Just Why Do You Need Title Insurance Anyway?

The purchase of a home is probably the single biggest financial investment you will make. When you do that you always think of getting home owners insurance to protect the physical house against a loss. Shouldn’t you have insurance to protect against a claim on the title of your home?

For a one time premium paid at closing you will receive continuous insurance for title protection. If you have a mortgage on the property the mortgage company will require lenders coverage to protect them. You should ask the closing attorney to include an owners policy as well.

The title insurance company will do an extensive search prior to the policy being issued into public records, maps and other documents to trace ownership to see if anyone else has an interest in the property.

If someone does contest your title or ownership, the title insurance company will defend the title at no cost to you. If a defect in the title is found the title insurance company will protect you from any financial loss.

For more questions about this or any other mortgage matters call today – 910.200.8859

Forecast for the Week – 8.8.2011

nother big week is ahead, but only time will tell if it will be record-setting. Look for:

• Perhaps the biggest market mover of the week could be Tuesday’s regularly-scheduled Federal Open Market Committee Meeting. What the Fed has to say about the economy, inflation and the prospects of QE3 could affect rates for some time into the future.

• Thursday brings another weekly Initial and Continuing Jobless Claims Report. Last week’s Initial Claims came in at 400,000, below the 405,000 that was expected and right at that crucial 400,000 level which signals real improvement in the labor market.

• Rounding out the week are two reports on Friday that will give us a big hint on the state of the economy: Retail Sales for July and the Consumer Sentiment Index.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

Economic News and Your Mortgage Interest Rates

Typically the weaker the US economic news the better interest rates will be.  Weak economic news normally causes money to flow out of stocks and into bonds, raising bond prices and lowering yield, thus lowering mortgage rates.
Good, or strong, economic news will have the opposite effect.
Some of the economic reports to watch are:  Consumer Confidence, New Home Sales, Existing Home Sales, Durable Goods Orders, Jobless Claims, Pending Home Sales, Chicago PMI, Cross Domestic Product, GDP and various employment reports.
Many times a report that is different than the economists thought it would be will have an impact also.  If you don’t want to monitor all the economic data and the projected numbers you should have a professional doing it for you.  Patrick Stoy is just that professional……

Did You See Our Recent News?

Patrick Stoy, President, announces the expansion of Market Consulting Mortgage into the state of Tennessee.

Stoy believes expanding business into contiguous states is a natural progression for his growing company.  Currently Market Consulting Mortgage is actively closing all types of mortgage loans throughout North Carolina.   They are based in Wilmington and will be adding new employees as the increased business warrants.

For further information about this or other mortgage related stories contact Patrick Stoy at 910.509.7105 or 910.200.8859.

The Mystery Of Credit Scores

Due to clever commercials with catchy tunes many people are confused about credit scores and how to monitor them.  The commercials are correct in portraying the importance of good credit and credit scores.  In years past, it was almost a cardinal sin to not pay your bills on time. It seems over the years that has lost importance. We are now coming full circle back to it being critical to pay your debts as agreed or there being consequences.  It can result in higher interest rates, higher payments, higher insurance premiums, or just being turned down for the loan or insurance or being able to rent somewhere.
The best thing you can do for yourself is take advantage of the free credit reports before you need credit in the event you need to make some changes.  Under the Free Credit Reporting Act you can obtain a free credit report from the three main credit reporting agencies, Equifax, Experian and TransUnion, once annually.  The only place to obtain those reports is at www.annualcreditreport.com . The free reports will not show your score. To get that a fee is charged by the agencies.
The credit report is a historical snapshot at the time it is obtained.  All three agencies will provide a different score. The main reason for this is differing creditors report to differing agencies. An example of that is if your car is financed with ABC Bank and all your payments are made on time.  Your boat is financed with XYZ Bank and you have been late a couple times. ABC reports to Equifax and XYZ reports to Experian.  Experian will have a lower credit score reported because you made late payments to XYZ for your boat.
There will be instructions with your free credit report advising you of what to do if there is inaccurate information reported.  You have a right to dispute anything reported and provide copies of supporting documents to substantiate your claim. They are required by federal law to investigate within 30 days and report any corrections to the other 2 agencies.
Scam alert – Don’t fall for any services claiming to improve or change your score. It can’t happen overnight as they frequently claim.
If you are thinking of buying a home please get in touch with me now and we can review your credit and if necessary provide a plan to get you in a position to purchase a home.

Not the Time to Refinance, Or Is It???

You have probably read and heard that you have to reduce your interest rate by 2.00% to make a mortgage refinance worthwhile. That is almost an old wives tale, maybe an old husband’s tale, at this point in time.

It may be financial advantageous for you to refinance with slightly less than a 1.00% drop in interest rate.   Three critical questions need to be answered:

1. How much will your principle and interest payment be reduced?

2. How much will the cost be to refinance?

3. How long do you intend to own the house?

The simple formula is to divide the payment savings into the cost of refinance and that will give you the number of months before you break even.  If you intend to own the house longer than that, then it would be advantageous financially to move forward with a refinance.  Certain costs do not have to be included in the cost to refinance however.

Get your paperwork out or look at your loan on line and write down the mortgage balance and your principle and interest payment.   Call us with that information (910.200.8859) and we will do the calculations for you.  If it is not a good time with the current interest rate we can let you know when it is right.

5 Items To Help You Get A Mortgage

There has been a lot of press in recent months about how difficult it is to obtain a mortgage today. That is not entirely fact.  Getting a mortgage is not much different than it was prior to the onset of no-doc, no income verification, no verifying anything mortgages.

1. You will need a down payment unless you and the property qualify for a USDA loan or you are a veteran. The amount of the down payment depends on the type mortgage you obtain. FHA mortgages have less than a 5% down payment requirement, but also fall under a certain purchase price requirement.

 

2. You will need to have an employment history to demonstrate an ability to maintain an income to make the mortgage payments.

 

3. In addition to the employment history you will need to prove income sufficient to pay your monthly debts and the new mortgage. If you are self-employed, you will want to talk with us and your accountant to be sure you are handling the way you pay yourself.

 

4. You will need a credit score that shows you have a history of paying your monthly debts as you agreed to.

 

5. The above 4 things will need to be proven with documentation and independent verification by the lender.

It really isn’t that difficult to get a mortgage if you have a job, can prove you make enough money to pay the mortgage payment and you have a history of paying your debts on time.

If you aren’t able to show good credit, there are steps that my office can take in order to repair your credit.

Many of the horror stories you’ve heard are just that, ghost stories.  It is important, however, if to talk with a reputable lender and discuss your fears.  The best time to talk with a lender is before you even begin to shop for a home.

Ready to get started? We can take your application on-line, or even over the phone (910.200.8859) and begin working today!

How the Bond Market Relates to Your Mortgage Interest Rate

Lenders provide guidance on locking in an interest rate but it is ultimately your decision as to when to lock in an interest rate.  Waiting too long to lock in an interest rate could delay your approval or closing so this needs to be discussed with your loan officer.

Part of that responsibility of deciding when to lock the interest rate and points is monitoring the mortgage rate markets.  Mortgage interest rates are based on Mortgage Backed Securities (MBS) or bonds and change daily based on a number of national and international economic factors.  You may be told to “watch the bond market” as an indicator of rates.  What does that mean?

The 10 year bond is most familiar and most easily monitored.   Many newspapers show that in a small box on the business page along with the Dow and Nasdaq numbers.  It can also be readily found online.  Keep in mind this is only an indicator.  The number you will see quoted is the bond yield.  If bonds sell high then the yield will go down and mortgage interest rates will go down.  If bonds sell low, yield goes up and then mortgage interest rates go up.

It is really that simple.

Happy April Fools Day!

Okay, interest rates are no where near 10% – and maybe this was an obvious gag.  But it begs the question, what if the interest rates did climb? Would you be kicking yourself and wishing you had refinanced or purchased before that jump?

If you’ve been keeping up with the news at all, inflation is pretty high up on the concerns of everyone.  We (should) learn from history and history has taught us that inflation occurs after recessions.  Already we are seeing the rise of grocery prices and gas prices that many say are the first signs of coming inflation.

It’s times like these that I really wish I had a crystal ball and could tell you when the absolute bottom of the market is, or when interest rates will edge over that 7% mark we once thought was a Godsend.  I don’t.  I can only keep track of the economic news on a day to day basis and spend my time analyzing so I can best advise you.  But I do know one thing, there’s no time like the present.  We know that right here, right now, interest rates are the lowest they have been in more than a lifetime (my lifetime at least), we know that there are real estate deals abounding. So my advice? If you are able, take advantage of it today, because it could truly be gone tomorrow.

And that’s no April Fools!

3 Steps To Apply for a Home Loan

The process of applying for a home loan can sometimes seem daunting, but it really is as easy as 1-2-3:

1. Talk to a mortgage broker. I know this sounds obvious, but it’s worth stating.  So many times I hear of people who base their information on home loans on a friend or co-worker. Everyone’s situation is different.  Your employment, your credit history, your cash available are all factors in determining not only how much of a home you can afford, but also the type of financing you are qualified for.

2. Credit Report. The first thing your lender will do is run your credit report.  With the credit in hand and information you provide them, they will be able to match you with a program that is perfect for you.  If your credit needs to be corrected or cleaned up, they shold be able to advise you on the steps you should take to do so.

3. Gathering. From here, your lender will give you a list of documents they need in order to get a “hard approval”.  Getting your firm approval will allow you to really begin your search for a new home, satisfied you hold added negotiating power.

I’d love to help you or those you know in your search for a home loan, please give me call at 910.200.8859 so we can discuss your personal situation and move you one step closer to your next dream home!