Where mortgage leads come from

If you are a loan officer or mortgage broker, and you are considering purchasing mortgage leads, one thing that will be important to know, is where these lead companies obtain their leads from.

Many times, mortgage lead companies will sell their leads multiple times. They have a data base of thousands of leads that they sell repeatedly over and over.

Or, they buy leads in bulk from third party vendors and sell them at a profit.

This is known as recycling leads, or selling junk. And who knows how many times that third party vendor sold their leads to other mortgage lead companies.

By the time that lead lands on your desk, it has gone through the hands of literally dozens of loan officers.

Your best bet is to deal only with mortgage lead companies that own and operate their own mortgage lead generation sites. This way at least you now that there is an excellent chance that the quality of the lead will be good.

How can you find this out?

Call someone in the customer service department of the company you are considering. Don’t be shy, come right out and ask where and how they obtain their leads.

If you are not satisfied with their answers, than move onto the next mortgage lead company.

Remember, if you are not happy with their customer service, than more than likely you will not be happy with their leads.

Taking on home ownership

So the time has come for you to purchase a home and take on home ownership.

Home ownership will be perhaps the largest responsibility you ever take on in your life. But it will most likely be the most rewarding thing you ever take on in your life as well.

But before you go out and buy that rake, snow shovel, and lawn mower to keep up with all of your towns ordinances, you will first need to obtain a mortgage to purchase the home.

Although obtaining a mortgage takes some time and research, as well as a lot of paperwork, it doesn’t have to be all that painful. Just take your time, educate yourself as much as you can, and do your best to put yourself in contact with the right people.

One of the very first things you will need to do is locate a realtor to point you in the right direction.

Realtors are not hard to find, but before you go through the yellow pages, see if you can’t have one referred to you by a friend or relative who had a positive experience with their own realtor.

The very first thing your realtor will ask you will be if you have been preapproved for a mortgage, I can guarantee it.

So here will begin your quest for a mortgage. There are literally thousands of lenders throughout the United States, all carrying many programs for all borrowers with many different needs. Such as FHA, Va, and Interest only, just to name a few.

One of the best resources for finding information on the mortgage industry, and finding a good lender is the internet.

If the internet is not your first choice, you may want to try your local bank. Ask your branch manager to set up an appointment for you to sit down and talk with the bank’s mortgage representative.

Remember that most banks deal with perfect credit only. So if yours is a little bit challenged, than consider trying the internet to find a loan officer or mortgage broker to assist you.

All in all, taking on home ownership is a very big responsibility, it is also a one of the largest financial transactions you’ll ever make in your life, so take it slowly and seriously. If at any time you are not comfortable with the people helping you along in this process, than move on to someone else.

And remember, research and education are the key’s to getting the best possible mortgage and home. Best of luck.

Interest-only or 50 year mortgages - do they really make sense

With hotspots like Las Vegas, much of California and Florida still enjoying a good real estate market, many banks and mortgage companies are now spreading out payments over 50 years to make them more affordable. Prior to these 50-year mortgages, interest-only mortgages were promoted and sold as the way to go. The real question here is which is better?

Let’s first digress on what an interest-only mortgage is. Interest-only home loans or mortgages aren’t as a general rule permanently interest-only. The bank or mortgage company will normally offer the borrower 2 to 5 years at interest-only; after that they must start paying off the principle. During this time, the principle has grown. A great many borrowers may find themselves unable to pay the higher payments that come at the end of this interest-only period. In this case, interest-only loans are similar to ARMs, and have similar default and foreclosure rates (higher than for regular fixed mortgages where the payment stays the same throughout).

The 50-year mortgage simply spreads your payments out over a longer time period and greatly increases the amount of interest you will payback; this also tends to reduce your build-up of equity. Alex Diaz Jr., Vice President of Statewide Bancorp in Rancho Cucamonga, stated that “the 50-year mortgage has particular appeal in California because prices are higher than the rest of the country. The 30-year fixed mortgage is great, but with gas prices so high, people we're dealing with are concerned about making prices work, and the 50-year mortgage is something they're starting to consider." The real estate market has grown by leaps and bounds in California with the average home selling in excess of $300,000.

The 50-year mortgage was designed to do three things. First, it makes it much easier for someone to buy a home in these high price areas. Second, it can help buffer and insulate the borrower against a housing bubble or possible localized deflation. Third, it keeps the selling prices high. However, many so-called real estate experts will tell you that the interest-only loan does the same thing, but does it? The main problem with the interest-only loan is that it does not insulate or offer any protection for the borrower from increasing principle, negative equity (which can happen should there be a drop in housing prices), and, of course, those increasing payments when the term you agreed is over.

Keeping this in mind, plus the fact that there is only a very minor difference in initial payments (payments over the interest-only period), clearly the 50-year mortgage should be a better way to go.

If your budget allows, a good tactic to use is to make bi-monthly payments which will reduce the interest and term of the loan saving you many thousands of dollars. There are many lenders out there now offering this option to their borrowers. As they say, the real money in real estate is made from buying low and selling high.

The problem is that in most of these hot communities, the selling price often ends up being much higher than the asking price, plus houses do not stay on the market for very long at all. So, buying low is normally out of the question. Just try finding a bargain foreclosure or HUD homes for sale in California, it's a little like trying to find gold in the old days. In these hot communities, the real money is made by buying and holding for a number of years allowing for the yearly increases and returns on additions and upgrades. Money can be made for sure, but with a uncertain future. It is really best to have a payment program set in stone – always use a fixed term and rate mortgage. You can still sell in five years or less, make money, and have the added comfort of a fixed payment.

Have an opinion or a question you would like me to answer, then write me! CarlHampton. com

Getting a mortgage from beginning to end

Purchasing a home is incredibly exciting and stressful. Knowing as much as possible before you purchase is the key to reducing stress.

Getting A Mortgage – From Beginning to End

The mortgage process can often be a confusing one. Most homebuyers are interested in their dream home, not their lender. Throw in endless forms and document requests, and the mortgage process can quickly become miserable. Here is an overview of how it works, which will hopefully cut down on your stress.

Searching for the best loan is the first step. The best loan for you is entirely dependent upon your situation. A low interest rate may be a key for one person, while a low down payment might be critical for another. Other factors include your credit score, length of the loan and so on. I highly recommend you don’t apply with the bank where you have a checking account. If they know it is your first loan, you are going to get a poor deal. Shop around or use a mortgage broker to do so.

Getting pre-approved is not a required step, but you should do it. This single step will cut the stress factor of buying a home by at least half. Instead of sweating your loan application during escrow, you can relax because you are already approved. This free time gives you the opportunity to nag the seller for breaks on the home purchase.

The next step is to file a mortgage application. Many people make the mistake of providing the minimum amount of information possible. Don’t. If you have credit problems or some other negative, the lender will find them. Provide as much information as possible on your application.

Part and parcel with your application is supporting documentation. This is where a mortgage broker can really help. A lender is not going to take you application at face value. Unlike applying for a credit card, the lender wants to see supporting documentation. You will commonly be asked to submit tax returns, pay stubs, bank account statements, investment account statements and so on. The lender will inevitably lose some of these and ask for them again. Welcome to the mortgage loan process!

Appraisals, inspections and title searches will next be ordered on the property. The lender wants to make sure the seller has the right to sell it, the home is in good shape and it is worth enough to justify the loan. There isn’t much you can do during this step, so relax.

At this point the loan is processed to get everything in shape for the underwriter review. The underwriter is the “buck stops here” person for the lender. The underwriter will approve or deny the loan. They may also ask for additional information or offer adjusted terms. If this occurs, you can make counter offers.

Assuming the loan is approved, commitment time is the next step. Yep, you will sign the loan documents. This sounds simple, but many people can’t help but get nervous about committing to the repayment of hundreds of thousands of dollars. Just do it!

Assuming everything is going well with the purchase, the next step is closing. The lender will wire money to the title company, escrow will close and you are the proud owner of a new home and hundreds of thousands in debt!