I thought this might really help my readers in making smart choices in their next quest for a home loan. Not to brag, but I have been told that I was very straight-forward when I speak, I did not take it the wrong way because it is absolutely true. My theory for my business is that the more true information you teach people about your business, the easier it will be practicing it. Again, I have been in this business for over 18 years and the last thing I want is someone calling me in the wee hours of the evening crying about their loan not closing on time or their payments going up without warning. Here are some Q & A’s from our readers that I thought might be informative to everyone.
Caller: I am currently applying for a home loan refinancing and it has taken longer than expected and I don’t even have any type of disclosures on fees and rates. What is going on?Ken Go: In all fairness to all agents, first you have to ask yourself if you have provided all information to your lender, such as complete income information, have they pulled your credit report or have you given them your credit scores (3). Basically, with your complete income information (only if going full documents) and a completed credit report, any lender should be able to quote rates by phone or fax immediately. Even if you have issues with your credit, a loan officer (experienced) should know where to place your loan and be able to give you a confirmed rate for the day. Now, about all the fees and miscellaneous closing cost that should also be disclosed asap. If you have not been given these disclosures I would not pay them any appraisal fees until I am satisfied with a written quotation. Remember always ask if the rates are locked.
Caller: Another refinancing question. I had a late on my mortgage because when I was refinancing my loan, the loan officer advise me to not pay the following months mortgage and they claimed that we should be closed before the payment is due.Ken Go: Please be aware that the loan officer who is refinancing your loan has no relations to your existing lender, even if you are refinancing with the same bank you still need to be sure yourself that your payment or the payoff meets your mortgage due date. Can you blame your loan officer, Yes of course, but that might be after the fact and your lender will hold you responsible for the payments not your loan officer. I have received multiple calls on this and in some cases the loan dragged on for almost three months and the property is currently in foreclosure.
Caller: I got turned down by Countywide because I am buying a new house again with in a 8 months period and the new house is only less than 4 miles away from a house I bought in January 05.Ken Go: Actual case that we closed for this client. We immediately assessed the entire situation and found out that there is a valid reason why these clients are buying another home close by and within such a short period of time. They have just relocated from another state, bought the first home they saw and was not happy with it, they were also living with an elderly parent who cant go up the stairs and the new home has a room on the ground floor. This buyer was able to buy this house, with no money down and we were able to close within 3 weeks that avoided them a penalty from the home builders. They acted early enough for us to save their deal. Reminder, if you sense a slight problem with your loan, maybe you are not getting return calls from your lenders and or you are getting the run around and still don’t know what is going on. Look else where chances are something is wrong. Typical loan approval now a days are within 24-48 hours of your initial interview, with completed loan packaged you should close your loan within 2 weeks maximum 3 weeks.
Caller: My loan balance is increasing and I am not sure why?Ken Go: A very common call nowadays. These are your 1% loans that are now called “Option payment” or “Pick a Payment” use to be called “ Negative Amortization Loan” which is all the same program. There is a lot you need to understand before choosing a loan like this, I refer to this loan as a cheating loan. If you are not cheated to get into this loan, you are cheating yourself getting this loan. Now, again this could be a loan for you if you fully understand it. Make your loan officer explain this program to you in full details before getting it. Your key question to ask when getting this loan program is what type of index is this loan tied to and what is the margin ( the lower the better ), I like the 11th District Cost of Funds index, its very stable and does not move as fast and much as a LIBOR. Go to the ARM Indexes 11th District Cost of Funds web page and study and understand how they operate.
Caller: I paid a company $450.00 six months ago to clear my credit and have not heard back from them.Ken Go: In my 18 years experience doing home loans, I have only met one person in the early 90’s who can erase bad credit and he has disappeared a few years after, my guess is he is probably either hiding somewhere or in jail. No one can erase bad credit legally (I would like to know if anyone might have any good experience with a credit clearing companies, pls call me so we can share the info to other readers). I have develop a simple way to send the bureaus a letter if you have a dispute with your credit. Call me and I will fax it over to you for free. As far as your funds are concerned, its probably a no guarantee service contract and non-refundable fee.
Caller: I have been offered a low interest rate loan by a Lender (do not prefer to discredit) but I am being charged close to $15K for the entire closing cost.Ken Go: Another actual case, when I got the estimated closing statement from this lender the caller was not sure of why they are paying so much for the closing cost. It turned out that they were charge a “Origination Fee” and another “Discount Points” totaling almost 9K for a $350,000.00 loan. I was shocked, both are actually the same fees, the terms were originally use for Government loan (FHA) and this is a conventional loan. Not only that, there is a miscellaneous fee for $1500.0 and a couple of junk fees that is not common. I told the caller to compare that estimate with one we gave her and she was able to save $9500.00 of cost and I was able to actually save her $26.00 on the payments too. This lender finally called the client back and said they would discount another $1500.00 in order for her to go with them. Even if you might not see all the cost that is factored into the loan, you will feel it when you sell because that is less money to your pocket later. Check everything little cost on a loan.
Interest rates are certain to go up this month, per investigations from different real estate offices there seem to be more listings and prices of homes are being drastically reduced. Take that with a grain of salt and please shop smart. Visit my California Home Loans web site, or call me for any further inquiries by phone (888)822-5363, or email me: kennethgo@verizon.net.
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