You spend hours each night scanning the Internet and reading the real estate section of the newspaper looking for the perfect home. However, many home buyers do not give enough attention to finding the right mortgage company and often spend more for their mortgage than needed, because they don't know what questions to ask their lenders. Here are the MUST DO questions to ask a mortgage lender:
Ask lenders about their experience in the industry and their experience helping home buyers in your similar situation. Fully disclose your goals to loan officers and ask them how they would best handle your situation. Write down each loan officer's answers to reference when you make a decision who to apply with.
Ask your real estate broker or agent for references of mortgage brokers that have performed well for their previous clients. And don’t be afraid to ask the mortgage lender to provide you a list of references of home owners that they have helped in the recent past!
Different mortgage lenders provide different mortgage products. And each homeowner may qualify for different types of loan programs depending on their credit, income, down payment, and many other factors.
Ask each lender to provide at least two different mortgage programs for your needs. Ask questions about each loan program until you fully understand how each loan works. If you don't understand something about the mortgage program, continue to ask questions until you do.
What about Mortgage Insurance? Some mortgages, particularly those with low down payments, will require you to purchase mortgage insurance. Mortgage insurance appears as an addition to each monthly bill until you've paid off a certain amount of the house, usually around 20 percent of its value.
Every mortgage transaction includes a series of fees. These vary from lender to lender and can potentially add up to thousands of dollars that you're responsible for paying up front. Ask your lender to provide a list of the fees associated with the mortgage, along with an estimated cost for each fee. Get an explanation for any fees that you don't understand so you know where your money is going and how much to set aside.
Inform each lender that you intend to shop your loans with several other lenders. Ask them to lower the fees paid to their company. Lenders often negotiate origination and discount fees when facing competition.
Mortgage lenders offer different interest rates to borrowers based on rates elsewhere in the economy, the level of demand for mortgage loans and the borrowers' credit. If you have good credit, you may be able to take advantage of special low interest rates, which can add up to considerable savings over the life of the loan.
Ask the loan officer for a lower interest rate. Interest rates are also negotiable, just like origination and discount points. Request a GOOD FAITH ESTIMATE (GFE) - This puts the offer in writing and binds loan officers legally to the interest rate and most of the fees.
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COASTAL SAN DIEGO PROPERTIES
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Buying Real Estate | Credit Scores | Mortgages/Loans | Real Estate News | San Diego Real Estate
The average monthly rent in the county increased 1.5 percent, to $1,335 in March from $1,315 the same time last year, according to numbers from a twice-yearly rental report from MarketPointe Realty Advisors, a San Diego based data company.
The San Diego rental market is stable and will likely see steady increases this year tied with the normal rate of inflation, according to property managers and data analysts. Peter Dennehy, a vice president of John Burns Real Estate Consulting, says the local market echoes what’s happening nationwide: Rents are increasing as an anemic economy gains strength. The consulting company, which has an office in San Diego, projects rent locally will jump 30-plus percent within five years.
“People are out shopping,” said apartment manager Luis Leguizamo, who recently tacked on $25-30 a month for residents at the Loma Portal Apartments, near Point Loma.
“The economy is somewhat stimulated,” he added. “People are in the position to move and consider paying a higher rate.”
Here’s a look at some of the factors that are driving up rental rates:
THE LOCAL ECONOMY-
More Californians are getting jobs, part of what’s helping the rental market.The state created almost 100,000 jobs in February, mainly in areas such as technology and construction. San Diego’s job count went up by 2,000.
Many San Diego homeowners who have lost their homes to foreclosure or via a short sale have shifted back to renting. Property managers throughout California have said they’re willing to work with would-be renters that have foreclosures or short sale history. All they ask is that prospective tenants be clear and forthcoming about their credit and history. Eric Wiegers, of the California Apartment Association, said some landlords might charge higher security deposits to these tenants. “People are definitely doing that,” Wiegers said. “It’s a legitimate practice.”
Another driver of higher rents is a trend called unbundling. This happens when college grads, often without jobs, return to their parents’ homes for a year or two, and then after saving up for a year or two, move out. “As the job market gets better, folks who were forced to double up can now live alone,” said Nevin, of MarketPointe.
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Tags: San Diego Rents Increase, San Diego Economy Gains Strength, San Diego are paying more rent
San Diego Real Estate | Real Estate News | Economy | Credit Scores | Buying Real Estate
That rankles a lot of people, but what really annoys borrowers is the secrecy surrounding the credit-scoring process. A federal law enacted in 2003 requires the three credit bureaus to provide consumers with a free annual copy of their credit reports, but they're not required to include your credit score. If you want that, you usually have to pay, and even then it's unclear whether the score you've purchased is the one lenders will use when you apply for a loan.
But this year, free and relevant credit scores will become much more widely available, for two reasons:
•Provisions of the 2003 Fair and Accurate Credit Transactions Act — the law that requires credit bureaus to give you a free annual report — will impose new disclosure obligations that could encourage more lenders to provide customers with a free credit score.
Under "risk-based pricing" provisions that took effect Jan. 1, lenders are required to send a notice to loan applicants who receive a loan with a higher rate than the best rate available. The notice must also explain how the applicant can get a free credit report.
However, the law gives lenders who don't want to wrestle with these notices — and the rules governing who must receive them are complicated — an alternative. If they send all loan applicants a copy of their credit score, they don't have to provide risk-based pricing notices.
Most lenders will probably choose the second alternative, says Craig Watts, a spokesman for FICO, developer of the most widely used credit score. In addition to the credit score, consumers will receive an explanation of the range of the score and a graphic illustration showing how their score compares with other consumers' scores.
•A provision of the Dodd-Frank financial reform law that takes effect July 21 will require lenders to provide borrowers with a free credit score whenever they're turned down for a loan or charged a higher rate than the best rate available. This "adverse action" requirement will also extend to landlords, utilities and other entities that use credit scores, says John Ulzheimer, president of consumer education for SmartCredit.com.
Those two provisions are overlapping and somewhat contradictory, but the end result is that, for the first time, millions of consumers will see the credit score that lenders, insurers and others use to gauge the likelihood they'll repay a loan. "This will be an eye-opening experience for consumers," Ulzheimer says. "They'll be able to conclude how far they have to go before they truly have elite credit scores."
Tips for consumers who are disappointed with their score:
•Contact the lender that sent you the score. If you were given a rate that's higher than the best one available, ask the lender what score you would have needed to get the best deal, Ulzheimer says.
"If they tell you you're 20 points away, you'll realize you're not far off from the goal," he says. "If it's 70 points, you'll realize you've got some work to do."
•Order your free credit reports. Your credit score is based on information in one or more of your credit reports, so it's important to know what those reports contain. Yet most Americans don't take advantage of their right to a free credit report. A survey by the National Foundation for Credit Counseling found that nearly two-thirds of Americans hadn't ordered a copy of their free credit report in the previous 12 months.
•Get educated on what goes into a credit score. FICO has launched an educational website, scoreinfo.org, that explains the factors that influence a FICO score.
While these changes will put credit scores in the hands of a lot more people, some consumers should still consider buying a credit score, Ulzheimer says. Even after the Dodd-Frank provisions take effect, you'll have to wait until after you've applied for a loan to get a credit score, he notes. Buying your score several months before making a major purchase, such as a house or a car, will give you an opportunity to improve it before you apply for a loan.
All of the credit bureaus sell credit scores, but you need to be careful: Offers of "free" credit scores are often used to promote credit-monitoring services, which charge a monthly fee.
By Sandra Block, USA TODAY
Tags: San Diego Real Estate, Coastal San Diego Properties
Credit Scores | Buying Real Estate | Mortgages/Loans | Real Estate News
It’s not uncommon for credit score reports to contain errors. Make sure you double check it and fix any mistakes as it may impact your overall credit score significantly.
This is also an extremely important things to watch out for when trying to improve your credit score. Paying your bills frequently and in full amount can go a long way in improving the credit score. If you have the means then make sure your debts are always paid. Although it will not improve your credit score over night, in a few months you should see a dramatic change.
Reducing the balance on your credit cards to 75% or less of the available credit will also affect your credit score. 25% is a preferable amount, although no debt is always best.
Creditors will always look into your financial history, so even if you’re not using that old credit card you may get a better credit score. Pay a small amount every few months with that credit card and as soon as the statement arrives pay it in full.
Frequent inquiries into your credit reports will lower your score. Do note if you’re looking for a best deal for a loan make sure to have all your inquiries within a week or two as they will be counted as only one inquiry.
When improving your credit score the best strategy is to pay down credit cards which are closest to their limit, rather than the typical advice to pay those with highest rates.
These are just six tips but can go a long way in improving your credit score. Make sure you always keep them in mind!
TIP: DO NOT be sucked into some credit counseling scheme where some agency wants to repair your credit for you. You can do this yourself by following the procedure I just outlined. YOU don't need to pay to have it done. Credit counseling agencies often do more harm than good and can actually hurt your credit. You can fix errors in your credit report.
The process of going through each credit report and responding to both the credit reporting agencies and the companies involved is time-consuming but absolutely necessary in the end. What's more, it's free since you will do it yourself!
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