Logan Utah Real Estate Mortgages

Mortgage Logan 11/30/2009: Some things a "good" loan officer should and shouldn't do.

John Neil (Wasatch Mortgage Solutions) — Thu, 03 Dec 2009 13:20:17 -0600

The profession of loan officer has been beaten up pretty badly in the media as of late. We were blamed for the sub-prime crisis and consequently much of the problems in the financial system. It's obvious now that there was some unscrupulous lending going on. Many of the loan programs that got borrowers into financial trouble are gone and I suppose that many of the dishonest loan officers are gone with those programs.

Even with all the changes there are still some bad loan officers out there. But there are also some good ones. It can be hard to know who is who and whether a loan officer is going to provide great service or not. The following lists should help you know what to look for.

A "good" loan officer should...

     - Be available 24/7
     - Ask a lot of questions about your situation and listen more than talk
     - Present you with multiple options
     - Disclose how much they will make on the transaction
     - Provide you with a good faith estimate and a guarantee that it will not change at closing
     - Explain the option of locking or floating the interest rate

A "good" loan officer should NOT...

     - Try to predict the future of interest rates because nobody knows!
     - Set unrealistic expectations for closing dates and times
     - Collect a check for the appraisal until the borrower has had 3 days to review the initial disclosures

These are just a few things to look out for when you are meeting with a loan officer. I like to think of myself as one of the good ones that is trying to give the profession some dignity again. I think that the changes that are occuring in the industry are a good first step to helping establish the consumers trust in the mortage industry again.

If you can think of any other things that a good loan officer should or should not do, I would love to see your comments on this.

Mortgage Logan: November Realtor of the Month

John Neil (Wasatch Mortgage Solutions) — Fri, 13 Nov 2009 16:12:13 -0600

I'm happy to announce that Shane Calder of Cornerstone Real Estate has been selected as MortgageLogan.com's Realtor of the month. Shane Calder is a true professional and Logan Utah is lucky to have him as a real estate agent. I had the opportunity to ask Shane a few questions about himself and real estate and this is what he had to say...

1.      Why did you choose Real Estate to make a career?

Helping people buy or sell real estate is a huge responsibility.  I like the fact that you are helping people purchase something that they want. You don't have to use shady salesman techniques to make someone purchase or sell a home. They want to do it. If I do my job, people are happy and that is the best reward in working in real estate.

2.      What do you like about Real Estate?

The real estate market is ever changing. The key to being a successful real estate agent is staying on top of the changes and adapting to the current market. It is difficult and challenging. I find myself stepping out of my comfort zone to be successful. Approaching people is not the easiest thing for me. My constant drive is I am helping people make the most important decision of their life, and I want to make sure that it is the right one.

3.       Is there anything unique about the Logan Utah Real Estate market compared to other areas of Utah?

The most unique thing about the Logan, Utah market is that it has been fairly constant. Even though the rest of Utah and the country took a big jump and then a fall, Logan has remained unusually consistent.

4.       Where do you see yourself in 10 years?

In ten years I see myself still in the real estate market. I want to expand into residential and commercial development. Currently, I am studying those fields and really excited about the outlook on Cache Valley.

5.      Tell us a little bit about yourself and your company.

I live with my wife and two children in Nibley. We love Cache Valley and look forward to being here a long time. I have been doing real estate for a little over 4 years now, and love the endless possibilities that it possesses. I have worked with investing, residential, and commercial properties.  We enjoy the beautiful scenery, endless outdoor activities, and going to Utah State University sporting events.

Thank you Shane for being MortgageLogan.com's Realtor of the month. If you or someone you know is in need of exceptional real estate service, you can contact Shane Calder at 435-760-2009 or email him at shane@utahcornerstone.com.

Mortgage Logan Utah: New Website

John Neil (Wasatch Mortgage Solutions) — Tue, 03 Nov 2009 14:03:24 -0600

I have created a new website called Logan Utah Mortgages which I believe will be very useful for anyone looking to purchase a home or refinance an existing mortgage in Logan, Utah and surrounding areas. My hope is that I can provide information that will help somebody make a better informed decison about their mortgage.

I appreciate any and all feedback, negative or positive. Let me know what you think! Thanks in advance!

Utah First Time Homebuyer: 5 Do's and Dont's

John Neil (Wasatch Mortgage Solutions) — Tue, 27 Oct 2009 17:46:55 -0500

Utah First Time Home buyer: 10 Dos and Don'ts!

1. Do hire a real estate agent: Hiring a real estate agent won't cost you anything (in the state of Utah the real estate agents commission is paid by the seller) and it could save you a ton of money. A good real estate agent will not only make sure the transaction goes smoothly but that you don't get taken advantage of.

2. Do get a home inspection: A good Realtor will also recommend this to you. A home inspection in Utah will run you anywhere from $200 to $300 but it could save you thousands in the long run. A licensed home inspector will check all the components of the home and can detect things that can't be seen with the naked eye. I recently had a borrower whose inspector found Asbestos in the home he was going to buy. The repairs would have cost him thousands. Luckily he only spent $250 and moved on.

3. Do attend a first time home buyer workshop: In most cities in Utah you can find a home ownership workshop sponsored by either a local University or a local real estate professional. In most cases, these workshops are free and can give you some much needed insight into the world of buying a home.

4. Do establish a realistic budget: What you can afford and what you can qualify for can be two very different things, even in today's climate. It would behoove first time home-buyers to establish a realistic budget to see how much they can afford. In particular, they will need to analyze how much they are currently paying in rent and how much more they will pay for a mortgage (including property taxes and insurance), utility costs of a the new home, annual home repair costs, etc.

5. Do get pre-approved first: Most real estate agents will want you to meet with a loan officer to get pre-approved before they will take you out looking for homes. When you do meet with your loan officer, make sure to bring your last 2 years tax returns with W'2s, Last 2 pay stubs, and last 2 checking and savings account statements. By bringing these documents, the loan officer can give you an official pre-approval and not just a pre-qualification.

Don'ts for Utah First Time Home buyers

1. Don't rush into buying a home just to get the $8,000 tax credit: $8,000 is a lot of money but if you buy the wrong home which requires constant repairs, that $8000 won't last very long and you'll wish you took more time finding the right home.

2. Don't gamble with the interest rate if you are comfortable with the payments: When you finally have a home under contract your loan officer will give you the option of locking or floating the interest rate. My advice is this: Nobody knows the future of interest rates and if you are comfortable with the payments, lock it! Getting a little bit lower rate is not worth the risk of having to take a higher rate and a payment that is more than you budgeted for.

3. Don't do any repairs on the home until after escrow has closed: Once again a Realtor would never allow their buyer to do something so stupid, but I have heard of buyers that did extensive repairs and spent a significant amount of money on a home only to find out that the deal wasn't going to work out.

4. Don't try to time the market. The housing market is kind of like the stock market in that you will never be able to pinpoint the bottom until everything has turned up. How else can you pinpoint the bottom? Teal estate can be a great hedge against inflation but more importantly it is a home. Focus on personal lifestyle needs more than trying to time the market.

5. Don't get a loan from a company that advertises "creative financing"."Creative financing" is just a euphemism for "you are going to get screwed". Stick to the basic loan programs which are easy to understand and, more importantly, are affordable.

Logan Utah Mortgages: The Eight Hour Rule for First Time Buyers

John Neil (Wasatch Mortgage Solutions) — Thu, 08 Oct 2009 14:27:08 -0500

When you are buying a home you can't always rely on your loan officer to tell you what you can afford. The fact is that what you can qualify for and what you are comfortable with can be two very different things. To find out if you are truly comfortable with a potential monthly payment there are a few things that you should do...

Develop a Realistic Budget
You should develop a monthly budget and write down every single monthly cost and include a contingency fund of 10% for the unexpected. After the mortgage payment, do you still have enough to put some into savings? into an emergency fund? Are you going to have to cut out cable/Internet, eating out, or other luxuries that you can't do without? If you are uncomfortable with your answers, look for a different house.

The Industry Standards
You could also use the standard "housing ratio" and "debt to income ratio" which underwriters use to determine whether the payments are affordable. Those standards are that you shouldn't spend more than 28% of your gross monthly income on your mortgage payments and that you shouldn't be spending more than 41% of your gross monthly income on your mortgage payments along with other monthly debts (e.g. car payments, credit card payments, student loans, etc.)

It's possible to get approved if your ratios are higher than these standards, if you have very good credit or a large down payment for example. But unless you live very frugally it's likely that you will struggle with a mortgage payment that high.

Account for all increases!
you need to look at your current housing expenses and take into account all of the increases that you will see if you buy a new home. You will need to ask yourself at least these questions...

How much more is the new mortgage payment (including hazard insurance and property taxes) vs. our current rent payments?
How much more or less will the utility bills be?
How much do we need to set aside each month for potential home repairs? (Studies show that you will pay 3.5% annually of the purchase price for a new home and 4.5% for an older home)
Is there an HOA fee that we need to account for?

*You also need to find out how much more of a tax refund you will get because mortgage interest is tax deductible.

The Eight Hour Rule
If you have taken all of the above steps and passed there is still one more test that you need to be aware of. You can always fall back on the eight hour test to determine whether you will be comfortable with a new mortgage payment. If you find yourself reaching for the Tylenol PM at 2 am, chances are that you will not be comfortable with your new mortgage payment.

First Time Homebuyer Class in Logan, Utah

John Neil (Wasatch Mortgage Solutions) — Tue, 06 Oct 2009 17:27:18 -0500

For those that are interested in purchasing a home in Logan, Utah, I will be teaching a first time home buyers class on October 15th, 2009 in conference room 305 of the University Inn on Utah State University Campus from 6:30pm to 8:00pm. Those in attendance will learn about...

     -The $8,000 tax credit
     -The $4,000 home run 2 grant
     -The $7,500 "Welcome Home Own in Logan" grant
     -The BRAG down payment assistance program

Some other topics that will also be taught are...

     -What you need to qualify
     -How to make the loan process go smoother
     -How to effectively shop for a mortgage loan
     -How to buy a multi-family property and save money on your mortgage payments

Other topics that may be taught...

     -100% financing options
     -How to buy a home with a co-signer

If you are interested in attending this class, please contact John Neil at 435-770-2709 or john@mortgagesbywms.com to register.

Paying extra on your mortgage VS. Investing in the stock market

John Neil (Wasatch Mortgage Solutions) — Wed, 30 Sep 2009 11:36:30 -0500

So after my last blog post I didn't feel like my argument was very strong and that I needed to back up my argument with some cold hard facts. So here they are!... Below you will find a comparison between the money (savings) that you will make by paying an extra $100 per month on a $150,000 30 year loan at 5% and the money that you would make by investing that same $100 in the stock market (specifically the Dow Jones) over 30 years.

Paying $100 Extra on Mortgage Investing $100/month in Stock Market

Mortgage
Interest $105,278 $139,884
Paid

Years when
Mortgage Paid 23.5 30

$ made in Stock             $92,215 ($905 invested for                                $149,035
Market (Assuming          6.5 years after mortgage
8% annual return)            is paid off)

Benefit compared             Mortgage paid off 6.5                                        $56,820 more dollars
to other                                years earlier, save                                             in stock market
                                    $34,606 in mortgage
                                    interest

I think it is obvious to see which scenario has a greater value. Many critics will try to use the recent stock market crash to argue that it is more important to pay off your mortgage first but the 8% figure on the Dow Jones includes the recent crash. So next time you think about paying a little extra to your mortgage, think about talking to a financial planner first. If they're smart, they will recommend you put that disposable income towards your retirement instead.

If you live in Logan or Cache Valley, Utah I would recommend Ted Karren at Edward Jones. He can be reached at 435-563-1811 and he would be happy to assist you with your investment needs.

Mortgage Logan Utah: A couple of reasons to NOT pay your mortgage off early

John Neil (Wasatch Mortgage Solutions) — Tue, 29 Sep 2009 15:58:44 -0500

I have had a couple of experiences recently that has got me thinking about the various reasons why someone shouldn't make extra payments towards their mortgage.

The first experience occurred a few months ago. A gentleman came into my office trying to get me to sign up to be a vendor for their software which helped people pay their mortgages off early. The basic idea behind this man's product was that somebody will save a ton of money in interest if they put their entire pay check towards the mortgage at the beginning of the month and then use an equity line of credit for monthly expenses. The software (which cost $3,500 by the way) also would tell the client exactly when and how much to add in additional principal payments to the mortgage for optimum savings in interest.

I do not doubt that this strategy works. In fact, it's quite simple to see that this would save somebody thousands of dollars of interest over the life of the loan, which could be a very short amount of time if somebody puts their entire paycheck towards the mortgage. However...

With this salesman, I was initially very impressed with his product and I thought that it would appeal to many people. Saving thousands of dollars in interest on your mortgage would be a big benefit. My second thought was about the opportunity cost of putting that money somewhere else.

The fact is that mortgage debt is the cheapest debt that you will ever have. And with mortgage interest being tax deductible, it's as if the government is subsidizing a 3rd of your mortgage payments (assuming you are in the 33% tax bracket). An interest rate of 6% (rates are much lower than this today) is really more like 4% with the tax deduction.

In 1979 the Dow Jones was at 907.74. As of September 29th, 2009, the Dow Jones is at 9,744. That is an average of 8% a year over the last 30 years. This is including the recent crash in the stock market. Assuming this rate of return continues for the next 30 years, it makes much more sense to fund your retirement than to pay off your mortgage early.

The other experience I had was just yesterday. I was meeting with a client about a refinance. She informed me that she wanted to refinance to a lower interest rate so that she could pay the mortgage off earlier. When I pulled her credit report I noticed that she had about $7,000 in credit card debt on which she told me she was paying an average of 22%.

With this client it was fairly easy to see that it makes much more sense to pay off her credit card debt at 22% interest rather than pay off her mortgage at 5% interest. She agreed and we set some goals for her to do that.

I know that there are some who disagree with me and I can see the merit of the argument that you can't put a price on peace of mind and paying off your house early = peace of mind. Still, in my opinion, if you have disposable income it makes more sense and cents to pay off any other debts first and then apply your disposable income to a ROTH IRA, where you can invest it in just about anything.

In my next blog post I will show you specific examples of how it may be smarter to invest your disposable income rather than put it towards your mortgage.

Mortgage Logan Utah: Tired of paying mortgage insurance? Here are some tips...

John Neil (Wasatch Mortgage Solutions) — Thu, 24 Sep 2009 13:34:32 -0500

Nobody likes paying private mortgage insurance. It's one of those monthly fees that feels like money is just going down the drain. It feels that way because It doesn't protect the homeowner. It is strictly for the lender in case the homeowner defaults on their payments and the bank has to foreclose.

Because of the federal "Homeowners Protection Act", which applies to people who bought their homes after July 29th, 1999, there are some rules for lenders as to when they must cancel private mortgage insurance on a loan. The act says that homeowners can ask that the PMI be canceled when they have paid down their loan balance to 80% of the original home value and that the lender must cancel PMI automatically when the homeowner has paid down the loan balance to 78% of the orignal value.

The other way that a homeowner might get their PMI canceled is by getting 20% equity through the appreciation of their home (less likely in this market, although Logan has not depreciated as much as many markets in Utah or the nation) or through home improvements.

If you feel like your home has 20% equity, whether through making payments or home appreciation, there are some steps you can take to get rid of your private mortgage insurance.

1. The first step would be to look in your original loan documents (the packet that the title company gave you) for information from your lender on the procedures for getting PMI canceled. If you can't find this, I'm sure you can call customer service of your lender to find out the procedures. Usually the first step is requesting the removal in writing. You will want to keep copies of all your correspondence in case you need to take the lender to small claims court.

2. The second step would include an appraisal if you are requesting the removal based on the appreciation of your home. Make sure to ask the lender if they have a list of appraisers to choose from. Many lenders won't accept appraisals from just any appraiser. The appraisal will cost you anywhere from $350 to $400; Not very much considering that most people in Logan, Utah would save anywhere from $500 to $1,500 per year by getting rid of the private mortgage insurance on their loan. If you aren't sure about the value of your home and you don't want to risk $400, call a Logan Utah Realtor to give you a CMA (Comparative Market Analysis) which is the next best thing to an appraisal. Most will charge you about $20. You will still have to do a full appraisal to get rid of PMI but this way you will have an idea of what your home is worth before forking out $400.

3. If you have an interest rate that is currently higher than the going rate you might consider a refinance to get rid of your PMI and to lower your interest rate. If the home has 20% equity, you won't have to have PMI on the new mortgage.

If your lender refuses to remove your PMI you should write firm but polite letters with evidence that you do indeed have the 20% equity requirement. Some lenders do have clauses in the loan documents that state PMI must remain on the loan for a minimum time period. In these cases, you are probably out of luck if you haven't been in the home long enough. Many lenders take a long time to process the requests because it just doesn't benefit them that much to get rid of your PMI. It's a sad but true reality.

If you have an FHA loan, I'm afraid you will pay mortgage insurance for a minimum of 5 years, no matter what your equity in the home might be.

Getting rid of your PMI does not have to be a long tough battle. With the right steps and if you meet the lenders guidelines for removal, it could be a stress free process. Just be patient and prepared to meet the lenders requirements.

Morgage Logan Utah: The Skinny on FHA Energy Efficient Mortgages

John Neil (Wasatch Mortgage Solutions) — Wed, 16 Sep 2009 23:02:42 -0500

I am going to make a bold statement: The "FHA Energy Efficient Mortgage" is the most underused and under appreciated loan products available in the mortgage world today. And the biggest reason is that very few people know about it. Thus, I write this blog post to inform the misinformed on one of the coolest (no pun intended) loan products out there.

The skinny on the FHA Energy Efficient Mortgage (EEM for short): The EEM is a way for buyers to upgrade the energy efficient products of the home (e.g heat and air conditioning, water heaters, windows, insulation, etc.) with an "add on" loan of up to 5% of the sales price. The idea is that you will save more money with the upgrades than the increased monthly payments from the higher loan amount.

Here is an example of how it works: So you find a great deal on a home that has lots of potential but also has a boiler from 1920, a rusty wood stove, a water heater from the Carter era, single pane aluminum windows that let the fresh air in, and sawdust insulation in the attic (i actually had sawdust insulation in my first house!) that has a better chance of starting a fire than actually insulating anything. This is where the EEM comes into play.

Let's say the purchase price is $100,000. You put 3.5% down to bring the loan amount to $96,500 (There is also upfront mortgage insurance of 1.75% but for the sake of focusing on the benefit of the EEM we will exclude it here). From the very start of the loan process you tell your lender that you want the EEM "add on" to upgrade the energy efficiency of the home. Your lender will then order a HERS report (Home Energy Rating System) from an FHA approved inspector. He does an audit on the home for its energy efficiency and will come up with some potential improvements and the estimated monthly savings for each.

The audit might say that new double pane windows will save the homeowner $30/month in heating costs or that 12 more inches of insulation in the attic will save the homeowner $15/month. The borrower will then get to choose which improvements they would like performed up to a cost of 5% of the purchase price. They might choose to just add the insulation which might cost $500.00. The money goes into an escrow account which is designated for the repairs which are done after closing. This $500 "add on" to the mortgage will raise the monthly payments by about $3/month but it will save the homeowners $15/month. Pretty sweet..right?!

The other nice thing about the EEM is that you don't have to qualify for the extra money because the lender realizes that it is saving you money. In fact, you may be able to qualify for a bigger loan because of the EEM.

I know that in my city Logan, Utah that there are hundreds of homes and homeowners that would benefit from an EEM. They just didn't know about it. One last thing...You don't have to purchase a home to take advantage of the EEM. You can do it through a regular refinance or a streamline FHA refinance. Give me a call if you have any more questions about it.

Mortgage Logan Utah: Welcome Home Own in Logan Grant

John Neil (Wasatch Mortgage Solutions) — Mon, 14 Sep 2009 11:21:59 -0500

"Welcome Home Own in Logan" is a $7,500 subsidy or grant for first time home buyers in the city of Logan, Utah. It can be used for a down payment and/or closing costs. It turns into a grant if the home is owned for 10 years. It must be repaid if the home is sold, if the mortgage is refinanced, or the home is rented out in the first 10 years.

To be eligible for the program you must be a first time home buyer which is defined as someone that hasn't owned a home for 3 years, those that own a mobile home that is not on a permanent foundation, those that own or lease a condo, and also those that are a displaced spouse.

Also with this program there are some income limitations. To be eligible for the program applicants can not make more than 80% of the HUD median income guidelines for Cache County. As of the date of this blog post, applicants can't make more than $44,400 to be eligible for the program.

Applicants must also attend a workshop for first time home buyers. In Cache County this workshop is provided by the Family Life Center of Utah State University. They can be reached at 435-797-7224 for questions or to register. I have attended and taught this class and I recommend it to buyers that don't even qualify for the grant.

Also, applicants must provide at least $500 of their own funds towards the purchase of the home.

To sum things up, to qualify for the $7,500 Welcome Home Own in Logan grant you must:

     1. Be a first time home buyer
     2. Earn no more than $44,400 per year
     3. Attend a First Time Home Buyer Workshop
     4. Apply at least $500 of your own funds to the purchase of the home
     5. Buy a single family residence within Logan city limits

This grant would be on top of the $8,000 tax credit that the government is offering to first time home buyers and on top of the Utah Home Run Grant 2 if you are buying a newly constructed home. Please feel free to call me at 435-770-2709 if you have any questions about this grant or any others you have heard about.

Why live in Logan, Utah? Here are 10 reasons...

John Neil (Wasatch Mortgage Solutions) — Wed, 09 Sep 2009 14:31:14 -0500

Why live in Logan, Utah? Here are 10 reasons!...

1. Utah State University: The University is Cache Valley's largest employer and a huge part of the economy. It has a beautiful campus and boasts some of the best programs in the state. I might be biased but I went to Utah State and had an amazing experience.

2. Stable economy: Some people might say it's because we live in a bubble but I think it's because we are smarter than everybody else :)

3. Low Crime Rate: Logan is a safe place to live. Many people don't even lock their doors at night.

4. Great fishing!: If you like to fish, you will love Cache Valley. There are tons of rivers, lakes, and fishing holes with some of the best fishing in the state.

5. The Mountains: If you can't appreciate the beautiful scenery that Cache Valley has to offer than you don't have a pulse. When the leaves begin to change towards the end of September, a trip through Logan Canyon is a must.

6 . Golfing: Cache Valley has some of the best golf courses in the state and nation. Birch Creek was recently named one of the best public golf courses in the nation.

7. Aggie Basketball: Stew Morrill and the Utah State Aggies have been one of the best shows in town for the past 10 years. Their arena, the Spectrum, sells out on a regular basis and boasts one of the craziest student sections in the country.

8. Demolition Derby: Ok...not really a good reason to live anywhere, but Logan does have some sweet demolition derby.

9. Aggie Ice cream: Aggie ice cream is a must stop for all visitors to Logan. It is the best ice cream in the state, bar none.

10. Welcome Home Own in Logan: This is a $7,500 grant for first time home buyers. Give me a call at 435-755-2177 to see if you qualify for this grant.

These are just a few of the reasons that make Logan and Cache Valley, Utah such a great place to live. Me and my wife moved here about 7 years ago and have loved it ever since. It's a great place to raise a family and make a living. If you have any questions about living in Logan, give me a call at 435-770-2709. I'd be happy to answer any questions you might have.

Utah Mortgage Rate Shopping Tips

John Neil (Wasatch Mortgage Solutions) — Wed, 02 Sep 2009 12:48:19 -0500

Shopping for a mortgage can be confusing and counterproductive if you don't know what you are doing. If you are shopping for a mortgage in Logan, Cache Valley, or Utah, there are a few tips that you should know to simplify the process and to help you truly find the best deal. In no particular order...

Tip #1: Do your shopping on the same day! Interest rates change every day and sometimes several times a day. If you can, do all of your shopping within a time period of a few hours.

Tip #2: Know your credit score beforehand.This is important so that each lender that you talk to doesn't have to run your credit score. In fact, do not let any loan officer run your credit score unless you have made a decision to go with them, as this can hurt your credit score. For a decent rate, with no "hits", most conventional lenders are requiring a score above 720. FHA lenders are requiring minimum credit scores between 620 and 640. You can obtain your credit scores through experian.com, transunion.com, and equifax.com

Tip #3: Shop for the same type of loan. Lenders have different interest rates for their FHA, Conventional, Rural Housing, and other loan products. Make sure that you know beforehand which loan is the best fit for you. Lenders may quote you rates and fees on other products but you should insist that you receive a quote on the loan option that you are shopping.

Tip #4: Insist that the loan officer quote you an interest rate with the same amount of points."points" and interest rates are interrelated. If points are higher, interest rates are lower and vice versa. Choose a certain # of points that you would like the loan officer to include in his/her estimate. Ask them for their "1 point mortgage rate" or their "0 point mortgage rate". Whatever you do, keep the points the same at each lender to give you an accurate comparison.

Tip #5: Shop for the same mortgage rate lock period. Interest rates will change for the length of the lock period. The shorter the lock, the better the rate. Unfortunately, some loan officers might quote you a 15 day lock period to lure you in, knowing that it might take more than that to process the loan. I would recommend you insist on a quote based on either a 30 day or 45 day lock period. Keep the lock period the same with each lender you shop.

Tip #6: Do not complete an application until you have received a good faith estimate. Most loan officers are willing to give you a good faith estimate before you complete a loan application with them. If they are not willing something may be sketchy. You should be able to know what the rate and fees will be before you undress financially for anybody.

Tip #7: Ask the loan officer if you can lock your interest rate today. Your interest rate should be able to be locked on the same day that you complete the loan application. It only takes 15 to 30 minutes to get the automated approval, at which point the loan officer should be able to lock. Make sure that you know whether the rate you were quoted is locked or "floating".

Logan Utah Real Estate: 3 Reasons to put as little down as possible on your home

John Neil (Wasatch Mortgage Solutions) — Tue, 01 Sep 2009 12:34:23 -0500

The majority of first time home buyers that I have worked with over the last few years haven't had much of a choice with the size of their down payment. They usually only had enough for the minimum, which is 3.5% on an FHA loan or no down payment on a Rural Housing or VA loan. However, other clients have ample funds for a down payment and struggle with the question of how much to put down. They wonder if it would be better to put as much down as possible and have a low monthly payment or if it would be better to keep that money and use it for other means.

here are 3 questions that every borrower needs to consider when deciding how much money to put down on a home...

1. Do I want my money tied up in my home?: Having your money tied up in your home isn't earning you any interest. It's like putting your money in a mattress. With the performance of the stock market and other investments over the past year many would argue that having your money in a mattress is a good thing. However, the value of your home is going to rise and fall regardless of how big the mortgage is. In many parts of the country home values have fallen and large down payments and equity have disappeared.

2. Will I need the cash?:It's impossible to predict all of the crisis that might occur in life. Job losses, illnesses, injuries, marital problems, family problems, etc. could all arise and any of these could require massive amounts of cash. Having your home paid for might be a small consolation if you don't have the cash to take care of these other problems.

3. Should I pay off other debts first?: Mortgage money is cheap. Of all the debt that you might have in your life (e.g. Student loans, car loans, credit cards, a mortgage) your mortgage is most likely the lowest interest rate. Also, unlike most loans, your mortgage is tax deductible. This means that if you are in the 33% combined federal/state income tax bracket, your mortgage is being subsidized by the government by up to a 3rd. Your 6% interest rate is really only 4%. It would be better to pay off your other debts first.

There are some that say that paying off your home should be the top priority before making significant contributions to other investments. If this school of thought helps you sleep better at night, than maybe that is what you should do. It's hard to put a price on peace of mind. There is no right answer that is the same for every borrower. It is going to be different for everybody. A good loan officer should be able to help you find out what is the best decision for you and your individual goals.

Buying a Condo in Logan, Utah? Here are some things to know...

John Neil (Wasatch Mortgage Solutions) — Mon, 31 Aug 2009 11:54:47 -0500

I might be biased but I think Logan and Cache Valley, Utah is the best place on earth and purchasing real estate here can be an amazing investment. Whether you are buying a single family home, a duplex, triplex, fourplex, condo, or townhome, you will be making one of the best decisions of your life (I left out "manufactured housing" because its just not a good investment, but that is another blog post).

When you are buying a condo in Logan, Utah there are a few things you should find out...

1. What is the monthly HOA dues? This can be very important because a lot of people budget for their housing expense (i.e mortgage payments) and do not account for the HOA fee, which could be from $60 to $150 more. You will also want to find out what is included in the HOE fees. Does it cover cable and Internet, lawn care, hazard insurance, etc.?

2. How many condo owners are delinquent on their HOA dues? The answer to this question will not only give you an idea of the type of neighbors you might have but also might make you second guess the benefits that the HOA can offer.

3. Is the condo project FHA approved? to qualify for FHA financing, not only do you, the client, have to be approved, but the condo project must be approved as well. If it is not, your lender can do a "spot approval" but it might delay your closing. Also, if the majority of the condos are rental units, it will not be FHA approved and you will have to use different financing.

4. Does the hazard insurance included by the HOA cover the interior of the units or just the exterior?The majority of HOA's in Cache Valley do not cover the interior of the units. This means that if the condo burnt down, the insurance would only pay for the structure to be rebuilt. The owner would have to pay for everything on the interior (i.e. sheet rock, flooring, cabinets, etc.). In this case, it is wise to have an HO-6 policy which is similar to a renters policy. Some lenders have started to require an HO-6 policy.

There are some awesome options for condos and townhomes in Cache Valley, Utah. Visit with one of these Realtors to find out which one is the best fit for you. Also, feel free to call me at 435-770-2709 if you would like to find out about your financing options.

The Top Seven Reasons Why You Should NOT Use a Realtor

John Neil (Wasatch Mortgage Solutions) — Fri, 28 Aug 2009 01:46:51 -0500

I saw this post and thought it deserved a re-blog.

Via Rick Pelleriti - Upfront Mortgage Broker (Clarion Mortgage Capital, Inc.):

Much has been written about why a buyer should use a Realtor, and I know this is an organization full of Realtors, but in the interest of finding a balance and delivering a different viewpoint, I hereby present this list of the top 7 reasons why you should NOT use a Realtor.

1. You believe you will keep the house for many years, so you don't care if you overpay.

2. You believe all living creatures have the right to survive, so you don't care to inspect for termites.

3. You believe in recycling so you're not concerned that a waste dump is planned to be constructed across the street.

4. You like camping out so you're not too concerned if the roof leaks and after all, the smell of mold provides a nice earthy ambience.

5. You believe the sellers are nice people, so if they want to close early and want you to remove contingencies, that should be fine, seeing as how you don't know what that means anyway.

6. You want to save the commission, so you don't mind driving hundreds of miles and spending countless hours looking at homes wishing you knew what you were doing - but hey, life's an adventure.

7. You read a good book about Real Estate over the weekend, and besides, your neighbor told you what he did when he bought his house 10 years ago - so how tough can it be?

If for some reason you defy the above wisdom and still wish to use a Realtor, if you're in California, give me a call and I can refer you to a top-notch Realtor.

Logan Utah Real Estate - Preparing to get a mortgage

John Neil (Wasatch Mortgage Solutions) — Wed, 26 Aug 2009 11:10:07 -0500

If you are looking to purchase a home and you need to get a mortgage, there are a few things that you can do to help prepare yourself to be able to qualify. A mortgage is a big commitment and every lender wants to make sure that you are able to pay the loan back. There are 3 basic things that the lender is going to look at to measure your financial stability. They are 1. Your credit report, 2. Your assets, and 3. Your income.

1. Credit Report: Your credit report is your financial report card and it's imperative that you know what is on that report card so that you can fix it if necessary. For most conventional loans today you will need a credit score of at least 700 and for FHA loans at least 620. If your score is 619 you are out of luck. So find out what your score is and talk to a good loan officer than can help you increase it if necessary. You can go to experian.com, equifax.com, and transunion.com to order your reports for free.

2. Your Assets: If you plan on using a down payment, you better be able to show the lender that you have it in the bank, and not in a business account. In some cases the lender will also want to see that you have more than just the down payment just in case you lose your job. It's a good idea to have some reserves anyway, even if you are using a 100% financing program. Set the goal now to save at least 10% of your monthly income and make this a habit through out your life.

3. Your Income: The name of the game with income is "stability". The lender wants to make sure that your current income is going to continue. If you are self-employed, you will need a 2 year history on the job before you can use this income on a loan application. Same rule if you are part-time. If you are receiving bonus or commission income the lender will take a 2 year average of this income to calculate the monthly income. If you are receiving SSI, you need to prove that it will continue for at least 3 years. If you recently graduated from college and have begun working at a salary-paid position, this income can be used immediately.

These are the 3 most fundamental elements of qualifying for a mortgage. It's possible that you are ready now but if you are not, sit down with a qualified loan officer and set some goals to get yourself ready.

Logan Utah Real Estate -Mortgage Rate Update

John Neil (Wasatch Mortgage Solutions) — Tue, 25 Aug 2009 17:56:45 -0500

08/25/2009 30 year fixed conventional 5.0% (APR 5.167%) 15 year fixed conventional 4.5% (4.644%). www.loganutahmortgages.com

Why Recommending A DIRECT LENDER Could Make You Choke on Your Coffee

John Neil (Wasatch Mortgage Solutions) — Sat, 22 Aug 2009 00:55:10 -0500

I get so tired of the misconception that the big banks are better equipped to process a loan more efficiently and with better service. The fact is that many of my clients have come to me as a result of the incompetence of the "big bank". I think this blog post sums it up with a nice metaphor.

Via Janet Guilbault California Mortgage Banker/Broker:

Why do Realtors like to recommend DIRECT LENDERS?

Could it be that somehow the lenders who are dumping foreclosures have brainwashed Realtors by insisting that anyone making an offer must be approved with a DIRECT LENDER?

Or is it because you believe that an approval from one of those BIG BOX banks is somehow safer, better, more familiar?

Now, please don't get me wrong. I work for a company that is a bank, and a bank is a direct lender. I can also BROKER a loan out to one of the BIG BOX banks.

But every time I do that, I regret it. I will tell you that the BIG BOX bank that is our biggest broker has gone from having 120 active mortgages with our company to less than 20 in the last six months.

I will leave it at that because it speaks volumes.

Lots of loans this year have come from people who took the advice of their Realtor and went to the BIG BOX bank. Typically they become so frustrated that someone finally says to them "Go find a broker".

Ironic, isn't it? I will then broker the loan to the same BIG BOX bank.

Or, I will do it "DIRECTLY" through my own bank, a smoother faster and more DIRECT way of closing a loan, where I retain far more control of the transaction.

Maybe, just maybe, some of the BIG BOX banks have spread themselves TOO THIN?

Imagine that we mortgage people sell coffee instead of money. You are just an average guy who wants some great coffee.

Everyone is different after all, that's why you have choices like this:

1.    Go to the supermarket and pick up coffee, stand in line to buy it, take it home.

You don't expect the store to answer questions, to recommend the newest brand, or to provide information, or to have any sort of communication with you.

It is laughable to believe they would answer a phone call at all. But the supermarket is familiar, you know where it is, and you are there anyway, once or twice a week.

2.    Go to the chain brand coffee shop next door that carries only their brand of coffee.

There, you have someone who will discuss every little detail of the coffee, and will let you sip samples.

But there is just that one brand. What if there is something better out there?

3.    You go to a locally owned gourmet coffee shop right in your neighborhood.

Someone actually smiles at you when you walk in. The name brand is there, at the same price as the supermarket.

But there is a much bigger selection than you have ever seen, and a person there to answer questions, and recommend the best new blends.

The owner of the shop lives right there in your neighborhood. It is clear he really wants to keep you as a repeat client, because his success depends on repeat business.

He answers his phone. He publishes a coffee newsletter. He sends you free samples, discount coupons, and is even interested in what you do (in case he can send you a referral).

Shall we ignore this guy because he is not direct? Or should we celebrate this guy for giving the customer a choice about how he wants to buy his coffee?

It makes me wonder if there will ever come a day when we mortgage people will recommend to our own clients, "Go find a direct real estate agent".

What would that mean?

That buyers would go to a BIG BOX bank that also has a real estate department.

I remain hopeful that buyers will recognize the value of working with a local professional, who can show them all of their options, and who will answer the phone, even on weekends.

Because sometimes, you really, really NEED your caffine FIX.

Written by Janet Guilbault, Mortgage Banker/Broker Based Out of the San Francisco Bay Area.

Logan Utah Real Estate - Mortgage Rate Update 8/20/2009

John Neil (Wasatch Mortgage Solutions) — Thu, 20 Aug 2009 11:35:55 -0500

30 year fixed 5.0% (APR 5.133%) 15 year fixed 4.5% (APR 4.649%)

Buying a duplex in Logan, Utah? Here are your financing options...

John Neil (Wasatch Mortgage Solutions) — Sun, 16 Aug 2009 23:31:46 -0500

Lately, I have been getting more and more questions from borrowers about their mortgage options for a duplex, triplex, or fourplex (owner occupied); and I think I know why...it's a no-brainer! I've even considered buying one myself. Think of the advantages...

     - You get help with the mortgage payments and can pay the mortgage off sooner
     - You can use the rental income on your loan application to help with the loan approval (75% of the average rent for the unit)
     - You live right next door to your tenants making your job as a landlord much easier
     - You can enlist the tenants help with the yardwork

For those of you that are interested in buying a multi-unit property and plan to live in one of the units, here are some financing options...

-FHA Mortgage: FHA has a great advantage over conventional financing in that it only requires a 3.5% down payment and the interest rates that are offered are not credit-score driven, meaning that as long as you qualify your interest rate will not be determined by your credit score. FHA also offers a home improvement loan called the 203k that will allow you to finance some repairs into the loan. Also, in the future if you decide to move and rent out all the units of your property, FHA will allow this after one year.

-Conventional Loan: Things have tightened up considerably with conventional loans and especially for multi-unit properties. If you have 20% down and a 740+ credit score, then conventional financing may be your best option because you won't have to pay monthly mortgage insurance.

In these tough economic times more and more people are looking for options to reduce their housing expenses. I think buying a duplex, triplex, or fourplex may be one of the better ways to lower those expenses. There are many options in Logan, Utah right now. See for yourself...www.utahrealestate.com or talk to one of these realtors.

Buying a Condo?...You will need supplemental insurance!

John Neil (Wasatch Mortgage Solutions) — Thu, 13 Aug 2009 16:51:28 -0500

In the past, if you needed a mortgage for a condo or townhome, the lender would allow a borrower to get a loan with the insurance that the HOA provided and didn't require a supplemental policy. This "blanket policy" usually covered the entire project and it usually only covered the exterior of the building and not the interior. For example, if the unit burnt down, the insurance would pay to rebuild the structure of the building but the condo owner would have to pay for the interior (e.g. sheetrock, cabinetry, floorings, etc.).

It has always been recommended that condo owners get this extra coverage for the interior but it was never required. That is all changing however and now lenders are starting to require that extra policy to insure the interior (all of my insurance agent friends are very happy about this!). The lenders won't give the loan without it.

I think that it's important that all loan officers are aware of this change so that they can give their clients an accurate estimate of their monthly payments.

Deadline for $8,000 tax credit for First Time Homebuyers

John Neil (Wasatch Mortgage Solutions) — Tue, 11 Aug 2009 16:59:33 -0500

The Deadline for the $8,000 tax credit is technically midnight of November 30th, 2009 but the deadline for when a buyer needs to start the loan application is much sooner than that.

With the new MDIA law, which enforces rules for the time that borrowers must have to review disclosures before closing, the # of days that it takes to process a loan from start to finish is potentially longer.

This means that it would behoove borrowers to start a purchase transaction much sooner than the middle of November. If they wait that long, it's likely that they won't get to claim the tax credit.

To be safe, I would recommend to someone that wants to claim the $8,000 tax credit to start a purchase transaction no later than October 30th. That gives the real estate agent and loan officer a good 30 days to close the transaction.

Here in Logan, Utah, if somebody wants to do a Rural Housing loan, they need to start the purchase transaction no later than October 15th, as Rural Housing is taking up to 2 weeks to review the loan package. This is on top of the 30 days that it could take to process the loan.

My hope is that the government will extend the tax credit through all of 2010. But if I were a first time home buyer I would not wait to see if that happens. With interest rates as low as they are, I can't think of another time that has been better to purchase a home.

Questions that a good loan officer should ask you during the loan application

John Neil (Wasatch Mortgage Solutions) — Tue, 11 Aug 2009 14:16:48 -0500

When you are meeting with a loan officer to take a loan application there are some questions that they have to ask. Questions such as...

     1. What is your gross monthly income?
     2. Who do you bank with? What is your current balance in those accounts?
     3. Have you ever had any foreclosures, bankruptcies, tax liens, judgements?
     4. etc. etc.

Any "order taker" could ask these same questions, complete a loan application, and submit a loan for you, with no regard for your long term goals or needs.

A good loan officer is much more than an "order taker" and will ask the questions that help him/her understand your long term goals as well as current needs. They will use this information to help them choose the loan options that will best meet those goals. Questions such as...

     1. How long do you plan on staying in the home?
     2. What are the possible reasons that you might move?
     3. Would you consider renting it out in the future?
     4. Are you a first time homebuyer? (believe it r not, some won't even ask this!)
     5. Have you made all of your rent payments on time?
     6. Where would you like to purchase a home?
     7. How much have you budgeted for (for a monthly payment)?
     8. How much would you like to have in reserves after you purchase the home?
     9. Do you prefer having lower monthly payments or to pay off your mortgage more quickly?
     10. What kind of condition is the home in and are you looking to do some improvements?
     11. etc. etc.

These questions will help the loan officer to offer mortgage options that you qualify for but that also meet your needs. Beware of the "order takers" that will do neither. They are easily identified because they will not ask any of these questions.

Logan Utah Real Estate - Mortgages: How do I increase my credit score?

John Neil (Wasatch Mortgage Solutions) — Mon, 10 Aug 2009 12:07:32 -0500

If you are looking to purchase a home and get a mortgage, your credit score may be the difference in obtaining a decent interest rate and/or being able to get a loan at all.

If you are looking to get an FHA loan you will need at least a 620 credit score with most lenders. The good thing about FHA is that the interest rates are not
"credit score driven", meaning that the interest rate won't be determined by your credit score.

On the other hand, If you are shopping for a conventional loan then your credit score becomes even more important. In the past a credit score of 680 would demand the best interest rates. Now days you really need a credit score of 740 to get the best rate.

So what if your credit score is less than 740? What can you do to get it higher? Every credit profile is different and a good loan officer should be able to look at your credit report and help you set specific and unique goals to improve your credit score. But the principles are the same for everybody. They are...

1. Make your payments on time! This is an obvious one but this is the single most important thing to improving your credit. If you have late payments on your credit report, make the goal to never have a late payment ever again and your scores will start to rise as time passes. Time heals all wounds.

2. Improve your balance to credit limit ratio. If you have credit cards that are maxed out, you are hurting your credit score tremendously. Ideally, you don't want to use more than 40-50% of your credit card limits. One strategy is to ask the credit card company to increase your limit so as to lower ratio. However, this can be risky if you don't have the discipline to abstain from using that credit card.

3. Manage and protect your golden accounts. On your credit report, some accounts are worth more than others. For example, a mortgage is by far the most significant credit account. Make your payments on time and it will help your score tremendously. Have a late payment and look out below!...Sub-500 here we come! Department store cards (e.g. Macy's, Best Buy, etc.) are the least significant and usually hurt more than help.

When I was in elementary school my dad use to give me $2 for every A on my report card, $1 for every B, nothing for a C, and I had to pay him $5 for a D and $10 for an F. Your credit report is much the same as a report card, but of your financial behavior. You will be rewarded with great interest rates for a good credit score.