Mortgage Secrets…Learn What the Experts Say

Shopping Around?

Here’s the Inside Scoop on How to Do It Right!

First: make sure you are working with an experienced, professional loan officer. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

Here are FOUR SIMPLE QUESTIONS YOUR LENDER ABSOLUTELY MUST BE ABLE TO ANSWER CORRECTLY. IF THEY DO NOT KNOW THE ANSWERS…RUN…DON’T WALK… RUN…TO A LENDER THAT DOES!

1. What are mortgage interest rates based on? (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)
2. What is the next Economic Report or event that could cause interest rate movement?
   (A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, visit www.SilverstarFinance.com and hit the “market update” link at the top of the page – this is where we put recent news and blog posts that are important to you when it comes to buying, refinancing, or investing).
3. When Bernanke and the Fed “change rates”, what does this mean… and what impact does this have on mortgage interest rates? (The answer may surprise you. When the Fed makes a move, they can change a rate called the “Fed Funds Rate” or “Discount Rate”. These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed change. This is due to the dynamics within the financial markets in response to inflation. For more information and explanation, just give us a call).
4. Do you have access to live, real time, mortgage bond quotes? (If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday’s newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday’s paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? No way!)

Be smart… Ask questions… Get answers!
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What Lenders Learned During Prior Refi Booms

First off, what is happening with interest rates and reduced yield spread premium? 15 years ago it wasn’t uncommon to see nice buy-up schedules on many products, with an increased yield spread premium being offered in return for a higher interest rate. But then along came the refinancing frenzy of 1993 and 1998, followed by the grand daddy refi bonanza of 2002 to 2003. As home loan rates dropped ever lower over the years, you can imagine how the investors felt as they watched loans turn around to be paid off in a relatively short time, as increasingly lower rates made it attractive for clients to refinance, sometimes multiple times in a year. These losses on loans were very costly to lenders.

So…after learning their lesson many times over…the lenders got smarter and started to reduce the amount of par premiums, followed by making those premiums more expensive by demanding even higher rates in return for a smaller premium and have now nearly eliminated that premium pricing which cost them so much money in the past.
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Article Written by Teresa Boardman of Inman News

I rarely put up articles that others have written but, in this case, it was so well written that I felt it necessary to give credit where credit is due!  Enjoy!

I am writing this today from Main Street America, the very same street that we have heard about on the news as the $700 billion financial rescue package was being discussed. I can almost see the street from my desk, but not quite.

It is lined with trees and brick buildings with shops in them. There are several restaurants, some bars, coffee shops and antique shops. The business owners I have talked to tell me that business is slow, it has been for months, and will continue to be slow in the coming months.

Our country is in the midst of an economic catastrophe, fueled by huge amounts of consumer debt that cannot be paid back to the financial institutions that lent the money. I know this is an oversimplification, but it gets at the heart of the problem. If borrowers cannot pay back the loans, the banks that lent the money are in jeopardy of insolvency, which puts our global economic system at risk.

The Republicans blame the Democrats, who blame the Republicans, and we all blame the lenders. They lent money to people who could not pay it back. There were subprime loans, no-doc loans, interest-only loans, exotic loans and no-down-payment loans, as well as widespread mortgage fraud.

There are a lot of people in this country who are financially overextended. Our national government is overextended to the tune of $10 trillion. We are nation of borrowers. For some, it starts with student loans. They seem to be the gateway loans that kick off a future of borrowing for cars and houses and using credit cards to buy everything else.

Americans are in debt before they are old enough to legally drink. The credit industry has a role in all of this, as they mail credit-card applications to children, but they would be out of business if people did not want to borrow money.

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Quote of the Week:

Know What You Don’t Know

“The doors of wisdom are never shut.”

Benjamin Franklin
~ Inventor    

Good Afternoon!

Please take a moment to watch this very quick video about something I’m going to try out, Question and Answer emails / videos:

http://www.vimeo.com/1610110

Forward this email to your friends and family so that they can watch the video, too.

QOTW - Q & A Introduction http://www.vimeo.com/1610110“This week I talk about how doing the opposite of what we’re taught or what we think we should do is usually the right thing to do, surprisingly. Also, I’d like to introduce my new Question and Answer idea that I hope will be useful to all of my viewers. If you have any questions that you would like me to address by video, email, or privately, send them to me via email at kkooiman@silverstarfinance.com.

Here is an example of a recent Q & A that I read online through one of the companies I learn from: Read the rest of this post

Quote of the Week:

“It is not the crook in modern business that we fear, but the honest person who does not know what he is doing.” ~Owen D. Young

Research has confirmed that one out of every three homeowners have no idea what kind of loan they have. If you and/or any of your family members find yourself in that category, I have set aside some time to review their loan and provide advice to determine what to do next.

When a family member, friend or neighbor needs advice about buying/selling/borrowing, please don’t keep me a secret because you want them to get the best possible result and be delighted that you introduced me, don’t you?

All anyone has to do is give me a call to talk about their own situation or equally as important, to give me the name and number of someone they think will benefit from a relationship with a trusted adviser.

Rarely do I send out the same video twice but, in this case, it’s such a no brainer (saving money) that I would hope everyone would inquire after watching the video. Will you do me a favor? Will you please forward this email to those who you work with or better yet, to a Human Resources person who is authorized to forward this to the entire company ? I’m sure your fellow co-workers/friends/teammates will certainly appreciate their company looking out for them by way of giving them a way to save hundreds, if not thousands of dollars each and every year. This will, of course, spread the word about what we do here as well. Let’s just call it another win/win for everyone. Read the rest of this post

Quote of the Week:

Vision (I made “vision” realllly big because it takes as much energy to think BIG as it does to think small. Pretty cool, right?)

“People who say that life is not worthwhile are really saying that they themselves have no personal goals which are worthwhile. Get yourself a goal worth working for. Better still, get yourself a project. Always have something ahead of you to look forward to…to work for and hope for.”

Dr. Maxwell Maltz

Author and Psycho-Cybernetics

The inspiration for my video this weeks comes from a very personal story of mine that happened last week and it has everything to do with asking the right questions of your paid professional before AND during the loan process. A great point that I mention in my video this week is the importance of knowing what your trusted advisor is going to do for you AFTER your escrow is closed. I mean, don’t you want to know? If you are working with someone who isn’t a cheerleader for what his/her company does for their clients after a transaction is closed, well, I hate to break this to you but, there probably isn’t a whole lot that company AND that person has to offer you by way of continuing education and debt management. It’s an unfortunate part about the mortgage industry. We are doing our part to fix that problem!

Please take a few minutes to watch this video (that was supposed to go out two days ago….arrrrgh!), then read the rest of my email:

http://www.vimeo.com/1125901
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“If you owe the bank $100.00, you have a problem. If you owe them $1,000,000, the bank has a problem!”
Donald Trump

3 Ways to Make the Fed’s Moves Work for You

Here’s how to take advantage of low interest rates without letting lenders take advantage of you.

Written by Kimberly Palmer of U.S. News on April 30th, 2008

Consumers still have the chance to negotiate favorable interest rates, which are close to historic lows. Now is the perfect time to call credit card companies to ask for lower rates, lock in favorable financing on car loans, or refinance homes. But it’s not as simple as checking the latest move from the Federal Reserve. Here’s what consumers need to know:

1. Credit Card Companies Are More Willing to Offer Lower Rates

Card providers often say yes to consumers who ask for lower rates, especially when those consumers have a record of paying off their bills each month. But now is a particularly opportune time to shop around or call providers and ask for lower rates, says Bill Hardekopf, chief executive of LowCards.com. Companies are eager to keep their best customers, and the average credit card rate is just over 13 percent, a two-year low, according to IndexCreditCards.com.

More from USNews.com:

• What Fed Moves Mean for Mortgage Rates

• Is Bernanke Worse Than Greenspan?

• FAQ on Paulson’s Regulatory Reform

The downside: Even consumers with so-called fixed-rate cards can find their interest rate climbing again for a variety of reasons unrelated to their own behavior, including economic ones such as higher inflation.

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For Immediate Release… Homeowners Gain Edge in Changing Real Estate Market 

It’s no secret that the softening real estate market has caused considerable confusion among homeowners and investors alike who wonder what will happen next and what they can do now to safeguard their investments and still continue to meet their financial goals in the declining real estate market.  

To clear up some of this confusion and provide homeowners and investors with an edge on the changing market, The SC Group Realtors, Silverstar Finance and The CA Educational Institute are providing a free educational seminar titled “Common Sense Strategies to Successful Equity Management.” The seminar will be held at SeaCliff Country Club in Huntington Beach on Thursday, February 21^st at 5:30pm.  

“Never has it been more critical for homeowners and investors to be educated on the current state of the real estate and mortgage markets but more importantly how they can implement successful home equity management strategies to protect their investments from further market fluctuations. As real estate consultants we understand the necessity and value in providing services that allow our clients to make more informed financial decisions and that’s exactly what we plan to deliver with this workshop”, says Tawnya Henderson of The SC Group. 

“In addition, the liquidity crisis that resulted in the recent failure of a number of lenders has shaken confidence in the mortgage industry and left many homeowners wondering how to take the safe road when securing a loan. Many are fearful of their home values continuing to decline and the possible re-cast of an adjustable rate mortgage loan on the horizon. This workshop is designed to address those concerns and provide practical solutions to help clients achieve continued financial freedom”, says Kurtis Kooiman of Silverstar Finance. 

Also, featured at the Learning Annex of Los Angeles this seminar has been incredibly valuable and seats fill quickly so reservations are required and recommended.  

To obtain more information or RSVP to this workshop call Toll Free 1.877.892.1002 or email knewberry@silverstarfinance.com. For more information on The SC Group Realtors call Toll Free 1.877.672.4768, email info@myscgroup.com or go to www.myscgroup.com.

Wow! So, I get home and there it was…an actual Federal Express package from the company where I hold my mortgage. I’m thinking, what on earth could this be? My bank actually Federal Expressed me a solicitation to refinance out of my mortgage and into another one. What’s even better is that the verbiage in the letter was very deceptive. It’s amazing what one little sentence can do to entice one to give them a call, which is of course their primary objective. Banks are getting better and better at soliciting new business…doesn’t mean they’re getting any better at giving valuable advice and good service!

I want you to know that IF this happens to you or anything of the sorts, please give your Trusted Advisor a call. If you decide to inquire with someone else, that’s fine. All I ask is that you give me a call or an email as well and let me know what you’re thinking or what your objectives may be. As always, I will give you the very best advice possible, as I likely have hundreds of more hours of education than any traditional bank Loan Officer. Not trying to toot my horn, I just don’t want any of my friends, family, and clients taking advice from people that haven’t earned the right to give financial advice. Remember, your mortgage IS a large part of your overall financial plan. It’s not JUST a mortgage, it’s an important part of your future.

Also, I wanted to share a radio interview that I did a few months ago with you. I hope you enjoy it. I come on about 25 minutes into the program. This interview was aired along the majority of states along the west coast and was recently re-aired, as the response to the interview was very positive.

www.marketwrapwithmoe.com

Go to “Listen Now.”

Click on “Listen to the Archives”

Password: Lincoln