Da ADR BLOG

To find the best rate, one needs to start with common sense analysis. If you were looking to purchase a new car - would you go to the center of the city you live in and see if there were car dealers in the downtown area? Of course not. Rents are too high there.

Similar to car dealers, big banks have thousands of branches set up all over the city. You get to pay for that. It's called overhead. Greenhouse gas emissions that are unnecessary in my opinion.

Another problem with waltzing into your bank or credit union is that the institution you are speaking with has hired an 18 year old. That's the only current requirement for these "employees". Sometimes they are 1099 contractors. They often times sell only their products (think bank option arms). Well, besides million-dollar a day paychecks....overhead....people that are unlicensed and can't qualify to get a license there's another reason a bank or credit union isn't a good place for a mortgage - they charge a lot more to pay for it all.

So, what about the internet? Should I type in my personal information? Not likely. What about those great rates I see out there. Why can't I get a 30 year fixed at 3%? Simply put, because you'll never get the rates they promise. Those are bogus rates that hook you in.

So, no to banks. No to credit unions. No to the internet. How is one supposed to find a great rate? Simple. Call your local mortgage broker. Make sure you are working with a professional first. Check the loan officer out on the web. Check the company's BBB report. Type in "complaints" and the company or person's name into google. You can even go to www.nmlsconsumeraccess.org to check on your "professional". Of course, this is only a registration system. You will find many 18 year olds here. Banks only have that as their requirement to advise consumers on mortgages. Even if you find your bank LO in this registration system, they still probably aren't licensed. 

Ok, so when you've done your research and determined that you want a 30 year fixed (or 15 year fixed, or 5/1; 7/1 arm) then you should ask for a Good Faith Estimate. Many lenders (banks, companies that have names that sound like the government, etc.) will give you a "estimate of Good Faith" or some other form that sounds good. Without a Good Faith Estimate you are looking at a low ball estimate. At ADRMortgage.com we give only Good Faith Estimates. We don't want to waste your time or give out false information.

Once armed with your GFE's you can now make an informed judgment regarding which company you will select. We had one client call us the day after they closed with America's biggest bank. Yes, one day after spending time and money closing on a purchase the client called us to refinance. Needless to say, they got slammed badly by the bank.

Some banks and credit unions have thousands of foreclosures, as they put people in the wrong mortgage. So, keep your eyes wide open throughout the process. At ADRMortgage.com you'll get several people that help you through the process. We take pride in delivering on our value equation. It's one of the reasons we are a company that has survived without a bailout!

Take care and good luck with finding the best rate you can.

People want to know what effects their scores?

This piece talks about what not's out in the media.

We start with the facts that we know....there are 30+ factors effecting your score from payment history to total debt relative to total debt available. But there are other items that we don't hear about that effect your score significantly.

For example, your age. While it's illegal to discriminate based on age, the facts are friendly. Years of Credit Experience, is a significant factor. And how many 18 year olds do you know that have 20 years of credit experience? You get my point. Age matters when it comes to your credit score.

Managing your credit line versus limit is really important. If you owe $100k on a $300k credit limit that's not a biggy...but if you owe $550 on a $500 limit you will lose about 40-70 points. I had one client that hadn't changed his limits since college (he was about 35 at the time) and he regularly spent his limits and paid the card off every month. His scores were in the low 600s. Within a month we had him at 750. You simply need to ask for more credit line limits.

Lastly, judgments. Most people aren't even aware if one of these erroneously show up on your report. They'll chop 100+ points off your score. So, be diligent and fight to make sure someone doesn't throw an alarm bill on your credit. I've seen that happen before. Or, a phone bill....or cable bill. Those are the ones that happen the most.

Manage your credit to save tens of thousands of dollars on your mortgage. You owe it to yourself.

http://www2.nbc17.com/news/2011/nov/03/andy-mays-adrmortgagecom-12500-vi-37589/

Copy and paste the above link for an interview with Andy May, founder of ADRMortgage.com. The interview covers the mortgage market focusing on Freddie Mac and the impact of the Senate Subcommitte on Securities, Insurance and Investment hearings on the possibility of eliminating the 30 year fixed rate mortgage (and replacing it with a Canadian-style higher interest short term 5 year bullet strategy).

Andy May has written extensively on the mortgage market and has appeared in magazines, newspapers, and television. He has over 20 years of mortgage market experience and understands how to deliver low-rate mortgages to consumers without incurring the $1,000,000/branch overhead that banks pass onto their "clients".  Call Andy May with any questions at 919 771 3379.

How to Improve your Credit Scores at no cost

Credit Score Improvement Guide

By Andy May

To raise your credit score by up to 20 points - opt-out of all junk-mail solicitations from credit card companies and others. Go to https://www.optoutprescreen.com/?rf=t and register to opt out.

You will get two benefits: First, your score will improve by up to 20 points. Secondly, you will save the environment by saving on gas used to deliver your mail, paper used to produce this junk mail, and you'll stop having to waste time opening solicitation junk mail.

Here's some more "how to improve your credit score" information. But first, let's give you a little background:

What: How to improve your credit score.
Who: Credit Bureaus rank you from 350-850 (scores). There are 3 repositories that collect and report your data to any company that you want to buy a financial product.
When: Everyday.
How: They use a simple model like: ax+by+cz ----- where a, b, and c are coefficients (0-100%) and x,y, and c are the factors that they rank you on.

This is a simple Factor Model, or Discriminant Analysis Model.

Example: Years of Credit Experience = "x"; Factor for "a" = 25%. So, if you're older you would potentially get 100% of 25% for the full 25 points; say age 55 or older. The credit bureaus don't report exactly how they score you.

And you thought there wasn't age discrimination in America? Well, one of the factors is years of credit experience. How can you have a lot of years if you aren't older? Proceed carefully if you are thinking of getting your 14 year old a credit card.

In any case, younger people have lower credit scores as a result of this factor - which contributes probably as the second most important factor when scoring your credit.

First is i) on-time payments for everything (never-ever-never miss a mortgage payment - then comes installment payments (ie: auto) then comes revolving credit (credit cards)). Second is ii) your age (aka: years of credit experience). Third is job stability (yes, moving lowers your scores). While there are other factors, it's kind of like getting your website ranked in google. The Credit Bureaus, like Google, change the factors all the time.

That makes it interesting, as the Credit Bureaus really can't tell how good you are at managing your credit going forward - only how good you managed it in the past. That's why your age is so important to them.

Education also plays a role in how high your score is. The more years of education - the better your score should be. However, the credit bureaus aren't sophisticated enough to make these adjustments at this time.

So, you want to raise your score? Here are other ways, with the author's scale of 1-10 (10 best) to rank order my opinion on how to improve your score:

1) Opt-Out of Credit Solicitations (10) - see above for web address;

2) Raise your credit limits on your card (10) ; this pushes your useage of credit down. If you owe $15k on a limit of $15k on your credit card - that's 100% use. You want to be under 50% - so call your credit card company and have them give you a $30k limit. This will improve your score;

3) Check your credit report (not the free ones, as those are "fake" reports and you won't know who is reporting you delinquent - call your local mortgage broker and ask them to do it for you. They may be able to save you some money on your loan anyway. And it's only $20 to pull all three bureua scores. If there is a mistake on the report, have your mortgage broker fix it with you - or if you're in real trouble, your mortgage broker can refer you to a credit specialist that they work with regularly. I've often seen scores improve 150 points by removing erroneous reporting. So, I'd give this one a (8) because it doesn't apply to everyone;

4) Do NOT close your cards. If you do your score will drop by up to 25 points. If you want to pay off a card, that's great. But closing an account is not good. It will lower your scores. (10);

5) Put your mortgage in only one spouses name - both on the deed. This will lower the indebtedness that the computer model sees for one of the spouses. That way you'll always keep one spouses credit "clean". (4);

6) Put student loans in forebearance. This eliminates your payments from your debt to income calculation and can allow your to qualify for a mortgage. Speak with your mortgage broker about this. As far as improving your score - (2);

7) Obviously, pay everything on time (10);

8) Don't get those silly "save 10%" on your Home Depot purchase. That costs you on your credit score. Yes, you will save $100. But I've seen that cost borrowers $10,000. Their score dropped below 620 ......same thing for purchasing a automobile. Don't do it before you buy a home - do it after. (5).

9) Ok, this I only give a (3) because it's kind of become an issue in the mortgage industry and I don't particularly condone it. Add yourself to a person's credit card that has a good score. For example, you are getting married. Add your poor scoring spouse to your long credit history on a card that you've paid on time for the last 10 years. That'll improve the score of the other spouse. Again, (3) since I don't condone this entirely. The example above is obviously fine.

10) Pay your mortgage on the 30th - not 2 weeks later. Paying ahead of time can improve your score a few points. (2). Also, don't worry about having your credit scores pulled. That only lowers your score 1-5 points, and you can pull it many many times over a 30 day period (as long as it's a similar financial institution - like mortgage cos. or auto cos.....not both).

I hope you've enjoyed reading this article. There is a real art to improving your score. In fact there is an entire credit improvement industry - where a professional will charge you $500 to consult with you. DO NOT pay your mortgage broker or anyone associated (paid by) with the mortgage broker. You want a pro, not a mortgage broker. We can help you - but we shouldn't be spending all our time fixing your credit scores - rather, we should be getting you into a great mortgage (and not the pay option arm!). If we are spending a ton of time on your credit scores, you'll over-pay on your mortgage - a lot more than the standard $500 charged by Credit Repair Specialists like Shannon Hart in Dallas, Texas.

So, split the two functions up and save money. Get your credit improved by a credit repair company and then get your mortgage through a mortgage company.

andymay@adrmortgage.com
www.adrmortgage.com

ADR has second best year ever. 2010 was a year of attrition. We had the most bank failures since 1992 and we lost over 80% of all competitive loan officers.

Yes, you read that right. Over 80% of loan officers that compete on rate (like we do) are no longer licensed to do loans. Who is? Of course, a lot of these loan officers went to work for high-cost tarp-money banks. Those same banks need to recapitalize themselves so they are charging A LOT MORE!

In fact, I was talking with a client and he was kicking himself that he paid 1/2% higher in rate then he had to (we're doing another property for him). However, that 1/2% rate difference equates to a 10 year cost to him of $20,000. Go ADR - get a better rate.

2011 should be another challenging year for high-cost banks. Watch yourself out there. It will be expensive and you should work with licensed and qualified loan officers. Not bank loan officers that have no federal or state licensing requirements (yet).

At ADR we stay apprised of compliance issues, check this article out.

http://nationalmortgageprofessional.com/news20300/glba-compliance-save-thousands-overhead-and-make-more-money-same-time

Raleigh, always ranked highly compared to all other cities, recently was ranked 3rd best place for young and upwardly mobile. Also, home starts are the worst they've been since the Kennedy administration.

All of this while Raleigh attracts 3.9% more people every year (3 times the national population growth of 1.2%). Raleigh was also recently ranked in the top 5 for job growth (2010 expected to be 16% more jobs than 2009).

This means home prices should see a nice uptick. While home prices were only about 1-2% in 2009, we will see a more normal 3% increase in 2011 and 2% in 2009. That's pretty good when the rest of the nation is contracting.

Check out our newsletter at www.adrmortgage.com for more information. Take care. Andy

Interested in learning what HUD says about buying a home? Check it out right here.

Have a great new year, and remember....save money, live better....through an ADRMORTGAGE.COM loan!

Andy May

919 771 3379

A lot of clients ask me, "when is the best time to purchase or refinance". It's an easy answer. It's around December 15th. No one wants to be working on their mortgage during the stress-induced days of the holidays.

Let's face it, do you want to work on your mortgage 10 days before Christmas?

So, it stands to reason, with not a lot of homebuyer activity, it's also a good time to purchase a home - before the spring homebuyer season kicks in. Rates are at an all time low right now and you can get a great rate if you are willing to work for it during the holidays.

Have a prosperous new year and we'll speak with you soon.....thanks for your business and thanks for making 2009 the best year ADRMortgage.com has had!

Andrew Coumo purportedly created the Appraisal Management Company. Thanks Andrew! We appreciate you adding another layer to the mortgage business, and significantly raising consumer closing costs! This isn't New York ya know!

We have been tracking how the added cost with which the Appraisal Management Company system impairs North Carolinians. So far, it is costing approximately $500 more (rate lock extentions and blown deals) per person. And 80% of North Carolinians are infected by this New Yorker's infective problem.

What can you do about it if you are purchasing or refinancing your home? Well, nothing. You've got to go through the nightmare that Andrew Coumo purportedly brought you. However, you can write your Congressman, Senator, and or Washingtonian insider and complain about the treatment of the American public by these new changes. By the way, we are 100% TARP-FREE! We take no government assistance. We don't pay ourselves $1 million a day (like so many bankers).