Testimony - My customers are extremely important to me, and I am here to prove it

“Kristin was able to provide the dedication and information that I needed to purchase my first home. Without her wealth of knowledge and experience I would have never been able to get away from the money pit that calls it self “rent!” Thanks Kristin!”

~Travis G. / University of Tennessee


“Your home is your most important investment. For many people, it’s the largest debt that you’ll ever personally incur. And, your home is where you will raise your family and create your own secure haven. These are two compelling reasons why you should take the greatest of care and consideration when choosing a mortgage specialist. I will take all the time and energy necessary to ensure you have the best options before you when making the important decisions that affect your largest and most important investment. Let my experience and years in the industry work for you. My customers are extremely important to me, and I am here to prove it.” - Kristin Abouelata Mortgage Specialist

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For Sale by Owner (FSBO), what do I need to know about home financing?

FSBO or For Sale by Owner can be a hugely successful endeavor and can save you money. But to be successful, this endeavor must be executed correctly. Below are a few tips that may help you be successful in this venture.

Price the Home Correctly: It is crucial that you research and place the correct price tag on your home when selling it. A reputable real estate agent is the first person to contact to help appraise your home. Many agents won’t lend you the time of day to assist you with this aspect since they aren’t listing your home. But a good agent will do it for you with no strings attached. They realize that their business is based on reputation and referrals. They may not get this listing, but you may want them to represent you in your next home purchase. Or your cousin may need a good realtor’s help in the future. Do your homework. Find similar homes in your area and compare their price tags. Are the homesas attractive as yours? Are they as large as yours? Pricing the home correctly is crucial.

Use your time: A FSBO property allows you to place your home on the market for the maximum price to see if it sells quickly. If you have a deadline to sell your home, market it yourself well in advance of this deadline. Later, if you feel you need a realtor’s help, you haven’t painted yourself into a corner. You still have time to market and sell the property correctly.

Market the Home: Make it easy for people to know more about your home without investing too much time. Put a For Sale by Owner sign in the front yard with contact numbers. Put a brochure with information out front so people can pre-screen the information and not waste your time. Talk to your local paper or other FSBO’s and investigate whether placing an ad in the local paper has had results. Different markets yield different results. Consider hosting an open house, but make sure you get the information out to the right market.

Put Your Home’s Best Foot Forward: You want to make sure your home sends the right message to prospective buyers. People have to be able to see themselves in that home. What is the first impression when driving up to the home? What’s the feeling inside? Take measure to provide maximum curb appeal. You want to make sure people want to come inside the house. The outside of your home should entice them to do so. The interior should be clean, airy and free of clutter. Try to make the home smell good and pack away personal effects that remind prospects someone else lives there. The realtor that helps you determine a market price should be able to make suggestions in this area that will make your home more marketable.

Is Your Prospect Qualified?: Make sure your buyer is pre-qualified before entertaining their offer. You can request that a preferred mortgage lender you trust or another reputable lender provide this service. If a person isn’t qualified to buy your home, you don’t want to lose valuable marketing opportunity to attract other prospects. Do not take verbal offers seriously. A serious prospect will sign a contract and provide earnest money as a show of good faith. Make sure you are using a legal contract and that it is executed properly and protects your interest. Again, that real estate agent who helped you earlier or an attorney may be a good idea at this juncture. A well executed sales contract is worth its weight in gold.

Of course all of the above is based upon my personal opinion and experience. Use these thoughts for informational purposes only. And good luck selling your home!

LOCKING IN YOUR INTEREST RATE AND OTHER TALES OF LAS VEGAS

“Should I lock my loan? Are the rates going up? Are the rates going down? What’s the market supposed to do in the next week?” These are questions that every experienced loan officer has been asked by his or her customers on various occasions. I’ll tell you one thing, if I had a hard and fast answer to any of these questions, I would be reading a book on my own private yacht in the Mediterranean Sea. And my butler would be asking me what I wanted for lunch.

Here’s the deal on locking in your loan. Typically a standard lock is for 30 days. This time frame gives all parties involved in the transaction adequate time to complete their responsibility in the loan process. If you are closing within 30 days, you should probably go ahead and lock your rate, provided you are comfortable with the terms quoted to you. What if the rate goes down .125%? I counter and ask what if the rate goes up .125%? Are you willing to risk it?

If you are happy with your payment, then I advise you to lock in the rate. Your mortgage lender will give you a picture of the general trend of interest rates, or you can research it for yourself. Find the loan payment amount you are aiming for and focus on this issue to lock your loan. I’ve seen it happen plenty of times: everyone speculates the rates are going down, but the next day you see a .25% increase. Of course the converse does happen at times, but I haven’t seen it happen as much!

I’ve had customers who have checked with me every day to see where the rates are and I’ve never seen this vigilance result in a significant rate improvement. Not to say it can’t happen, I’m just relaying the odds from personal experience that it won’t. But, if this course is what my customer is most happy taking, I’m just as happy to update them daily till they feel comfortable locking. But keep in mind it’s a gamble. If it was easy, there would be a lot of folks on the beach with their butlers. It is very difficult to predict short term movements in the market. Try it for a few days just for fun, and you’ll see what I mean.

When a loan is locked, your mortgage company has made a commitment to provide a product at that note rate to its secondary market source. If the rates go down, you still are expected to close at your locked rate. If the rates go up, you still expect to close at your locked rate. A lock represents a commitment from the customer and the lender. So, find your comfort zone and lock your rate. Spend your time worrying about what you’re going to do with all the money you saved on your refinance or how you are possibly going to get boxes packed in time to move in two weeks!

Do you have a question on home financing?

Do you have a question on home financing?

I have been writing an article each week on home financing for various publications, and I am looking for topics that interest you. If you have a question, please post a comment. I am hoping to generate timely subjects for my weekly articles. And if you don’t find your reply in an article, I will get you an answer.

Thanks!

Kristin Abouelata / Home Loan Specialist

Ch-Ch-Ch-Changes……Why You Might Want to Refinance Now!

Big changes are expected in the mortgage market for 2008. With rates so low, now is a good time to weigh your refinance options…..

Have you been reading the papers or listening to the news lately? (Ok, I guess you have been because you are reading THIS paper. Just call me Master of the Obvious). Rates are low. Actually, rates are really quite low. You may be considering refinancing in the next couple of months. Maybe you need equity from your home but you're hesitant to touch that great rate you got a couple of years ago. Or, maybe you're sure you want to refinance but are waiting for the latest news from the "Fed" before you take the plunge. Well, there are a few reasons why you may want to take action sooner than later.

Fannie Mae and Freddie Mac, the major lending institutions for non-government loans, have recently announced that they will move to risk based pricing in the new year. What is risk based pricing and why do you care? This announcement means that loans with higher risk characteristics will receive a higher rate. In the recent past, risk based pricing was typically reserved for non-conforming loans, or loans that were outside conventional guidelines. In 2008, you can expect to see risk based pricing passed on to conforming loans. What constitutes a higher risk? First and foremost is your credit score. If your loan to value is greater than 70% - your rather healthy credit score of 680 won't get you the same rate that your neighbor's 720 credit score will get him. Same goes for your sister and her 620 credit score. Her mortgage rate will be much higher than yours. Fannie and Freddie will assess tiered "hits" or cost increases to borrowers based upon their credit scores. That could make a huge difference in the rate you will be quoted in December and the rate you would be quoted next year. It may also mean you might not qualify for a loan tomorrow that you would qualify for today. And now lenders will have to pull your credit to actually give you a hard and fast quote. If you have a good idea of what your credit score is, you can compare lender's quotes more effectively. But if you haven't a clue as to what your credit score is, a lender will have to know it in order to be on target with a quote.

And there's more. Although pundits say the rates will stay low (and no, I'm not a pundit), another cost will be passed on to the consumer that will begin to be realized by many lenders very shortly. As a result of recent increases in foreclosure rates, Fannie Mae has decided to increase its margin in order to maintain adequate capital reserves for federal regulators. And Freddie Mac is expected to follow suit, although the announcement is not official as of the date I am writing this column. It may be official by the time you are reading it. Even if rates remain stable through the upcoming period, increased margins mean higher effective rates to consumers. Thus, if you are mildly considering a refinance for whatever reason, you should really decide now if it's right for you. Waiting too long could cost you money.
Of course, refinancing has to make sense. You need to consult with a reputable mortgage lender who can help you analyze your options and choose what's right for you. You need to weigh the savings against the closing costs and also take into consideration how the refinance may or may not benefit you. But, don't drag your feet. Do your homework. Get your ducks in a row. And finally, the risk based pricing and all that other stuff I discussed will also apply to new home purchases (but not select first time homebuyer programs- they remain the same). Whatever type of mortgage you are considering, now is the time to investigate before the changes occur.

Email your home loan financing questions to Kristin Abouelata, Mortgage Specialist, at question@kristinmortgage.com or call (865) 567-0113.

Let my experience work for you!

Kristin Abouelata / Mortgage Specialist with Mortgage Investors Group

Phone: (865) 567-0113
1-800-489-8910
http://www.kristinmortgage.com/

What are all these fees and why is a mortgage so expensive?

Not only are the expenses associated with a mortgage hard to understand, people often wonder why a loan costs so much. Here's a little background info to explain why home financing isn’t cheap…

Did you ever wonder what a great credit score really gets you in the mortgage market? Many people think it means they get better pricing. Unfortunately, that’s not really the case. It mostly just means your lender won’t have to hassle you for as much documentation to do your loan. In fact, no documentation may be required from you at all if it’s a purchase and you put enough money down. I’ve heard many clients say, “I’ve got great credit, so quote me your best rate.” Good credit can’t directly influence the rate. But it can influence your mortgage loan officer to give you better pricing. If your lender can be assured your loan process is streamlined and smooth, and that they won’t have excessive hours to devote to the process, they may be able to quote you a more competitive rate. Much about a quoted rate depends upon the man hours it will take to make your loan, the loan amount itself and how quickly you can close.

Lenders usually have a minimum percentage of income they are supposed to make on a loan. That percentage is flexible, but only to a certain extent. For instance, the loan amount size is a huge contributing factor. If you’ve got a really large loan amount, your lender doesn’t need to have a feeding frenzy on your loan. The percentages lower because the payback is higher.

However, if you’ve got a really, difficult loan and a modest loan amount, you can expect higher rates or discount points. Or fees. Some lenders may raise your fees to make you think you’re NOT paying as much. But you are. You have to in order for the lender to cover the cost of doing business.

Here’s the secret. Closing a loan is actually a very involved process. Lenders can’t do the loans for free or break even profit because it’s a business and their in it for profit. Plus, there are many people involved in the loan process that you aren’t even aware exist. Processors, closers, post closers, insurers… a staff of thousands! Ok, so maybe not thousands, but your file is probably touched by 5+ different divisions (at minimum) within a mortgage company. Since it is a business, the lenders must make enough money on the loan to cover their costs and actually make money, too. The lender also pays outside parties for services too, like the appraisal, flood cert and automated underwriting system. Paying your originator is just the beginning of the mouths (and families) being fed by your business. It ain’t cheap to close and sell a mortgage.

When you examine all the fees and charges on a good faith estimate, your lender should be able to tell you exactly where that money is going and how it is to be spent. Your lender should have no qualms in telling you what costs are associated with your loan, or which funds cover third party expenses that your lender incurs by doing your loan. And some of that money will be profit. Much of it may be. But remember, you’re not just paying the salary of only one person. However, you shouldn’t pay too much for your loan. After all, the lender will make additional profit on the loan when it is sold on the secondary market.

A good lender will validate any fees and charges for you and should make you feel ok with the fees. If they don’t seem reasonable or fair, always ask questions. If you don’t like the answer, say so. And if you still don’t like the answer, than look for a new lender. Buying a home is such an important purchase and you should feel good about it.

Let my experience work for you! Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist, at question@kristinmortgage.com or call (865) 567-0113. Kristin will try to answer all questions on her website Home Loans Plain Talk.

Kristin Abouelata
Mortgage Specialist
Let my experience work for you!
Knoxville, TN 37919
Phone: 865-567-0113
http://www.kristinmortgage.com/