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Mortgage Dangers...

Things to watch out for and  be aware of

A personal gripe....What brainless morons lenders are sometimes!  The new acceptable credit score for a conforming loan is now 720+!  This means that over 90% of consumers are out of luck.  Lending guidelines for conforming conventional loans used to include credit socres of 620 and above and if you look at history, you will find that the old guidelines worked fine for years!  Lenders don't GET IT....it was the damn Sub-Prime, ARMS and the Stated mortgages that were the problem!  NOT the credit score!  No wonder nobody is getting a loan approval and the market is in the tank.  When lenders finally pull their collective heads from that dark hole they are in now, maybe they will see that credit scores in the 600's are still good!

For  years I watched from the inside as mortgage companies put people into the wrong mortgage, sold higher interest rates, bundled up fees and bled equity out of peoples homes.  It bothered me so much that I decided to form Mortgage Consulting Service.com, so I can give unbiased, insider information to borrowers.  Too many people are in adjustable mortgages (ARMs) that are ticking time bombs waiting to explode in a much higher rate or going to come due sooner than they think (balloon payments).  There are too many loan officers out there that think nothing of cashing out the equity in your home for reasons that do not make sound economic sense for the borrower. 
  
Please take a moment to give some thought to the long term effects of refinancing or getting into a ARM mortgage.

Thank you- Jeff Arndt, Mortgage Consulting Service/MortgageExam

"Money is better than poverty, if only for financial reasons. "
-- Woody Allen



The collapse of the sub-prime industry is complete and homeowners are going to be faced with rising interest rates, crushing monthly payments and mortgage servicing changes. 

Countless American families have had their home owning dreams destroyed. Over 480,000 properties have entered foreclosure on one type of loan.

The culprit is the “Pay-Option-ARM”.  This was designed for sophisticated investors and yet was being marketed to the average homeowner through false and misleading advertising by being packaged as a 1% or 1.5% mortgage. These loans can completely erode your equity and leave you owing more than what your home is worth if not managed properly.  Rarely does anyone give you guidance in the pitfalls and detailed monitoring that these types of loans require.

Lenders were not required to disclose the repercussions of this highly dangerous loan product such as payment shock, whereby a borrower's monthly payments can increase by as much as 200% in a short period of time.  This is highly dangerous in a market where home values are in fluctuation.

All lenders in this country knew that the Federal guidelines on these exotic mortgages were a joke. This is the epitome of predatory lending.  Be aware and be prepared.  Get a second opinion BEFORE you commit to any type of loan.

READ:
Risky mortgages imperil market ; Financial threat challenges Fed

Buying those points to pay down the rate does not pay off

Mortgage Refinancing Dangers

Author: L. Sampson

Mortgage refinancing can be a great decision for some people, but it can have a dark side if consumers don't look before they leap. It's a great idea for homeowners looking to lower interest rates, especially for people who took on adjustable rate mortgages during the ridiculously low rates a few years ago. Their once-low rates are climbing, and it's time to lock in something steadier.

Using a refinance to roll all debt into one loan may seem like a fantastic way to streamline personal finances, but this can
prove disastrous if there isn't a serious change in spending
behavior. Sure, the credit cards are all technically paid off,
but the balance still exists and it's attached to the roof over
your head. Not being able to make payments on credit cards
results in annoying phone calls from creditors, but not being
able to make mortgage payments results in foreclosure. Even
worse, if the temptation to use credit cards proves irresistible
then a person can wind up right back where there started, with
maxed out credit card debt and an even bigger mortgage payment.

Beware the cash-out refinance. It may seem like a brilliant idea to take a little extra cash out on home equity, but it is
important to realize that home values can go up or down. If a
home is worth $200k during a real estate boom it may eventually be worth something more like $150k when the bubble bursts, and this leads some people to discover they owe more than their home is worth. Woe, fleeting equity.

Don't forget that a refinance is a whole new loan, and therefore that means all new paperwork and closing costs. Those closing fees that were so annoying in the original purchase will again rear their ugly head and although a reputable company will not charge junk fees, some fees are unavoidable. All financial decisions need to be approached with caution, but when dealing with a home a person needs to be doubly cautious. Equity should be thought of less as a cash-cow and more as an emergency safety net.

Check out our E-Book and get thousands of dollars advice for a few bucks!

 

Why is it important to have that second opinion?

MORTGAGE BROKERS AND BANKERS are paid by commission. This is often seen as origination fees, yield spread premiums, and service release premiums. While they are entitled to make a reasonable profit, many are seeking to make excessive profits at your expense. We can spot excessive fees and the dreaded junk fees!

IS THE INTEREST RATE REASONABLE? Everyone has a unique situation in their credit, income and circumstances. Let us examine your situation and give you another opinion. There maybe other options to consider. You can then take this to your current banker, broker or shop around to others.

ARE YOU IN THE RIGHT TYPE OF PROGRAM? There are dozens of different types of programs from VA, FHA, conventional, sub-prime and more. Regardless of your credit or income source, you need to have a second opinion on the entire realm of options to see if what you are considering is as good as you have been advised.

WE CAN HELP EXPLAIN ALL THE FEES AND ITEMS YOU SEE ON YOUR FORMS. No hidden agendas, no profit motives.

WE ARE NOT HERE TO DISCREDIT YOUR BROKER OR BANKER. We have been brokers, bankers, underwriters, and customers. We will tell you if you are getting a fair honest deal or what we have concerns about. You decide how to proceed after that.

FOR THE COST OF A CREDIT REPORT you can have the peace of mind that you are getting the best second opinion possible
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