The Real Voice of New Jersey Real Estate

If you answered with a resounding "YES" to that question, you aren't alone.  I can't think of many sane individuals who don't want the best deal possible, and when the word "free" is mentioned... people tend to flock in interest like the George Foreman family to a Bobby Flay BBQ.  While it seems the path of least resistance, to jump at what appears to be the least (or no) amount of money for a service rendered or product delivered... it most times ends up the path of greatest disappointment.

Such is life...

Back in some of my more naive years, I used to think that when my parents offered up the timeless cliché "you get what you pay for" that the very slogan they were spouting was probably conjured up by some individual(s) who just wanted to soak up every bit of money they could from unsuspecting folks who needed their product and/or service.  Then my naive nature awoke to a staunch reality.  There may be something to that.

The Mortgage Business is an interesting one, for sure.  We compete on many levels (service, lowest rate, lowest fees, name brand, delivery, reputation, marketing, etc) but it is no more interesting than most businesses who compete on similar levels.  Let me digress:

• Have you ever purchased anything from an infomercial you saw on television?  Come on, be honest.  Okay then, I have.  I'll put it this way, there won't be any testimonials airing anytime soon from yours truly on how I became a multi-millionaire while sitting and sipping cocoa in my underwear from the confines of my humble abode.

Perhaps that isn't the best example in the world, yet I think it drives home another age old point of view... "If it sounds too good to be true, it probably is."  That written, here's a few Marketing Gems you've probably seen, or things you've said you wanted from the Mortgage Industry that may not be all they are cracked up to represent - or, you were just smart to ask for in the first place:

• No Closing Costs and/or No Fee Mortgage Loans!  I've never offered this product.  That certainly doesn't mean it is bad; I just am unable to offer it.  What it means for you as a consumer is that you'll see a much higher interest rate than the ones the market is currently bearing.  Does it make sense?  That depends on your situation, frankly.  For me, the longer I plan on staying in my home, the lower I want my interest rate to be.  If I don't want to pay points of any kind, I should expect a higher rate.  The profits are being made somewhere.  On no closing cost, no point loans, those profits are on the back-end... in the form of a higher, sometimes much higher, interest rate.
• I want your lowest rate with no fees.  Have you ever called a Mortgage Company or Bank and said that?  If you have, you aren't getting the lowest rate.  End of story.
• I'm going to log on to Zillow.Com or BankRate.Com and get the best quote possible!  It's called low-ball offers, folks.  The honest ones are typically disclosing at a more expensive pace.  You'll probably (from the low-ballers) be getting quotes on 15-day locks (not done nearly as much as you would think, for a variety of reasons) instead of 30 or 60 day locks... which are more realistic, especially in this market.  To boot, you may get a version of the bait and switch when you contact that sweet quote and hear that, "Rates change daily, the quote I gave you isn't available as I disclosed."  The fact is rates DO change daily, no question about that.  Yet, using that to draw in phone calls and emails isn't somebody I want to work with.  That's just me.  We all make money, as a consumer... I just want a fair shake.
• No Application Fee!  First off, I don't believe in application fees at all unless they are applied to paying for the appraisal or refunded if your loan doesn't close.  I have a very simple philosophy here, if your loan doesn't close... nobody should be making a dime off of you.  If I had charged for every application I have taken in the past eight years, I'd be sipping martini's with Gene Hackman in the Cayman Islands.  Sorry, just wanted to work in a reference to the film, "The Firm."
• Does your town or city get a Sunday paper?  Mine does.  There's a section where Mortgage Companies and Banks advertise rates.  I'm not sure about areas outside of Allentown, Pennsylvania... but we used to advertise in there every week.  Our advertisement was due by Wednesday and came out Sunday.  Is there something wrong with that picture?  Yup.  Rates could have changed, sometimes significantly, on Thursday or Friday.  So of course you get rates that may or may not even be relevant when you turn to that section on any given Sunday. 

For what it is worth, my advice is as follows when shopping for a mortgage to buy or refinance a home:

• Reputation, Education, Price.  While I wouldn't recommend taking the most expensive deal in town, I don't think it is a splendid idea to jump at the cheapest either.  If you want a free loan, hit up Aunt Mary and stiff her while trying to live with yourself.  You won't find it in lending institutions of any kind.  As long as it takes money to buy things, profits and personal income need to be made to survive and thrive.  And for God's Sake, make sure they are prone to calling and/or emailing you back in a very timely manner.  If days go by, tell them buh-bye!

Jason Sardi is a human being involved in the Mortgage Industry.  Other than being a former star on an undefeated Little League Team, hitting the winning shot "Chip Hilton" style in a high school basketball game to defeat the best team in the league, he has also made a prominent (in the day) high school wrestler who just competed in the Olympic Try-Outs tap out in less than two minutes.  Come to think of it, maybe that's why that wrestler didn't make the team. 

I can be reached via email at jsardi@ihmci.com or on my cell phone @ 610-653-0317. 

http://www.robbinsvillehomesforsale.com/009666

Whether you are buying a home or refinancing the one you already own, there are steps you can take to avoid unnecessary problems as the transaction gets to closing. While it is important your chosen loan officer (read->Me;) helps to educate you on these, doing your due diligence before hand is rarely a bad idea. Here's some food for thought:

• If you are required to bring money to the table, make sure you have enough money in your account to do so. Also, lenders & banks often require that funds to close a loan are seasoned and sourced. This simply means that they want to know where it is coming from and how long it has been available. Generally speaking, they want to make sure that it has been available at least 60 days. As far as the source of the money, your bank account is acceptable. Your mattress is not.
• Don't be moving large amounts of money around. Any irregular deposits being made that don't jive with your regular banking habits may put up a red flag. That red flag would then have to be explained.
• While you may want to buy furniture, that gorgeous new car, or the newest vacuum cleaner from Dyson, avoid any large purchases prior to your loan being closed. If we have to re-verify your credit and another debt shows up that didn't at the time of the initial approval, it could kill the deal and your dream.
• If your loan approval requires you to pay off bills or back debt, DO NOT PAY THEM YOURSELF, CONTINUE TO MAKE ROUTINE PAYMENTS UNTIL YOUR LOAN CLOSES. Just gather the most current monthly statements or most recent statement on a bad debt and get them to your loan officer. That way the Title Company and Lender can make sure the debt is paid off in full.
• If there is any change in your employment, notify your lender immediately! While you may dislike your wise-ass boss or the people you work with, do not quit your job. You can quit after the loan closes. Then again, you'll need some source of income to pay your mortgage so don't quit your job (after the loan closes) until you have another lined up.
• Don't apply for any type of additional credit until your loan closes.
• Do not open or close any accounts you currently have on your credit. Of note, closing an account that you have paid on time is not generally regarded as being too healthy for your credit score.
• Continue to make ALL of your payments as agreed, especially your mortgage even when you are refinancing your loan. If your loan officer ever tells you not to make your mortgage payment, disobey that incompetent entity and find a new loan officer. The only exception to this is if your loan is clear to close and your signing the papers the next day. If you make any extra payments to your mortgage before closing, they will be applied to your pay-off or refunded to you from your former mortgage company.
• If your loan officer asks for documentation, they probably need it. While you can question why they need it all day long, it is counter-productive to the common goal... your loan closing.
• This last piece of advice is one for anybody wanting to get pre-approved to buy a home. Your loan officer will take a full application and run your credit and probably issue you a pre-approval for such and such amount of money to buy a home. Do everyone involved a favor, supply all supporting documentation (pay-stubs, W-2's, bank statements, etc) as soon as possible. That's a real pre-approval, my friends. Sorry, I just had a John McCain moment:) I see quite often that folks mistake what they actually make in income or have in the bank account. If you supply them with everything, the full story is there. When you supply the full story, it makes the lending decision easier to fund your book.

Make homeownership a wonderful dream, nightmares are better left to film and certain parts of the imagination.

Jason Sardi

Mortgage Consultant

Infinity Home Mortgage Company, Inc

Toll Free @ 1-866-262-8720 ext. 229

jsardi@ihmci.com (and think twice before you spam me, I can be deadly with words;)

http://www.robbinsvillehomesforsale.com/009610

At the time, it was indistinguishable as a moment I would recognize down the line.  After being down the line, I knew exactly what that moment meant.

Some of the questions that we get asked as folks working in the Real Estate Industry seem rudimentary... at least to us. 

"Should I refinance" is a question I get often.  Personally, I'd love to answer with a resounding, "YES!" each and every time.  But I can't.  It's just not the way it works.  For eight years now, I've heard a bunch of folks answer that question in different markets, with different motives, with different companies... and I'm sure with different results in whether their particular client benefited from it and how much?

Here's my bullet points on that very question:

This is an easy one but how long do you plan on owning that abode you want to refinance?  To me, that's as crucial a part of the application process as asking what debts you have and what your social security number is.  By the way, I better get your immediate contact info too;)  Why?  You got the chance to consult me and I want at least, the chance, to consult you before you disappear.

Ideally, what are you looking to accomplish?  Do you want to save money and/or consolidate debt, broaden the array of Investors holding your Real Estate Portfolio, lower your interest rate, shorten your term, or skip a month's mortgage payment because you are buying time?  All are good reasons but the last.  The last is simply wasting equity... and time. *1A

If you can get a rate that is fixed in the four percent range (higher or lower 4% range) at a decent cost... one to two points at least... then you know something I don't.  Is it worth that cost?  See question number one.  If it is long-term (let's say 5-years plus) then you might want to jump as long as you have a lending source who is good with the vertical leap. *1B

 (If I'm boring you to death with this interview of sorts, let's spice it up a bit.  How's the weather?  You look like you've lost a heck of a lot of weight from when this photo was taken on your Driver's License?  Do you like David Bowie?)

Back to the bullet points, here.  It's tough times, in the Media & the Reality of it all.  But let's say I'm a 45 year-old man who has 15 years left on his mortgage.  Let's also say that I can refinance into a 10-year term and keep the same or a very similar, payment.  Should I do it?  If that's the situation, I think you should.  As long as your cash-flow and reserves (liquid assets) are in good order, you'll save a bundle of money in interest along the way.  And having a home that is paid off by the time you are 55 years of age is rarely a bad thing. 

I'm a Real Estate Investor and right now I don't have a whole lot of cash, yet I have a whole lot of Resume.  Do you have a branch that actually considers Common Sense Lending?  To keep this simple, "No."  I've thought about this and spoke about it with many individuals... opening up credit to legit Real Estate Investors may be a core stimulus in getting this rock rolling.  Hang on and talk to your lender of choice regularly. 

(I promise the torture is ending soon)

*  "I think of myself as a smart consumer, what does my credit score mean now?"  Rule your Credit Score.  If you are affording it, keep on keeping records of affording it.  It's like a GPA, doesn't mean much unless you know the system... or at least already mastered it.  The system loves a good GPA and a good Credit Score.  It means everything, right now. 

*  "I hear of the President's Plan, and I want that rate (whatever it was/is) for my Mortgage.  I'm seeing this one a lot.  Let me first say that I'm as bipartisian (hate that term, as there should be more than two;) as they come.  I have no my political agenda.  That written, please quit even wanting to rely on the government for anything.  Rates are what they are.  Seriously, if you can get a fixed rate in the 4% to 5% range on a 30-year mortgage... you won.  Trust me on that one.  Wait and opt for a better deal if you choose to roll the dice.  Personally, I've never been successful in Atlantic City and have never been to Vegas. 

Act Now; Think Later;)

 1A - I'll write about loan modifications down the road.  Unfortunately, they seem a necessity at certain points in the current atmosphere.

1B - I'm 6'1" and can't dunk a basketball at this moment in time.  A tennis ball is eye candy, though;)

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She was one of those clients that was truly a pleasure to work with.  Her peristence, patience, & steadfast pursuit of a dream ... became a magic moment in my Real Estate Career.  Though young, she was not living an unencumbered life.  With great motives and responsibility, she emerged from a struggle ... with a dream realized.

The name has been changed to protect the admirable.

Lucy came to me with a bundle of burdens in her credit history.  Her passion was simple, to sell the home she currently lived in and buy a new one.  She had made leaps and bounds in her career after schooling and the income was coming in.  It was now time to upgrade.  But the demon's of credit past were still lurking ...

In a tougher (somewhat rightfully so) lending environment, I knew we had work to do.  Actually, she had the work to do.  I could only guide her in the right direction.

After reviewing her credit, I let her know exactly what needed to be done to get the financing to buy that new home that she so had her heart set on.  I was fully expecting to call her back in a couple of months and find that little progress had been made.  Perhaps that is just the cynical side of this Mortgage Broker's cruel self ...

About a month later, I got the call.  Lucy was on the other end of the line and exclaimed, "I'm ready!"

"To buy a home?" I cautiously asked.

"Yes Jason, I did what you told me and paid off all the negative debt I had and I'm ready to go!"

I recall a slight birth of silence on my part.  While I believed her, I was a bit taken aback.  After all, I've dealt with folks for years for whom we've put together a game plan and it never reaches the sweet ides of fruitation.  Yet, she had worked her keister off to put herself in a position of qualifying for that which she so desparately wanted ... that home.

Lo and behold, she was right!  I gathered all the documentation that she kept for her records after paying off her creditors and we re-visited her file and got her pre-approved.  She didn't need or desire to go searching for a home though, she already had one in mind.  It was the same one touting the 'For Sale' sign a month earlier.

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