MISTAKES -- Looking for a
house without knowing how much you can afford to pay. Not following
the SIMPLE steps below.
Follow these steps and it may save you
thousand of dollars, make shopping for a loan less
stressful, and make buying a home a more enjoyable
experience.
Step 1. Pull your credit FREE CREDIT
REPORT - You have a good
chance of errors on your report and any error can cost
you!
Step 3. Call me - and I will
show you how to shop for a loan, fast, easy with little
stress.
FREE credit report. It gives you a free credit report but NOT a credit
score
Be creditworthy. Pull your credit report to determine if there
are any black marks that could stall your application or get it
rejected. You are entitled to one free credit report each year from
each of the three major credit reporting agencies -- Experian,
Equifax and TransUnion -- which means you can get three different
credit reports each year at no cost. Obtain the reports from
AnnualCreditReport.com, the only
resource for the federally-sanctioned free report. The sooner you
know your credit standing, the sooner you can challenge errors or
otherwise address your findings.
We don't make loans, but I can show
you how to get the best deal. Remember-
your lender has NO DUTY to look out
after your best interest. So, you are own
your own and must protect yourself.
Wholesale Price + Loan Provider's Markup
= Price to
Borrower
Like automobiles and
TV sets, home mortgages have wholesale prices. These are the prices
quoted by large lenders or "wholesalers" to the many thousands of
smaller lenders and brokers who deal directly with borrowers. The
wholesale market is extremely competitive, since there are many
wholesalers and their prices are constantly being compared.
Like automobile
dealers, retail loan providers formulate their own price to the
borrower by adding a markup to the wholesale price. Mortgage loan
providers don't ordinarily disclose their wholesale prices because
that reveals their markup, which is their gross profit on a
transaction
All the abuses to
which borrowers are subjected have the objective of increasing the
loan provider's markup. Here are five of the most common
Price
Low-Balling: Loan providers sometimes deliberately
quote a very low price in order to "hook" borrowers who are
shopping. Later on, the low price disappears because (allegedly) the
market changed, or the lender discovered fees that were not
mentioned before, or for a dozen other reasons
Price
Omissions: Fixed-rate mortgages ordinarily have 3
price components, the interest rate, points, and fixed-dollar fees,
while adjustable rate mortgages have more. Loan providers quoting
prices sometimes omit one or more price components until it is too
late for the borrower to do anything about it.
Markups on Third Party
Charges: Some lenders add a markup to third party
charges such as appraisal fees or credit report charges. The
borrower is billed for these charges without knowing about the
markups.
Overcharging:
Many loan providers charge what the market will bear, which means
that borrowers who are na and trusting and don't shop
alternatives will pay higher markups than knowledgeable and
aggressive shoppers.
Market Niche
Misclassification: Borrowers are sometimes
classified as belonging to a higher risk category than is in fact
the case, which increases the markup. Borrowers who are erroneously
classified as sub-prime get whacked twice, since the wholesale
prices on sub-prime loans are higher, and markups are also
higher.
