Honest Mortgage Answers

Let me introduce Doug Fast with Platinum Realty

2007-08-18T02:23:00.000-04:00

Doug Fast is a personal friend of mine and an excellent Real Estate agent. What separates him from the other agents is his aggressiveness. I have seen him first hand take his transactions personal. If you’re looking to sell your house, or buy a new home, he will fight until the end and make sure that you are getting the best deal. He truly cares about his clients.

Doug contacted me this week and told me about how he wants to give back to the community. Doug wrote the fallowing message and after reading this, I encourage EVERYONE to give Doug a call.

"Now here’s something you don’t see everyday, (not yet, anyway)…

If you purchase or sell a home with us, we, at the “Fast Team” will give from 15 percent up to 50 percent of our commission to your church, school or the charity of your choice. We’ll make this donation in your name, or any name you wish. Here’s how our “Fast Team” program works:

Each month, we give 15 percent of our commission for this first transaction.
The second transaction of the month, we’ll give 20 percent, not only for that second transaction, but we’ll increase our donation for the first sale to a total of 20 percent as well. Each transaction we’ll increase our donation by 5 percent, up to 50 percent total, for all transactions.

Here’s an example:
The average home in our area sells for a little above $150,000.
Our typical 3 percent commission on $150,000 would be $4,500.
15 percent of $4,500 is $675. We will give that $675 to your church, school or charity.
Using this example:

1st transaction — we give $675 to your church, school or charity.
2nd transaction — we give $900 to your church, school or charity.
3rd transaction — we give $1,125 to your church, school or charity.
4th transaction — we give $1,350 to your church, school or charity.
5th transaction — we give $1,575 to your church, school or charity.
6th transaction — we give $1,800 to your church, school or charity.
7th transaction — we give $2,025 to your church, school or charity.
8th transaction — we give $2,250 to your church, school or charity.

The transactions do not have to be affiliated with one specific organization. They can be eight different churches, schools and charities combined. In this example, all eight receive a donation of $2,250 at the 50 percent level.

So, if you’re planning on buying or selling a home or other real estate — we’d like you to consider using us as your real estate professionals.

Thank you for your time and consideration.

Sincerely,

Doug Fast
Platinum Real Estate Group
(616) 293-9101"

Economic Update July 9th, 2007

2007-07-09T10:31:00.000-04:00

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The nation's service economy expanded at a faster-than-expected pace in June, as the Institute for Supply Management (ISM) said on July 5 that its index of business activity in the non-manufacturing sector registered 60.7, topping May's reading of 59.7 and Wall Street's forecast of 58.1. A reading above 50 indicates expansion, while one below 50 signals contraction. The June reading was the highest since April 2006, when it hit 61.1.

Output at U.S. factories, plants and utilities also expanded in June, the ISM reported July 2. The ISM's manufacturing index rose to 56 in June, above the May reading of 55, and higher than the market expectation of 55.4. The reading marked the fifth consecutive month of growth for the manufacturing sector.

Late payments on home equity loans -- payments that are 30 days or more past due -- rose to 2.15% in the first quarter of this year, up sharply from 1.92% in the final quarter of 2006, the American Bankers Association (ABA) reported July 3. On a brighter note, the ABA also reported that late payments on credit card bills dropped to 4.41% in the first quarter, down from 4.56% in the fourth quarter of 2006, the best showing in nearly a year.

The average rate for a 30-year, fixed-rate mortgage fell to a one-month low, Freddie Mac said July 5. Rates have ebbed in recent weeks as investors' fears concerning inflation have eased.

This week look for updates on the trade balance on July 12 and retail sales on July 13.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

Economic Update July 2nd, 2007

2007-07-02T12:46:00.000-04:00

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Sales of new single-family homes fell 1.6% in May, far better than the 6.2% decline Wall Street had anticipated, the Commerce Department said June 26. The median price of a new home fell 0.9% to $236,100 in May, down from $238,200 in May 2006.

Existing home sales fell 0.3% in May to 5.99 million units, the slowest sales pace in four years, the National Association of Realtors said June 25. The median price of an existing home was $223,700, down 2.1% from a year earlier, marking the 10th straight month that the price has shown a year-over-year decline.

Construction spending in May climbed 0.9%, the largest jump in nearly 18 months, and well above Wall Street's expectation of a 0.1% rise, the Commerce Department reported June 29. Spending on residential construction, however, fell 0.8% to an annually adjusted rate of $549 billion, the 15th consecutive monthly decrease.

Orders to U.S. factories for big-ticket manufactured goods -- expected to last three or more years -- dropped by 2.8% in May, the largest amount in four months, and a far bigger slide than the 1% decline economists had forecast, the Commerce Department said June 27. A 22.7% plunge in commercial aircraft orders paced the decline.

Meanwhile, consumer spending in May rose by 0.5% for the second month in a row, the Commerce Department said on June 29. Incomes, which fuel spending, rebounded in May by 0.4%, after falling 0.2% in April.

This week look for updates on the unemployment rate on July 6.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

5 Reasons Why You Should Keep a Mortgage and Never Pay it Off

2007-07-01T21:26:00.000-04:00

5 REASONS YOU SHOULD KEEP A MORTGAGE AND NEVER PAY IT OFF

Mortgage Planner and author Ric Eldeman urges consumers never to own their home outright or pay it off, regardless of age or income. Here are five reasons why Home Asset Advisor's mortgage planning principles can work for you:

1, A mortgage is cheap money. Mortgages offer you the cheapest way to borrow, so it makes sense to get them the largest loan you can.

2. Mortgage interest is tax-deductible. You can save as much as 35 cents in taxes for every dollar they pay in interest. That means a six percent mortgage loan can really cost as little as four percent.

3. Mortgages will let you clients sell without selling. You don't have to sell your home to realize any increase in equity. They can simply get a new, larger mortgage to acquire the value of the home in cash without having to sell.

4. Long-term mortgages help create wealth. I would like to introduce you to a Financial Planning partner who can show you how to create wealth with longer term, lower payment mortgage loans and equity redistribution.

5. Mortgages give you greater liquidity and flexibility. Their are a lot of fallacy of pre-payments. Extra payments often go directly to principal and offer no tax deduction. Most people can benefit from an interest-only loan, allowing them to invest any additional payments elsewhere for greater return.

If you have any questions or would like to discuss this further, please contact me at the web site or phone numbers listed below.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

2007-06-25T10:54:00.000-04:00

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Construction of new homes in May fell to a seasonally adjusted annual rate of 1.47 million units, a 2.1% drop from April and a 24.2% decline from a year ago, the Commerce Department reported June 19. The decrease matched economists' expectations, and reflected weakness in the South and West, which offset construction gains made in the Northeast and Midwest.

Housing permits, considered a good barometer of future activity, rose 3% in May, but the increase followed a 7.1% plunge in April. Last month's stronger activity originated from a rebound in permits for apartment construction. Meanwhile, mortgage applications for single-family homes fell 1.8% and have been down four of the past five months.

The National Association of Home Builders reported on June 19 that its survey of builder sentiment sank two points to 28 in June, the lowest since it hit 27 in February of 1991. Readings below 50 mean more builders view market conditions as poor rather than favorable. All three major components of the index -- sales, sales expectations and buyer traffic -- posted declines.

Rates on 30-year mortgages, after rising for five straight weeks, edged down slightly for the week. Rates have been pressured by rising yields on the benchmark 10-year Treasury note.

For the week ended June 15, unemployment claims rose by 10,000, to 324,000, the highest level since mid-April. While the increase was unexpected, analysts said the labor market remained strong.

This week look for updates on existing home sales on June 25 and new home sales on June 26.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

Economic Update June 18th, 2007

2007-06-18T16:16:00.000-04:00

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Fueled by a surge in gasoline prices, May's Consumer Price Index increased 0.7%, its fastest pace in 20 months, the Labor Department reported June 15. However, core consumer prices, which exclude volatile food and energy costs, rose only 0.1%, slightly lower than the 0.2% analysts had predicted.

The Producer Price Index, which measures inflation at the wholesale level, rose 0.9% in May, worse than the 0.6% increase economists had expected. Yet, wholesale core inflation increased a moderate 0.2%, slightly better than the 0.3% hike analysts had anticipated.

Meanwhile, compared to April, retail sales in May surged 1.4%, the sharpest rise in 16 months and double the increase analysts had expected, the Commerce Department said June 13. The increase should ease fears that consumer spending, which accounts for two-thirds of the economy, could falter in coming months under the impact of rising gasoline prices, a challenging housing market and recent increases in interest rates.

Rates on 30-year mortgages rose for a fifth straight week, hitting the highest level in 11 months, Freddie Mac said June 14. The rise parallels rising yields on Treasury securities.

Foreclosures for May were up 19% from April and up nearly 90% from May 2006, RealtyTrac reported June 14. In Nevada, there was one foreclosure filing for every 166 households last month, nearly four times the national average and the highest rate in the country.

This week look for updates on building starts and housing permits on June 19.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

2007-06-11T10:31:00.000-04:00

We are giving back to the community.

The market is flooded with homes for sale and people are desperate to sell them. As a result there are literally thousands of homes for sale in all price ranges for pennies on the dollar.

These homes are perfect for first time home buyers, people looking to “move up” to their next house, and investment properties.

Are you currently stuck in a lease? Don’t let that affect your decision. We have a lease buy out assistance program.

We have decided to take 10% of their revenue and donate it to a charity on every transaction. We support the fallowing charities:

• American Cancer Society
• Grand Rapids Humane Society
• Habitat for Humanity
• I.C.C.F. (Inner City Christian Federation)
• Met Trotter

We will donate to your choice of the charities listed above or to any charity or religious origination of your choosing.

For a free list of homes or to apply for financing please go to www.VirtualLoanPro.Com or call me at 866-366-5724.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

Economic Update June 11th, 2007

2007-06-11T10:25:00.000-04:00

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The U.S. trade deficit -- the gap between what America sells abroad and what it imports -- totaled $58.5 billion in April, a 6.2% improvement over the March deficit, the Commerce Department reported June 8. Record-high exports of $129.5 billion, reflecting strong sales of soybeans and other farm products, commercial aircraft and industrial machinery, helped shrink the gap.

The nation's service economy showed surprising strength as the Institute for Supply Management (ISM) said June 5 that its index of business activity in the non-manufacturing sector registered 59.7 in May, higher than April's reading of 56 and Wall Street's expectation of 56 for May. A reading above 50 indicates expansion.

A better-than-expected service economy underscored comments by Federal Reserve Chairman Ben Bernanke to a June 5 international money conference that the U.S. economy will rebound from an anemic performance at the start of the year to a "moderate pace" in coming quarters. On the mortgage front, he added, "We must walk a fine line: We have an obligation to prevent fraud and abusive lending; at the same time, we must tread carefully so as not to suppress responsible lending or eliminate refunding opportunities for subprime borrowers."

Meanwhile, mortgage rates rose a sixth straight week to their highest levels in 10 months, Freddie Mac reported June 7. Analysts attributed the rise to an improving service economy and low unemployment, resulting in a growing competition and higher-wage (inflationary) environment for workers.

This week look for updates on the Producer Price Index on June 14 and the Consumer Price Index on June 15.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

Economic Update June 4rth, 2007

2007-06-04T19:50:00.000-04:00

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The first-quarter growth rate of the nation's gross domestic product was downgraded from a preliminary estimate of 1.3% to just 0.6%, the worst showing in more than four years, the Commerce Department said May 31. The foreign trade deficit was largely blamed for stunting growth.

Employers, however, did their part for the economy, adding 157,000 jobs to their payrolls in May, the Labor Department reported June 1. Economists had forecast growth of 135,000 jobs.

Personal income slipped 0.1% in April from March, the first drop in two years, the Commerce Department said June 1. The decline follows the pay-out of unusually large Wall Street bonuses and corporate stock options in the first quarter of 2007. Analysts expected personal income to rise 0.3%.

Although personal income dipped, consumer spending -- a key ingredient to a healthy economy -- rose a strong 0.5% in April, ahead of analysts' forecast of 0.4%, the Commerce Department reported June 1.

Manufacturing output also rose, as the Institute for Supply Management said its manufacturing index in May climbed to 55, above April's 54.7 reading and higher than the market expectation of 54. A reading above 50 indicates growth.

Consumer confidence increased as well, with The Conference Board, a private research group, reporting that its index of consumer confidence for May moved to 108 from 106.3 in April. Economists had expected a reading of 105.

For the week, mortgage rates on fixed-rate products rose again, Freddie Mac said May 31.

This week look for updates on factory orders on June 4 and the trade balance on June 8.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

Economic Update May 28, 2007

2007-05-29T15:45:00.000-04:00

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Existing home sales in April fell to a 5.99 million-unit annual pace, a 2.6% decrease from March's rate, the lowest level since June 2003, the National Association of Realtors said May 25. Economists had expected a slight rise in home resales. The inventory of homes for sale grew 10.4% to 4.2 million units, which represents an 8.4 months' supply at the current sales pace.

New home sales in April, however, rose to an annual pace of 981,000 units, up 16.2% from March's rate, the sharpest climb in 14 years. The median price of a new home sold in April fell 10.9% from a year earlier to $229,100, the sharpest year-over-year drop in median new home prices since December 1970. Taken together, the sales surge and price decline indicate that builders are taking extraordinary steps to sell inventories of new homes.

For the week ended May 24, rates on 30-year, fixed-rate loans increased on upbeat consumer confidence and speculation that the Federal Reserve would not cut interest rates anytime soon.

Meanwhile, orders for durable goods -- big-ticket items expected to last three or more years -- increased 0.6% in April, slightly ahead of March's 0.5% pace, the Commerce Department said May 24. The increase fell short of Wall Street's expectation for a 0.9% rise.

Jobless claims rose 15,000 to 311,000 for the week ended May 19, in line with analysts' forecasts, the Labor Department said May 24.

This week look for updates on consumer confidence on May 29 and the unemployment rate on June 1.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

Economic Update May 21, 2007

2007-05-21T15:17:00.000-04:00

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The Consumer Price Index (CPI), which measures inflation at the retail level, rose 0.4% in April, compared with a 0.5% rise in March, the Commerce Department reported May 15. Economists had forecast a 0.6% increase. The more closely watched core CPI, which strips out volatile food and energy prices, rose 0.2%, after a 0.1% gain in March. While core CPI edged up in April, the 12-month core CPI average declined to a 2.3% rise, the lowest rate since April 2006.

Industrial production jumped a bigger-than-expected 0.7% in April, the Federal Reserve said May 16. Analysts expected production to rise only 0.3%. April's rise, paced by gains in auto and high-tech manufacturing, was only the third increase in the last eight months.

The Conference Board's Index of Leading Indicators -- a key gauge of future economic growth -- slipped 0.5% in April, greater than the 0.1% decline analysts had predicted. Of the 10 indicators, only stock prices and the money supply (the total amount of currency and checkable deposits in circulation, which influences interest rates) moved in a positive direction.

Housing starts unexpectedly rose 2.5% in April, confounding analysts who had forecast a 2.2% drop, the Commerce Department reported May 16. But applications for building permits plunged 8.9% in April, the sharpest fall in 17 years.

Americans filed 5,000 fewer jobless claims for the week ended May 12, the Labor Department said May 17. Economists expected a slight rise. Meanwhile, mortgage rates for the week ended May 16 nudged up on lingering Federal Reserve concerns about inflation.

This week look for updates on new home sales on May 24 and existing home sales on May 25.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

Economic Update May 14, 2007

2007-05-14T23:27:00.000-04:00

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The Producer Price Index (PPI), which measures the price of goods at the wholesale level, rose 0.7% last month, down from a 1% gain in March, the Labor Department reported May 11. But the more closely watched core PPI, which strips out volatile food and energy prices, showed no rise after also remaining unchanged in March. Economists had forecast a 0.2% percent rise in core PPI.

The Federal Reserve kept the federal funds rate, an overnight bank lending rate that affects credit card, home equity and other loan rates, at 5.25%. In its statement, May 9, the Fed noted that "the predominant policy concern remains the risk that inflation will fail to moderate as expected."

Retail sales unexpectedly fell 0.2% in April, hurt by rising gasoline prices and a sluggish housing market. Economists had forecast a 0.4% increase.

The U.S. trade deficit widened more than expected in March to $63.9 billion, as higher oil prices helped push total imports to the second highest level on record, the Commerce Department reported May 10. The trade gap swelled 10.4% from February, surprising Wall Street economists who had pegged the trade gap at $60 billion.

The Mortgage Bankers Association's index of mortgage applications increased 3.6% for the week ended May 4, the third consecutive week the MBA's applications index has risen. Meanwhile, Freddie Mac reported that mortgage rates on 30-year terms eased slightly for the week ended May 11.

This week look for updates on the Consumer Price Index on May 15 and housing starts on May 16.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

Economic Update

2007-05-09T14:30:00.000-04:00

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Employers added a net gain of 88,000 jobs to their payrolls in April, down from the 177,000 net increase in March and below Wall Street's forecast of a 100,000 net gain, the Labor Department reported May 4. April's job growth was the weakest since November 2004, when there was a gain of only 65,000 jobs. The unemployment rate edged up to 4.5% in April from the 4.4% reading in March.

U.S. business productivity -- a measure of how much any given worker can produce in an hour -- grew a greater-than-expected 1.7% in the first quarter of 2007. Economists expected a rise of only 1%. Meanwhile, unit labor costs grew 0.6% in the first quarter of 2007, well below the 4% rise analysts predicted.

The Institute of Supply Management (ISM) reported May 3 that its April index of manufacturing activity moved to 54.7, from 50.9 in March. Readings above 50 point to expansion in the economy. Forecasters expected the April index to hit 51.

The ISM also said its non-manufacturing index rose to 56 in April from 52.4 in March, beating Wall Street expectations for a reading of 53. The service sector represents about 80% of U.S. economic activity.

The National Association of Realtors' Pending Home Sales Index fell 4.9% in March, following a 1.1% increase in February, the trade group reported May 1. Economists had predicted a 0.4% rise in the index.

Mortgage rates for the week ended May 4 remained unchanged on signs of weakening consumer spending and cooling inflation, Freddie Mac said.

This week look for updates on the Producer Price Index and retail sales on May 11.

Economic Update

2006-11-09T10:26:00.000-05:00

The U.S. unemployment rate unexpectedly fell to a five-year low of 4.4% in October from 4.6% in September, even though the economy created fewer jobs in October than in any month in the past year, the Labor Department reported November 3. There were 92,000 new jobs created in October, fewer than the 125,000 new jobs economists had expected.

U.S. worker productivity -- the amount of output per hour of work -- showed no change in the July-September quarter, while labor costs rose by 3.8%, the largest quarterly rise in more than two decades, the Labor Department reported November 2. For the past year, labor costs are up by 5.3%, the fastest increase since 1982, which is likely to raise inflation concerns at the Federal Reserve.

Construction spending fell 0.3% in September as home building declined for a sixth consecutive month, the longest stretch of weakness in residential construction in more than a decade, the Commerce Department said November 1. The decline was the largest since a 0.7% fall in July.

Consumer confidence in the economy slightly weakened from 105.9 in September to 105.4 in October, the Conference Board reported October 31. Analysts had expected a reading of 107.8. Economists cited worries over job losses at auto plants and other manufacturers for the decline.

Orders to U.S. factories for manufactured goods rose by 2.1% in September, the biggest increase in six months, the Commerce Department reported November 2. Excluding a surge in demand for commercial aircraft, factory orders would have fallen 2.4%.

This week look for updates on the trade balance on November 9.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

Do Adjustable Rate Mortgages cause Foreclosures?

2006-10-15T22:22:00.000-04:00

The media has been reporting that part of the reason why the foreclosure rate is high is because there are millions of people that financed their homes with ARM's (Adjustable Rate Mortgage). These reports claim that people are loosing their home because of an upward adjustment to their interest rate. As a result they can’t afford to make their mortgage payment. Once again the media has it wrong.

There are two main reasons why the foreclosure rate is so high. The first is that simply these people buy homes they can't afford.

Let’s say someone purchased a $120,000 home 2 years ago. They decided to go with a low adjustable interest rate with a 2 year start rate of 6% and they put no money down. Their monthly mortgage payment was $719. Let’s say the interest rate went up a 2% to a fully amortized rate of 8%. Their payment is now $880 a month. Of course they need to come up with the extra $161 a month. However, if an extra $161 out of your pocket would result in something as drastic as loosing your home, you probably shouldn't be paying $719 a month to start with. If this person looses their home it is not because they went with an adjustable interest rate, they simply bought a home they can’t afford.

Another reason the foreclosure rate is so high is because of the poor job market. In Michigan, it seems like factories are closing left and right causing extremely high unemployment rate. If someone is used to earning $50,000-$60,000 a year and now forced to collect just a few hundred dollars a week in unemployment, they will not be able to continue to live the same life style that they are used to. In a lot of cases, this will result in people loosing their home. In this situation the foreclosure was because of a change in income, not because their payment went up a couple of hundred dollars.

When I write a mortgage for a customer I don't just look at the underwriting guidelines and see if they qualify. I look at the customer’s financials and spending habits. Because of the many "Stated Income" or "No Income Ratio" loans, most people can get an approval from an underwriter on just about any price of a home. However, I install my own guidelines to protect the customer. Job stability, assets, and family situation are some of the key factors I consider when pre-qualifying a customer.

About a week ago, I had someone on SSI come to me looking to get a second opinion on a mortgage. She only earns about $900 a month, had credit scores in the high 700's, and already had a home picked out. Because of the liberal lending programs and their high credit scores, I probably could have qualified her for just about any price of a home. However, I figured the customer could only afford a payment of about $400 a month after taxes and insurance. So I told her they could qualify for about a $45,000 mortgage. She was disappointed that this was all I would lend her when she was approved for a loan around $100,000 by another local lender. Her mortgage payment would be around $600 a month and she was not considering taxes or insurance. I explained to her why it wasn't a good idea to go that rout and suggested that she should work on saving up a down payment if she wanted to buy a nicer home. I know I lost the deal, but hopefully she listened to my suggestion and will give me a call a few years down the road.

So how do you protect your self?

If you put $5000 down, the only way you can access that money is either sell your home or pay closings costs to refinance. I always recommend that my customers buy a home with as little down as possible and have them put their extra money in a liquid interest baring account that they can access in case of an emergency such as a job loss or illness. If you do this, you are financially protected.

Also, look at your future income not just your current income. If you are receiving $400 a month in child support and your going to loose that in 2 years, you should look for a home that you can afford with out that as part of your income. Or if you are planning on retiring in a few years, make sure you can afford your home on your retirement income.

ARM loans are great programs. I believe in them so much, I have one for my self. When ever I offer a quote to a customer I always look at both some sort of ARM and a fixed rate. When looking at your options, don’t be afraid to consider an ARM.

Please feel free to call me about any questions about foreclosures or ARM’s.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com/
http://www.homecredible.com/
http://www.honestmortgageanswers.com/

Should I pay off my car?

2006-10-03T10:02:00.000-04:00

I know you are probably as sick of these radio and TV commercials advertising mortgage companies as I am. I really wish they would just go away.

Some lenders are suggesting that you should pay off your debt using equity in your home. I agree with this to some extent. It is perfectly fine to pay off your credit cards using your equity. However, they also suggest that you pay off installment debt such as car loans.

My opinion is that this is the wrong way to become debt free and it is unethical for them to push this as an option.

Let me explain why.

Most car loans are not longer than 5 years. Yes they have high payments, but you will have it paid off within 60 months. If you include the car loan with your mortgage, you actually turn a 5 year loan into a 30 year mortgage.

Let’s do the math. Say you currently have a $750 house payment and a $250 car payment. You decide to refinance your home and now you have a mortgage payment of $800 and your car is paid off. So you are saving $200 a month. Sounds good doesn't it?

WRONG!!!!!

You saved $200 a month for 60 months, a total of $12,000. But you are now paying an extra $50 for 30 years, an extra $6,000. So instead of paying your car off in a few years, you will now have this payment until 2036. That’s assuming you are on pace to pay it off in 5 years. What if you only have 3 years left? Using that same math you save a total $7,200 over the next 36 months. However, because you are paying $50 for 30 years, you wind up paying an extra $10,800.

Not only did your mortgage payment go up, but what is going to happen when it is time to get a new car? Most likely you are going to need to get another car loan. Not only did your mortgage payment go up $50, but you are now going to have to pay an extra few hundred for a new car loan. As a result you have lost equity in your home and you are even further in debt.

Why is this different then revolving debt such as Credit Cards?

After you make your credit card payment you might notice that your balance has hardly changed. If you continue to make the minimum payment it will take years to pay it off, much longer then most installment loans. Also, most people they are paying anywhere from 15% to 25% interest on their credit cards. I much rather have my clients pay a tax deductible low interest rate then that high interest rate.

I have to be honest and admit that I have refinanced and paid off quite a few installment loans through out my career. My job is to give my clients the pro’s and con’s of each scenario. Not to make the decision for them. After providing all the information, if they still want to pay off an installment loan, of course I will help the client with a great mortgage.

My suggestion:

Do what ever you can do to pay off your credit cards first. If there is equity in your home making 0% interest, then look into opening a tax deductible line of credit and put your equity to work and pay off the debt.

Another possibility is to refinance your first mortgage to a lower payment and with the money you save, put towards paying off your installment loans.

If you have any questions or if you want me to review your current situation please feel free to contact me with the information I provided below.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.VirtualLoanPro.com
http://www.HomeCredible.com
http://www.HonestMortgageAnswers.com

Let me introduce Gary Hammerlund

2006-09-20T23:36:00.000-04:00

Once in a while I will have people from other professions contribute to my blog. Not only will they talk about their business, but they will stress the importance of having a quality mortgage planner involved in most of their financial decisions.

I would like to introduce Gary Hammerlund from http://www.ecityrealty.net/ and http://www.buythislot.com/. In my 8 years in this business I have dealt with a lot of real estate agents. My opinion is majority of them are more concerned about their commission check then what is best for their clients. Gary's business plan is simple. Take care of the customer first, then everything else will take care of it's self.

Their are about 10 real estate agents that I refer my clients to. You will see several posts about them in the future. Gary is one of the better agents in my network and I trust him with my customers.

I asked Gary to write about him self and his business. This is what Gary wrote. Enjoy........

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.virtualloanpro.com
http://www.homecredible.com
http://www.honestmortgageanswers.com

Thinking about selling your current house and buying a new home

The first two things you need to do when considering shopping for a new home is
Contact a reputable mortgage broker to find out how much home you can afford. Nothing is more disappointing to you or your spouse than finding out that you can’t afford the home they just fell in love with.
Contact a reputable Realtor® to get a Comparative Market Analysis of your home. The CMA will show you what other area homes of similar style, size, age etc have been selling for. It will also show you the average time a home is in the market place before it sells.
Now that you have taken these first two steps you should have a good idea of how long it will take to sell your current home and a price range for your new home.

What types of homes are selling right now?

There is a good market for the entry level home up to about $150,000. Typically I see buyers being able to qualify with little to no money down on this type of home.

Another type of home that’s selling now is one that’s ready to move into! That’s right completely finished except for where to hang the pictures. Why? I think our spouses have caught on to our good intentions of finishing the basement after we move in, and never getting it done. With so many property owners competing for buyers the homes that show the best are selling. The ones that show a lot of wear and tear and advertise “lots of potential” tend to sit on the market. There are many great values out there if you’re willing to take the time and look for them.

For most people, purchasing a new home is usually one of the biggest decisions they have to make. It’s ok to take your time. I like to help educate my clients to the market place conditions. We’ve always been able to find a better home at a better value than the one that seemingly got away. Sometimes it can take as few as 30 days, but usually it’s somewhere between 2 and 6 months.

So in summary, “find yourself a reputable mortgage broker and Realtor® that will take their time and educate you to the current market conditions that are relative to your situation”. Also make sure they know how to use the internet to communicate with all parties involved with your transaction.

Gary Hammerlund
eCity Realty
616-540-3031
http://www.ecityrealty.net/
http://www.buythislot.com/

How do you find a good Loan Officer part 2

2006-09-11T00:08:00.000-04:00

Quick tip.......

When shopping around for the best mortgage, don't be affraid to ask for the resume of any loan officer that you are considering working with.

Below, I have provided a copy of mine.

Jason S. Lash
5075 Cascade Road Suite B
Grand Rapids, MI 49546
Phone (616) 464-0792 Toll Free: (866) 366-5724
E-Mail: Jason@VirtualLoanPro.Com

OBJECTIVE:
To structure new mortgages that are best suited for both current and potential new home owners.

COMPUTER SKILLS:
Experience with Microsoft applications, and Loan Officer Software.

EDUCATION:
1996 – 1998 Grand Rapids Community College – Grand Rapids, MI
· Associates in Administrative Arts with an emphasis in Sales & Marketing

1994 – 1996 Davenport College of Business – Grand Rapids, MI
· Took various business classes

EXPERIENCE:
2004-Current Family Home Lending Corp. – Grand Rapids, MI
Branch Manager
· Network with Realtors, Builders, Financial Investors C.P.A.’s and Lenders
· Responsible for training new Loan Officers
· Handle day to day operations for the Grand Rapids branch
· Excel in conventional, home improvement, government and sub-prime lending

2000 – 2004 Marigold Mortgage, Inc. – Grand Rapids, MI
Sr. Loan Officer
· Network with Realtors & Financial Investors around Michigan
· Use strong customer service skills to create a customer base
· Research and found new banks for the company to utilize
· Assisted in handling day to day operations

1999 – 2000 Gordon Group Mortgage – Grand Rapids, MI
Loan Officer
· Consistently ranked among the top Loan Officers in the company
· Established a strong referral base of business
· Executed several different profitable marketing programs
· Continued education in conventional and sub-prime lending

1998 – 1999 Choice Federal Mortgage – Grand Rapids, MI
Loan Officer
· Consistently ranked among the top Loan Officers in the company
· Established relationships with Realtors around the State of Michigan
· Ran several different marketing plans
· Educated in conventional and sub-prime lending

INTERESTS:
Sports, Traveling, Movies, Computers, Family & Collectibles

References Available Upon Request

If you are shopping around for a mortgage, please consider me as your advisor. Not only will you receive low rates without bogus fees, you will also experience top notch service and have a mortgage advisor for life.

Thank you,

Jason Lash
Family Home Lending
(866) 366-5724
www.VirtualLoanPro.Com/
www.HomeCredible.Com/
www.HonestMortgageAnswers.Com/

How do you find a good loan officer…..

2006-09-09T12:49:00.000-04:00

Have you ever asked yourself why is the mortgage industry filled with fraud and “hustlers” only out to make a quick buck? Or why it is so hard to find someone that wants to actually help their customers as opposed to make as much money on a transaction as possible?

There are two main reasons. First are the liberal Mortgage licensing requirements. In a lot of states (including Michigan) there are no licensing requirements to become a loan officer. If you are 16 years old and can legally work in the United States, I can hire you as a loan officer for my branch. It is scary to think that you might be giving your personal information to someone with a long criminal history.

The second reason is the recent refinance boom. When rates fell to record lows in recent years, everyone was refinancing their homes. It was real easy for almost any loan officer to make a great living. Just about anyone who could work a calculator and possess average phone skills would make $40,000 a year. Now days, rates are still low compared to the 40 year average. However, most people redid their mortgage and the refinance boom is over. These same people who where trained only to quote rates on a traditional 30 year fixed mortgage over the phone are trying to survive in a slower market. Unfortunately, because majority of loan officers never learned how to structure a mortgage or qualify a customer are now struggling. This is resulting in a lot of “bait and switching” (they will tell you one rate and closing costs over the phone then surprise you at the closing table with different numbers). This is the only way they can make a living in this market. Also, because of their lack of experience, they will make mistakes and tell you that you qualify for a better program than what you really qualify for.

So how do you decide who to work with? Most importantly, don’t simply look at the interest rate you are getting quoted. Every loan officer’s interest rate shouldn’t be further than about .25 apart. Plus, rates change all the time. You can get a quote from one person and rates will change by the time you call for your next quote. So you might be under the impression that you are getting a better or worse deal. But the truth is the economy is always changing causing rates to consistently move. If anyone is offering you a dramatically better rate then anyone else then it is probably not an accurate number. Remember the saying “if it sounds to good to be true, then it probably is.” Also, avoid anyone that asks for an “application fee.” The truth is there is no such thing as an upfront application fee. There are a lot of lenders that go around asking for a fee up front. Once you pay for it you are financially committed to the loan. If you back out, you will lose your money. You will also find some companies will collect this fee with not ever having any intention of lending any money. Avoid working with anyone that asks you for an application fee up front.

I recommend when deciding which loan officers to work with, ask the following 5 questions:

1. What are mortgage rates tied to?
Correct Answer: Mortgage Backed Securities
Wrong Answers: 30 year treasury note, 10 year bond market, prime, etc.

2. When is the next important economic report or event?
It is important to know when events are coming up or when reports are going to be released and how they impact mortgage rates. This will help you decide when is the best time to lock your loan to insure the best rate. The majority of loan officers believe that rates raise or drop randomly and they are wrong. You should work with someone that knows what economic news is coming up and the impact it will have on your mortgage. Remember that bad news for the economy will generally result in lower mortgage rates and good economic news will raise rates.

3. How does the federal government changing interest rates affect mortgage rates?
They have no direct affect. However, the verbiage the federal government will use will have an impact on Mortgage Securities. It is more important to see how they word their statement then the actual rate change. If the federal government is predicting higher inflation, then rates have a tendency to go down. However, the Fed raising or lowering interest rates will have a direct impact on most credit cards and home equity loans.

4. Can you tell me live and in real time what the current rates are?
If you were going to invest in stocks, you would want to work with a stock broker that could tell you what the market is doing any time of the day. You should use the same line of thinking when it comes to mortgages. You want to work with a loan officer that can tell you what is going on in the economy and the impact of that information on your mortgage.

5. How long have you been in the business?
As I mentioned above, a lot of loan officers just got in the business within the last few years. Of course, not all rookie loan officers are “unethical.” But it is a safer bet to work with someone that has a longer track record. Not only do they have more experience at writing mortgages, but it is more likely that this person will take his career more seriously and be around down the road to answer future questions.

I have been a Loan Officer/Branch Manager since 1998. I have extremely high ethical standards not just for me, but for the network of business partners such as title companies, appraisers, real estate agents, financial advisors, lawyers, and C.P.A.’s. Not only will I provide you with top notch service, I can help refer you to several other partners that will help you accomplish your financial goals. While other mortgage companies have to send you spam mail, advertise bogus interest rates, or bombard the radio air waves with advertisements to grow their business, I have built my business almost entirely on referrals.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.VirtualLoanPro.com/
http://www.HomeCredible.com/
http://www.HonestMortgageAnswers.com/

Thanks Alex......

2006-09-04T21:38:00.000-04:00

I wanted to make my first blog entry recognizing the service Alex Toth has provided. As one of my top loan officers, not only did he bring in a lot of business, but he is one of the hardest working and most ethical people I have ever worked with. He made a good living helping others. Very few people can say that. I wish you the best of luck in your web site development business and I look forward to working with you in the future.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.VirtualLoanPro.com/
http://www.HomeCredible.com/
http://www.HonestMortgageAnswers.com/

New Day Part II

2006-08-24T12:01:00.000-04:00

Well folks, it seems as if the Honest Mortgage Answers Blog will live on. A friend of mine, Jason Lash, who is a reputable mortgage professional will be taking over the HMA blog over the next couple of weeks. He will also be taking over the Virtual Loan Pro family of websites as well. Keep an eye peeled for Jason's first post here real soon. I hope you are as excited as I am . Thanks!

-Alex

It's a new day....

2006-08-07T10:45:00.000-04:00

After much thought and consideration the time has come to take my exit of the mortgage industry. Effective immediately, Virtual Loan Pro, the Honest Mortgage Answers blog, and all other mortgage related websites belonging to Alex Toth will be discontinued. For a very long time the mortgage industry was my passion. I woke up nearly every morning with the sole purpose of helping someone obtain fair and ethical home financing. Well, it is time I move on. I am actively pursuing my other passion which is web design and development. It has been a hobby of mine for just as many years and the time has come to give my whole heart to it. I will keep the HMA blog online but I probably won't make new posts. I have considered starting an organization to rally all of the honest and ethical mortgage pros together but that is still in the consideration phase. I will continue to welcome questions and emails from anyone with an interest in mortgages but I will not be offering home loans any longer. I wish everyone the best of luck and thank you for all of your trust. Best wishes!

Alex Toth

When Banks Compete...

2006-04-27T23:13:00.000-04:00

I am sure most of you have heard the popular catch phrase for Lending Tree, "when banks compete, you win." Well, I hate to break the news to you but, when banks compete, you lose. Let me explain how.

First of all, I am going to let you in on a few little secrets. The mortgage companies and banks that offer loan programs and rates on the Lending Tree website pay thousands of dollars to do so. When I say thousands, what I really mean is 10's of thousands of dollars. If fact, they usually have to pay a set-up fee just to get started that is over $10,000. Then they pay a "per lead fee" and some (if not all) pay another fee when your loan closes. I hate to be the bearer of bad news but those companies don't pay those ridiculous fees to offer you better rates and terms than their competitors. If they did, how would they make all of that marketing expense back? Think about it for a minute. I have talked about bait and switch a few times before so when you are on the Lending Tree website, keep an eye on those low rates and ask yourself how they are able to offer such low rates. Enough said.

Secondly, when you release your social security number to Lending Tree, you are actually releasing it to who knows how many mortgage companies and banks. Do you know what 50 inquiries will do to your 730 credit score? It's definitely not pretty. In fact, I read a mortgage article (I won't say the name of the author because I am not giving away free advertising to my competitors) about a man with impeccable credit that filled out an application on one of those "banks compete for your business" websites. This customer had over 150 inquiries within a 30 day period. His credit score dropped over 160 points. He went from an excellent credit loan program to a sub-prime or bad credit loan program. There was nothing anyone could do to fix the problem. He authorized the company to check his credit. Little did he know that his credit report would be requested so many times.

So the moral of the story is, "when banks compete you lose." Now I am not trying to discourage you from shopping around. But if you do shop around, make sure you finish up your shopping within 14 days of starting. Any credit inquiries within that 14 day window will not hinder your credit score as long as they are all for the same purpose. In other words, don't go car shopping or credit card shopping while your mortgage shopping. Stick to one plan at a time. Also, if you must shop around, pull your own credit report first and ask the mortgage companies your are working with to use that to qualify you for a rate. When you have the results, then settle on a mortgage professional to work with and let them pull their own report. 2 inquiries are better than 50 or 150.

As always, if you have a mortgage or real estate related question, please don't hesitate to contact me. I look forward to earning your business and your trust.

Mortgage Associations

2006-04-25T09:35:00.000-04:00

I have had a few thoughts recently about what is going down with an association I used to belong to. At one point, I let my alliance with this association dictate how I do business with my clients. Recently this non-profit voluntary association started collecting dues in order to belong to it. In return they made promises to enhance business for its members. They promised more branding and advertising to inform the public about the existence of the association. Instead, they are placing ads/articles in Mortgage Industry magazines trying to attract more members to collect dues from. I am sitting here wondering if I am the only one noticing this.

Originally, this association was founded by a professor at a rather large college. This person scrutinized mortgage professionals in a similar way that I do. The major difference is that this person has never originated or processed a mortgage or home loan. Instead he writes books on how to work with mortgage professionals and other financial issues. In exchange for having the privilege of belonging to this association, a mortgage broker or lender would have to publicly display the commitment of this association on their website. They would also have to place the logo of the association on the home page of their website AND also a back link to the professor's website. All in all, I did not have a major problem with that other than I felt his logo was a detraction from the long hours of hard work I put into my site. I would send traffic his way and in return, I would get about 15 hits a month from his.

Now this association has been turned over to certain members. They have implemented this annual fee which is more than most Realtors pay to belong to their respective associations. It is not the National Association of Mortgage Brokers who charge quite a bit less to be a member. NAMB also provides valuable training to mortgage professionals in the hopes of having more competent professionals available to the public. Does the professor's association do that for the public? No. Instead they have this commitment of honesty and full disclosure. Folks, I hope you don't hold it against me but I am not paying a large fee to be talked about in a Mortgage Industry magazine and so I can continue to advertise this association or group on my websites.

I don't need to belong to an association in order to prove to the public that I am honest and up front with ALL of my clients. Instead, I will post my commitment here:

I commit to you, my clients and potential clients, that I will ALWAYS be up front and honest with each of you about your loan process.
I commit to you that you will receive a Good Faith Estimate within 3 days of your completed loan application.
I commit to you that you will receive an honest and fair loan transaction.
I commit to you that I will lock your loan when you say to lock it. I will prove this by providing a written confirmation of the lock upon your request.
I guaranty that the closing costs on your Good Faith Estimate will be within 5% of the actual amount found on your final Settlement Statement excepting only 3rd party fees. The industry standard is between 15-25% variance.
I will NEVER charge junk fees as described in my 2 posts on the subject.
I will always work for the clients benefit over my own.

This is my commitment to all of you. This is the way I do business and this is the way I will always do business. I hope the fact that I refuse to belong to any association will not affect the chance to earn your business. As always, if any of you have a mortgage or real estate related question OR you want to know more about Mortgage Associations, please don't hesitate to contact me.

Interim or pre-paid interest

2006-03-22T09:25:00.000-05:00

I have had a couple of inquiries recently about mortgage interest lately so I thought I would post a few bits of information about how interest is accrued on a mortgage. Interest is paid in arrears. Your monthly mortgage payment is always applied to accrued interest first, assuming your payments are up to date. In other words, your April mortgage payment will pay for March's accrued interest. Simple enough, right?

It is customary that a borrower pays for interim interest at closing. This means that if you closed on your new home loan on April 15th, there are 15 days remaining in April. Rather than make your first payment due on May 1st so you can pay that remaining 15 days interest, the lender will require you pay that interest up front at closing. This will make your first payment due on June 1st. The June 1st payment will pay for May's interest.

This works the same if you close on any other day of the month (generally - I will explain further in the next paragraph). If you close on the 28th of May, you pay the remaining days worth of interest at closing and your first payment will be due on July 1st. The July 1st payment will pay for June's interest. With me so far? I hope so.

There is a couple of exceptions to this rule.....

First exception: If you close between the 1st and the 7th of the month, sometimes the lender will give you a credit for those days and require your 1st payment on the 1st of the following month. Example - If you close on April 3rd, the lender may give you 3 days worth of interest as a credit on your closing statement and then charge you 30 days interest on May 1st. This isn't always the case but it happens. More often that not, you will have the option to structure your loan this way or pay the remaining 27-28 days worth of interest in April at closing and have your first payment due on June 1st.

Second exception: Sometimes the lender will take the remaining days worth of interest and combine it with the payment that is due the month after next. Example - If you close on April 15th, there are 15 days left in the month. Rather than collect the interest for the remaining 15 days at closing, the lender will combine those 15 days worth of interest with the next months interest and collect it all with your first payment. If you close on April 15th, your June 1st payment will pay for May's interest AND the remaining days worth of interest in April. This means that your first payment will be higher than the 2nd and consecutive payments.

I hope this sheds a bit of light on interim interest (sometimes called pre-paid interest) and the way interest is paid on your home loan.