The Truth about Rate Shopping

In my time as a mortgage broker I have heard the following statement so many times its starting to make my ears bleed:"I'm looking for a rate quote on a mortgage but already had my credit pulled with another broker/bank. Don't pull my credit because I don't want my score to go down as a result of multiple credit inquiries"

The consumer is being mis-informed and now its time for me to set the story straight. A little information can be dangerous and many brokers and banks use this myth for their own gain so that their potential prospect does not shop around for a better deal. In their 'What to know about rate shopping', Fair Isaac says the following:

"Looking for a mortgage or an auto loan may cause multiple lenders (or brokers) to request your credit report, even though you’re only looking for one loan. To compensate for this, the score ignores all mortgage and auto inquiries made in the 30 days prior to scoring. So if you find a loan within 30 days, the inquiries won't affect your score while you're rate shopping. In addition, the score looks on your credit report for auto or mortgage inquiries older than 30 days. If it finds some, it counts all those inquiries that fall in a typical shopping period as just one inquiry when determining your score. For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score."

I will not quote people a firm rate if I do not have a clear financial picture of the prospect I am trying to quote. It's absolutly a waste of time and useless. So I always want to see a credit report pulled from my credit reporting vendor as well as other supporting docs. I will not take a report from another vendor pulled by a different broker because I don't know if its been altered by the user. I hope that you find this enlightening and if a broker or bank tells you not to get another credit report pulled because it will decrease your score or show too many inquiries, then you can call them a liar.

David P. Cruickshank
Loan Consultant

Ardain Mortgage Corp.
1508 W Algonquin Rd.
Palatine, IL. 60067

Cell 847-354-5455
Office 847-963-1000
Fax 847-963-1010

davidc@ardain.com
http://www.ardainmortgage.com/

An Illinois Residential Mortgage Licensee

How do we sell all these foreclosures????

You’re a home buyer looking at bank owned properties and foreclosures. The locations are fabulous, the prices are awesome but the interiors are always trashed!!! The lender will not provide you a loan because the home is so damaged that it is deemed uninhabitable. You don’t have the cash to purchase the home outright and then repair it. So you give up deciding that these deals are only available to the wealthy.

203K to the rescue!!!!

With the FHA 203K rehab loan you can buy any property and rehab it the way you want without requiring additional money or time. Quite simply you can turn that dilapidated home into a gem. You don’t need perfect credit or a lot of cash reserves (money in the bank) to qualify as the same qualifying guidleines apply as with other FHA loans.

Down payments are as low as 3.5%; sellers can assist with closing costs; loan amounts up to the new increased FHA loan limits (see LTV’s on 203-k’s); the entire down payment could be a gift from a family member; income credit for unoccupied rental units—just some of the many benefits that make 203-K rehab financing the right choice for your home purchase.

Eligible Properties

Properties may be single family homes, two-to four-unit multi family properties, condos, town homes, or mixed use properties (residential combined with commercial store front). Also, you may convert properties with greater than 4 units to 4 units or less to meet our eligible property requirements.

In One Simple Loan

You only have one loan with the 203K rehab loan. Make one simple payment on one loan. You will have one 30 year fixed loan that will include taxes and insurance. In fact, during construction you may not have to make any payments at all!!

What about the Appraisal!!!

You agree on a purchase price and decide on what improvements you want to make. An appraisal is performed on the property to determine it’s after rehab value. At the closing table the funds are provided to the seller to pay for the purchase and the rehabilitation funds are put into an escrow account to be drawn as the work progresses.

My Experience!!

Yes, I did this to my own home!! My wife and I found the perfect little Victorian home with a huge yard for our dogs. The problem was it just needed so much work. I searched the web for programs and found the 203K. I used Ardain Mortgage to help me with the process and loved my experience so much that I decided to go work for them. Why did I do this? I believe that this is the perfect opportunity in the current market to lift communities and take abandoned properties and breathe new life into them.

Here is a partial list of repairs that I made to my home: All new wood floors, new kitchen (including appliances), new drywall, plaster and paint, knocked down three walls for a more open home, new stairs, landscaping including a fence in the back yard.

If you think this is the loan for you please give me a call or send me an e-mail and I would be happy to help you get started. I can provide financial advice as well as my own personal experience of this fantastic program.

David P. Cruickshank

Loan Consultant
Ardain Mortgage Corp.
1508 W Algonquin Rd.
Palatine, IL. 60067

Cell 847-354-5455
Office 847-963-1000
Fax 847-963-1010

Home Affordable Refinance Program Explained

There has been a lot of buzz about the new Home Affordable Refinance Program. I hope this will clear up some of the questions that people may have regarding the program.

This program is aimed at home owners, who due to market conditions have seen the value of their property (owner occupied or investment) decline, and are not defaulting on their mortgage payments. This program will allow home owners whose loan to value (LTV) on the property is between 80-105%, to refinance and obtain a lower rate where under normal circumstances they would be unable to without incurring additional fees, hits to the interest rate and private mortgage insurance (PMI). Under the guidelines issued on March 4, 2009 by Fannie Mae and Freddie Mac it states the following pertinent information:

• The loan must be securitized by Fannie Mae or Freddie Mac which can be verified by using the following links. The answer is either immediate at the website or you will receive an e-mail with the information. http://loanlookup.fanniemae.com/loanlookup/ and https://ww3.freddiemac.com/corporate/.
• On a Fannie Mae backed loan the loan can be refinanced with any service provider or lender, which can be done using a mortgage broker. On a Freddie Mac backed loan the loan must be refinanced with the current lender which can also be done using a mortgage broker as long as the broker has this lender in his portfolio (you should ask your broker this question).
• If PMI is not being incurred on the existing loan then it will not be incurred on the new loan.
• On a Fannie Mae backed loan the closing costs can be rolled into the loan and a sum of 2% of the loan amount (not to exceed $2000) can be taken as cash at closing. On a Freddie Mac backed loan closing costs of up to 2% of the loan amount can be rolled into the loan but cash can not be recieved at closing.
• The same borrowers that are on the existing loan must also be on the new loan, however a new borrower can be added.
• Only loans that closed before March 2009 are eligible.
  

What if I have a 2nd Mortgage as well?

If you have a second mortgage then the LTV rule (80-105%) applies only to the first loan. Only the first loan can be refinanced and the second loan holder must subordinate to the first in order for it to refinance. Lenders have already started rolling out the program and I am currently submitting files.

If you think you can qualify you should start talking and submitting your information to lenders or brokers soon as I think this will be a popular program. Here is a link to determine if you qualify for the program http://makinghomeaffordable.gov/refinance_eligibility.html.

It should be noted that this program is not for everyone. If have already missed payments then you do not qualify but may qualify for the new Loan Modification Program which you can see if you are eligible for at this link http://makinghomeaffordable.gov/modification_eligibility.html.

David P. Cruickshank
Loan Consultant

Ardain Mortgage Corp.
1508 W Algonquin Rd.
Palatine, IL 60067

Cell 847-354-5455
Office 847-963-1000
Fax 847-963-1010

davidc@ardain.com
http://www.ardainmortgage.com/

An Illinois Residential Mortgage Licensee