Colorado Mortgage Manager

Colorado Home Search Website

2011-04-05T19:16:00.000-07:00

We have created a new Colorado Homes search site, ColoradoHomesiq.com. ColoradoHomesIQ provides homebuyers the ability to save searches, read information about specific neighborhoods, and ask questions to local Colorado real estate experts. Check out Coloradohomesiq.com from Cherry Creek Mortgage Company and let us know what you think.

Loan Modification Numbers Still Out of Whacked

2010-08-30T20:55:00.001-07:00

The government's loan modifications program which was sold as a program that will help more than 5 million is still failing to live up to they hype. The program has only helped provide 421,804 home owners with loan modifications since it began. Which is great, until you know how much it has costed tax payers in America.

The government has spent over $75 billion to help over 400,000 home owners with loan modifications. If you do the math, each modification comes with a price tag over $177,000. While this number has come down slightly from when I first reported this "bank bailout," it's still obvious this was a horrible thought out program or well though out bank bail out.

Real Estate Niche

2010-08-20T11:54:00.001-07:00

If you could, would you work with your ideal client on every transaction? Over the next few weeks we are going to help you with creating a niche.

A lot of agents avoid developing a niche because they don’t want to “limit” their business. However, creating a niche doesn’t limit your business, but allows you to focus your marketing time and money on your “ideal client.” Establishing your expertise within your niche is not an overnight transformation. While you are building your niche you will continue to work with all clients even though they don’t “fit” your niche. However, in time you will have the ability to only work with your “ideal clients” and refer all other prospects to other agents.

First you must decide what YOUR NICHE will be. Consider the following questions when determining your niche:

• What defines you?
• What are your interests?
• Who do you like working with? Who are your friends?
• Who were your past clients that you enjoyed working with the most?
• What are you doing when you’re not a Realtor?
• Where do you live?

Take some time to think about your niche and remember the greater the passion for your niche the less work you will be doing.

Check out this article for more information
http://www.brokeragentsocial.com/article/485/breaking-down-niche-economics-how-what-where-and-when

FHA Guideline Changes

2010-08-10T13:47:00.001-07:00

FHA announced over the weekend that they will be changing their mortgage insurance premiums effective September 7, 2010. Currently, borrowers obtaining a FHA loan pay 2.25% for upfront mortgage insurance and 0.55% for monthly mortgage insurance. For a $200,000 mortgage the mortgage insurance would be $4,500 and $93.73/month.

On loans after September 7th FHA borrowers will pay 1% for upfront mortgage insurance and 0.90% for monthly mortgage insurance.

While home owners will end up paying more for mortgage insurance in the long run, this was a necessary change to keep FHA above water. FHA has taken major hits in the last few years and changes needed to be made for the program to continue.

Need to Sale, but Underwater?

2010-05-17T07:17:00.000-07:00

With almost half of Colorado home owners underwater on their home there are a lot of people wondering what to do when they have to move? Bankruptcy? Foreclosure? Short Sale? Or do you keep the house and convert in to a rental? None of the options are great, but what is the best of all evils?

There is no right answer for every one, however, more lenders are starting to allow clients to purchase a new house after a short sale is completed with NO seasoning requirements. FHA announced this change in guidelines in December of 2009, however lenders still required applicants to wait 2-4 years after a short sale to be eligible for a new mortgage. A majority of lenders still require borrowers to wait, but there are a few lenders that will now let you obtain a new mortgage immediately.

However, there are additional guidelines you must meet to qualify for a new mortgage without waiting at least two years. If you are considering a short sale on your current house and purchasing a new home you must:

Have no delinquent mortgage payments in the last 12 months and your mortgage must be current at time of closing.
You can't have any delinquent payments on any installment debts in the last 12 months.
You can not complete a short sale just to take advantage of the market. You need to be able to show that moving is necessary (increase or decrease in family size, moving to a different geographic area)

If you have any questions or are planning to do a short sale please call us for more information.

Why Locking is Better than Floating?

2010-04-27T08:57:00.001-07:00

Once you lock your interest rate you are guaranteed that rate as long as you close with in the lock period. However, if rates fall you can not take advantage of lower rates. So should you lock or float?

There is an easy way to determine if you should lock your mortgage interest rate. There are only three options that can happen when locking an interest rate. Rates can go up, rates can go down, or rates can stay.

If you lock your interest rate and rates increase or stay the same you win. The only situtation you would lose is if rates decrease during your lock period. However, if you float and rates increase you lose, if rates remain the same you took a risk for nothing.

Lock your rate as soon as you can, UNLESS you know mortgage rates are trending down. The odds are on your side.

Remodeling This Spring

2010-03-11T07:32:00.000-08:00

If you are planning on remodeling or doing any improvements this spring you may be able to get tax credit from the Federal government. The government is providing a tax credit for qualifying energy efficient products. Visit http://www.nahb.org/generic.aspx?genericContentID=113316 for specific details on the tax credits.

Also, for all Colorado home owners, Colorado will begin their appliance rebate program for energy efficient appliances later this month. We will let you know when the details of the program are released.

How Guidelines Changes Affect You

2010-02-26T08:29:00.000-08:00

There has been so many changes in the mortgage industry nationally and in Colorado over the last few months it's tough to keep track. Our business has been constantly changing for the last 3 years, but over the last few months we have seen big changes that will affect you trying to obtain a loan. Below I have listed the big changes and how they will affect you.

Qualifying debt-income ratio has been lowered by most companies to 45% from 50%. The tougher guidelines decrease your purchase ability. If you household income is $4,000/month your purchase power has been decreased by over $30,000.

When FHA increases their fees this spring (upfront and monthly mortgage insurance) you will not only be paying more you will also be buying less.

CHAC in Colorado has recently changed their guidelines AGAIN, but this time it's to the home buyer's benefit. CHAC will once again provide down payment assistance to most home owners in Colorado. They do not lend in all cities and counties so for more information please contact us.

The new GFE which was instituted at the beginning of this year, doesn't do much but create a new headache and more paperwork. If you not seen this form you will get a good laugh once you receive it.

It's important that you understand how much the process and guidelines have changed before you begin the process of refinancing or purchasing a new home. Please call with any questions or advice. Or you can visit our website www.colomortgages.com

There is Not Much Time Left

2010-02-17T19:39:00.000-08:00

No I'm not talking about the tax credit. While the home buyer tax credit has received the most attention, the government's mortgage backed security (MBS) program has done more for the real estate market and may have a bigger impact when it's over.

The federal government allocated $1.25 TRILLION to purchase MBS to keep mortgage backed rates. In fact, they have become the ONLY player in the MBS market. The MBS purchase program is set to expire at the end of March. Once the government leaves we will see rates increase, the question is how much? Some experts believe we will see an increase of at least 1% immediately and possibly 2%-3% higher by the end of the year.

What does this mean in dollars? If you have a $200,000 loan currently you could receive an interest rate of 5% which would give you a payment of $1,073. If rates increase to 6% your payment will increase to $1,199. The difference of $125/month or $1,500/month or $45,000 over the life of the loan.

If you thought of refinancing, have a rate above 6%, have an adjustable rate, or purchasing a new home, do it now. Go to www.colomortgages.com and apply online for free.

HAMP and Another Short Sale Disaster

2009-12-23T12:54:00.000-08:00

New numbers were published by the government a few weeks back with regard to HAMP, the government's loan modification program. And I was surprised they would release the numbers! Any one who has tried to obtain a loan modification, this might not be too big of a surprise, until you find out how much the government has paid out.

Since the program started earlier this year over 3.1 million have applied for a short sale and the lender has requested initial documents to process. Out of 3.1 million people only 31,000 have received a permanent loan modification, that's only 1% and well short of the 4 million people our government promised to help!!!! While, lenders and the government guidelines are to blame, it's not all their fault. There are a lot of people that don't send in the paper work or are just plain tired of the headache tying to obtain loan modification and give up.

As I have said in the past, if you don't have professionals helping the public, the success rate of any loan modification program will be low. There is just too much paper work and too much to know for the average American to handle.

Now here is the real kicker. For helping 31,000 Americans lower the mortgage payments lenders have received over $27 BILLION in incentives from the government. $27 BILLION!!!! ARE YOU KIDDING ME!!! If the government would have paid off mortgages of $200,000, they could helped 135,000 home owners pay their mortgage IN FULL!!!!

HAMP has become another bank bail out, with out all the bad press that TARP received. This is amazing, that we would pay $27 BILLION to lenders to help on 31,000 people. And now the government has not only created a similar program for short sales, they have also increase the HAMP funds to $50 BILLION.

The bottom line is, that lenders are getting RICH without providing any service or product, and we are paying for it. The loan modification and short sales that we are paying for, lenders would have done regardless of a government incentive program, as it SAVES them money. And I have heard countless stories and worked on loan modifications for friends that qualify for HAMP and are being denied for no reason, except that they don't help the bottom line of the lender.

If you are working on a loan modification, good luck and hopefully it's the lenders financial best interest.

HVCC Ended Appraisal Fraud?

2009-11-03T09:15:00.000-08:00

Fannie Mae and Freddie Mac along with the Attorney General of New York created this great program called Housing Valuation Code of Conduct (HVCC) that would solve all the appraisal fraud problems we have experienced over the last few years. While EVERY ONE in the business knew this was bad idea from the beginning the public was unable to let their voice be heard.

HVCC has not only resulted in higher fees and additional headaches for the consumer, a recent report shows appraisal fraud has actually increased by 40%. Another government intervention failure and I know there will be more to come.

When will they learn to talk to experts in the business before they create or pass new guidelines/laws?

The Moving Target

2009-08-12T08:25:00.000-07:00

As the mortgage industry continues to evolve the toughest obstacle to over come is the constant moving target of loan approval. Tougher guidelines continue to limit home ownership to those who want to buy. Many potential home owners are finding out they may have qualified last month to purchase a home and now they don't OR they are approved for a much lower loan amount. So what can you do to make sure that you are able to buy home today AND next month with guidelines changing so rapidly and often?

You need to make a budget for yourself and know what you can afford and WANT to pay on a monthly basis. The biggest problem most potential home owners make is they try to purchase a house at their qualifying amount, which is not always what they can afford. Mortgage underwriters only account for the debt that is reporting on your credit and you may have other obligations that are unknown to the underwriter. Make sure you have room in your budget for emergencies and don't over buy. By not over buying you are also protecting yourself from debt to income ratio guidelines changing.

Pay off your debt and save money! I know this sounds like common sense, but you don't how many people purchase new items for their home BEFORE they close or start the approval process. The lower your debt and the higher your savings will help your chances of loan approval when guidelines change. Mortgage underwriters will grant exceptions on certain guidelines if there are compensating factors and the two biggest compensating factors; our your debt to income ratio and savings.

Plan ahead - Once you obtain a mortgage approval it is typically good for 120 days, but you must be approved FIRST. Before you start looking for houses talk with a mortgage professional and obtain underwriting approval. This way if guidelines change, you most likely won't be affected as your loan is already approved. Also, the approval process is taking a little longer then it did six months ago, if you wait to start the approval process until you are under contract you may run in to complications with closing on time.

Finally, be prepared for the loan approval process to be a little more in depth and require more documentation then you did the last time you purchased a house or refinanced. If you haven't obtained a new mortgage in the last 12 months you are going to be surprised/shocked on how different the process is now.

If you have any questions or would like to be pre-approved for a mortgage please call 303.666.6550, email, or visit us online.

http://www.colomortgages.com/

YES, We Are STILL DOING LOANS!!!!

2008-11-10T12:39:00.000-08:00

I've never been so amazed on how many people believe every thing they hear on the news. Almost every person that I have met in the last month are amazed that I'm still doing business in the mortgage industry. They all thought that mortgages were near impossible to obtain at this point and were surprised to hear that I was not filing for unemployment. What about the credit squeeze they heard about on the news?

The facts are, that mortgages are still being approved and funded every day. Yes, the guidelines can be tougher in some places and there are a lot of loans that we can no longer due. However, you don't have to have an 800 credit score or 20% down to be approved for a loan. NOT EVEN CLOSE.

There are still 100% financing options available and you don't necessarily have to have GREAT credit to obtain no money down financing. And, YES, you can still obtain a mortgage loan if you can't verify your income. AND, YES, you can still obtain a mortgage for an investment property.

However, lenders will no longer approved loans with layered risk (multiple risk factors). If you don't have great credit and can't verify your income, good luck finding a loan. Or if you want to purchase an investment property with no money down, have fun trying. There are dozens of programs still available (with good rates) that will lend money to people with a lower credit score or can't verify income or don't want to put money down, but you can't have multiple risk factors.

When we look back in 5-10 years at the mortgage meltdown, I believe layered risk will be one of the biggest lessons learned. A lot of these loans are great programs, but there can't be multiple risk factors involved within these loans.

Greg Selters
Mortgage Manager
Prosperity Financial, LLC
http://www.myprosperityfinancial.com/

Why the Mortgage Bail Out Bill Won't Work?

2008-07-28T08:30:00.001-07:00

There has been a lot of hype surrounding the Mortgage Bail Out Bill that is scheduled to be signed by President Bush today. However, it's all been for the wrong reason. Our government has waisted a lot of time and tax payer's money for a bill that will cause more harm than good. I'm not sure how they could get this so wrong and not have a clue.

Why won't it work and what is wrong with the bill?

To be eligible for the bail out you must have obtained a loan between January 2005 and June of 2007. So if you received a loan prior to January 2005 or after June 2007 you are out of luck.
To receive help your current lender must be willing to write a portion of your current loan balance, similar to a short sale . If you currently owe $250,000 and your home's value is only $200,000, your current lender will have to write of $70,000.00. Don't get me wrong a lot of lenders will do this, but it's a process and not an easy one. Most consumers will not be able to navigate through the process on their own and very few lenders will be willing to help as it will take a lot of time and very little in compensation.
The consumer will have to share any appreciation they obtain with the government, up to 100%!!! If the consumer refinances or sales their house with in the 1st year the government would get 100% of the profit. The percentage the government would receive decreases 10% every year there after but is guaranteed to receive at least 50% of the profit regardless when you sale or refinance.
TIME!!! There will also be a huge back log to obtain approval as all of these loans will have to be manually underwritten. Lenders are already struggling to keep up with current FHA loans that must be manually underwritten and a lot of lenders have placed tight guidelines on FHA loans that they will manually underwrite. I foresee a lot of lenders not offering this new FHA program as they will not be able to handle the workload and/or it will be cost prohibitive.

Not only will the bail out fall short in helping the millions Americans, it has made it tougher for millions of American to purchase a home. The bill will eliminate down payment assistance (DPA) programs that millions of Americans use to help purchase a house AND it raises the the down payment requirements to 3.5%. While I agree with the elimination of DPA this is not the time to do it. We have now cutoff millions of potential home owners ability to purchase a house at time that we are trying to stimulate the housing market. How will this help???

If you are in a house or mortgage that you need to get our of you need to call a mortgage specialist and discuss your options. We will provide a free consultation to review your options and help you develop a plan.

100% Financing And Much More

2008-05-09T14:47:00.000-07:00

In this market there is no doubt that it's tougher to get financing then it was a year ago or even a few months ago. If you are self-employed or trying to buy a house with no money down you already know this. But it doesn't mean you can qualify for a mortgage, even at 100% or with stated income. Although you can't go to your local bank and get a loan at 100% financing or with stated income, mortgage brokers have access to these types of loans.

Why don't you hear about these programs, because a lot of brokers are lazy and complacent. They are still in the same mind set they were a few years ago, they have a few lenders that they work with and when their lenders eliminate programs they assume every one has. A lot professionals in the business also have the mindset if they can't help you now, they can't help you.

Don't give up if you have been turned by a lender or even 5, there are programs out there that can help you achieve your goals, but you have to be willing to do the research. I spend about 2 hours a day looking for new lenders and new programs that can help my clients (and I know where to look). Yes, you might have to do a little work to improve your credit scores, but your mortgage professional should be able to help you do this. I would say about 25% of our clients needed help with improving their scores 20-30 points before we could do a loan, but that usually can be done with in 60 days.

If you are self-employed, looking for 100% financing, or just need help finding a loan call us, we will work you to find the right solution, whether that is doing a loan with us or another option that will meet your needs better.

Prosperity Financial - Your Mortgage Manager

Questions YOU SHOULD be Asking

2008-04-29T08:55:00.000-07:00

Any time I talk with a client or introduce myself to a stranger as a mortgage professional, the first and usually only question I receive, is what are your rates? Obviously, price (rate and closing costs) are important to every one, but I'm amazed that is the only question I hear?

While, price is an important factor when making a decision on what lender to use, service is more important. The problem is most people don't understand how great service from their lender can save them thousands of dollars and a dozen headaches. Here are some questions that you should be asking your lender and why they are important.

What is your process and how do you communicate the status/progress of the approval process? While all lenders basically have the same process, they all do it differently, and this can be important if there is a time crunch, especially on purchase transactions. Communication is also very important, you want to make sure you are working with a lender that communicates effectively with all parties involved. Also, make sure your lender is willing to fax/email/mail your rate lock to you, this will help you avoid the bait and switch tactic some lenders employ.

What after closing services do you offer? I believe this is one of the most important questions you can ask. You want to make sure you have a great relationship with you lender and that they are looking after you best interest even after the loan closes. A good lender will offer multiple after closing services such as, credit analysis, rate watch, and value analysis. After closing services can save you thousands of dollars, if not hundreds of thousands.

How do you store/dispose of my private information? This should be a no brainer, however, there have been many instances in the news of lenders throwing away clients private information (application, tax returns, bank statements), in the trash with out shredding it. Make sure you lender takes your privacy as seriously as you do.

Ask for Referrals!!!!! It blows me away how few people ask me for referrals from past clients. Any GREAT mortgage lender will have a plenty of refferals that you can call and ask about their services. Great lenders have raving fans as clients and their clients never have problems talking to prospective clients. If your lender is hestitant or will not provide you referrals, find a new lender.

Prosperity Financial - Your Mortgage Manager

www.colomortgages.com www.3bed2bath.net www.myprosperityfinancial.com

Are you Kidding Me?!?!?

2008-04-14T10:21:00.001-07:00

As most of you know in February of 2009 all television broadcasts are moving to digital. Which means that you will be required to have a TV or attenna or converter box that can receive the digital signal. What you might not know is that the Federal Government may spend over $1.3 TRILLION to help people with conversion!!!

ARE YOU JOKING????

Your tax money is going to help ensure people don't miss out on American Idol??? I didn't know watching TV was a right as an American? With all the problems we are facing now, we can't find a better way to spend this money?

Why it Will Get Worse

2008-04-14T09:47:00.000-07:00

I know I have been predominately optimistic about the local real estate market, however, over the last few weeks I'm starting to think we might not be out of trouble yet. In fact, the problem may be getting bigger. Why the change of heart? Lender guidelines, "Declining Markets, and Americans spending habits"

This ugly tag of a "declining market" that lenders and mortgage insurance companies have set on most of Colorado and the nation is going to hurt. If a market is designated as a "declining market" financing becomes much more difficult for those who are trying to obtain financing (purchase or refinancing). 100% financing, forget about it. In a "declining market" 95% financing is difficult to find, a lot of lenders will on financing 90%-92%. Ten, twenty years ago this would not have been a problem (actually the norm), however, very few people plan or have the ability to make a down payment now.

Lender and mortgage insurance guidelines are becoming more conservative by the day. Stated income loans, which most self-employed borrowers use to qualify, are becoming extinct or so limited they are only useful to a small percentage. Other similar guideline changes have excluded thousand from home ownership or trapping them in bad loans that they can't refinance.

For example, I talked to a borrower the other day, he purchased his house 2 years ago with no money down. He has a great credit score 743, he has never made a late payment in his life, however, because he lives in a "declining market" and is self-employed he has no chance at obtaining a new loan at this time. He can't afford his payment when it increases $650/month, he is going to have to walk a way from his home.

So we have an excess of homes on the market, thousands of people who own homes and now in trouble (because of the economy, life changing events, or bad loans), lenders shutting the doors on a majority of society, and Americans who like to spend and hate to save. This is bad news for the national economy and local real estate market. However, all of the plans that have came from the White House or Capital Hill will do little or nothing to stop the slide. Watch out!!!

Prosperity Financial - Your Mortgage Manager
Lafayette, CO

www.colomortgages.com www.myprosperityfinancial.com www.3bed2bath.net

Paying For Other's Mistakes...

2008-03-26T15:02:00.000-07:00

You came home after a hard day at work and open your pay check, and you are astonished, upset, angry when you see how much of your check has been taken my Uncle Sam. If you are still mad, STOP READING NOW!!!

Although most American home owner's made a conscious effort to purchase a house within their budget, obtain a loan that would fit their financial plan, and even struggled to make their payments in hard times, they now will be forced to help those who didn't. Many Americans don't know that their hard earned money and taxes they pay will be used to help bailout homeowners who made bad choices and may lose their home in foreclosures. The Federal Government has already allocated billions of dollars to bailout investment banks that made poor decisions and now there is legislation that is gaining popularity to bailout homeowners, AT OUR COST!!!

Politicians are quick to note that some of these homeowners were victims of fraud, and will share personal stories of these people to help them pass these bills. The fact is, a majority of these people made poor financial decisions and either purchased more house than they could afford or gambled with ARM loans and didn't follow up and refinance their house before the loan adjusted or over spent on materialistic items (like new cars, boats, electronics) and now can't make their mortage payment. And now, we have to pay for their mistakes and bail them out.

When will we as society start holding people responsible for their mistakes and make them accept the consequences of their actions??? If I don't manage my business correctly and I'm forced to close my doors the government is not going to come and save me, nor do I expect them or want them to. I understand and fully support helping those who are less fortunate, but I'm responsible for my failures and the consequences, as well as, my success and prosperity. I shouldn't have to bare the burden of others mistakes nor should I share in their prosperity. But I guess that is what our nation is becoming or already has become?

Prosperity Financial - Your Mortgage Manger

Say it Ain't so, Joe

2008-03-26T14:35:00.000-07:00

Lenders are once over reacting and creating another mortgage mess. This time they are eliminating programs for qualified borrowers making it tougher for people to purchase or even keep their homes.

Every day I hear of new guidelines or lenders eliminating products eliminating another set of borrowers from purchasing or refinancing their house. There are very few lenders offering 100% LTV loans even if you have great credit, income, and assets it's a lot harder to obtain financing then it was a few months ago.

Self-employed borrowers options to obtain financing is also becoming scarce. A lot of self-employed borrowers typically use stated income loans because their tax returns do accurately reflect their cash flow. However, many lenders are eliminating their conforming stated income programs making it tough or impossible for them to obtain financing. If they can obtain financing the loan amount for which they will be approved will be much lower than before.

These two changes are going to eliminate a lot of borrowers from the real estate market and will also probably help increase the foreclosure numbers around the nation. There are some alternatives for borrowers, such as FHA and others but they will not be able to help a lot of these people. Not good for the real estate market and not good for the value of your house.

Why are lenders over reacting? There are a few reasons, supply and demand on the secondary market and mortgage insurance companies are facing problems with their current portfolio of loans that they insured over the last few years.

If you need help navigating through mortgage chaos to find financing that meets your financial needs, please call and we would be happy to help you or guide you in the right direction.

Prosperity Financial - Your Mortgage Manager

http://www.3bed2bath.net/ http://www.colomortgages.com/ http://www.myprosperityfinancial.com/

Mortgage Brokers Hitting the Books

2008-03-13T13:15:00.000-07:00

Colorado has announced that mortgage brokers licensed to do business in the State of Colorado will have to complete 40 hours of education by the end of 2008. Until now, any one that was registered/licensed could originate mortgage loans with little or no knowledge of the industry.

This is great for the industry and consumers, as consumers can now be assured their mortgage brokers is knowledgeable about the industry and not some one who was selling cars yesterday. However, I would like to see it go a step further and require all mortgage professionals, even those who work for banks, be required to complete education courses. If we really want to protect consumers we need to make sure every mortgage broker and loan officer is required to complete classes that will provide them with the knowledge to originate mortgage loans.

Are you Trying to Pay Off Your Mortgage?

2008-03-10T15:43:00.000-07:00

I'm still surprised with how many people I talk to on a weekly basis that hold paying off their mortgage as one of their main financial goals. My first question is always why? And I never receive a good response.

While our parents and grandparents worked hard every day to pay off their mortgage, this is not the best use of your money in today's market. I know their is a huge sense of pride to own your house free and clear, but your equity in your house is not making money for you.Also there has been a large marketing campaign recently about a new program in the mortgage industry that will help you pay off your mortgage quicker.

However, if you leverage your equity in the house and invest wisely (and conservatively looking for a 6% return), you would not only be able to pay off your mortgage within 30 years but you would also have hundreds of thousands of dollars in liquid assets.

Your mortgage should be a part of your financial plan that allows you to accomplish your financial goals quicker. For more information on how you can be using your mortgage to help you meet your long term financial goals please call us.

Prosperity Financial - Your Mortgage Manager
Lafayette, CO

www.colomortgages.com www.3bed2bath.net www.myprosperityfinancial.com

What Your Lender Should be TEACHING YOU!!!!

2008-02-29T11:35:00.000-08:00

A majority of the public has very little understanding of the mortgage industry, heck, 70% of Realtors (and a lot of mortgage professionals) I speak with have very little knowledge of the mortgage industry. Even though purchasing a house is the largest financial transaction most of us will ever be a part of and, a mortgage is the largest debt we will ever have there is no LIVE resource to educate the masses.

Yes, you can go online and do research and HUD does have a hot line that can provide general advice, but most sources are general and impersonal or WRONG.

Due to the lack of education sources, your mortgage broker should be providing you with the information you need and want (and what you don't want to hear). Many mortgage brokers often only provide information to their clients that they believe they want or when asked. However, as professionals in a business that is often rarely comprehended beyond the basics, mortgage brokers have a responsibility to educate their customers beyond the scope of "must need" information for their specific loan.

Educating the borrower on program and real estate risks/benefits, how their mortgage fits in with their financial plan, using credit, and how they can become a "better borrower" for lenders should be information discussed with ALL borrowers. Mortgage brokers usually believe borrowers don't want this information unless they ask. The problem is a lot people either don't think about these issues or believe the myths they have heard and don't bother asking because they "know" the answer.

How much do you know? Answer these questions through comments or email.

What are the major factors that determine your credit?

Is it better to have an adjustable rate mortgage or fixed mortgage?

How much money do you need to put down to purchase a house now?

What is a "good" credit score?

What do lenders look at to determine if they will approve your for a loan? How do they determine what interest rate you will receive?

Is it better to payoff your mortgage? Why or why not?

gselters@myprosperityfinancial.com

Prosperity Financial - Your Mortgage Manager and Teacher
Lafayette, Colorado

http://www.colomortgages.com/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/

ARMs Making a Come Back???

2008-02-21T13:13:00.000-08:00

Over the last 12 months we have seen a decrease in adjustable rate mortgages (ARMs). The main reason for the decrease was that borrowers could obtain a fixed mortgage at the same or a better rate them ARMs. However, ARMs are now offering significant lower interest rates than their fixed counterparts. Currently a 5/1 ARM is averaging about 0.875% lower than a 30 year fixed.

Does the discount on ARM loans mean it they are the best choice at this time? It depends on your situation and goals. If you are planning on staying in your house for more than 5 years it probably doesn't make sense to take the lower rate. On a $200,000 loan you would save almost $110/month if you went with ARM loan, but you would have to refinance your loan to avoid your rate increasing. Therefore, you would save $6,594 over 5 years on your mortgage payment, but would spend $3,500 in closing costs to refinance and would be gambling that you could get a fixed rate as good or better than you could today.

There are also other factors that you would need to consider that may limit your ability to refinance such as; income and liabilities, real estate market, and changes in the mortgage industry. Many people have learned this lesson the hard way in the last 6 months. They were able to save thousands of dollars over a few years, but the real estate market changed or their income decreased and they were unable to refinance.

ARMs are still great options and can save you a lot of money, here are some situations when to consider an ARM:

You plan on selling within the fixed term on the ARM

You plan on refinancing or paying off the loan within the fixed term of the ARM

You know you will be making more money in the next few years and want to purchase a house that will meet your future needs and an ARM will allow you to afford the house and you can refinance to a fixed rate mortgage within the fixed term of the ARM.

Before refinancing or purchasing you should always think about your immediate needs and future goals and plans before deciding on a mortgage program. If you need help with deciding which loan will be best for you please feel free to contact us.

Prosperity Financial - Your Mortgage Manger

Lafayette, Colorado

http://www.3bed2bath.net/ http://www.colomortgages.com/ http://www.myprosperityfinancial.com/

Home Ownership at it's Highest Levels

2008-02-20T08:10:00.000-08:00

We have all heard the criticism and negative consequences of the subprime sector and the relaxed guidelines many lenders used to approve loans over the last few years. However, I have not once seen a report on the news regarding the record levels of home ownership. The fact is, that more people own their home now than ever before, about 70% of Americans.

As shown in the cartoon on this blog, lenders can never escape criticism for their underwriting guidelines, they are either too strict or too lenient. Obviously many lenders went a little to far approving high risk loans, but I believe we have once again over reacted and many well deserving people will miss out on home ownership.

Consider this, many experts are stating that 20% of subprime loans are failing or will fail, that would mean that 80% are NOT. Even if their projections are off at worse we are still looking at a 70% success rate, not bad. These are people who otherwise would not have been able to purchase a house or would have lost their house in foreclosure due to a job loss or another life changing event.

I believe if we can approve our financial literacy and regulation in the mortgage industry, we can then afford to take chances on people and avoid the credit disaster we are in now.

Prosperity Financial - Your Mortgage Manager

Lafayette, Colorado

http://www.colomortgages.com/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/

Finally, They are Trying to Get it Right

2008-02-14T13:24:00.001-08:00

A baby could have foreseen what was going to happen when Colorado implemented their mortgage licensing regulation. In last 12 months there have been a migration of mortgage hacks who could not obtain licensing because of fraud or other past issues to federally charted banks (Chase, Wells Fargo, TCF, Washington Mutal). Not any more.

It appears that State of Colorado is finally trying to look at for the consumers and ignore the lobbyist. In an attempt to help protect consumers (which is what they stated was their reason was from the beginning with mortgage licensing), Colorado will require ALL mortgage originators to be licensed by the state regardless of their employer.

Initially, only mortgage brokers that were not HUD approved were required to be registered/license, and then the state amended the law to require all mortgage brokers to be licensed, but employees of federally and state chartered banks were exempt. However, the Division of Real Estate has determined that EVERYONE who originates loans must be licensed in Colorado.

There is a big obstacle that stands in the way of making this a permanent reality. The Supreme Court has ruled in the past that federally charted banks are governed by the Office of Comptroller and Currency and are not subject to state regulations. However, the vote on the decision was very close (3-5) and, at issue then and now will be, whether federal oversight of federally chartered banks extend to their mortgage subsidiaries and granting them exemption from state regulations.

Let's hope they get this right for consumers, a fraud is a fraud, it doesn't matter if they work as a mortgage broker or Wells Fargo and they should have access to our personal information.

Prosperity Financial, LLC -Your Mortgage Manager
Lafayette, Colorado

http://www.colomortgages.com/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/

Why Can't They Report the Full Story?

2008-02-13T12:20:00.000-08:00

The Denver Post and Rocky Mountain news both had an article published online from the AP about Denver's foreclosure ranking. The headlines stating Denver is ranked 9th in the nation for foreclosure filing in 2007.

The article has two small paragraphs about the Denver market and then reports on other markets around the nation. However, in the brief mention about the Denver market they fail to mention that foreclosures were down in the 4th quarter compared to the 3rd quarter and from December to November.

The average reader is going to read the article or just the headline and believe that our market is still in shambles, when that is not the case. I understand free press, but shouldn't publications be held to some type of standard to report the full story?

Prosperity Financial, LLC - Your Mortgage Manager

http://www.colomortgages.com/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/

2008-02-12T08:44:00.000-08:00

Don't They Know What They're Doing????

2008-02-09T12:22:00.000-08:00

Congratulations Nancy Pelosi and California home owners!!!!

A revised economic stimulus package has now passed the Senate and House that includes a temporary increase in the conforming loan limit and the upper threshold for FHA loan programs to as much as $729,000. Which will help only homeowners in a few markets around the county, but will raise rates around the country and jeopardize the stability of Fannie and Freddie.

The bill allows Fannie Mae, Freddie Mac, and FHA to purchase and guarantee loans up to 125% of the median home price in any given market for the duration of 2008. Currently, Fannie Mae and Freddie Mac are limited to loans equal to or below $417,000 regardless of location and FHA limits are based on the market (Denver Metro is about $310,000).

Regardless, this will have no impact/help on Colorado home owners, as there will be only a few if any "markets" that will have a median home price great enough to matter. Even if you have a jumbo loan now, unless you live in resort community like Aspen, Vail, or Beaver Creek your "market" most likely won't qualify.

Even though we won't benefit from the increase, we will PAY FOR IT!!! Larger loan amounts carry greater risk for the lenders, especially if they are in markets like California, Florida, Las Vegas that are suffering double digit depreciation. Fannie and Freddie must change (increase)their pricing (rates) in order to account for this additional risk they are taking on.

Another problem with this bill, is Fannie Mae and Freddie Mac are barely surviving with the current conditions in the market. This additional risk they will be adding to their portfolio is not coming at a good time and may be the straw the breaks the camel's back. And if you thinks are bad now, wait to see what happens if one or both companies fails.

Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado

http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/ http://www.colomortgages.com/

Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates

Top Foreclosure filings by Zip Code

2008-02-05T11:11:00.000-08:00

Realty Trac issued a new report showing the top zip codes for foreclosure filings. The good news, out of the top 100 zip codes Colorado only has one listed, 80013 (Aurora). Colorado once had as many as 10 zip codes listed in the top 50.

A good sign for our market?

Yes, but don't get too excited as Colorado still ranks in the Top 10 in total foreclosure filings and annual foreclosure rate. While we still have a long way to go, Colorado is one of only a handful of states that show a decrease in filings in December 2007 compared to November 2007 amd from the 4th quarter 2007 compared to the 3rd quarter.

We are definetly heading in the right direction and I'm optimistic that 2008 will be a rebound year for the real estate market in Colorado.

Prosperity Financial - Your Mortgage Manger

Lafayette, CO

http://www.colomortgages.net/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/

Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates

The Economy Still Stinks? Let the Sell OFF Begin!

2008-02-05T09:02:00.001-08:00

Here we go, investors on wall street just figured out that our economy still has some steep challenges in front of it and the latest Fed rate cuts has not fixed the problem. I always wonder if this can happen again, every time the Fed has cut the rates in the last 6 months we have seen this same pattern.

Good news is we should see mortgage rates drop today and again tomorrow morning.

What Happened to Service?

2008-02-04T15:59:00.000-08:00

A friend was telling me a story the other day about the terrible service he received from his cable provider. The customer service agent was rude, unable to fix the problem and even told him that a previous problem was fixed by "magic" and she didn't what else she could do.

When did poor service become the norm?

In an effort to try to save money companies not only outsource factory jobs, but also customer service jobs. There is nothing more frustrating than when some thing doesn't work and you call customer service and you have to struggle to understand the service agent. I know they are probably hard workers and great people, but that doesn't help me fix the problem. I know a few times I have recommended my cell phone provider just becuase the customer service agent speaks English that I can understand??? Not becuase the service was outstanding, but they had customer service I could use.

However, it's not like we deliver great service ourselves. From utility companies to waiters/waitress to retail workers service is typically horrible. I went to a rent a movie last week and it took 30 minutes to check out!!! It wasn't busy (my wife and I were the only people in the store), but the cashier had better things to do than help us and when she did decide to do her job she was incompetent and slow. And her manager sat their and watched it all happen?

I wish I knew what was the source or reason for the lack of service in our society and how to fix it, but I don't have that much time on my hands. So instead of crying, I have decided to celebrate good service on my website and blog and will be creating a working list of "GOOD" service that I have experienced. And I'm not talking about just people/companies providing service (which often passes as good service these days), but actual people/companies that go above and beyond.

If you have any nominations or stories, please feel free to let me know.

Prosperity Financial, LLC - Your Mortgage Manager

Lafayette, CO

Purchase - Refinance - Cash-Out - Home Equity - Debt Consolidation - Great Rates

Feds Cut the Rates Again - What Does it Mean

2008-01-30T14:11:00.000-08:00

Every time the Federal Reserve cuts the rates the phone calls I receive appear to be ten fold of a normal day. Every one is curious what it will do to their mortgage rate, does it make sense to refinance now? What almost every one doesn't know, is the when the Federal Reserve lowers the Fed funds rate it doesn't necessarily correspond to an equal drop in mortgage rates and often mortgage rates increase. Let's see if I can keep this simple...

When the Fed lowers the fund rates it has a direct effect on short term rates, (credit cards, lines of credit (HELOCs). So you can expect the interest you pay on your credit cards and home equity loans to decrease (unless if you have a Capital One card, they have been known to raise their rates when the Fed cuts rates). However, you will now earn less on money you have invested in CD's, money markets, and savings account.

Unlike short term rates, mortgage rates are determined by the market and adjust according to the market (some days it will adjust multiple times a day and others none at all). The Fed lowers the funds rate to try to stimulate the economy by enticing people to spend money and the stock market usually has a positive reaction to rate cuts, at least in the short term. When people are investing their money in the stock market there is less money to invest in bonds. The 10 year bond is a good indicator of where mortgage rates are heading. If the bond market is not doing well, mortgage rates increase.

There is obviously a lot more than this, but this at least will give you a good idea on how mortgage rates work. While, we saw an increase in mortgage rates today, I believe the optimism in the market will be short lived and we will see rates fall again, at least for a day or a few hours like it did last week. So if you are thinking of refinancing, stay tuned as this next week or two will be the best time to do it.

Prosperity Financial - Your Mortgage Manager
Lafayette, Colorado

http://www.colomortgages.com/ http://www.3bed2bath.net/ http://www.myprosperityfinancial.com/

Purchase - Refinance - Debt Consolidation - Cash-Out - Home Equity - Great Rates

We Can't Pay for Financial Literacy?

2008-01-29T08:40:00.000-08:00

A bill has been introduced at the Capitol to bring financial literacy to Colorado Schools. The goal of the bill is to help teach our children about mortgages , personal finances, savings, budgeting and other financial lessons.

What a great idea!!! Let's provide our children with the information and knowledge they need so they don't make the same mistakes we did. We will show them why it's important to save and invest their money, and then HOW TO DO IT. We will teach them why it's not wise to spend your all you money on things you don't need, why it's no smart to max out your credit cards, and why you don't spend more money than you make.

One problem, WE don't want to PAY for it. This new bill would cost about $550,000 to implement in schools around the state. I don't understand how the State of Colorado can't pay for a bill that will save 100 times that in the years to come. Our state spends over $13 million dollars a year for education and recreation programs for PRISONERS in our state. I have an idea, let's spend $550,000 less on convicted felons and use that money for our children.

There was no vote taken on the bill yesterday and funding options will be discussed before a vote on Thursday (1/31/08). Hopefully, they do the right thing.

Prosperity Financial - Your Mortgage Manager
Lafayette, Colorado

http://www.colomortgages.com/ http://www.3bed2bath.net/ http://www.myprosperityfinancial.com/

Did You Miss Out?

2008-01-28T15:46:00.000-08:00

In this crazy and volatile market there have been many opportunities for home owners to drastically reduce their interest rate and save hundreds of dollars a month. The problem is that the opportunities were short lived and only a very few were able to take advantage of lowest rates offered last week. On Tuesday, rates in the morning were at their lowest levels in over 3 years, however, 3 hours and 4 rate changes later they were up 0.375%-0.5% (still great rates).

By the time most home owners knew about the rates dropping, they already raised a 0.50% or more. It pays to work with a mortgage broker that will manage your mortgage and knows your target rate and payment to refinance. If you have a $250,000 mortgage a 0.50% in rate could save you about $80/month and over $28,000 over the life of your loan.

If you have not heard from your last mortgage broker/banker please feel free to give us a call and we can discuss and help you determine what your target refinance rate should be and ensure the next time rates drop you don't miss out.

Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado

http://www.colomortgages.com/ http://www.3bed2bath.net/

Purchase - Refinance - Cash-Out - Home Equity - Debt Consolidation - Great Rates

What you Don't Hear About in the Tax Rebate Bill?

2008-01-25T15:12:00.000-08:00

As always, politicians can't just try to help the masses. There is always a hidden clause that finds it's way in to bills even though it has nothing in common. Most of us have heard about the tax rebate that we may receive due the economic stimulus bill the house passed, however, I bet most of you don't know that there is a clause in there that will raise the conforming loan limit from $417,000 to a maximum of $729,750.

Nancy Pelosi, a California Representative was able to include a one year increase in Fannie Mae and Freddie Mac's loan limits in to the "Tax Rebate" bill. An idea that has been discussed over the last few months with regard to mortgage reform, but many experts believe it will help on a few and will most likely due more harm than good to the overall market. Pelosi, knowing she would not be successful in passing a bill that only raised the conforming the loan limits, is now trying to piggyback on a bill that will most likely pass (what politician won't vote for a tax rebate in an election year????).

Raising the conforming loan limits would force Fannie and Freddie to assume more risk, forcing them to raise rate to account for the risk. So while, raising the loan limits would help very people (mostly California home owners and the real wealthy), the rest of us will be stuck paying higher interest rates.

You have to love politicians? I still don't understand how they can screw up every thing they do.

Prosperity Financial, LLC - Your Mortgage Manager

Lafayette, Colorado

www.colomortgages.com www.3bed2bath.net

Purchase - Refinance - Cash-Out- Debt Consolidation - Home Equity - Great Rates

Fraud Alert

2008-01-22T17:35:00.001-08:00

Have you ever wondered why you receive so many calls from mortgage brokers and lenders once you applied for a mortgage from a broker or lender? It's called trigger leads. Once you apply for a mortgage loan (purchase or refinance), the credit bureaus/repositories sale your information to mortgage lenders, brokers, and possibly con artists around the country.

Currently it's perfectly legal for the credit bureaus and repositories to sale YOUR personal information. Feel a little vulnerable, wait a second? Companies that sale these leads don't even check or verify if the company/person they are selling YOUR information to are licensed mortgage brokers or if they are on the fraud watch list. Now you have 5-10 people calling you that know a lot about you personally, financially, and your credit offering to beat the rate and closing costs of your current lender. Beware!

A few quick stories from people we have helped recently.

The first borrower we were helping refinance their house to lower their rate and they wanted a little cash out. A few days in the process they received a call from a well known national lender (they were just purchase by Bank of America), promising lower closing costs and a lot more cash out. Obviously, any one would be interested in a deal like that. It turned out the loan officer was not familiar with our local market and assumed the house was worth a lot more than it was. After three weeks and $500 later the borrower called us tired of hearing promise after promise but no substance.

Borrower two received a call 3 days before closing, again a lender promising to beat the rate we had provided. They provided the loan officer all of their personal information and waited for a response, but never heard back. We closed the loan for them after a slight delay, and every thing was great. Until 3 months later we received a call from the borrower, their identity had been stolen.

Borrower three was purchasing a house and received a call about a week after we pulled their credit, once again some one telling them they could beat our loan. They provided the borrower with a good faith estimate and all the disclosures and every thing appeared great. However, on the day of the closing they received a call from their broker telling them rates had jumped over a 0.50% and their closing costs had also increased.

How can you avoid your personal and credit information being sold? Call toll-free 1-888-5-OPTOUT (1-888-567-8688) or visit http://www.optoutprescreen.com/

Remember it's always good to shop when looking for a mortgage, however, make sure you know who you are doing business with, try to use a local broker/lender that is familiar with the market, and you ask for a lock confirmation as well as the other disclosures.

Please contact us if you have any questions or would like to look over your mortgage package another lender has provided.

Prosperity Financial, LLC - Your Mortgage Manager

Lafayette, Colorado

http://www.colomortgages.com/ http://www.3bed2bath.net/

Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates

Good Signs for Northern Colorado

2008-01-21T09:02:00.001-08:00

Weld and Larimer County both saw sizeable increases in wages for the the 2nd quarter in 2007. Weld County ranked 20th out of 329 of the largest counties in the nation, with a 6.8% increase in weekly wages. While Larimer County, had a 5% increase in weekly wages.

Good News in Colorado Real Estate?

2008-01-17T15:20:00.001-08:00

Many experts believe that Colorado's real estate market troubles are in the past and 2008 should be a promising year. Experts site the strength of our local economy and the fact that we didn't not experience the "Boom" as much as other markets in the country.

Many people I still talk to believe the real estate market locally is still suffering and that we still lead the nation in foreclosures. While foreclosures levels are still high, we not even in top 10 markets for foreclosures. Experts believe the biggest obstacle for our local real estate market are people's beliefs. Almost every day there is a negative report on real estate, however, a majority of the reports are national reports, not local reports. Real estate markets are local and it appears that is a good thing for Colorado in 2008.

http://www.9news.com/money/article.aspx?storyid=84644

http://www.rockymountainnews.com/news/2008/jan/17/economist-sees-denver-housing-turnaround/

Fannie and Freddie Not Helping Many Colorado Cities

2008-01-14T07:59:00.000-08:00

A few weeks ago Fannie Mae labeled most of the Denver Metro Area cities as declining markets, and it appears Freddie Mac will follow suit. What does this mean to you? Why do you care? How will it affect you?

To begin for those of you who don't know, Freddie and Fannie are the two largest suppliers of mortgage funds in the nation. The designation of a declining market by both companies will make it more difficult and impossible for some to purchase a house. Fannie and Freddie both determine declining markets based on your zip code.

If you are trying to purchase or refinance a house in a declining market both companies will reduce your borrowing power by 5%. The max you will be able to borrower is 95% of the value of the house, and in some cases lower.

This designation will make it extremely difficult for many real estate markets to improve, and it will surely have a negative impact on many markets. For example, let's take the Highlands neighborhood in Denver, this neighborhood has seen some of the highest appreciation in the state over the last 2 years. However, some how this neighborhood has found itself on the declining market list, which means any person trying to purchase a house using a conforming loan will have to put 5% down. They could try an FHA loan, but currently most of the houses in this neighborhood would not meet their guidelines. Due to this new guideline, there are will now be less qualified prospective buyers, lowering the demand for houses in this neighborhood, forcing sellers to lower the price of the house if they want to sale.

The declining market will also make it impossible for many A paper borrowers to refinance their house if they are currently in ARM, which may force people with great credit into foreclosure, reducing the value of the neighborhood further!!!

On the other hand, this may help cities/neighborhoods that avoided the list. For instance a majority of Broomfield is on the declining market list, while neighboring towns to the north (Erie and Lafayette) are not. Prospective buyers looking to purchase in the north part of Broomfield, are now likely to look at houses in Erie or Lafayette if they don't have 5% down or don't want to put 5% down. Good for Erie and Lafayette, not so much for Broomfield.

For more information on the declining markets in Colorado, or to see if you are in a declining market, please email or call me.

Prosperity Financial - Your Mortgage Manager
Lafayette, Colorado

http://www.colomortgages.com/ http://www.3bed2bath.net/

Purchase - Refinance - Cash-out - Debt Consolidation - Home Equity - Great Rates

Are we Falling in to Recession?

2008-01-09T15:06:00.000-08:00

Some experts believe we may already be in a recession, the 1st time since late 2001. Check out this article about our current economic state.

http://money.cnn.com/2008/01/09/news/economy/recession/index.htm?postversion=2008010915

What do this mean for the mortgage rates? Typically, during recessions the Federal Reserve lowers rate in attempt to stimulate the market and help pull the economy out of it's declining state. Some experts the believe the Fed Reserve will lower rates to 2.5%, it currently sits at 4.25%. Which means you will definitely see a drop in your HELOC rates and payments and will see a decrease in first mortgage rates.

Prosperity Financial -Your Mortgage Manger

Lafayette, Colorado

http://www.colomortgages.com/ http://www.3bed2bath.net/

Buyer Beware - Lease Option Scam

2008-01-07T09:07:00.000-08:00

The recent boom and bust in the real estate industry has created many opportunities for scam artists to make quick and easy money, while leaving their victims wondering what happened. Real estate fraud has been a problem for decades, however, it typically increases in markets that recently have experienced problems and people are desperately looking and hoping for solutions.

I recently heard of scam that appears to be gaining popularity in the real estate industry. The scam artist, will first prey on people that are having a tough time making their mortgage payment or facing foreclosure and promises to handle their problems if they quit claim the title of the house to them (the home owner relinquishes their ownership of the property). They tell their victims that they will refinance the house in their name or handle the sale of their house so they don't have to deal with the headache and can salvage their credit.

Once the scam artists takes over ownership of the property, they then advertise the property for rent, or even better for them, as a lease option to buy. Once they have tenant, they collect a deposit (on a lease option the deposit could be as much as $10,000) and rents, but never make a payment on the house or try to sale the property. By the time the original owner or tenants discover what has happened they scam artist has collected their money (up to $15,000 in some cases) and has disappeared. The original owner is now stuck with a mortgage that is in foreclosure and has no options to save their property and the tenants are out their deposit and are forced to find a new place to live.

How do you avoid falling victim to a similar scam? First you have to know the people that work these scams are good and very convincing. They will provide you will a deed to shown they own the house, and it's almost impossible for the common person to know who is on the note of the mortgage. However, there are few easy steps you can take to protect yourself.

First, always ask to contact their other tenants for a referral, any good landlord or business person will have no problem providing this information.

Next, check county records to determine how long they have owned the property and how they acquired the house. Almost every county has this information online through the assessor's office or property records. If they acquired the property through a quit claim deed, there is a good chance that they are not responsible for the mortgage and it should raise red flags.

Another good idea (especially for lease options), is to have the deposit held by a non-interested 3rd party, such as a title company. If some thing does happen you will be able to get your earnest money back from the title company.

If you are doing business with a stranger, remain skeptical throughout the process, make them earn your trust, and don't be a afraid to ask for help from some one with in the industry. Feel free to call us and we will take them time to review the transaction and provide any advice that might help.

Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado

http://www.colomortgages.com/
http://www.myprosperityfinancial.com/

Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates

Are you Kidding Me?!?!?!

2008-01-05T19:41:00.001-08:00

Let me begin by saying, I'm a huge sports fan and while baseball is not my favorite, I understand and follow the game. But, why in the world is our government wasting their time and efforts to probe in to the steroid/HGH debacle in baseball? Don't they have better things to do? Don't we have troops fighting overseas? Are we not in the middle of a foreclosure crisis that could force our county in to a recession? Immigration? Social Security reform? Health care reform? The bottom line is, there are more important issues for the government to focus their attention and our money on.

For those of you that don't know what I'm talking about, there will be a 2nd congressional hearing on the steroid problem in baseball later this month. The House Oversight Committee has invited a few players and others that were recently named/involved in the Mitchell Report (the investigation in to steroids and other performance enhancing drugs in baseball).

What I don't understand (besides the obvious question of why are they wasting their time on this issue), is what they expect to come out of this hearing? Are they going to fix the steroid problem in baseball? I understand that baseball players are role models for our youth, and some one needs to fix this problem. However, I don't think our government should be spending time on this problem. Is this why we voted for these people to represent us? I don't ever remember once in a debate a politician discussing their solutions to the steroid problem in baseball? Is this why we pay taxes? Where are their priorities?

Hopefully, they don't spend too much time on this issue and get back to work solving American's real problems.

Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, CO

http://www.colomortgages.com/
http://www.myprosperityfinancial.com/

Purchase - Refinance - Cash-Out - Debt Consolidation - Homey Equity - Great Rates

You Have "A+" Credit, the "Cerdit Crunch" Won't Hurt You? Or Will It?

2007-12-28T14:40:00.000-08:00

Talking with many people within the industry and clients many people don't understand the the mortgage industries problems are more than subprime loans. And more than Alt-A loans that offered 100% interest only loans. While the subprime crisis spread to Alt-A lenders fairly quickly, A paper or conforming loans escaped the "credit crunch." However, conforming loans may not be able to escape the "credit crunch" forever.

While, it's tough to predict what will happen in 2008 given the market uncertainties, there is a chance the conforming lenders may be the next in line to take a hit. While, Fannie Mae and Freddie Mac have remained stable over the last 6 months, they are not out of trouble yet. If you ask 10 experts about their forecast for 2008, you will receive at least 9 different answers and they all base their forecasts on whether Fannie and Freddie will be able to steer clear of the credit crunch.

The main concern remains, will foreign investors continue to invest in American mortgage backed securities. If foreign investors become reluctant to invest their money in mortgage back securities Fannie and Freddie will be certain to experience problems 2008 and we may see rates increase to 7%-8%, which will hurt the real estate market even more. However, if foreign money supply continues the conforming market should be able to avoid the problems that have faced the subprime and Alt-A sectors.

We have also seen private mortgage insurance companies, such as MGIC, tighten their guidelines and are more reluctant or will no longer insure lower credit scores. This new trend has made it even tougher for people to obtain financing for a new home and/or refinancing their current mortgage.

I remain optimistic that Fannie and Freddie will remain stable through 2008 and the mortgage industry will be in better shape by the 3rd quarter in 2008. However, to be honest this is just a guess from my research and experience, hopefully, I'm right.

Prosperity Financial
Lafayette, CO

Your Mortgage Manager

http://www.colomortgages.net/, http://www.myprosperityfinancial.com/, http://www.3bed2bath.net/

Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates

Colorado Mortgage Brokers Taking All the Blame?

2007-12-27T13:18:00.000-08:00

Almost every day I turn on the news and see a new story about different bills in the Senate or House of Representatives or Colorado's legislative branch or the Federal Reserve trying to curb the foreclosure epidemic and they are always focused only on mortgage brokers. This is especially true for Colorado mortgage brokers. A majority of the new regulations passed by the Colorado legislative branch and signed by the governor only apply to Colorado mortgage brokers.

I will agree some thing must happen to help curb the fraud and dishonest practices that have occurred in the mortgage industry. However, these new rules/laws/regulations should apply to all mortgage professionals regardless of who you work for. These problems are not specific to mortgage brokers and I'm confident that a large portion if not the majority of the issues you hear in the news are a bigger problem in the larger banks.

There have been many surveys and reports that show consumers receive better interest rates, closing costs, programs and SERVICE from mortgage brokers, than they do from banks and direct lenders. There are a few reasons for this:

Mortgage brokers have the ability to shop multiple lenders and find the best mortgage for their client, a bank or direct lender only has access to the products their company offers. The mortgage brokers ability to shop with multiple lenders and programs ensures that they can find the best mortgage program for you at the best rate available.
Mortgage brokers don't have an endless marketing budget and most of their business is obtained from referrals and past clients, so they are more likely to work harder and offer better rates to earn repeat and referral business. Repeat and referral business is not as important to loan officers at banks because they know their marketing and banking customers will always bring more clients through the door.
Mortgage brokers have more flexibility than banks and direct lenders because they have lower overhead, therefore, they can offer better mortgage programs at lower rates with lower closing costs. To give you an example, I have a friend that works for a large bank here in Colorado and his rates are typically 1.5% higher than what I offer and his closing costs are usually $4,000 more. Why would people pay so much more? Because consumers trust their bank and they don't shop around (banks know this and therefore charge higher rates).
The mortgage industry, like many sales industry, has a high turn over rate, especially within banks and direct lenders. Many loan officers that work at banks and direct lenders change company's every 6-12 months. This job hopping leads to less accountability for loan officers, as they have left the company before a borrower realizes they have received a bad loan.

Again, I think there are bad actors on both the mortgage broker and banker channels, but for some reason mortgage brokers are being singled out when it comes to new rules/regulations/laws. I believe if we truly want to protect the consumers, all mortgage professionals should be required to follow any new rules/regulations/laws including, licensing, E&O insurance, and industry education.

Prosperity Financial - A Proud, Honest Mortgage Broker

Your Mortgage Manger

Lafayette, CO

http://www.colomortgages.com/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/

Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates

Getting Back on the Horse and Rebuilding

2007-12-17T10:35:00.000-08:00

In previous posts I have talked about how to avoid bankruptcy(BK) and foreclosure (FC), however, life happens and some times there are no other options than BK or FC. If you find yourself in this situation, you are probably wondering how to re-build, re-establish, and get back on your feet.

The first step is to reflect on the past, and determine what was the cause of your financial problems and learn from your mistakes. While it may have been an unforeseen event such as job loss or family/personal emergency, was there any thing you could have done different to avoid BK or FC? I'm not talking about preventing the event itself, but did you have adequate savings that you could have used to pay your bills while you were trying to find a new job? Learn from the past, otherwise, you are doomed to repeat history.

The next step is to PLAN your financial future. There is no better time to develop a personal financial plan then when you have reached rock bottom. Create a budget for yourself and determine how much you can save on a monthly basis. Savings is the key, you must find a way to save at least a little every month. As with all plans, make sure you set dates to evaluate your plan and chart your progress. You will find that you need to make changes to your plan frequently in the beginning, I would suggest you do this every month or every other month for the first year and every 3-6 months after the first year.

Once you have a financial plan, now you need to work on re-building your credit...pull out the Advil and let's have some fun. First a quick piece of advice, if you are filing BK exclude at least 1 item from bankruptcy, this will help you re-build your credit quicker. If you have eliminated all of your debt through BK or all of your debt is currently is delinquent you will need to obtain new credit lines, in order to re-establish your credit.

There are a few ways you can do this, the first is by applying for new credit (credit cards, auto loans, pre-paid credit cards). When applying for new credit make sure the new credit will report to the credit bureaus, otherwise, it will not help you. Once you have new credit lines, make sure you keep your balances low on credit cards and that you make your payments on time. Another option, which will improve your credit quicker, is to become a co-signor or joint owner on a family or friend's credit card. Obviously, you want to be sure this person has perfect payment history and a low balance. This option will improve your credit quicker because it will report on your credit that you have had this account since the credit line was opened, providing you with a great credit history.

Next you will want to obtain a copy of your credit report, I would wait 2-3 months from the discharge of the BK or the completion of the FC. Many times, you will find that there are a lot of errors on your credit report. Items that were included in the BK are still reporting as open and/or your mortgage showing as active loan even though the FC is completed. You will need to dispute all of these items with the three credit bureaus. I would suggest you consult with a professional that is knowledgeable in credit repair (they will typically charge about $450) or contact us and we can provide guidance for free. It can take up to a year to clear your credit, but it is worth every penny and minute.

All of these steps are necessary to re-establish yourself and your credit, if you choose to only focus on 2 or 3 of these areas you will the road to recovery a challenging obstacle and you most likely will not be successful. If you have and questions or need a little help please feel free to contact us and we will be happy to assist you.

Prosperity Financial, LLC
Lafayette, CO
http://www.colomortgages.com/
http://www.myprosperityfinancial.com/

Your Mortgage Manger

Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates

Purchase Horror Story - Don't Let it Happen to You

2007-12-13T13:55:00.000-08:00

A Realtor that I have helped in the past called me today to share a story of one of his clients. His clients, like many savvy mortgage shoppers, went online to shop multiple mortgage companies to find the best rate and program before they started looking at houses. They found a lender that offered them a rate that was almost 0.50% lower than any of the lenders. They found a house they really liked, put in an offer, and every thing was great until the day before closing.

They called the lender to discuss what the final payments, closing costs, and how much money they would need to bring to the closing. What they found out was that their interest rate was almost a full point higher than what they were originally quoted. The lender would not budge on the rate stating that rate changes and they could do not any thing about it. They could not change lenders as the closing was tomorrow and they really wanted the house so they could not back out (if they did back out they most likely would have lost their $3,000 in earnest money). They were forced to close on the mortgage and take the mortgage with the higher rate.

It's tough to say if the mortgage lender was acting fraudulent, and I hate to speculate on what happened, but at the very best, the lender exercised very bad communication. One thing many people don't understand is how often and how big rate fluctuations are in this market. If you obtain a rate quote today and don't close on your house for 60-90 days your rate will more likely be different, however, the lender should communicate any and all changes in rates.

How can you protect yourself from this happening to you? It's pretty easy to avoid this type of situation by following a few simple steps.

Do business with some one you trust and was REFERRED TO YOU.
Talk to your lender about lock options, you can typically lock your rate for 30 days at no cost and longer if you are willing to pay a little more in closing costs. It may be worth to pay a little more in closing costs if you and your lender believe interest rates are going to increase.
If you talked to a lender about rates before you found a house and didn't lock the rate, ask them again what your rate will be once you have a contract on a house.
Once you decide to lock your rate ask your lender to fax/email you the lock confirmation. Every lender has the ability to do this and if they say they can't or won't I would find a new lender. A good faith estimate (GFE) is not the same as rate lock, it just an estimate of your rate and closing costs, but things can change (see story above).
Ask your lender to email/fax you the closing docs before the loan commitment date on the purchase contract. If you find a problem with the loan before the loan commitment date you are more likely able to extend the contract (and find a new lender) or terminate the contract with out losing your earnest money.

While most mortgage professionals are honest and professional individuals, as in all business, there a few bad apples or people that just don't know what they are doing. Make sure you take every step to protect yourself. If you have any questions, please feel free to call or email me.

Prosperity Financial - Your Mortgage Manager

http://www.colomortgage.com/

http://www.myprosperityfinancial.com/

Purchase - Refinance - Cash-out - Debt Consolidation - Home Equity - Great Rates

Mortgage Industry Update - What the News Doesn't Tell You

2007-12-12T11:08:00.001-08:00

I thought this would be a good time to give every one a quick update on the Colorado mortgage industry. Every time the Fed lowers the fund rate we receive a lot of inquiries on what is happening to the mortgage rates. Along with the Federal Reserve lowering the rates over the last few months, there has been a lot of mortgage talk in the news lately; subprime/ARM bail out, guideline changes, and mortgage reform.

We will start with the Federal Reserve lowering the rates and where rates stand now. Typically, the Fed's lowering the funds rate has little or no impact on the mortgage rates, however, it will lower your rates on credit cards, home equity line of credits, and short term mortgages. It also may have an impact on your ARM, depending on what index your loan uses. Please call us and we will review your current loan with you to see what, if any, affect it may have on your ARM. With that being said, mortgage rates are still great. You can purchase a house with NO MONEY down and receive a 30 year fixed rate of 6.25%.

The subprime/ARM bailout has been receiving a lot of news lately. I'm not going to go in to specifics or if I agree with the plan or not. What you need to know, is the current plan will help very few people in America and you should not count on the government to help you save your house. If you are having a tough time paying your bills or your loan is going to adjust in the next 12 months, contact us immediately before it's too late. There is a lot we can do to help you restructure your mortgage and advice that we can provide to help you through these tough times. At the first sign of trouble call us, it's better to be safe than sorry and you will be surprised what we can do.

There has been a lot in the news about guideline changes and it's a lot tougher to obtain a new mortgage now. While a lot programs have disappeared or changed guidelines, most of the programs that were affected were exotic mortgages (interest only, negative amortization, hybrid ARMs). There a lot of great mortgage programs that are available and offer great rates and flexible terms, like no money down purchases.

Ahh, and now my favorite subject, mortgage reform. Although mortgage reform has not been in the news as much as some of the other topics, it probably has the biggest impact on you and all home owners. I always get a kick out of people trying to make rules, laws, and guidelines for industries they no nothing or very little about. It reminds of the the Holiday Inn commercials, where people are playing roles they no nothing about but are ready to handle they situation because they slept at Holiday Inn. To give you an idea on how bad are elected officials can screw things up, there was a bill introduced in Colorado that would require you to have $40,000 in equity in you home at all times regardless of the value of your house. Which means, you would have to have at least a $40,000 down payment to purchase a house. The good news on this front, it appears that are elected officials have received some good advice from professionals in the industry and are not going to screw things up too much. However, I would recommend every one to stay tuned and be involved.

Once again, for the most of us our house is the largest asset we have and biggest purchase we will ever make in our lives, make sure you do the proper research and ask questions any time you become confused. Don't be that that person that spends more time planning lunch or their weekend than their financial future.

Prosperity Financial
Your Mortgage Manager

http://www.colomortgages.com/
http://www.myproserityfinancial.com/

Lafayette, Colorado

Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates

Shopping for a Mortgage Online? -Not the Best Idea

2007-12-10T12:21:00.000-08:00

The Internet has made all of our lives easier in one way or another. Whether you are purchasing a new washer and dryer or searching for directions or looking to purchase a new house, the Internet is full of useful information to assist you in your decision. However, for every piece of useful information online, there is an equal amount of useless or erroneous information.

I know many people who have turned to the Web, when shopping for a mortgage, sites like Lowermybills, Refinance.net, Lending Tree offer the ability to shop multiple companies quickly. Lending Tree, being the most known, has advertised for years, when banks compete you win. However, there are a few things you should know about these online companies before you provide them with your personal information.

Many of these online companies, Lending Tree being one of them, are actually mortgage lenders as well. Therefore, while you may think there are a few banks competing for your business, this may be not be the case.

On the other hand, you may find yourself on the other side of the spectrum and you may receive 15-20 calls from one submission. Online companies make their money by selling your inquiry to mortgage brokers and lenders, and some of these companies may sell your information to 15-20 companies to maximize their profits. What you thought was a great idea, now has turned in to a pain, with mortgage companies calling you every 15 minutes. If you have experienced this before, you know that mortgage companies are relentless when it comes to trying to contact you and that's because they spent good money to get your information.

Another problem I have with online companies, they don't require their lenders to go through any type of background investigation or provide certification of their experience or knowledge. The loan officers receiving your information may have very little knowledge of the industry or even worse they may be frauds. While most companies don't require you to input your social security number, some, like Lending Tree, do require you to enter your social security number.

So how you should shop for mortgages? Referrals are the best way to find a great mortgage company that will take care of you. Ask friends, family, neighbors who they used to purchase their house or refinance. If you are new to the area and don't know any one ask your Realtor, financial advisor, insurance agent who they used or who they would refer. I always suggest to shop with at least 3 lenders but not more than 6.

Also, I would suggest to use a local mortgage lender. There are a lot variables in the mortgage industry that are related to the local market and you are less likely to have problems if your lender is familiar with your market. We don't do any loans out of Colorado, because we know we won't be familiar with the local market and, therefore, not able to provide the service we expect of ourselves.

If you don't know any one that can provide you a good mortgage professional, your best bet is to visit the National Association of Mortgage Brokers website for local mortgage professionals, http://www.namb.org/.

Happy shopping!!!

Prosperity Financial
Lafayette, CO

Your Mortgage Manager

http://www.myprosperityfinancial.com/
http://www.colomortgages.com/

Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates

How Much do you Know About Your Credit Cards

2007-12-07T08:30:00.000-08:00

Every one I know has at least one credit and most people have multiple credit cards. Even though, we know we should only use them if we have the ability to pay them off quickly or in case of emergency, we find ourselves swiping the card for purchases that are not necessary and often for items that we can't afford. Why do we do this? How have credit cards become such a large part of American society? The ability to purchase an item now and paying for it later costs Americans billions of dollars. How much are you credit cards costing you???

On average Americans have over six credit cards with an average balance of $2,500 on EACH card, over $17,000 in credit card debt!!! In total Americans have over $9 BILLION in credit card debt!!!

If you make the minimum payment on a credit card with $2,500 it will take you over 20 YEARS TO PAY IT OFF!!! With a total cost of OVER $5,800!!! You borrowed $2,500 and you paid $5,865.51, and if you are the average person and have 6 credit cards you will pay $35,193 to pay off your credit card balances of $17,500...how does this make sense??? Would you be willing to pay $93.84 for a pair jeans, when the store is selling the same jeans for $40.00? No? This is exactly what you are doing when you purchase an item using your credit card and can't pay off the balance quickly. So next time when you think of purchasing an item (and you can't afford it), before pulling out the credit card, ask your self if you are willing to pay more than double for that item.

What about the transfer game? I know a lot of people that think they have the credit card companies fooled, they transfer their balances to a low or no interest card to save money. However, this is what credit card companies want you you to do. They know most consumers don't read the small print and/or review their statements closely every month. Did you know, most of these offers require to use you card at least once a month (and the new purchases have a different, higher interest rate) just to keep the promotional rate? Or if you are even one day late they will charge you a much higher rate on your balance (18%-30%).

Even if you are able to maintain your great rate, you can still fall in to the credit card companies trap. Typically, they will lower your minimum payment to entice you to make a lower payment during your promotional period, therefore, paying off less of your balance. In addition to paying off less of your balance, the credit card companies know that a majority of us will use our credit cards more now that our monthly payments are lower, raising our balance and making them more money in the long term.

Like Vegas, the house always win, so don't play with your credit cards unless you can pay off the balance at the end of the month or it's emergency and you don't have any other options.

Prosperity Financial, LLC
Lafayette, CO
http://www.myprosperityfinancial.com/
http://www.colomortgages.com/

Your Mortgage Manager

Purchase - Refinance - Debt Consolidation - Cash Out - Home Equity - Great Rates

When does your Mortgage Adjust?

2007-12-03T09:02:00.000-08:00

With over 2.5 million mortgages schedule to adjust in the next 12 months there is a good chance that you have an adjustable rate mortgage (ARM) or know some one that does. If you have an ARM there is no reason to panic, with a little planning you shouldn't have a problem with finding a new loan that you can afford, BUT you MUST plan a head. A majority of people suffering problems or facing foreclosure becuase their ARM adjusted was because they DIDN'T PLAN!!! The mortgage industry has changed drastically over the last 6 months and it may cause a problem for you when you try to refinance.

Start developing a plan 6-12 months before your ARM adjusts. Talk to a mortgage lender and have them look at options that are available to you now. Even though rates are historically low, most likely your payment is going to going to increase and is important that you know in advance how much higher your payment will be (especially if you have interest only ARM). If you know 6-12 months in advance that your payment is going to increase by $300 you can develop a budget now, that will help you afford the higher mortgage payment.

With the elimination of programs in the mortage industry over the last six months, you might also have a hard time qualifing for a new mortgage. Not only have programs been eliminated, guidlines are now, much more strict making it difficult for many to qualify for a new loan. Talking to a lender in advance will help you understand why you don't qualify now, and provide time for you to make adjustments so you can qualify in 6-12 months.

Also, in a few areas in Colorado houses have depreciated, therefore, your house may be worth less than what you currently owe on your mortgage. While you might still be able to refinance your mortgage, it will be more difficult and the extra time will ensure that you find a new mortgage before your existing ARM adjusts.

Another thing to consider, is that you may be better off selling your house and down sizing to smaller house that is more affordable. I know, it's not the best time sell your house and you may have to offer it at a reduced price, but the more time you have to sell your house the better chance you have. Also, it's a great time to buy a house, there are a lot of great houses available at reduced prices which should offset the money you lose when you sell your current house. If you end up losing a little money, it's still better than losing your house in foreclosure.

Prosperity Financial, LLC
http://www.myprosperityfinancial.com/
Your Colorado Mortgage Manager

Don't Refinance to Pay for Gifts

2007-11-29T09:10:00.000-08:00

Isn't this the greatest time of the year? The holidays are around the corner, decorations are on houses every where, and people are full of joy. However, this is also the most expensive time of the year. Your making your list, checking it twice, and trying to figure a way to pay for all these gifts. Here are a few ideas on how to ensure that you still won't be trying to pay off your credit cards in July.

Make a Budget: Before you make a list of all the people that you will be buying gifts for this year decide how much money you can afford to spend on gifts. Once you know how much you can spend for the gifts, make you list and assign a MAX dollar amount you can spend on each person.

It's the THOUGHT THAT COUNTS: It's easy to forget what this time of the year represents, it's not about buying expensive gifts to show those we love that we care about them. There are a lot of inexpensive gift ideas that will show the people close to you that you love them. Baking holiday cookies, a picture frame with a picture of you and the person you are giving the gift to, other crafts (there is a lot you can do even if you failed art and crafts in elementary school, like I did. Search the web and there are many sites that will help you with ideas and how to do it. Here is a good site to start your search http://www.thriftyfun.com/). Your kids artwork is also a great gift for grand parents. Frame the artwork with an inexpensive frame and add a quick poem or scripture or picture to the frame.

Give your time: Ahh, we all made coupon books for our parents or brothers and sisters when we were children. Coupon books are great way to show people that you care about them and they allow you to spend more time with people you love throughout the year.

Search for Bargains: For those people on your list that you HAVE to buy some thing for, look online. The Internet is the best tool you can use for holiday gifts, you can shop thousand of stores looking for the best deals from the comfort of your own home.

Good luck with your budget, and Happy Holidays!!!

Prosperity Financial, LLC
http://www.myprosperityfinancial.com/
Lafayette, CO

Managing your Mortgage

Purchase - Refinance - Cash-Out - Home Equity - Great Rates

What's in your Wallet?

2007-11-26T13:19:00.000-08:00

First of all, Happy Thanksgiving to all, I hope every one had a great Thanksgiving.

One of the most valuable assets we have is our credit, however, most of us don't know much about it and what we can do to improve our credit. There are many factors that play a role in how the credit bureaus determine your credit score. Most of know about that timely or late payments affect our credit we don't much about the other factors. Here is a little information on 3 major areas that have an impact on your credit.

Amount Owed: Next to your payment history the amount owed reporting on your credit has the biggest impact on your score and can be the most confusing. Having a lot of credit cards is not necessarily a bad thing, however, having a lot of credit cards that are maxed out is. Credit cards actually help your credit, but you want to try to keep your balances below 30% of the credit limit (If you have a $1,000 credit limit, keep your balance below $300). This is one reason why I don't recommend having a Capital One card and if you do have a Capital One card check your credit report frequently. Capital One is known to report your last month's balance as this month's credit limit (if you have a credit limit of $5,000 with Capital One and your balance last month was $2,000 and you paid $500, next month they will report your limit as $2,000 month with a balance of $1,500, even though your real credit limit it $5,000), which can have severe impact on your credit score. Also, try to stay away from department store cards and other high interest rate cards, they will not help improve your score. It is also important ot know when your credit card company reports to the credit bureaus. I know a lot people use their credit cards and pay off the balance every month. However, if your credit card company reports before you pay off the balance then it will appear to bureaus that your cards are maxed out or have a high balance every month. Typically, you want to have a few credit cards with small or no balances, auto loan, and mortgage (if you have one), is a good mix.

Length of Credit History: The longer your credit history is the better. That means if you have a credit card that has been opened for 20 years but you don't use it and were thinking of canceling it, DON'T. If you cancel the card and close your account your credit score will drop. This also explains, why some times a person's score when drop when they pay off a collection account that has been opened for years (I know it doesn't make sense).

New Credit: Ahhh, I hear this all the time, I don't want my credit pulled because my score is going to drop. While, credit inquiries can have a slight and very temporary impact on you score, they typically don't affect your score. However, when you obtain new credit (credit card, auto, installment loan) your score will be drop for a short time (3-6 months). This is caused because the credit bureaus are unsure of your ability to make the new payment along with your other payments. Once you have proven that you can continue to make timely payments your credit score will rebound and in most cases will be higher than it was before.

If you have any questions regarding your credit or want to know how you can improve your score up to 100 points with in 3 months please feel free to go visit us online at, http://www.myprosperityfinancial.com/ or call us at, 303.666.6550.

Prosperity Financial
Mortgage Manager
Lafayette, CO

Purchase - Refinance - Cash-Out - Home Equity - Great Rates
The best choice for a Mortgage Manager in Colorado

Purchasing a House with No Money Down

2007-11-19T12:38:00.000-08:00

People all the time tell me they are waiting to purchase a house until they can save enough money for a down payment. My first question is always, why? I typically will receive 1 of 2 responses, "Don't I have to have some type of down payment" or "I want to get a good interest rate." This probably the biggest myth in the real estate industry.

There are dozens of loan programs/mortgages that are available that don't require any down payment and they all offer great interest rates. In fact, purchasing a house usually will take less money out of your pocket than renting a home. When you rent a house you have to make a security deposit and pay the 1st month rent (some time the last month too), however, when you purchase a house the only money that is out of your pocket is the earnest money (typically $500-$1,000, and you usually receive this back when you close).

Any time your mortgage finances over 80% LTV (if you purchase a house for $100,000 and you mortgage is for $90,000 you are financing 90% loan to value (LTV)), you will have to pay monthly private mortgage insurance (PMI). PMI helps reduce the risk for lender by insuring the lender against defaults, therefore, allowing the lender to offer you a better interest rate. While, a mortgage with PMI will add to you monthly payment, it is tax deductible if your household income is less than $100,000 and many of the no down payment programs/mortgages offer reduce PMI rates.

Another option for 100% financing is to obtain a first and second mortgage, often called an 80/20 (your 1st mortgage finances 80% of the purchase price and the 2nd finances 20%). The advantage of an 80/20 is that you can avoid paying PMI and therefore, at times can offer a lower payment.

For more free information on mortgages or real estate please visit us at, http://www.myprosperityfinancial.com/ or you can call me or one of our mortgage professionals at 303.666.6550.

Prosperity Financial, LLC
Lafayette, CO 80026
Refinance - Purchase - Cash Out - Home Equity - Great Rates

Plan Right and Never Worry about Foreclosure

2007-11-15T09:57:00.000-08:00

The topic of the year in the mortgage/real estate industry has been the spike in foreclosures over the last 9 months. We have reached foreclosure rates that have not been seen in over 20 years and has added more stress on the already weak real estate market. While the media has blame bad loans, wall street, the government, what can YOU do to ensure that you will never have to worry about foreclosure?

Avoiding foreclosure begins before you purchase your house. Purchasing a house is typically the single most expensive transaction most of us will make in our life time. However, most of take more time planning our weekend activities than the purchase of our house. Failing to plan is a plan for failure. There are a lot of details that must be considered and discussed before you start shopping for houses.

1. Plan Wisely
How much can you afford now? How much can you afford in 5 years? 10 years? How long will you live in this house? Are you expecting your family to grown in the next 5 years? A majority of us only think about today and worry about tomorrow when it comes. However, this is a recipe for foreclosure. Interest only (IO) loans and adjustable rate mortgages (ARM's) are not at fault for the problem that we face now. The lack of planning is the problem. While, both loans carry additional risk they both offer great benefits for those borrowers who planned wisely. Before talking to any one (Realtor or Mortgage Professional) develop a personal financial plan for the next 5-10 years. What debts do you have now? What debts will have in 5 years? Consider; growing family, new car, saving 5%-10% of your income, emergencies. I always suggest that you over estimate your debts and under estimate your income (raises, promotions). Once you have considered all factors you can now determine how much you can afford monthly on your new house.
2. Talk with a Mortgage Professional
There are thousands of mortgage professionals available to help you obtain financing for your new house, talk to a FEW of them. It is important that you like and trust the person that is helping you find a mortgage. Make sure the person that you choose will help you MANAGE your mortgage (they will help and assist even after the loan closes). This is important because you want some one that will take care of you after the loan closes. If the rates drop and you can save a few hundred dollars a month, will this person call you? Will they remind you when you rate is going to adjust? Will they help you manage your credit after the loan closes? They should be willing and able to sit down with you and discuss all the options that are available. A good mortgage professional will tell you all the advantages and disadvantages of the different loans your considering. You want to make sure they are willing to walk you through the entire process. Follow your gut feeling, if you are uneasy or don't feel right, find some one else to work with.
3. House Hunting
MAKE SURE YOU STICK TO YOU BUDGET!!! If you can afford a $250,000 house, purchase a house that is $250,000 or LESS. This is a buyer's market and there are thousands of houses available there is no reason to purchase a house that is not in your budget. Take your time and view as many properties as you can before you decide on a house. When comparing houses find out what property taxes, monthly HOA dues, and insurance will cost. Theses additional expenses can vary a lot between houses and will help you stay in budget.
4. Managing Your Finances
You would think they would teach personal finance in high school, since it's a subject that every American will use every day for the rest of their life. Don't use your credit cards if you can't pay it off at the end of the month. Plan on saving 10% of your income every month for retirement or a rainy day. A majority of foreclosures are caused by life time events (death in the family, illness, injury, divorce, loss of job), not because of bad loans. Plan for the rainy day and if you are lucky enough to avoid them you will enjoy retirement that much more.

For more helpful mortgage or real estate information visit us at, http://www.myprosperityfinancial.com/ or call 303.666.6550

Prosperity Financial, LLC
Lafayette, CO
Refinance - Purchase - Cash Out- Home Equity - Great Rates