Karl's Blog Report

Hi All,

Fall is here and lenders have fallen left and right. What has happened to the mortgage industry? Well, rates have dropped and may drop some more if the Fed continues to lower the Prime Lending Rate. The bond market has been o.k.. I have seen a RASH of bad Good Faith Estimates, no pun intended (Bad Good).

Recently, two loans referred to Accurate Finance for comparison completely frustrated me. Their Good Faith Estimates were deceptive. Each of the clients had gone with a so called familiar brand lender; we see their commercials all the time. One I will call Quick-en to take your money and the other Di-ying to take your dough. Both of these borrowers were unaware that they were being charged points. I cannot figure out how these companies operate. Being dishonest is bad business!

The first company, Quick-en to take your money was charging 1.625% in points; this would have cost the borrower $4000, an amount that would have almost wiped out the 3% closing cost credit he was receiving from the seller. It was the same with buyer number two; he was being charged 1.75% in points which translates to $2850, eliminating over one-half of the 3% closing cost credit due from the seller. These companies may be big time players but they are creaming their potential borrowers with fees. And, I won't even mention the junk fees they were also charging. Just because the mortgage industry has gotten ugly, it doesn't mean that the borrower must pay points.

In addition, their interest rates were half a point to .750% higher than what I am quoting here at Accurate Finance. If you pay points, you should be able to obtain a lower interest rate. However, because you pay a point doesn't mean you will have 6% rather than 7%, as other things are factored in. What I'm trying to say is, Buyer Beware. When you're receiving closing costs from a seller, these companies will try to swallow up that credit as fast as they can. One client even paid $500 upfront and will only get half of that back if they change lenders. This is a rip-off! Do not pay upfront fees as the lender is trying to keep you from jumping ship. With their loan they can buy another ship or two.

I am available to help you save money and buy a home or refinance your existing home loan; I am not trying to milk you with fees and points.Read the bottom line and make sure you a getting a fair deal. All mortgage companies including Accurate Finance are in the business to make a profit; if we weren't, we'd be out of business. Profit is one thing, highway robbery is another! Yes. this is a tough market. I have been in the business for over 10 years; I believe the reason for this is, as corny as it may sound, is that I want my clients to save their money and I want them to be able to afford their mortgage payment. When your loan closes I'm not the one making your mortgage payment, you are. I want you to be happy with my service and your loan. Do not be fooled by large companies promising the world because you will pay for the world. When you use Accurate Finance you pay for what is standard in the mortgage industry....translation, our fees are low.

The next time you, a family member, co-worker, or a friend need a mortgage or to refinance a current mortgage, call Accurate Finance. We have been here to help since 1999.

    Thank you, Karl J. Holub / Sr. Mortgage Consultant.