you get unlimited rides all day. There will also be food and drinks available. It all takes place at :

Florida Horse Park
11008 S. Hwy 475
Ocala, FL 34480
(352) 307-6699

Come out and have some fun while helping out a great cause. Conveniently located off of I75 for a great day trip. Come by and see me at the Bobcat booth.

Why Mortgage Brokers Can't Be Trusted

Tom Engelhardt (First Choice Mortgage) — Mon, 18 Feb 2008 12:41:01 -0600

After a rough couple of weeks, I feel I needed to get this off my chest to someone. I have heard many brokers be tagged with the "used car salesman" title. With the mortgage mess, sure there were some throughout the country, but many are trying very hard to earn a living by doing things the right way. Well over the past two weeks I feel as though I am being thrown into the same catagory.

My first loan was a very good credit score, full doc, good work history loan. The down side being 100% financing. He doesn't qualify for many lender programs due to his income. However, I got a very clean and easy approve/eligible and placed with a large reputable lender. They called once for extra verification on employment and income which we promptly provided. Then after many calls and emails and a TEN DAY wait. They said they were turning down the file because they don't like the Villages area (very large and prominent retirement community in FL. They are basically their own city) because of the marketability if they had to sell! So now after informing my customer it should be no problem and I don't foresee any obstacles, I had to floor him with this! He was very understanding but that doesn't help the way I feel for this at all. I have had loans that I may have had questions but this was one I felt so good about.

Then, when I tried to put it behind me and move on to the next customer I get the knockout punch. I have another customer also good credit, NO derogatory items but it is a cashout refinance over 80% LTV. So, not the easiest loan, but for best pricing I go to the local credit union. He sends me a rate and terms after reviewing credit and application @ 8.625%. Pretty good considering a Bankruptcy in 1/04. I relay this info to the customer and they are happy. The loan officer at the credit union then sends me a good faith with a rate of 8.75% and dropped their cash back from $6k to $4k. He claims he didnt realize he didnt add on for the cash out and escrows. So, I call my customers back into the office and explain that this isnt me and go over the new terms which are still better than their current situation. They sign the GFE and leave. I send the full package over to the credit union and he ignores me for two days. Then Saturday morning he leaves me a message that he is emailing the package to me for review and he'll of course be unavailable until Tuesday. I get the package and now the rate is 9% and their getting back $3k. Now, I have to look my clients in the face and try to explain that I am not baiting and switching.

I am so steamed right now you can't imagine. Now what do you think these clients will think of me? How many referrals do you think I'll receive after this? Is a pre qual letter worth anything at all? Tomorrows another day and theres a good chance it will be better!

Don't Wait to Refinance in Florida!

Tom Engelhardt (First Choice Mortgage) — Fri, 14 Dec 2007 10:51:22 -0600

First came the subprime fallout mess and now the after effects are coming. After everyone bought homes based on a credit score rather than true factors, such as employment and ability to repay, the housing market is in it's adjustment phase. Now there is such a surplus of homes compared to buyers the home values are falling off. As more and more foreclosures take place over the next 6-12 months the home values will fall at a forecasted rate of 13-15%. According to Moodys Economy Report, there isn't an expected measurable recovery until 2010!

What this means to the average "joe" is get out of your adjustable or use your equity while you can. If you are one of the millions who have an adjustable mortgage that will reset in 08-09, you could wind up with a higher rate than you thought if you wait. For instance, if you have a 75% loan to value loan right now and you refinance in 4-6 months, your new loan to value will be between 85-90% causing you to pay mortgage insurance or a higher rate to avoid the insurance. If you have plenty of equity and can afford to pay a little extra each month, you may want to think about taking some of that cash and investing it rather than taking a 15% hit on that money. Most investment firms can set up a portfolio earning between 12-15% per year.

There are many people who bought homes between 05-06 for $0 down and will soon owe much more on their homes than they are even worth. Don't wait until it's too late and become a casualty of the market. Florida and California will be the hardest hit. Certain areas are already flagged by lenders to either stay away from or cut values accordingly. If you're not sure of your position most mortgage professionals offer FREE consultation to see if they can help.

New Technology- From Little Ole Ocala, FL

Tom Engelhardt (First Choice Mortgage) — Mon, 22 Oct 2007 09:48:24 -0500

On a recent trip we took, my parents offered us the use of their newest technology gadget. I must admit, I'm not the Treckie of today that most around me are. I think tivo is one of the neatest things out but I don't have the desire to learn how to use it. Mainly because we really dont watch that much tv unless its game day. Anyway, the gadget is a GPS device that gives you turn by turn directions, along with nearby food, lodging, fuel, attractions, etc. We have had navigation systems in vehicles before, but I was very skeptical because the ones I have used would always seem to get you close, then send you in circles. The one we borrowed was a Mio, but they have Tom-Tom, Magellan, and a few others. We had absolutely no problems with it at all. It even warned us in advance of turns coming up, exits, which lane to be in, and much more. Like I said, being behind the times with most technology, when we arrived at our destination with family and friends, everyone of them already had one! There are apparently about 5 different name brands, but the common theme was you can't be with out one. For those of you that are technologically challenged like myself, they are very easy to use. If youre not already using one, check them out. Plus they are alot less bulky than an atlas and much easier to read while driving. So for me growing up in a small town like Ocala, FL, it is a must for places like Atlanta and Orlando. Maybe by next season Ill be ready to learn about tivo!

Back Home in Ocala, FL.........

Tom Engelhardt (First Choice Mortgage) — Fri, 19 Oct 2007 10:14:27 -0500

Well we just returned to Ocala from our family vacation to The Smoky Mountains. Its always nice to come back home, but I desperatley miss the scenery and the weather. We left Ocala and it was a normal 87. Of course it was late evening. We stopped in north georgia to eat and we thought we were going to freeze! Being florida natives, if it drops below 60 its freezing. It was about 50 out the first day. The rest of our trip it was 38 in the mornings and climbed to about 65 during the hottest part of the day. The leaves were just starting to change good. It was absolutely beautiful. The most astonishing thing about the whole trip was the difference in home prices. There are some very affordable homes throughout northern georgia and tennessee. While visiting some relatives, we stayed in their wonderful home. They have a 3300 sq ft main floor and a 1900 sq ft basement and paid around $200k! It sits on 1.2 acres. Needless to say, I was floored. After browsing the local real estate books it seemed to get even better. Then yesterday, a coworker and I went to see some models in a new golf community in Ocala. We looked at a 2600 sq ft home on less than a 1/2 acre for right at $1M! What a difference. Like the old saying goes, "location, location, location". As we discussed how nice it would be to move and enjoy all of our seasons, buy a larger home, our teenager brought us back to earth as we were informed that there is no way she could be dragged away from her friends and school, then her sister chimed in.......So, if anyone is interested in 2 fairly well behaved, not so tidy, good students, we are ready to move immediately. The things we do for our kids!

Would you like to pay $3 or cancel?

Tom Engelhardt (First Choice Mortgage) — Thu, 04 Oct 2007 09:28:52 -0500

Its a decision that many of us are faced with at the most inopportune times. Usually, the closest free ATM is 3 miles away. Do I accept the fee or drive all over town to save the $3 fee? Most likely as the kids are pulling on your leg ready for lunch or initiating the "dying swan" because they won't last the day if they can't play one more game, you give in and pay the fee.

This same saga is repeated countless times each day all over the world. Customers are paying for the convenience. Ever wonder how much this convenience fee amounts too? According to a recent poll, bank ATM fees total nearly $4.2 billion per year! Thats a large chunk of change. To top it off, some banks feel they can recoup some their losses in other areas by raising their ATM fees.

There are a few banks however that are luring away discontented customers by waiving ATM fees. While rates have risen and profit margins are falling, how can they afford to waive fees? The answer is there are owners of free networks that will charge your bank instead of you. They are hoping that this will cause an increase in people using the machines and offset the losses of fee income from the consumers. Localized banks and credit unions are more willing to pay the fees to the larger free network operators due to the high cost of maintaining and servicing the machines in house. Just to keep the machines loaded with cash has become very costly, along with gas for the couriers that deliver the cash, paying the employees, etc. Maybe this will turn out better for everyone eventually. I know I could use an extra $3 in my wallet these days.

Try these two sites to locate free ATMs in your area. Moneypass.com and Allpointnetwork.com

Attention Readers: Great Referral

Tom Engelhardt (First Choice Mortgage) — Thu, 20 Sep 2007 12:40:57 -0500

I'm not a big fan of curling up with a good book. But recently, a coworker/friend, suggested a book that was given to her written by Jeffrey Gitomer. I'd heard the name before but didnt know much about him other than he has done some sort of motivational speaking. In the past I have taken Stephen Coveys 7 habits of highly successful people, Dale Carnegies art of speaking, etc. But unless its information relating to real estate or sports I usually won't keep interest. Thats the reason for this blog. I was truly impressed with how much information is in the book. He brings alot of well known facts to life by giving it to you straight. The title of this particular book was "Little Red Book of Selling". I dont know if the rest of his books are nearly as good but I definitely felt obligated to recommend this one. It mentions many of the same items Ive seen on AR the past few weeks such as branding yourself, networking, etc. One of the easiest things to relate to was "How much time is spent each day on things totally unrelated to building your business?" When you truly think about it, there tons of people clicking on the useless titles like(Countrywide on their way out--The market is soooo dead--etc.) Don't let yourself become one of the rest. Seperate yourself from the negativity and network with the positive people. If you like a good book to redirect your thinking, check it out.

Are Professionals Worth the Money?

Tom Engelhardt (First Choice Mortgage) — Mon, 17 Sep 2007 10:22:40 -0500

I don't know about the rest of you, but I am the type that asks myself this question about everything. If the tv stops working, I take it apart. If the A/C stops, I don't know what I'm looking for, but I start to take it apart. Maybe it's a guy thing. I don't really know. I do know that it drives my wife absolutely nuts though. Well, the latest saga was the bathroom. In the kids bathroom, there was a leak behind the tiles, plus they are pretty dated being our home is about 20 years old now. So, since I know everything, I am sure I can redo a little tile job in about a day or two. I started by tearing all the tile out, apparently insuring there was no going back at this point. This was easy. Why would I pay someone to do this? After the tile, I took down the green board and had everything exposed. I could see the culprit was a slow leak at a copper pipe joint. I went to the hardware store and got all of my needed supplies. Although I know everything, I have tried several times to sweat copper pipe to no avail, so I decided to switch to cpvc. In between cheerleading, open houses, work, laundry, etc. about a week and a half later everything was installed. ( Nevermind the 3-4 leaks that came about while installing) Now all I have to do is put up the new backing board. I finished this in about an hour and half. Now I was ready for the new tile. I know quite a few people who have done it recently and could have called for help. But men don't do that. I started putting the tile up and discovered it's not as easy as it looks. After about 2 1/2 weeks of cussing each night. Ruining tiles while cutting them. And other fun times. The tile was on and had a couple or 20 imperfections. After another night and a few blisters, I did learn that grout actually hides most mistakes!

All in all, it did turn out pretty nice. But I will gladly admit, the other bathroom will be done much more quickly by a professional. I wouldn't recommend any of my clients to do their own mortgage, so I guess I'll stick to mowing the grass and minor paint jobs. After quite a bit of research, I am finding most professionals really are worth the money. Have a great day all!

When Will They Learn??

Tom Engelhardt (First Choice Mortgage) — Tue, 11 Sep 2007 15:49:57 -0500

One of the problems with the housing industry right now is people were misled into loans that they couldn't afford. But everyday on the homepages, the largest ads are usually companies like Lending Tree and Lower My Bills offering a $500k mortgage for $20 per month. Stretching a little yes, but you get my point. If we want to fix the problem I think we should start with ads like these. A recent news article stated that these type of ads are bringing such a huge chunk of business their way that they can't afford to stop them. The part I really don't understand is why people continue down the same path after all of the media on the issue. I originally blamed the greedy people behind these ads and the greedy brokers putting them into loans they would never be able to afford. The more it happens the less sympathy I have. Its all over the news every day. Companies collapsing, Mothers and Fathers losing their jobs and homes but this isn't enough for some to get the hint. We still have clients who respond to the ads and call in looking for these ridiculous loans. Maybe I'm just grumpy today. I just don't understand......?????

Workin In the Nude!!??

Tom Engelhardt (First Choice Mortgage) — Mon, 10 Sep 2007 15:39:52 -0500

During lunch, I enjoy taking a break and skimming through different news pages on the web. Well, one on MSNBC certainly caught my attention today. A carpenter in Oakland, CA apparently regularly does his work in the nude! Not in his home, but at his clients home. This particular day he was building cabinets in the clients back yard in the ole birthday suit. And if that doesnt bring on a chuckle, he was found not guilty by the judge because he wasnt acting lewd or looking for "sexual gratification". He stated that he only did it because it is more comfortable to work in the buff and besides it helps him keep from ruining his clothes.

Of course as I read it, I could only picture the faces of my esteemed coworkers if I decided to parade around in the buff. Afterall, during these extremely hot summer months, it would be much more comfortable. And can you imagine what I could save on drycleaning! I'm sure it would be a bit awkward for my clients at first. But Im sure when I explained to them the huge advantages of doing their mortgage in the nude.....After about another 3 seconds of thought I realized that I can barely stand to look at myself. Though I get along well with everyone I just don't see this new fad catching on anytime soon. Just when you think you've seen it all.

Mortgage Crisis in Florida??

Tom Engelhardt (First Choice Mortgage) — Thu, 30 Aug 2007 10:19:51 -0500

There has been a lot said in the media over the last 2-3 months about the mortgage industry. The best advice I've heard is don't believe everything you hear. The market is definitely slower than a year ago for buying and selling. And, yes, there have been many changes. But there are still many people that will need to refinance out of an ARM or adjustable mortgage. There are still plenty of people looking to buy and sell homes. The limits have come for those who really couldn't afford another home and for those who were trying to buy everything on the market and resell for profit.

These changes are affecting borrowers with very low credit scores due to nonpayment of other bills and those who couldn't prove their income because of no job! How can anyone think that this is a bad thing? Just before August 1, 2007, there were over 63,000 licensed mortgage brokers in the state of florida! My guess is that at least 50%, probably more were never trained to look at a customers financial situation. They were taught, "get your license and you can make a killing". Very sad but true. Many of these sharks have been and are in the process of being weeded out. This is actually great news for most of the people needing to refinance into fixed mortgages and especially those looking to purchase a home.

First, the 30 year fixed rates are still very low at less than 7%. Secondly, if you are looking to purchase a home, there are tons of homes on the market with all sorts of incentives. Builders looking to lighten inventory are offering closing costs, pools, upgrades, etc. Investors who are now carrying a plethora of payments are looking to depart with homes for what they paid for them. The unfortunate ones are the average joe that was simply looking to sell and move to a different area. Now he has to sell his home for less in order to be competitive.

There are still many programs for 100% financing, however you could save nearly 2-3% on your rate if you have a down payment. As for your credit, don't close old accounts after paying them down or off. They are considered tradelines which help your credit score. Try not to carry more than 40% of the high balance on any credit account. Always try to keep at least 3 tradelines or accounts open and active on your credit. Make sure to take advantage of your free credit reports each year and dispute any incorrect items. These are going to become very important for future home buyers.

The last bit of advice is to get at least 2 quotes or good faith estimates. Why is it that when we get our a/c fixed we call 2 or 3 techs for pricing, but when we are considering hundreds of thousands of dollars we talk to 1 person? Be very strict about holding your broker to the costs he quotes. There is NO such thing as a NO COST loan! Ask for references from the last 3-6 months. Clients will not lie if they feel they were treated unfairly. Finally, the cheapest closing costs isnt always the best deal.

Question on Newsletters

Tom Engelhardt (First Choice Mortgage) — Thu, 16 Aug 2007 14:01:44 -0500

I am in the process of creating a newsletter. I am wondering what other brokers have seen or experienced with their own. Have you had better response monthly rather than quarterly? Is color better than b&w? How many pages do you include? I have an idea of the content I want but wasnt sure with the details. Any help is always appreciated.

A Few Common Problems With Closings

Tom Engelhardt (First Choice Mortgage) — Wed, 08 Aug 2007 15:12:26 -0500

The Buyer:

1)Giving incorrect or incomplete information on the application

2)Late payments on mortgage or rent

3)Loss of borrower or coborrower employment

4)Borrowers making large purchases on credit before closing

5)Lack proof of verifiable income

6)Borrower switching from salary to commission

7)Don't have required funds at closing

The Seller:

1)Loses motivation to sell/ cant find suitable replacement property

2)Will not allow appraisers or inspectors inside home in timely manner

3)Unable to clear liens on property

4)Misrepresents information about home

5)Isnt sole owner of subject property

6)Removes items included in the contract

7)Leaves town before closing

The Realtor:

1)Unfamiliar with clients financial situation

2)Contract written incorrectly

3)Does not do sufficient homework on property

4)Takes time off during transaction

5)Will not show property due to bias against particular office

6)Misinformation given to client

7)Inexperience with transaction process

The Property:

1)Termite report reveals surprises

2)Damage to home before closing

3)uninsurable property due to zoning or damage

4)Encroachments on property

5)Easements/Access to property inproperly recorded

6)Cant get approval for septic or well

7)Unique home or property(Dome, Loghome, etc.)

The Broker:

1)Under quotes closing costs to get the deal

2)Doesnt have access to loan product quoted

3)Inexperience and no company support

4)Overshops loan causing credit scores to drop

5)Unfamiliar with steps needed to clear credit problems

6)Does not verify with lenders who are approved vendors for appraisals and such

7)Loses documents

These are a few items from different people involved with the closing process that can go wrong. Good communication from start to finish can deter many of these problems. Make sure you do your homework on the people you choose for your mortgage needs. One of our AEs passed a similar list around a while back and it received good feedback from those who read it, so heres my version. Although Im sure I probably omitted quite a few pet peeves!

Latest Changes In Lender Programs

Tom Engelhardt (First Choice Mortgage) — Wed, 18 Jul 2007 20:50:33 -0500

Well the emails have started trickling in over the last couple of days. The latest change for the lending side is lenders are eliminating short term ARMs. Commonly referred to as a 2/28. This means the rate is fixed for the first two years and then adjusts thereafter. The advantage was for some clients they could receive a start rate much lower than a 30 year fixed rate, giving them 2 years to rebuild or repair credit. After 2 years of paying a reduced payment they could refinance into a lower rate or it served as a way to hold property for 2 years until capital gains are up. Some lenders are still offering a 3/27 as of now but I think the trend will be to return to 5 yr and longer ARMs. Along with this change, subprime rates jumped on average approximately .25-.40 across the board.

As for better news, many of the larger lenders have changed their guidelines to allow homeowners who have had their home listed for sale, to refinance the equity. This is to capture some of the business from people who are trying to juggle 2 payments or have decided to stay in their home after being dissappointed by the market. Many lenders wouldnt allow this in the past if the property was listed in the past 6 months.

Jump on Board or Taken for a Ride?????

Tom Engelhardt (First Choice Mortgage) — Tue, 10 Jul 2007 18:21:52 -0500

I am wondering if anyone has measured or knows about the success or failure of magnetic signs for the side of your vehicle. I've seen the trend grow quite a bit in my area as of late. I'm always looking for ways to get my name out but I wonder if its worth the 40-50 bucks. It just doesn't appeal to me personally. In my opinion, if I'm looking for an agent or broker, I would ask friends or family first. But then again, I see about 20 cars per day with these signs on them and I'm starting to scratch my head a bit.

The business I came from, we were told that we could basically try any form of advertisement we wanted as long as we could show a measurable result. Whether it was mentioning this commercial or bring in this coupon, you get the idea. I figure with the broad demographics we have access to here on AR, why not pose it to the community.

Thanks all in advance!

How Do Some People Sleep?

Tom Engelhardt (First Choice Mortgage) — Fri, 29 Jun 2007 15:07:40 -0500

I know that the market is changing, but what lengths some people will go to in order to "steal" a deal away is sad. I've done this long enough to expect this type of behavior from some brokers. But we are talking about a top 10 lender in the US! This happened to a fellow broker today and I just had to share. This is a company who has a wholesale and a retail side, like most large companies do now. This is important because we deal with the wholesale side of this company on a regular basis, and know every program they offer.

The client in question can absolutely NOT show proof of income and is needing the loan to buyout a chapter 13 BK. My coworker diligently shopped everyone in our arsenal and gave the GFE to the client. He of course wanted to see what else was out there, which I don't blame him. Well, long story short, he calls today and says he really appreciates the free help repairing his credit and the outstanding customer service BUT he is getting a much better offer from another lender. We asked him if he would mind showing us his GFE just so we could better educate ourselves for future and if we had a similar program available. What we received is the finest piece of fiction ever written! They are quoting him rates on a full documentation loan, which he can not qualify for, and it is missing insurance of any kind, taxes, closing fees, title fees, title insurance, then they actually added 2 fees I've never heard of or seen! All of this along with an A paper rate. We explained it all to the customer and encouraged him to pursue these figures that were quoted. Needless to say they will not honor the quote and will not be able to disappoint this customer at the closing table. But it makes you wonder how many clients receive these liar loans and then at the closing table they go with the flow because they have bills due now or have already prespent a portion of the money.

I try to give some people the benefit of the doubt and think maybe they are new or haven't been trained. Then I see something like this and this is just plain ole bait and switch. He'll have to answer to someone much higher than me eventually. How do they sleep?????

Less Documentation=Higher Rate

Tom Engelhardt (First Choice Mortgage) — Tue, 19 Jun 2007 22:20:30 -0500

As mortgage rates rise many consumers don't quite understand why they aren't being offered the 5.5% rate they saw on tv the night before. After all, they have great credit! Unfortunately you never have time or the magnification to read all of the fine print thrown up on the screen just before the end of the ad.

Many self employed borrowers write off much of their income for tax purposes. This prevents many borrowers from being able to do a "full documentation" loan. For each item of proof that you don't show to the lender, your rate is affected. So your FICO score may in fact be a 750, but you take a hit to the rate for stating your income and proving your assets, another hit if you state the assets, another if you choose not to disclose your employer, etc. So on a fully documented loan with 2-6 months of reserves proven and putting down 20%, you may in fact qualify for that 5.5%. The more likely scenario though is you wind up paying a rate of 6.5% and are required to show very little of your personal dealings. The other upside to this is that your loan should in fact close quicker than a full documentation loan.

Make sure that you discuss all of your options with your lender. If you sit down and are only given one option for a loan be sure to ask what else is out there. There are usually many different options and you should be given the opportunity to participate in the decision. Don't be afraid to ask alot of questions. How many questions do you think of to purchase a coffee maker for $40? You should have many more when you're spending $50-$500k.

What Really Happened to Borrowers?

Tom Engelhardt (First Choice Mortgage) — Mon, 18 Jun 2007 16:35:39 -0500

I have heard so many different views on what happened to the mortgage side of the real estate industry. Frankly I think it is truly for the better. I agree that there has been and still will be some "over-tightening" on lending practices, but something needed to change. In reality, they simply removed the ridiculous loan programs that were being offered. Basically 6 months ago if you had a 660 FICO, you didnt need a job, proof of income, etc. and you qualified for 100% purchase money! You could state nearly anything on an application for income and as long as the ratios looked good, you could get approved.

On the flip side I think it will take time for some lenders to loosen up to where they need to be. There are circumstances where a stated income program needs to be utilized or even a NO DOC loan. But the abuse of these programs were very widespread. I didn't realize how widespread until reading the message boards and seeing people say that the industry is done and how can you make a living. These are people who never tried to counsel their clients or help them with their financial situation. They found a program where they had to work as little as possible sold their fee and closed the loan. I'm not saying that we should be setting up college prepays, but I do feel responsible for my client being able to truly make their mortgage payment each month and still give little Johnny his lunch money without going broke.

My point is, I don't think the borrowers went anywhere. I think the loan sharks are finally being weeded out and people who can afford a mortgage are still receiving them. I have some who are actually saving for a down payment like people used to. Some are repairing their credit and learning what they can do to help their FICO. It will be a slower process for some but in the end the market will have "qualified" borrowers again. I just hope we can get rid of enough "unqualified" brokers until then.

FREE CREDIT REPAIR..What credit repair specialists don't want you to know.

Tom Engelhardt (First Choice Mortgage) — Fri, 15 Jun 2007 11:57:59 -0500

When you apply for a mortgage many people either aren't told what their credit score is or are told this is your score and this is what I can offer you. When ever your credit is pulled for any reason you are entitled to a free copy of that report. The advantage when applying for a mortgage is you can actually repair yourr credit for free at this time! About 75% of all credit reports have some sort of errors on them that reflect in your score. Once you receive your copy of the credit report, scan it for any errors. Some of the most common errors are made in the case of jrs., srs., III, etc. This is due to the names being the same. Some other things to look at are items that have been paid, items that were included in a bankruptcy, late payment histories, home addresses, aliases, etc. All of these items reflect in your score. After finding errors most think you have to begin writing countless letters to the three reporting bureaus. Although when applying for a mortgage you can simply call the bureau who is reporting the incorrect information and ask specifically for the "mortgage pending " dept. Sometimes you will have to hang up and call back in order to speak to someone who is aware of this dept. Once you reach them they will ask for verification of who they are talking to. Let them know that you are in the process of getting a mortgage and that time is of the essence. I have had them ask for the lenders name before to verify this. Once you submit the information to them or notify them of the errors, it usually takes approximately 18-25 days for it to reflect on your score. No more writing and waiting 60-90 days. I have had scores jump up to 45 points in as little as 3 weeks! This makes a difference between 85-90% financing, compared to 100% financing. Also a difference in rate. Why pay 8.5% on $100,000.00 when you could be paying 7% by fixing your own credit in about 30 minutes? This alone is a savings of $100 per month over 30 years! This is just one secret many people don't want get out.