1% Down Payment Program – A Good Idea?

Can you buy a home with only 1% down?  Yes, you can.  Is it some wild, exotic toxic loan product with super high interest rates?  Actually, no, it’s a conventional, conforming loan.  How does it work?  Glad you asked. The minimum down payment for a conforming loan is 3%.  However, some of that down payment...

What Is a No Closing Cost Loan?

As explained in the previous blog, the costs of your mortgage can be thought of as being in two different boxes. One is the cost of getting the loan, the other the cost of having the loan. Put another way, one is the cost of paying everyone who works on your loan for their services,...

No Cost Loans: What Fees Don’t Get Paid?

It costs money to buy a home. Sure, this doesn’t surprise you. But you’ve seen ads for no cost loans, right?  You will pay these costs one way or another.  So let’s look at the costs. An eye-opening fact is that you will spend more money on your home than you will on anything else...

What Is (Not) a No-Cost Loan?

You’ve undoubtedly seen or heard ads by mortgage lenders for no-cost or no-point loans, no out-of-pocket cost loans, or loans with super-low interest rates. Would it surprise you to know that these are all the same loan? That’s right! All loans cost money to originate. The difference between them is how you pay for the...

Latest Real Estate Scam is a Doozy

From the trenches comes a story of a new real estate scam that is worth reading.  This was passed on to me by Grace Rudawski and Eric Rudawski, a mother-and-son real estate team with Intero in San Jose.  (www.YouAskGrace.com) In Silicon Valley real estate is expensive, with a median price of over $800,000.  The typical...

Can You Lose Your Good Faith Deposit?

If you put down a good faith deposit on a new home and then are turned down for the loan, can you lose your good faith deposit? When you decide to purchase a new home from a developer the home builder is very likely to encourage you to use their in-house lender. This encouragement might...

How to Avoid Mortgage Insurance (Not)

I heard a very compelling ad on the radio yesterday. A large, very well-known national lender came up with a new program where you can avoid mortgage insurance – because the lender pays it for you! An offer this generous will, of course, make the phones ring off the hook. The cynics among you, however,...

Super Low Down Payment Mortgages Returning

Not everyone will welcome the above headline, but a case can be made that it is possible to make safe investments in low-down-payment mortgages and do so in a way that protects consumers from making poor choices as well. Most folks in the real estate industry agree that the underwriting pendulum swung too far to...

Bait-and-Switch Scam Bites Online Mortgage Lender

I will try not to gloat as I write this. Often when I am quoting interest rates and fees clients will tell me that they’ve seen better rates or prices from online mortgage lenders. Since I can broker to almost every mortgage lender in the country, and since we all get our money from the...

Mortgage Advisors Should be Finance Experts

One of my biggest gripes for a long time has been that mortgage originators are not properly educated in finance.  Those who have taken the initiative to educate themselves, either through a degree in finance or college-level finance courses are an exception.  Very few companies – if any – actually provide their originators with any...