Gene's Bit of Blogging
Financing
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Gene Mundt, Mortgage Lender: Posted on Monday, May 07, 2012 5:39 PM
I May Not Be Yoda,
but I'm Darn Close!
Yesterday, I was reading yet another blog about the low interest rates presently available to home buyers seeking mortgage financing.
Seems another new historic low was announced. Something not quite so noteworthy anymore, as we all have grown used to hearing about how the rates have dipped, dipped, and dipped again.
 And therein lies my big worry, both as a mortgage lender and as a parent. I think buyers have grown quite weary and fairly complacent.
Low interest rates, such as we are seeing presently, should be news that sends home buyers (currently seeking and potential) all giddy. They should be doing a happy-dance.
But although rates remain a topic of interest for mortgage applicants I speak to, the rates we are seeing do NOT stimulate action in the housing market or number of inquiries for financing you would predict. So many potential buyers simply are doing nothing in response.
And I find that sad. That attitude translates into so much potential lost savings . So many opportunities simply being ignored.
I believe that many potential buyers falsely believe they cannot buy. That they will not be approved for loan. It's certainly the mantra repeated by the media. And it seems nowadays, everyone knows someone that knows someone that has an awful story to tell about the financing process. Heck, I even hear it within our own industry.
The truth of it is that there are many successes being celebrated out there. The majority (around 62%) of people that apply for a mortgage loan DO get financing and successfully
buy a home. (Remember, we've seen the result of and are suffering from no one being turned away.)
Now, do mortgage applicants have to work at finding their successes? Yes! Is it easy? No! Are
they frustrated at times throughout the process? H#*$ yes! Should the
process be like this? No! I'm a mortgage lender and I think it sucks that
buyers and those refinancing are put through the ringer like they are. But the
process is what it is ...
So if that is the truth ... and the process is what it is, at least at this point, I ask ... What are you, if a hopeful and/or potential home buyer, going to do? What's your reaction??
I've written some about this in the past ... my own personal experiences with rates, home buying, and financing over my 35+ years within the mortgage and real estate industry. It's been interesting, to say the least.
But over all those years, one thing has remained true for home buyers and those seeking mortgage financing: No matter how bad your financial situation. No matter your credit scores. The situation and your scores CAN be improved and turned around. Help is available.
Okay .. okay ... you're right. I need to add an asterik to those statements ...
- Asterik 1: With time, care, and patience.
- Asterik 2: If willing to do some hard work.
And therein, lies some of the current problem. Many people hate the asteriks. But taking that into consideration, my question becomes this:
If you ever hope to buy a home ... now or in the future ...
Are you going to let those asteriks scare you away from starting the process? Are you going to let the need for some hard work and patience intimidate you into foregoing inquiries about your home buying capabilities and options?
Are you going to let all those stories ... those asteriks ... steal REAL opportunity from you? REAL SAVINGS?? And yes, I said steal. I can talk to you all day and all night about what I think
is the right thing for you to do. And it
will be "yadda yadda yadda" ... just noise in
your ears. Or I can tell you this ...
I may not
be Yoda,
but I'm
darn close!
I'm a mortgage lender, yes. But more importantly, I'm a
husband, a dad, and now a grandfather too. And
that is where my message (and vast wisdom) to you springs from.
I've been there. I've stared-down
growing insurance costs. Rising taxes. Emergency repairs at the home. Health bills for braces, glasses, broken noses, emergency hospital
trips.
I've had to come-up with unexpected costs ... dues for
sports camps, traveling leagues. I've shelled-out extra for Size 15 Nikes.
I've looked college payments in the eye.
And I'll tell you ... your child you never thought you'd hear it from? Yep, even
MORE schooling ... LAW school! Then wedding
plans start. Times 2 ... within 6 months of
one another. Heart-tugging Grandchildren aren't far behind.
All of these expenditures and more might be in your
future as they were in mine, you just never know. So take it from someone that knows ... you need to look for, and take
advantage of, every savings when you can.
Listen to Yoda ...
The savings you
can and will reap by buying now and locking-in a historically low interest rate?? Cha-Ching!
The savings you can and will reap through the lower housing prices found in many
markets right now? Cha-Ching Cha-Ching!
Those savings WILL come in mighty handy later
... believe me.
Forget whatever negative you have heard. Take action.
Reach out. Pick-up a phone. Text.
Email. Whatever! Do it on your break. At lunch time. Before you head to bed.
Ask your questions. Don't just accept what you're hearing on the news ... or from others, no matter who they are. Fight for every option, work for every advantage, every opportunity you can
find. You owe it to yourself and your future.
Contact me. Even if you have challenging financial and credit
issues. Get started on bettering your finances and future. It costs you zippo ... absolutely nothing to talk to me.
You'll be glad we talked. I'll be glad to hear from you ...
* You can find me in several convenient ways:  Direct: 815.277.4036Cell/Text: 708.921.6331 At Skype: 630.219.1316 Through Your Mobile Device:
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Credit Repair, Buying a Home, Credit Reports/Fico Scores, Financing, Mortgage Lender, Mortgages, Working with a Mortgage Professional, Credit and Financial Counseling, Announcements and News, Gene Mundt's Client Services, First-Time HomeBuyers, Money-saving Strategies, Savings Advice, Communication, Asking credit and mortgage questions, home buying, Right Time to Buy a Home, Home Ownership, Clients, Interest Rates, Cost of Living and Bills
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Gene Mundt, Mortgage Lender: Posted on Thursday, March 22, 2012 12:40 PM
It is said ...
Times change, people change, situations change, relationships change ...
The only thing constant is change.
Author unknown
Yes, change is inevitable. That is true ... but I personally believe, that HOW you react to that inevitable change is what is important. It can be your defining factor moving forward.
And if any business industry has seen and had to endure change over the past few years, it's certainly been the real estate industry. Change has been radical and constant.
More change is coming. We have to look no further than April 9th, 2012 to experience that change too. That's the day that upfront costs for FHA Mortgage Insurance will go from 1.0% to 1.75% (on most all scenarios).
Buyers/Borrowers and Real Estate Professionals alike can be upset or complain about this upcoming change, but it won't stop it from happening. Perhaps then a positive outlook ... a "lemon into lemonade" outlook ... is the one we should tackle this change with? What I mean is this ...
Good news can still be found, even taking this upcoming change into consideration. It's not the end of the world. Rates have remained low for a long time and it appears that they will remain low a good while longer.
Now that is NOT to say that we won't see some increase, but rates should remain advantageous. And don't overlook that there IS still time for action prior to this FHA Mortgage Insurance change coming.
A Buyer still has time to find a property, get it under contract, APPLY FOR MORTGAGE through April 8th and avoid the higher fees. That means if you're a Buyer that has already begun the home buying process, this post serves as an "Alert to Action". Get Moving!!
If you're an Agent, you've still got the time and opportunity to communicate with Buyers in your pipeline that are close to taking some action. Let this news serve as a catalyst. All is not lost!
I've put together an illustration (below) of the realities, pros, and cons regarding the upcoming FHA Mortgage Insurance changes coming on April 9th. Utilizing real numbers, I hope to clearly demonstrate what a Buyer's mortgage payment will be PRIOR to the upcoming changes .. and then after them.
| Current | Proposed | Loan Amount = $200,000 |
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| Interest Rate = 3.75% |
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| Current Cost of Upfront Mortgage Insurance * | $2,000.00 | $3,500.00 | Current Monthly Payment for Mortgage Insurance * | $193.58 | $211.98 | Total Payment (Excluding Taxes/Hazard Insurance) | $1,129.07 | $1,154.42 | Change (Increase) in Payments | $25.35 |
| LOSS of Buying Power | $5,500.00 |
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In most cases, a $5,500 reduction in a Buyer's approval price CAN be overcome. And consider this ...
In the scope of things, THIS change ... an increase in FHA Mortgage Insurance costs ... still remains a better option than no FHA-insured loans at all. April 9th will come and go ... and it will not be the end of the world. Working together, we'll overcome it.
* Work with a professional mortgage lender with 35 years of successful lending experience from which to draw upon to benefit you and your finances. Contact me today, so YOU can take advantage of every financing and financial option available to you. I'll be glad to hear from you ... and have the opportunity to earn your business. I can be contacted through any of the following: Direct: 815.277.4036 Cell/Text: 708.921.6331 Skype: 630.219.1316
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Financing, Mortgages, Refinance, Announcements and News, First-Time HomeBuyers, Obtaining Mortgage Quotes, Pre-Approvals, & Info, Mortgage Closing Costs, home buying, Right Time to Buy a Home, Clients, Mortgage Costs, Closing Costs, Interest Rates, Pre-Qualification/Pre-Approval, FHA Mortgage Insurance
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Gene Mundt, Mortgage Lender: Posted on Monday, March 05, 2012 5:13 PM
* Food for thought:
According to the 2010 Current Population Survey (conducted annually by
the U.S. Census Bureau), there are about 7.5 million unmarried
opposite-sex couples cohabiting in the United States today, a well as
another 620,000 same-sex couples. The same source reported that married
couples now account for only 48 percent of all households.
 More and more often, especially with young, first-time home buyers, I am assisting unmarried partners with their mortgage financing ... and I'm seeing huge differences in many of their money-handling styles and skills. While I see it in older couples too, the differences often are far more dramatic in the young. It's very clear ... one partner is the saver, the other is the spender. The conversations I have with them certainly reflect that too, as do their credit report(s).
Right now, I am working with a young, unmarried couple hoping to buy their first home and obtain a mortgage. Well, I should say ... SHE is hoping to buy a home. I'm not sure about him. SHE has been the catalyst of each and every call. Every piece of information or documentation I receive to advance their mortgage comes from HER. He has been forthcoming with little. He's also been very non-committal and evasive with answers. I'm a bit unsettled about him, to be truthful.
Now this young couple, may or may not end-up completing their sales transaction. I say their chances are 50-50 at best right now. The outcomes depends on how persuasive SHE can be. And if he quits dragging his feet and finally commits to the process.
It's just my opinion too, but I think this couple has bigger issues that should concern them. Their credit reports read like a life story. While both partners are young,
they are old enough to have already established financial outlooks, habits, and
distinguishable spending personalities. Theirs are vastly different on all counts. Extremes. And because of that, I see all sorts of problems before them long term. Red flags screaming out "Warning!" and "Caution!"
 Should this couple hope to have a long, happy, and successful future together, I'd suggest they have a sit-down and talk about their finances ...soon. Possibly even counseling. I think they need to be honest with each other about their financial histories (something I think she is possibly unaware of ... or doesn't understand the ramifications of) ... and their financial goals and dreams for the future. There should be no surprises ... no secrets kept between them.
They, as well as any couple (married or unmarried), should both know, understand, and then commit to what financial responsibilities lay before them. They should also know just how and what they hope to contribute as they move forward together ... and how and what they hope the other will contribute as well. An indepth, lengthy, honest conversation is warranted.
And as unromantic as it sounds, especially for this couple and other unmarried couples, this conversation needs to cover any future "what-ifs" ... and how those "what-ifs" affect them legally, should they part or die.
Unmarried partners must not assume that the legal options and protections provided them are the same as for married persons. It is my opinion that protections ... legal protections ... need to be arranged and put into place for each in this couple. That is especially so prior to a large financial purchase/commitment, such as this home ... or a car.
Unfortunately, I do not see much financial harmony within MY young home buying couple right now ... or the likelihood of any real indepth communications between them or any attorney occurring in the near future. Time will tell if they can make a "go" of this, or not. I'm hoping they prove me wrong ... and all ends-up well.
But I urge anyone hoping to buy a home with someone else, especially as a non-married partner ... discuss your plans and goals with one another. Then talk to a knowledgeable, experienced real estate attorney prior to making the financial commitment of buying a home or other large financial purchase. Understand and know your options and possible outcomes. Love and protect yourself enough to take these precautions ...
* In need of mortgage and credit advice? Some mortgage and financial planning guidance? Contact me. I'll put my experience and expertise as a mortgage lender and financial planner to work for you. Together will work towards a successful home purchase and find the financial solutions that suit your present financial needs and your future goals. Direct: 815.277.4036 Cell/Text: 708.921.6331 Skype: 630.219.1316 |
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Gene Mundt, Mortgage Lender - Chicago Bancorp: Posted on Friday, February 17, 2012 11:35 AM
What's Your Point?? Nawwwww ... Not THAT Point!
A great scene, isn't it? But it's not those "points" I'm going to talk about in this blog. No, I'm talking the "points" referred to when discussing mortgage costs and options.
I've had several discussions as of late, with some pretty confused borrowers regarding these "points". They've had no real grasp of exactly what a "point" is prior to our discussion. What it can equate to in cost to them. How the cost of a "point" is figured. This is especially true with first-time home buyers.
Here's what I tell my clients when starting this discussion ...
The best way to think of a "point" cost, is to remember a percentage point equaling the number 1 ...
One percent (1%) = 1 point One percent (1%) = .01
Then the cost of the "point" should be thought of this way: Cost of Point = .01 X Your Loan Amount
Okay, let's put some actual dollar amounts into the equation. It will make better sense to you.
Let's say you are borrowing $200,000 for your mortgage. One (1) "point" then costs you an additional $2,000 at Closing. Here's the math equation for that: .01 X $200,000 = $2,000
The question I typically hear during these conversations is this ... If these "points" COST me as a borrower ... why would, or should, I even think of buying them? What does buying a "point" accomplish for me
Think of "points" (and the dollars associated with them) as interest earned or paid to the bank. The "reward" for you as the Borrower when buying that "point" is the lower interest rate received for the life of their loan at that bank.
Alot to digest, isn't it? It must be remembered too, that as the markets fluctuate, so does the benefit of paying a "point" ... and the resulting reduction in interest rate earned for doing so.
 As a rule ...1 point paid = 1/8% lower interest rate
Again, let's revisit the math we did above for that: $200,000 Mortgage Paying 1 "point" Cost of "point" equals $2,000
Let's say, on the day this "point" and mortgage costs are being quoted to you, the interest rate is lowered by 1/4%. We'll say from 4% interest rate to 3.75% interest rate. The savings realized by the borrower each month (for buying a "point") is then $28.60.
Now, there is one more very important thing to figure into considering a "point" purchase ... and whether it makes sense for you to buy the "point" for your mortgage. And that's, how long you expect to be in the property you are buying or refinancing.
Why does that matter? Again, the numbers tell the story ...
We now know that the amount you save in interest monthly for buying your "point" was figured at $28.60 above ... and that you will pay $2,000 at your closing to receive that monthly savings. So to figure what your "break even" time is ... meaning the point where the savings in interest would equal the dollar amount paid on the "point" ... you do the following:
Amount paid for "point" ... $2,000 divided by:
Amount saved in interest each month ... $28.60 Equals:
70 payments
Knowing how long it takes to payback the savings realized by paying a "point" is absolutely essential when making your decision to buy that "point" ... or not. Then you simply need to consider if you plan on being in the property you are buying long enough to reach that "break even" time.
Helping you understand HOW the savings on "points" are figured ... and HOW buying "points" can affect your bottomline ... is an important part of my job, as your mortgage lender.
But the answer and decision is one that only you, the borrower can ultimately make. I hope that this blog helped you do that ...
 * Having an experienced, knowledgeable mortgage lender at your side during the many decisions your are called upon to make during your home buying is crucial. Contact me today. I'll put my 35 years of mortgage experience, knowledge, and expertise to work on your behalf. I'll be very glad to hear from you. I can be contacted through any of the following means: Direct: 815.277.4036 Cell/Text: 708.921.6331 Skype: 630.219.1316
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Buying a Home, Financing, Mortgages, Refinance, First-Time HomeBuyers, Obtaining Mortgage Quotes, Pre-Approvals, & Info, Money-saving Strategies, Mortgage Closing Costs, Asking credit and mortgage questions, home buying, Mortgage Costs, Closing Costs
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Gene Mundt, Mortgage Lender: Posted on Sunday, February 12, 2012 1:12 PM
The "Big Bank" Says You Can Wait for 60 to 90 Days to Start Your Refinance. What do YOU Say? Over the last couple of days, there's been more than a few articles showing-up online, on social media, and in the papers about the extremely long period of time that a "big bank" is guesstimating that some potential clients will have to wait, should they hope to refinance their present loan.  Seems that they can't keep-up with the workload and large number of those contacting them for this service. The numbers of 60 to 90 days is the waiting period being mentioned frequently within these articles. Yep, you read that right ... 60 to 90 days! That's before they can even begin to get back to you or talk to you ... start your mortgage application ... begin the mortgage process. Don't even bother them before that. Now granted, this is for those that are NON-"big bank" clients ... and those calling them on the phone only. But I still raise the question ... WHY would anyone that didn't strictly HAVE to deal with this "big bank", wait 60 to 90 days to start being serviced for their mortgage refinance? The "big bank" has been inundated with requests for service from those home owners looking for relief through the HARP 2.0 program. (Please keep in mind that only the "big banks" that currently service those same loans, have been given the technology/info to perform these new HARP 2.0 services. Smaller lenders, of which there are many, haven't been supplied that technology yet from Fannie Mae and Freddie Mac ... or the supporting partners (mortgage insurance companies, Servicing Lenders, etc.) and won't receive it until sometime in March). But the "big bank" says they are trying to add new staff and recall laid-off staff to better handle the volume of applicants they are seeing. NEW staff completely unfamiliar with their procedures and new rules/regulations. Laid-off staff members that have been out-of-the-loop are now going to work on your loan and get it done right. Doesn't that make you feel better? No? You say you don't want to wait that long. You say you want to talk to a mortgage lender NOW?  Contact me! I'll be more than happy to talk to you NOW ... and get started on assisting you with the refinance or credit repair you want and need. No waiting 60 to 90 days ... and an experienced, knowledgeable, professional mortgage lender and his staff at your service. Aaaahhhh ... MUCH better! * Contact me NOW to receive professional mortgage advice and service. I'll put my 35 years of mortgage experience, expertise, and knowledge to work on your behalf. I can be contacted through any of the following: Direct: 815.277.4036 Cell/Text: 708.921.6331 Skype: 630.219.1316
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Financing, Mortgage Lender, Mortgages, Refinance, Announcements and News, Conducting Business, Obtaining Mortgage Quotes, Pre-Approvals, & Info, Choosing a Mortgage Lender, Asking credit and mortgage questions, Homeowner Affordability and Stability Plan Update, 2011, HARP 2.0, Fannie Mae/Freddie Mac
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