MortgagesUndressed

The borrower had a 520 credit score. They wanted to put less than 10% down. They had some items on their report that could be cleaned up. It was a purchase.

They have to do something to fix this. In the short term a larger down payment via a gift could work. The interest rates would be very high.

They may lose the opportunity to buy this house with my suggestions, but that shouldn’t be the driving factor.

I suggest they work day and night, literally, to clean up the glaring problem on the report. Give proof it is resolved to the bureaus, and watch the score climb. With the new score in hand, get a pre-approval first, then go find a home. If at this point in time you are close to a year or two years without negative credit marks, expect to get a conventional type of a rate.

The lower the rate, the lower the payment, or the more home you can buy with your credential. It is worth the wait. The market has settled down in many places, even if this means no bubble, it should not mean the market getting away from you. Larry Cragun

Freddie Mac reports the average interest rate on July 20, 2006 was the highest for the recent several years. That average rate was 6.80%. Last thursday this had dropped to 6.30%, a nice 1/2 % reduction.

So how much difference does that mean to a mortgage payment? Here are a few numbers for your quick review: the first number is the loan amount, the second the monthly savings.

$200,000 = $65.90/mo

$300,000 = $98.86/mo.

Should you therefore refinance your mortgage now? Is it worth the above savings to you? What rate did you actually pay? Can you save 1/2 per cent without paying closing costs? These are important questions. I have had clients who refinanced every time they could save $50.00 a month, if they could do it with no closing costs. It is a bit of work, but to some worth it. The thing they had to remember, each refi resets the mortgage for another 30 years.

This gives me the opportunity to make another point. Using your money to buy a lower rate can have more impact on your payment than a larger down payment. In looking at a rate sheet for today I note a lender allowing a 1/4 reduction in rate by paying .45% loan fee. Turning that into dollars. A $200,000 loan could be reduced by $32.95/mo by paying a $900 loan fee. If you paid $900 more down, the reduced loan amount would only drop by $5.84/mo.

The main way that would backfire as the best choice would be to not keep the loan for at least 28 months, the breakeven point. Use this information as a rule of thumb. Each day the differences are different, and they vary from bank to bank and rate to rate. The point is right on however.

Larry Cragun

Answer: Both Larry Cragun and George Steinbrenner made public predictions that were true “Homers” and that were ridiculous.

Larry said that the Seattle Seahawks would beat the Chicago Bears 63-3. In equal fashion George predicted the New York Yankees would win the World Series.

Lets go have some humble pie George. You get to buy tho, there is no similarity in our net worth.

October 07, 2006

Larry Cragun undressed

Teresa says: “I am thrilled, I’m excited! . . . wait a minute, it’s not what you think, this is a family type G-rated blog. Larry Cragun has joined…..”

I add this to the comments I made on Teresa’s blog:

It has been the goal of LJ and myself to build websites with important information for consumers. We seek to provide transparancy in an industry that has many people selling loans that should be working elsewhere. Real Estate has attracted too many agents, and many are poorly trained and managed. There are business models that prey on the consumers desire to save money, yet the often cause great risk and financial damage to these consumers, in their search for a piece of the pie.

People need a place to get straight answers and credible information. That is the purpose of these two websites - blogs. While most real estate blogs try to attract each other, we seek to attract home buyers or home buyers to be. Be sure, we appreciate our colleagues of the citizen press, and are grateful when they find us interesting. They are not our primary market however, and we note that some shun us by not posting our comments. That is OK if over a period of time we develop a reputation with Mr and Mrs Home buyer, owner, or hope to be buyer.

Both of us, having been been deeply involved in the internet portion of the business for several years saw opportunities to bring credible agents and loan officers to a place people can find those professionals. We would endorse and advertise on other related sites those who profess the same principles we do. We will be doing that in a managed way, beginning in the Seattle Tacoma market. We will do that without digging in to the agents commissions and without making you the consumer into a lead we can sell 20 times for $20.00 a time. We will provide a forum where agents and loan officers will blog. We won’t charge them to join our system, they will be expected to meet our standards.

By providing this, you will choose who you want to do business with. You can learn a lot about a person by reading their blogs. This is the magic we see in this new blogging frontier. It will become the consumers best friend. Think about it, what if every one reported their experiences good or bad on our websites? The good would survive, the bad disappear. As the old song goes, “aint she sweet”? Yep.

We have watched the real estate industry struggle with lead snaggers. Companies like Lending Tree, RealEstate.com, LowerMyBills.com and HomeGain intice people to their websites and then sell the consumer as a lead. In some cases the agent ends up with only 1/3 of the commission when the lead generator and brokers take their piece for finding you the customer. The net effect of this to you the customer, is you often end up with someone who isn’t skilled and in some cases the broker assigns you to the agent who owes them money, hoping to catch up when your deal closes. This is a very bad dynamic.

We early on started making certain points: 1- Don’t be a lead. We offered to help you find a good agent or lender without any financial benefit to us. We have been taken up on this offer and we were glad to help. Eventually you will be able to go to neighboroodsUndressed.com and find agents and lenders who we believe will meet our standards, the greatest one being selecting a loan officer or realtor who work together. We have explained and will again why this is your best chance of a good experience. You will choose not be assigned, sold, or resold. 2- Stay away from flat fee brokers. This is a matter of principle and experience. We have much content on our sites for you to read about this point. 3- Start learning about mortgages when you start dreaming of homes. Too many play around on real estate search sites for a year and a half, then jump having ingnored researching the important financing part. 4- Use a loan officer that is referred by a real estate agent, letting the lender know the agent is aware. This makes you a priority and puts the entire agent relationship at risk if you are handled carelessly or poorly.

One principle we have been working from as we build our network is that we should be our own most passionate users of our systems. As I have said, LJ calls it playing in our own sandbox. Here we practice and live what we preach. For that reason I have said we are going back into the mortgage business. I decided to activate my real estate license. I was asked to interview for a key management position with Keller Williams. After gratefully turning down the opportunity to interview I was asked to reconsider, so as a matter of courtesy, I did so. As a result of that interview I have placed my license with them.

We have begun developing IssaquahUndressed.com. Issaquah is our town. We will be making our Issaquah neighbors proud of this site. We expect to do business with many of them, or with many that find Issaquah as we do, a great place to live. We will be inviting lenders and agents to participate in Issaquah as there are many great Issaquah communities to blog about. Ten more cities and neighborhoods are being readied to go live in the same informative model. We hope to have 10,000 in our network some day.

If you are curious or interested in where we are going, please contact me at larry@realestateUndressed.com. You may post a comment. Hopefully we are following the path of transparancy we started on.

Larry Cragun

PS: I felt this was so important I have posted it on both consumer sites.

Instead of bugs on the mortgage site we go for culture; art.

From a previously unknown cousin, Gary Jones, and a known cousin, Curtis Cragun we bring you a weekly series of fine art.

ORIGAMI

We will do one a week, on Saturday…. tonight we get a head start. Just pretend it is Saturday, I will be occupied tomorrow, Larry Cragun

Hey, are butterflys bugs? Maybe this is on the wrong site.

As it is a reverse topic we posted it on the real estate site. Click Here, its backwards.

OK class,

go to Teresa Boardmans site and learn about interest only mortgages. Click here and learn

They should. They better. The good ones will. Why? Because you will learn to do business with people who blog. You will learn to do blog searches along with google searches. You will find out what they say and believe. You will find out what people say and believe about them. It is becoming an open book world and the blogosphere is the new frontier of information mostly untapped.

Click and go to the websites of those on our blogrolls. Read a few articles. They are pioneers. They are good people. They spill their heart out, trying to provide some meaningful information. They spend several hours a week, some days, because they think it is important.

You should think it important. Do a search on our real estate blog about Mayflower van lines. You will find the article I wrote that convinced me. I had been under a much different illusion prior to this experience than I am now.

I will always search for people that blog in doing business. I will always search Google. I will always search Technorati for blog content. You should too.

Educate yourself, do as I suggest, take a few hours and read blogs I link you to. You will be enlightened, hopefully invigorated.

You will be on the cutting edge, as too few have figured this out. I am glad for LJ, the young son in law. He quietly and consistantly hammered these principles into an old skull.

How can you ever get a mortgage if you are a sucker? I received this email today.

I reference it as I see news releases of people that have fallen for scams like this.

Dear Friend,

I am Larisa Sosnitskaya and I represent Mr. Mikhail

Khordokovsky the former C.E.O of Yukos Oil Company in

Russia. I have a very sensitive and confidential

brief from this top (oligarch) to ask for your

partnership in re-profiling funds US$46 Million. I

will give the details, but in summary, the funds are

coming via Bank Menatep. This is a legitimate

transaction. You will be paid 20% as your

commison/compensation for your active efforts and

contribution to the success of this transaction.

You can catch more of the story on This website below

or you can watch more of CNN or BBC to get more news

about my boss.
mbktrial



      
4 comments       
    

Your credit score can go as low as 350. As high as 850. The lowest score I have been able to secure a loan for was in the high 400’s. The highest I have seen is near 850. How high is your score?

Don’t let this mans looks decieve you. He could have an 850 score. Most likely 700 however. It isn’t impossible for anyone to get to 700 with work and care.