FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware

 

As many of us know in the real estate market, FHA loans are being used more than ever before.  With the disappearance of the subprime market of 2 years ago and in several cases, that conventional loans can be more expensive, more FHA loans are being utilized.  I just wanted to point out some basics, because I am still hearing some misleading information that makes me cringe from time to time.

 

FHA loans are more expensive than conventional loans.  - FALSE

This one is always a favorite of mine. Right now, forget about the pricing hits on the credit scores when comparing the 2 types of loans.  In reality, a lender can make a little more on the FHA loan because of the SRP's, which are the service release premiums. This is basically what the investors on Wall Street are paying to buy the loan.

 

 

 

 

Why would a loan officer state that FHA mortgages are more expensive?  Or the fees might seem higher?

Here are a few reasons why you might hear this.....

• It went through the rumor mill. If it came from a realtor, the consumer, or the loan officer, it just circulated and either was twisted information or someone didn't know what they were talking about.

• Some people get the upfront mortgage insurance premiums confused with the general costs of the loan. If this is not explained correctly, it's very easy to assume that FHA mortgages are more expensive.

• Here is a good reason.... because the loan officer wanted to make more money, since the borrower didn't have perfect credit and or the credit scores were in the low 620's. I have known loan officers in the past that gave higher rates and or fees, telling the borrower that they were being placed in a FHA B minus loan.

• One false rumor - FHA loans are said to have higher costs. This might take place if the lender or loan officer decides that they can capitalize on FHA mortgages. But in reality, no matter what company that I worked for, my costs were the same no matter if it was a FHA loan or a conventional loan. And as I mentioned, sometimes people included the upfront mortgage insurance and associated it with the costs. Now, this is an extra cost, but you need a very good loan officer to break down these costs and compare apples to apples. I have written a series on comparing FHA loans and conventional loans. I take into consideration the LTV (loan to value) and the borrower's credit scores. (there will be 5 different blogs below, that will show you the differences between FHA loans and conventional loans.)
  

 

 

 

 

Other rumors out on the street?

 

• FHA loans now require a 3.5% down payment, not 3.0%. (this was announced in 9/08 and was effective January 1st, 2009.)  Besides, back then, it was 2.25% as a down payment and .75% used for closing costs).  I bring this up, because a friend of mine who is a loan officer in Florida was told in a class that it's 3.0%.  And keep this in mind, this was coming from an instructor.

• FHA loans aren't just for First Time Homebuyers.  You can use FHA loans over and over.

• You can have 2 FHA loans at once, but there are major requirements.

• Monthly Mortgage Insurance is not there for the life of the loan. It will fall off when you hit the 78% LTV mark. And if you put 20% or more down, the monthly mortgage insurance is only there for 5 years. On a conventional, this is called PMI, private mortgage insurance.

• FHA loans take longer to close !!! -  This is 110% incorrect. They take just as long as a conventional loan.  It comes down to how hard the deal itself is, and how good the loan officer and the mortgage company.
  

 

 

 

 

For more FHA loans vs conventional loans comparisons :

• FHA loans vs Conventional loans - A true numbers comparison with 5% down - Using a 710 credit score
  

• FHA loans vs Conventional loans - A real comparison with 5% down - Using a 659 credit score
  

• FHA Loans vs Conventional Loans - 20% down - A Rude Reality Check - Would you believe that FHA loans could be cheaper even with 20% down?  Come see why and how.

• FHA Loans vs Conventional Loans - 5% - 4 comparisons that you need to know - Comparing a FHA loan against 3 types of conventional loans with different types of monthly mortgage insurance. Guess who won while still using a 679 credit score.....

• FHA loans vs Conventional loans - Knowing the true comparisons - A great comparison with a 679 credit score and 5% down.  This example will still show that even with a better than average credit score, that FHA loans are still better in many cases.

 

 

 

 

 

                    

                                                                                               FOLLOW ME ON FACEBOOK

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- Mortgages -

 

Experience & Knowledge at its BEST !!!

 

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc

 

Direct Lenders, Bankers, and Brokers, oh my....

 

Another discussion has arisen again, and this time it's about dealing with Direct Lenders. The blunt of the topic is that dealing with those big banks, aka, Big Box Banks as mentioned, aren't always in your best interest for several reasons. Now, I will actually agree with this statement and will give my opinion later. But I am more about defining terms and such, and not just opinion that is one-sided.

Janet Guilbault wrote : Why recommending a Direct Lender could make you choke on your coffee. Janet talks about these big banks being slower in closing loans. In most cases, a fact and not an opinion. But the message set within the blog has come across sounding evil, that many realtors refer their borrowers to these big banks. My problem with this? I blame the borrower and that there are certain terms and opinions that aren't fully defined, which can lead to misleading opinions. Here is one comment that truly caught my attention. - Comment # 14 -

 

 

 

 

 

Opinions... so many of us have them. My problem with opinions and statements, is that so many of them come across factual. In most cases, when I state an opinion, I basically say that this is my opinion. But facts sell, right?  And because of your blog or comment, that might be totally one-side and an opinion, it could direct people in the wrong way or leave them with the wrong idea. Again, just my opinion.

 

 

 

 

 

Here is part of that comment that I mentioned above. "For my entire career I was a Mortgage Broker prior to my company getting acquired .... I love the flexibility to underwrite and fund our own loans but I also loved being a broker because you have so much more available for your clients."

Here is one misconception... Brokers always advertised that they could shop your loan with 100's of lenders, getting you the best deal. Any direct lender, aka mortgage banker, that doesn't service their own loans, can also have many investors that they could use. This person's comment makes you think they had more programs as a broker. I am a mortgage banker, a direct lender, and I have just about every program out there today. The lack of education out there is that many don't define the difference between mortgage broker and mortgage banker.

 

 

 

In Janet's blog, she uses an analogy of buying coffee, in which many comments focused on the analogy. The analogy was good, but again, the statements made were of opinion. Janet makes this statement in her blog...  "Lots of loans this year have come from people who took the advice of their Realtor and went to the BIG BOX bank. Typically they become so frustrated that someone finally says to them "Go find a broker"."

I have a concern about this statement. She talks about realtors that refer their buyers to large banks. And then makes a statement that someone then tells them to go to a broker. Both of these statements, I rarely ever hear this from the realtor. In my opinion, the borrower goes to the large bank because of name, because they are large.

 

 

Summary : The gist of Janet's blog was that big banks, aka Direct Lenders, are slow, undermanned, etc, etc. I agree. I spoke about the differences when it comes to large and small companies. Large or Small - The pros and cons in today's real estate market. But what I didn't agree with is her title of the blog, because it stated Direct Lenders. You need to truly understand the differences between such terms. The other is many realtors recommend these big banks. I do loans in 8 different states, ranging from CT to FL, and in my opinion, those that generally choose these large banks are usually the borrower. Why?  They feel more secure with the larger name. On the other hand, I am finding the true real estate professional who refers their borrower to the individual that gets the deal done. The key word being individual. 

But what irks me most, is the comment that someone will then tell the borrower to use a broker. How and why is this?  Many brokers will be just as slow, because many sell to these bigger banks. I know one broker that I took a deal from last month, that told his borrower that he was doing him a favor in getting the loan approved in 30 days. Why?  Because he was selling to Wells Fargo, which usually took longer. What is not truly defined is the differences between large banks, direct lenders, mortgage bankers, and mortgage brokers. You just can't make blanket statements, because the general public doesn't know the difference... let alone many realtors and even some loan officers. Again, this is just my opinion, but that of 17 years in the mortgage industry and one who has worked for both a mortgage banker, a mortgage broker, and a lender that was number 1 back in 1997.

 

• Get a better understanding - Bankers, Brokers, Direct Lenders, and banks -
  

 

 

 

 

                    

                                                                                               FOLLOW ME ON FACEBOOK

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- Mortgages -

 

Experience & Knowledge at its BEST !!!

 

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc

 

ACTIVE RAIN GATHERING

 

Active Rain gatherings -- For those of you new or old to Active Rain, it can be a lot of fun to meet others that you have followed, who you have talked to, and those that you have made an online connection with.  For those of you that know me, I guess you can say that I am a social butterfly. I just love meeting people in general. But better yet, as I have mentioned, meeting in person those that you have connected with. Talk about solidifying those relationships, to bond with, and to grow into the future with.

If you don't get tired reading these kinds of blogs, you can read about them in this group.  Active Rain Gatherings Group

 

 

 

Pittsburgh Pennsylvania

 

 

My neighbor with a few friends are driving up to Pittsburgh on August 25th to watch the Philadelphia Phillies play the Pittsburgh Pirates. As you can see from the picture, Pittsburgh is a pretty city, especially when lit up at night. I love cities and restaurants that are around water.

We will be staying at the Morning Glory Inn, which is located on 2119 Sarah Street in downtown Pittsburgh. The hotel, which is a converted bed and breakfast, is one block off Americas Longest Business Victorian National Historic District. 

 

Not only do I plan on attending the baseball game, but want to hold a breakfast for anyone wanting to attend.

 

 

 

 

 

Game :  August 25th @ 7:05 pm -

 

Pitching Match Up -

Philadelphia Phillies - Joe Blanton - Joe is 8-6 with a 3.86 ERA. He is ranked 43 overall amongst pitchers.

Pittsburgh Pirates - Ross Ohlendorf - Ross is 11-8 with a 4.15 ERA.  He is ranked 39 overall.

 

 

 

 

 

 

 

We got tickets in the 300 level, but plan on moving down during the game. PNC Ballpark holds 38,300 people, but usually draw about 12,000 a game. Tickets are very cheap for what I am use to. You could even get deck seating or outfield grandstand seating, so we all could hang out in the outfield, for standing room in the alleys. - Tickets -

We are hoping to get there about an hour earlier and if anyone wants to meet, we could meet at the PBC Grill, which is located near section 222.

PBC Grill - scroll down to the middle, under Levy Restaurants.  Meet at 6 pm, on the right hand side of the main bar, facing the bar (right hand side).

You can text me or call me at 609-440-5133 to let me know that you are coming or that you are there.

 

 

 

 

 

Breakfast

 

I wanted to have breakfast at the Grand Concourse, but they don't open until 11 am.  And we have to leave by 10 am or so, because it will take us about 5 1/2 to 6 hours to get home.  So unless anyone has a suggestion, we can meet at Morning Glory Inn, which is located on 2119 Sarah Street. Time : 8:30 am  Dress:  Dress casual, because I will be in shorts, just so I can be comfortable for my ride home.

 

 

 

Contacting myself, Jeff Belonger - Cell Phone - 609-440-5133   e-mail : jbelonger@ihmci.com  No matter if we have ever talked before or not, please don't hesitate to meet up with us. If you know anything about networking, this is a great thing and a great time to possibly meet others from Active Rain or others from your area. If you know of anyone in or near Pittsburgh, please don't hesitate to pass this along. And possibly learn some good tips about using Active Rain and about blogging.  And if you are new to Active Rain, yet you can't comment on here, please send me an e-mail.  Lastly, this could be your chance to meet the FHA Expert, Jeff Belonger. You can follow me on Facebook also. - The FHA Expert

 

 

 

 

 

Active Rain & Blogging Success Stories

 

• Active Rain success stories - Blogging does work

• My 2 year anniversary on Active Rain - October 3, 2008
  

• Crash course on blogging

• Where would I be without Active Rain
  

 

 

 

 

Active Rain Gatherings

 

Here is a shot of other Active Rain gatherings or meet ups that I took place in : If this doesn't get you to want to meet members !!!!

1. My 1st Active Rain meeting with an AR member..... Rob who?????
2. Lunch with Ravi Shah......
3. West meets East....... a face to face with Jonathan Vetter, loan officer.
4. Active Rain Gathering in Philadelphia - 12/2007  A success
5. Bloggers Connect in NYC - January 2008 - great friends
6. Active Rain Gathering for the New Jersey Area - May '08 - NJ, PA, CT, NY, DE, MD
7. Active Rain gathering -- Princeton, New Jersey -- May 22, 2008
8. Want to meet a Pilot aka Mortgage Planner? --- Meet Robert Ashby
9. It wasn't politics.... just meeting some friendly Active Rain members in D.C.
10. It just wasn't about the Philadelphia Eagles in DC. - An Active Rain gathering in Annapolis, MD

 

 

 

                    

                                                                                               FOLLOW ME ON FACEBOOK

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- Mortgages -

 

Experience & Knowledge at its BEST !!!

 

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc

 

DISCLAIMER : This topic might tick off some of those that do play both roles, who are a loan officer and a realtor. Sorry, but I have a problem with this. Just hard core mortgage related facts.

 

So, how many hats do you wear?  Sure, I wear many hats as a loan officer, but in my opinion, it's all part of my job. What about those that are actually a loan officer and a realtor though? How many more hats do they need to wear?  Sure, if you are one of those that do both, I am sure you think you do a good job for your clients. But is this just your opinion? And is good good enough?  I try for excellent and feel that it's hard to hit that mark if you are both. And keep in mind, this is just my opinion.

 

 

 

I GUARANTEE !!!!

 

I am sure that these same people that are both a loan officer and a realtor will say that they have your best interests at hand. Their reasons would be :

• I am not charging you as much, since I am your realtor and loan officer. But define not as much.  And could it cost you more in the long run?

• I have been doing mortgages and real estate for 10 years.  Okay, is this together, combined in years?  Have you been a realtor for 9 years and a loan officer for just one year? More on this later.

• "I will guarantee you satisfaction." Well, anyone that knows me, I hate such words and phrases as :  "I guarantee" "I promise" "no problem," "Don't worry" "trust me" "I have your best interest at hand" etc, etc. Even though I know I am very good at what I do and know that I can get you a mortgage, I don't like using these phrases. Yes, they calm the borrowers nerves, but I view it usually as a good sales tactic.
  

 

 

 

Here is how come I can make my opinions. I can base them on past examples and on comments from other individuals that say they are both a realtor and a loan officer.

I wrote this blog a while back. FHA loans vs Conventional Loans, a real comparison with 5% down  I was attacked by like 3 loan officers in this blog, telling me that I was way off on my conventional rate example. They either told me that they were both a realtor and a loan officer or I found out after doing some research. What was ironic was that I asked each one of them if they knew how to read a rate sheet and see that there is a major pricing hit for lower credit scores. And that this is not a lender hit, but a FANNIE MAE pricing hit. Only one got back to me and said that he spoke to another loan officer and still told me that I was wrong.Just because someone else confirmed your thoughts, doesn't always mean that it's correct. Hence why I ended up writing about this. Two wrongs don't make a right, or do they?

And the funny thing, yet a sad thing, these same people that tell me that I am wrong are usually both a loan officer and a realtor.

 

 

 

I will say this....   no matter how good you are in the beginning, you do usually become better with more years of experience. But just because you have been doing something for 10 years, doesn't always make that person very good or better. Example - I closed a loan last year that another loan officer had for 30 days, yet he couldn't make the settlement date. He was still working on it when we closed it in 5 business days. There were credit issues that needed to be taken care of. But this was a loan officer that told the borrower that he had been doing mortgages for 30 years. See my point?  Age doesn't always make it better or you better.

Passion and having a large heart. - Now, I know many of us have a large heart and passion for what we do. I know I do...  but just because you are nice, doesn't mean that you are good at what you do. Sorry, but it's just a fact of life.

 

 

Conclusion : Let me pose one question to you.  Would you want a heart surgeon who specializes in this, to operate on your brain, just because they are a "surgeon" and or went to medical school? What about a realtor who says, well, "I was trained as a loan officer also." The better loan officers and realtors that I know and respect, wouldn't do both. Sure, conflict of interest in my opinion. But it's hard to stay on top of just the mortgage industry alone.  Just food for thought and based on my opinions.

 

PS....  I know we are in a very tough economy. I know many loan officers and realtors that have gotten second jobs. But as a realtor and a loan officer?  In my opinion, this is like mixing gasoline with fire. You could just be waiting for an explosion and that explosion could be your mortgage not closing or closing on time.

 

 

 

                    

                                                                                               FOLLOW ME ON FACEBOOK

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- Mortgages -

 

Experience & Knowledge at its BEST !!!

 

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc

 

Mortgage Disclosure Improvement Act

 

Feeling the blues after hearing about the Mortgage Disclosure Improvement Act? (MDIA)  For those that haven't heard, this act is part of the Reinvestment & Recovery Act of 2009.

The MDIA became effective on July 30th, 2009. Here are a few highlights of the act that could delay real estate closings in the near future.

• The borrower must receive a good faith estimate and a truth in lending disclosure within 3 days of a mortgage application. (but this had already been in place by RESPA laws a long time ago)
• The earliest a transaction can close is 7 days after the initial dis-closers have been issued by the lender. This is assuming that no re-disclosures are needed.
• There has to be final disclosures sent if : if the APR is more or less than 0.125% of the original disclosures and or if the loan terms have changed. This has to happen after 3 days have passed prior to the closing date.

 

 

 

 

Sounds like time is of the essence and that we all need to be on the same page.  Gerry Suarez wrote about the MDIA - What the Mortgage Disclosure Improvement Act will mean to our industry. Gerry gives us his opinion as a mortgage banker and a mortgage broker.

What kills me about all of this is that this is nothing new. Re-disclosing took place and could be done at the closing table or the day prior, as long as it was done. The key point, if it was done. Many of us have heard those horror stories of rates, fees, and points changing last minute. But that the borrower didn't find out until they were at the settlement table. In reality, they had a leg to stand on and could have stopped or held up the closing proceedings.

The long and short of it, this could possibly interrupt closings/settlements if these changes aren't made 3 days prior to closing. These delays could cost many more money, in which case, the reason for this Act is to prevent this.

 

 

 

So what might be so tricky about this?  Could there be any confusion on the part of the lender? Keeping this in mind, re-disclosures have to occur if the APR changes by more than 0.125% or if the loan terms change, right? The confusion for many could be what are considered to be APR changes. - Annual Percentage Rate - Regulation Z is part of the TIL, Truth in Lending, and it states what charges are part of the APR, but at the same time, gives a list of items that don't have to be included. I have written why I think the APR is misleading to begin with.- Why is the Annual Percentage Rate (APR) so confusing? -

 

 

 

 

Here is where we all need to come together as one team now, more than ever, in order to not cost anyone else extra money while trying to close. In many cases, the realtor chooses the title company/escrow company. Why do I bring this up?  You better be working with an excellent title company, one that I don't have to follow up with for days, trying to get a preliminary HUD 1. This is very critical because some title fees are also part of the APR. Here is a list of them.

 -- Escrow/Closing Agent/Closing Attorney Fee

 -- Prepaid items - this is to include property taxes

 -- Wire Transfer Fee

 -- Courier Fee

 

 

 

 

Summary : Overall, we all need to be aware of these changes, not just the mortgage company.  Because here is one more issue. The only monies that can be collected prior or at time of application is the credit report fee. The appraisal fee can't be collected until 3 days after the initial disclosures are given. Yes, this could delay ordering appraisals also. As a loan officer with a mortgage company, I will need the help of the title company and sometimes the realtor. We need to work as a team.

 

 

 

 

Important Message -

Keep in mind that if a mistake is caught 2 days prior to closing, that it will need to be re-disclosed and couldn't settle until the 4th day. This is where not only costs could build up because of moving expenses, but because the interest per diem would need to be changed also. This is the interest that you pay daily, the daily interest, which is added into the costs. And keeping in mind that we need the correct and exact tax bill information. Any last minute changes, again, will delay the closing.

 

 

 

 

 

                    

                                                                                               FOLLOW ME ON FACEBOOK

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- Mortgages -

 

Experience & Knowledge at its BEST !!!

 

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc