Frisco Mortgage Tweets on Twitter

Just in case you were wanting to have a Mortgage person on Twitter, here is a my link.
http://twitter.com/Frisco_Mortgage

Refinance Current 30 yr Mortgage Into a 15 Year and Compare Advantages

Why are the majority of Frisco and Texas refinance applicants more interested in lowering their monthly payment rather than accumulating fast equity and ownership of their home?
Get your mind right and think with "lazer accuracy" and taking a better option with a slightly higher monthly may taste really good.
After talking to the car salesman, you wonder, "Can I afford an extra $300 right now if I just trade in my perfectly good PAID OFF car for A newer one? Does it make financial sense"?...and you rack your brain to try to make it make since.
Refinancing from a current 30 year fixed mortgage to a 15 year fixed mortgage make LOTS of since. Rates are probably higher than when you bought years ago, and the 15 year rates are lower than the present 30 year rates, so it makes the switch to the lower term feasable and does not kill your bank account. So, you can increase your payment by $200-$300 and refinance your home into a 15 year note and MAN THIS MAKES SINCE!

Let me illustrate how your sacrifice of an extra $200-$300 a month can make you really happy in just 3-5 years my.
Example:
Appraised Value Home of $200,000, with a current rate of 6%, and a current principle and interest (not including taxes and insurance) of $959 a month, current loan amount after buying this home 3 years ago with an original loan of $160,000 is now $153,734. Moving along as is, the balance on the loan in 5 more years (8th official year as this example is estimating figuring that the refinance is on a home that has been owned for 3 years to now)is just $140,435. Then, after 5 more years or 10 years from the prospective refinance this example chose not to take, the loan amount is $122,497.
Now lets say in this case that the person decided to take a 15 year mortgage and refinance their home that they have had for 3 years. The pay off of the 3 year old loan would be $153,734 as mentioned above, and the rate might be at 4.75%, after rolling in all the costs to refinance (I way over estimated to make my point), the new loan amount would be $160,000, and the new Principle and Interest payment would increase by exactly $285 a month. After the first year alone, your new loan would be paid down to $152,503 (you made up your cost to refinance in the first year). Now look at the details below to see what your new loan would be moving forward through the years and the savings you have made comparible to if you were still in the 30 year loan.
Year 2 balance of new loan - $144,643
Year 3 balance of new loan - $136,402
Year 4 balance of new loan - $127,760
Year 5 balance of new loan - $118,698 (savings of $21,737) This means you have $21,737 more in paid equity/principle in your home in just 5 years from refinancing than you would have if you stayed in your current 30 year loan. Graduating up to a larger home might be more possible now with that kind of equity when you sell.
Year 10 balance of new loan - $66,350 (savings of $56,147) This means that just after 10 years from the refinancing you made up $56,147 more in equity than you would have.
NOTE: IF YOUR HOME IS A HIGHER VALUE HOME, START THE MULTIPLYING AND START SAVING NOW.

Who To Believe While Shopping Your Loan

I was reading a blog on Money Magazine today about the best way to find a home loan. You can see that edition at this link (Money Magazine)
Sarah Max explained,
"When the easy money was flowing, you could get a great deal on a mortgage from just about anyone. But in today's credit-challenged world, all the avenues for finding a mortgage come with their own set of problems."

This is simple and a great intro to where we are at now in the industry. She went on to explain how the many banks have become very tough and tightened their standards and so forth. You see, brokers really have no direct relation with the money they loan, and that many times leads to a situation where more brokers than bankers would be willing to loan and "push" a loan that a banker or bank my turn down. Sarah makes mention of this in her message.

This is where I start to wonder, "is the helper trying to help the shopper in this case, speaking of Sarah with Money Magazine writing an article targeting the needed help of mortgage shoppers, or is she helping advertise the mortgage lead generating giants in our industry that typically support the broker and banker portions that established business by pushy sales rather than honestly earning referrals. Let me be clear though...I am not saying all bankers or brokers that purchase leads are not to be trusted, but I would place a bet on it that if you did the research you'd find there are more less qualified Loan Officers working primarily on purchasing leads rather than the Loan Officer who has made relationships through honesty and hard work. "Bonds between people keep one honest. If you don't have a bond with someone, you have nothing to lose"...for being dishonest that is.

Now this is where Sarah crosses me a little on whether she's helping the shopper or the major lead company. Sarah says,
"And while online lending sites hold the promise of one-stop shopping, some have developed a reputation for playing bait-and-switch on rates and not fully disclosing fees. All this adds up to a major shopping hassle. If you want to get the best rate, you'll need to tap at least two of the sources below. Scour the Web. Shopping for a mortgage online has come a long way from the days of one-size-fits-all rate listings. At some sites, including Bankrate.com, MortgageMarvel.com, and Zillow.com, you can now shop anonymously and get accurate rates. Keep in mind that all these sites act as referral services, so eventually you'll have to close the deal with a bank or mortgage broker."

The aforementioned lending website companies as I may bring attention to are lead generating companies. Sarah even mentions that you will shop their rates and fees and eventually be dumped onto a banker or broker. There is very little accountability between the bankrate.com type company and the lead purchaser loan officer for the receiver of the lead to be, should I say, less than straight forward or not slippery. That being said, Sarah is suggesting to avoid the "bait and switchers" and mentions it nearly just like that, yet she suggests to her readers to check with these lead generating sites that sell their leads to entities with more probable numbers of bait and switch type loan officers. THAT is why I wonder if maybe a blog such as this is contradicting...efforts to educate and help mortgage shoppers crossed with the demand for advertising and keeping relationships with the people who probably advertise with them, creates a less than conducive atmosphere sometimes.

Here is what I suggest. Those large "engines" such as the aforementioned bankrate.com's and so forth are large enough that they know they have to be on target when advertising and therefore will list their rates and fees pretty accurate to current competitive market costs...lending laws watch them closer than the small guys and therefore they are held more accountable many times. Now since it is obvious that today's market isn't forgiving to the person who prioritizes the "cheapest" loan, but first prioritizes the evaluation of trusting the loan officer with the most competitive rate, use the big "engines" to gauge what is competitive and then shop different lenders by your personal character "radar". If you feel rushed or feel like you are being pushed at all, trust in the old adage, "if it's a good deal, it don't have to be committed on today". Be sure YOU the buyer/shopper define committed right. Committed should mean to you in the mortgage industry, I've spent money. A lender may say, "sir, I realize you are shopping and I feel like rates will be higher tomorrow. Do you mind if I lock your loan?" As long as they don't require upfront non-refundable money if you don't use them, and you intend on using them if it works out, let them lock it for you.
Best of luck in your home shopping!