AAA Blog

    I get calls all the time that ask for my best rate.  I warn the caller that the rate that I quote is a thirty year fixed rate with no points.  If you just call and ask for the rate you don't know what you are getting. 

    Many national lenders quote with one point.  There is nothing wrong with that, except that you are not comparing "apples to apples". 

    So when you shop for your "best rate", ask:  Is this a 30 year fixed?  Are there origination points added?  Could you send me a Truth In Lending form?

    Remember, asking for the best rate is like asking how much is a bag of groceries.  Unless you know what's in the bag, you can't compare!

Should you use a broker?  It costs more to use one. Right?  My bank is cheaper!  Not so fast....there is some fact and some myth.  The mortgage broker was born as the banks appetite to lend extended beyond its capacity to create new business and do so cost effectively.  To put thousands of agents on salary to originate loans was not an effective game plan.  The mortgage broker could find business for the bank and work as a subcontractor to expand the banks lending platform.  The bank in term would share the profit generated by the transaction.  This freedom allowed the broker to structure a small business model that had the ability to undercut the retail rate structure of the bank.  It is a fact that mortgage brokers have the power to be cheaper than the bank.  The problem is that not all mortgage brokers are created equal and many chose to charge beyond the banks fees.  It is important that you find a mortgage broker with a business model that competes with the banks. 

"My closing costs are less at the bank".  This is often true.  However, the interest rate is often higher at the bank.  If you look a few months down the road you will find that the monthly savings will quickly offset any additional expense that you may realize initially. 

I have often said that having a mortgage broker is like having an attorney when you go to court.  There are many rules and regulations that govern the lending markets.  You need someone that can guide you through the process and rules to insure the best result.  You can go to court alone and face the judge, but it always feels better to have someone next to you that knows the system. 

     When I started in the mortgage business, one thing I liked was that there was always something new to learn.  The last two years have made me question that. 

     The mortgage business has changed, those changes changed and then they changed again.  If you have an old phone book around look at who was doing mortgage loans three years ago and how many of them are still around.

     My point is be careful who you do business with.  All the loan officers at AAA Mortgage have been in the business over ten years.  If someone calls you trying to sell you something, ask about their experience.  If they tell the truth, you will find you are most likely talking to someone who has been in the business less than one year.

     Experience is only part of what makes a good loan officer, but if they have been in the business over five years you know this person understands some of the changes that will make a difference to you.

Bob Euler

I have seen a lot of things in my time.  Interest only Mortgages, 50 year mortgages, even 125% Mortgages.  I thought I had seen it all, and along comes the 1 year payment free mortgage.  How is this possible?  I asked myself just this question as I listened to the radio with great interest.  After all I have been arranging mortgages for 10 years and have never heard of such a mortgage.  I asked every bank and lending institution that I could think of and each one shrugged their shoulders and looked at me with a blank stare. 

I would think a product with this kind of draw would be available on each and every street corner.  I decided to investigate.  Believe it or not it took a good deal of investigation to glean even a small amount of information.

After many calls and countless articles I have determined that the old adage that "if it is too good to be true..." is safely intact.  Yes, the wonderful payment free loan is just another gimmick.  A slight of hand worthy of a magician.  Here's how it works:

Your loan officer will inform you that you qualify for a payment free mortgage for 3 months, 6 months, 1 year.  Your interest rate is the same either way and your loan will be paid off in 30 years as agreed as is the case with any  30 year fixed mortgage.  Wow! Sounds great! (right?)  Wrong!  Well it is too much to assume that the bank is kind enough to forego payments for a year.  The truth is they don't have to.  Your loan officer has set up an escrow account at your expense using your equity to make payments on your behalf for the specified time.  Yes, someone else will use your money to make payments.  Usually at a substantial management fee.

The payment free loan is nothing more than a preset accounting service.  Since you are taking money out of your equity to make the payments you are subject to fees associated with cash-out loans. 

I have to admit it got my interest.  I am sure it makes the phone ring for the companies advertising such a product.  I just can't help wondering what loan officer in good conscience could sell this bait and switch.  Perhaps the same ones that worked to put the mortgage market in the mess its in today.  Don't Be Fooled!  If you want an honest opinion or voice your displeasure.  Contact Jason at (816) 272-5550.

Low Rates are Back

I thought for sure we had seen the end of super low rates.  However, I am again surprised by the move of the Federal Reserve.  Rates in the 5's are common and I have seen the reemergence of the 4's.  I didn't think it would happen again in my lifetime.  Short of World War 3, I thought we would have to get used to rates in the 7's.  Well, the banks created financial armageddon and here we are. 

Don't Be Fooled

Guess what?  The wonderful people that brought on the mortgage collapse are the ones leading the charge to resurrect the market.  I hear them on the radio all day long.  You need a fixed rate, I can save you hundreds of dollars.  These are the same people who promoted the adjustable rate craze that brought on the predicament we are in today.  Don't buy into it.  You need a firm that you can trust.  AAA Mortgage has long been a proponent of fixed rate mortgages.  We have never done a negative amortization loan.  We steered clear of 125% Mortgages.  Even when the market offered excellent financial incentive to promote these products, we knew that this was not in the best interest of our clients.  We are looking out for you. 

Navigating the Market

It is not easy to navigate the market these days.  Companies are coming and going.  Guidelines are getting tougher and the consumer is losing.  We will help you through the process with honesty and integrity.  Don't fall back into the loan trap.  Call AAA today! (816) 272-5550

Navigating the complexities of Insurance can be a difficult task.  Chris Woody of American Family has the experience you're looking for.  We recommend contacting Chris for quotes on your auto and home.  Don't trust your protection to a green lizard.  Trust your business to an agent that cares.

www.chriswoody.com

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