Artisan Mortgage Blog

Shouldn’t I just go with my current lender?

Jim Barry — Tue, 11 Jan 2011 22:30:15 +0000

Many of my clients often tell me that when it was time to refinance , they just assumed they should go with their existing servicer. They believe that since they are already with that lender they will receive special treatment and pricing, but that is not always the case. When you call your existing lender you are being channeled through their normal retail lending operation. Big lenders love this because so few companies actually service mortgages , so when a refinance boom comes in they have a leg up in getting the business. Their rates and costs are no different from any other lender and you will not receive special underwriting criteria. More than likely you will be put through their assembly line loan process which can take months to complete because these institutions are so large. So, what should you do?

It’s obvious, call me ! Whether your refinancing or purchasing I have the most competitive rates and costs in the market regardless of who your current lender is. I will give you better pricing, better service and you will actually get to work with someone who is knowledgeable and values your business. You are not just another cog in the corporate wheel. Usually big corporations price out it’s small competitors, but not in the mortgage industry. We small guys, usually have a price advantage because our small businesses are more streamlined and efficient.

Moral of the story, when you need a mortgage, shop around. Don’t just call your existing lender because they have a fancy term for a refinance , like the 123 program or the quick and easy. These are just marketing terms designed to give you a different perception than the actual reality of mortgage lending.

Double Dip, At Least where Rates are Concerned

Jim Barry — Wed, 09 Jun 2010 15:23:31 +0000

Several weeks ago, economic signs were looking great. The DOW was in rally mode and mortgage interest rates were beginning to creep up. But then, out of nowhere, interest rates crashed.

I believe this dip to be short lived, but if you are thinking of refinancing or purchasing, you better get a move on it. Depending on fees and point structures , the 30 year fixed interest rate is available at 4.375-4.75%. This is awesome ! I have 15 year fixed rate mortgages slightly under 4%.

I don’t know what is driving this market, but money is cheap and now is the time to get a handful.

I would suggest you Lock In !

Jim Barry — Thu, 15 Apr 2010 15:42:54 +0000

Of late, the main question I am hearing from borrowers is whether or not they should lock in. Nobody really knows for sure what the market will do, but there is more risk of rates going up than down. The federal government stopped purchasing their own debt as of March 31st, which had been keeping rates artificially low. We all expected a major jump up, but we only had a minor increase. I still believe there is great potential for rates to move up to about 6%, so if I were applying for a mortgage I would want to lock in early on in the process. Yes, it’s possible rate may dip a little , but it is more likely rates will move the other way. When rates are at historically low numbers, in the long term there is only one direction rates can go. If you would like to gamble and try to time a bottom, go for it. However, if you asked me I would Lock IT IN !

Don’t Fear the Math !

Jim Barry — Wed, 14 Apr 2010 15:46:05 +0000

The numbers never lie! I have many clients that I work with you are in the process of shopping for a mortgage. Their biggest hurdle is usually the math. They are OK with shopping around and getting different quotes but often struggle with analyzing the numbers and making sense of what is being offered. If you can take the time to understand the forms and understand what you are being presented , you will always get the best deal. So, don’t fear the math, embrace it! Only people lie and misdirect, the numbers always tell the truth!

GFE 2010

Jim Barry — Tue, 23 Feb 2010 20:17:55 +0000

So here we are, in a Brave New World, 2010. As the mortgage industry continues to come under scrutiny, we are working with mountains of new guidelines and procedures designed to create better transparency and protection in the market. I agree we need it but it’s often like the drug commercials we see, where the side affects sound worse than the initial problem, but let’s move on.

There is a new Good Faith Estimate in place designed to improve clarity and accuracy in loan proposals. I will give you some basics on it and then talk about its real affects in the marketplace. The GFE has 11 boxes designed to simplify the proposal. Certain fees must be guaranteed while others have tolerance change levels ( 10% ). Other boxes have no tolerance levels , meaning no matter what it says on the GFE it can change to any number. These are usually pre-paid items and not loan costs. Anytime we can have better transparency in the process, I applaud the action. However, we are still working with commodities and not goods! No matter how much you try to simplify the mortgage, it will always be tied to the market.

Now, there are some changes to the GFE that make no sense at all. The number 1 worse change, is that it no longer gets signed! All the effort and time to streamline a document and now the customer doesn’t even sign it. They sign another form that states that they have seen the GFE and got a copy. If anyone can make sense of this let me know. Also, we no longer itemize the fees, rather we lump categories of fees together in order to focus more on the totals rather than the individual costs. Missing is the old details of transaction, which would show the total breakdown of the loan proceeds with a clearer picture of the entire transaction. Two steps ahead, 3 steps back.

In end it’s just paperwork and people don’t read anyway. Those who read before are still reading and understanding what they are dealing with. The fact of the matter is not all people are strong with math. After you have reviewed 50 documents the picture gets fuzzier. It makes me think about the dozens of prospectives I get each year pertaining to my retirement account. I have tried to read them before and it goes right over my head. The same goes for mortgage paperwork to many people. Do you know the difference between a pre-paid item and closing cost? Do you understand the ins and outs of a rate lock agreement? The mortgage process can be a complicated equation and the lay person needs to be able to rely on the knowledge of a true professional. The real answer is that paperwork changes nothing! I am a big believer in Adam Smith’s hands off approach and I believe the marketplace will always cleanse itself. Someone will always get ripped off and some people won’t. If you ask around, check better business bureaus and ask for referrals of your friends and family, you will probably be able to find a reputable person in any vocation.

So let’s ask the question, do all these new laws and regulations really help or does it just keep other people working? There is nothing better as a bureaucrat than to create work and increase your budget in the name of protecting the people. If you have ever seen a magic show, you know the power of mis-direction.