Mitigating risk - mortgage leads

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Why would loan officers and mortgage brokers work with Mortgage-Leads. com? To mitigate their own risks when it comes to advertising. Loan officers and mortgage brokers profit from the loans they close on. If they have no clients, they have no profits. Mortgage leads mitigate those risks by providing leads that have already been:

• Pre-Filtered
• Pre-Qualified

Mortgage-Leads. com uses multiple interfaces to reach a client base that is nationally based. Local mortgage brokers and loan officers are then provided with leads that are within their own local area. Using a service to generate leads benefits mortgage brokers in the following ways:

• Increases Referrals
• Close More Loans
• Make More Appointments
• Attracts New and Repeat Customers
• Decreases Marketing Overhead
• An Edge on the Competition

The sad fact is that the competition for loans increases every day. The turnover rate of loan officers that abandon their careers in loans is about 95% within 5 years. That leaves only 5% making serious profits from the business. It does not matter whether officers specialize in Home Improvement, New Home, Secondary, Refinance or Debt Consolidation loans, a mortgage lead service mitigates the marketing risk and improves their personal business.

The key is to take advantage of the leads generated. Depending on the type of lead service invested in, mortgage brokers need to employ lead management. This crucial piece of the puzzle will not only improve personal business, but also provide a traceable resource for budgeting marketing funds on a year-to-year basis.

Leads are provided in different quantities based on the personal specifications or options chosen by the officer. It’s important to follow up on the leads as soon as possible. Because the leads have been pre-qualified and pre-filtered, providing detailed loan options to potential customers has never been easier.

More loans are being closed via lead services every day increasing the competitiveness of the market. Consumers want to shop their opportunities looking for better values, better interest rates and sometimes just a better payment. Because the consumer need is high, the supply must meet the demand.

Mortgage-Leads. com provides a crucial resource for officers who want to remain competitive. Internet savvy clients are more likely to surf the web in search of services and products than flip through the Yellow Pages. The potential client base is more than just private individuals, but also businesses. Real estate investment and small business loans are on the rise.

Mortgage brokers can optimize their market potential via mortgage leads. By contracting for a set number of leads for a set amount of dollars, mortgage brokers are not penalized for bad leads. They do not pay for leads that prove to be inaccurate or bad. This allows them to expand their business while minimizing their expenses. Taking advantage of mortgage leads requires good salesmanship. A good salesman will handle the follow-up and closing calls, making the most of the leads provided by the mortgage lead service. Taking advantage of pre-qualified, pre-filtered mortgage leads can ensure a profitable business.

To maximize their benefits while minimizing the risks, mortgage brokers should not only redistribute their marketing via traditional channels, but also engage personal lead management. A good management process will help to prevent leads from falling through the cracks. They will be able to prospect their leads in a timely fashion and improve their closing rates. In short order, they will mitigate their risks where their mortgage leads are concerned.

Before you buy why get pre-approved

OK. You’ve made the decision. You’re ready to buy a house. Great! You’ve got that dream home pictured in your head. Now all you have to do is find a Realtor, make your offer and move in. Right? Wrong.

Your first step should be to find a trustworthy mortgage professional. But that’s not the fun part, you may say. Why start with a mortgage professional? In a nutshell, this can save money, time and increase your bargaining power.

Your mortgage broker is going to be able to tell you first if you can qualify to purchase a home at all. Second, if you are in the running for purchasing, he or she can tell you how much home you can qualify for. Think about it. Do you and your Realtor want to run around for a month or two worth of weekends, finally find your dream home, just to find out that you cannot afford it?! That’s a lot of time, and time is money (or at least a lot of wasted weekends). Wouldn’t it be better up front to know what you can and cannot buy, zero in on that, and achieve that wonderful feeling of success? Of course.

Well, you may have already thought of all that. However, did you realize that the seller of your dream home may give you preferential treatment if you’re pre-approved? The seller has a life too and time lines like the rest of us. They want deals that are going to work. They don’t want their home under contract, just to have the deal fall through because the buyer cannot qualify! So, let’s say you make a bid on a house and another party makes a bid at the same time for the same amount. The other bidder is pre-approved, you aren’t. Which bid should they accept? Obvious. Another scenario, let’s say you (not pre-approved) make a bid and another bidder bids slighter lower but is pre-approved. Which bid would you accept?

And one last matter to cover, there are different levels of pre-approvals. The lowest level might be called pre-qualification and this involves the mortgage professional taking your information (income, expenses, etc.), putting it all together and letting you know how much home you can qualify for based on the numbers you provide. Another level of pre-approval is for the mortgage professional to run the loan through automated underwriting (getting more technical, here) to get an approval provided that all your info can be verified. The highest level would be running the loan through a lender and actually doing all the verifications. Obviously, the higher level of pre-approval gives you more to stand on and carries the most weight when bidding on a home. In any case, your mortgage professional should provide you with a letter stating on what level you are pre-approved.

Hopefully by now the picture is clear, call that mortgage professional BEFORE starting your house search. And maybe, just maybe, the process might even be fun.

Mortgage refinance

When it’s time to think about your mortgage refinance options, what should you know and how do you make the correct decisions? It’s more than guesswork and you can greatly increase the odds that you’ll refinance (or not) at the right time if you take time to consider some specific points.

Start by knowing your current mortgage interest rate. You can find this listed on your loan papers or your lender should be able to tell you. If you have a variable rate mortgage, you won’t have a set interest rate, but that’s also an important piece of information.

Next, find out the rate you’ll be offered if you get your mortgage refinanced. A word of caution – don’t simply take a look at the interest rates being offered and assume you’re going to get those rates. Ask about your specific situation. Lock a lender into a particular rate before you start the process. Many lenders advertise a very low rate, but you may find that you don’t qualify for that rate. Be especially careful if you’re being asked for any fees up front.

Compare the rate of your current mortgage with that you’re being offered, but also consider the terms of the loan. For example, if you have a variable rate loan, you may find the benefits of having a fixed rate mortgage are sufficient to warrant a mortgage refinance, even if the rates you’re paying aren’t that much different from what you’re being offered.

Most financial people recommend that you save at least one and a half full points on your interest rate before you consider a mortgage refinance. Why? You’re likely going to be paying closing costs, appraisal fees and other costs associated with the refinance loan. If you’re not saving at least one and a half full points, it will take you several years to save the amount of money you’re spending on the closing. Again, this doesn’t apply if you’re getting significantly better terms that in themselves warrant following through with a new loan.

As a final point, consider your future plans. Are you expecting to move in the next few years? Are you looking for a change in job status that could create the need to change your location? Is your family growing and in need of more space? If you aren’t going to stay in your current house at least two more years, a mortgage refinance probably isn’t a good option because of the time it takes to recover the cost of the closing.

Fixed rate mortgages the ups and downs

As the title of this article would suggest, I am going to take you on a journey through the ups and downs on fixed rate mortgages. When buying a house, especially the first one, I think that it is literally the most terrifying experience that I have been through, and I have combat experience as a military veteran. For those of you who find yourselves still anticipating the purchase of your first home, let me give you a brief rundown of what it is and what it isn’t. What it isn’t will be the easies to tell you about. It isn’t like going to the store and buying what you want by swiping your card. It isn’t even like buying a new car, although the new car buying experience is a little bit closer. It is like looking at dozens of houses that you hate in order to find one that you like, only to learn that it is $10,000 more than you wanted to spend. So you make an offer and wait to see if the seller takes the offer or sends back a counter-offer. Once the game of offer/counter-offer is through you set up a closing date. At the closing you sit down and sign enough papers to make Leo Tolstoy quake in his boots. Once that hour devouring procedure is done, the house is yours and you are in debt for 30 years. Sounds appealing doesn’t it? Well, actually, it really is. But, before you get to the point where you can sign all those papers, you have to decide on what kind of loan will be best for you. There are a couple of different options and, in this first installment, I will discuss the fixed rate mortgage.

Overview of a Fixed Rate Mortgage

As the name would suggest, the fixed rate mortgage is a loan that has constant payments. By constant I don’t mean that they will be due every month (although they will), rather I refer to the fact that they do not change. If you get a fixed rate mortgage and the payments are $900 per month, they will remain at $900 for the duration of your loan. Nothing changes, it is set in stone, and you can set your clock by it, $900 a month for 30 years.

Benefits of a Fixed Rate Mortgage.

There are a number of benefits to having a fixed rate mortgage. I would like to discuss two of them, the planning power that it gives, and the financial liberty that you can take from it. Let’s start with the planning power.

Planning Power

To take on the responsibility of a $150,000, $200,000, or even $1million dollar debt is, as a mentioned before, very scary. But, to know that all you will ever be required to pay is $900 a month (or whatever your payments end up being. I don’t in any way want to insinuate that all mortgage payments are going to be $900 if you get a fixed rate.) is a very comforting piece of knowledge. You can plan your budget around that amount and make sure that you can always afford it. It really helps things out to have that amount set in stone. The next thing that most people get out of a fixed rate mortgage is financial liberty.

Financial Liberty

What I mean by that would be best communicated in the description of a hypothetical scenario. Picture a young couple, just out of college, just married, and brand new at the jobs in their respective careers. They decide to take out a loan and buy a house. They, because of the salary restrictions that they are working with, can only comfortably afford $500 a month. They know that this won’t get them the house that really want so they decide to stretch a lot financially and get a house that will run them $800 a month. After two years they both get promotions and their bills get easier to pay. After another two years they both move into management and get more promotions. Suddenly they find themselves in a position where they can actually comfortable afford to make $900 a month payments, and later on they can make $1000 a month payments, but they don’t have to. All they are required to do is $800. Every amount of money that they pay over $800 in a month goes towards paying off the principle and this gets their house paid off much faster. When the house is paid off, there is $800 a month that is no longer being tied up in living expenses. You see, in a fixed rate, 30-year mortgage, it will take 22 years to pay half of the principle because so much of that money is going towards the interest. If you consistently pay more each month than the minimum payment you can pay off a 30-year mortgage in 20 years easily.

Final Synopsis

For the young, first time homebuyer with a solid income, a fixed rate mortgage is a pretty good option. It allows, as was earlier stated, predictability and the possibility for earlier financial liberation. For the older first time homebuyer this is the best option. The ability to pay off a mortgage in less than 30 years is something that becomes very important as retirement approaches. For the buyers that are on a much tighter, less predictable budget, this may not be the best option. In that case there are other mortgages that would be better suited for their needs. But, as with all mortgage and real estate decision, sit down with a professional who can assess your individual needs and come up with a plan that is right for you.

Is a home equity loan right for you

Home equity loans are an extremely popular source of credit. Lenders offer dozens of varieties of loans making it very easy to tap the equity in your home. If you browse the marketplace online, you will find most of these loans come with variable interest rates. Some loans are marketed with very low introductory interest rate. There are not many home equity lines that come with fixed interest rates. Many lenders charge upfront fees and large amounts at closing. Some equity loans charge annual fees and may have a large balloon payment due at the end of the loan. Equity loans that do not carry balloon payments typically come with much higher monthly payments.

As a homeowner you need to shop around for the best home equity loan that is right for you. The challenge is finding a lender that will match your needs for the best interest rate, fees, and terms. Fortunately, the marketplace is extremely competitive, and a shrewd shopper can find excellent deals. To do this you need to contact as many lenders as possible. Compare offers not just based on interest rates, but compare the fees and terms as well. Make sure you read and understand all the fine print contained in your loan contract. Don’t be afraid to ask questions or haggle over terms and stipulations. Mortgage lenders need your business more than you need theirs. Demand more from your mortgage lender and you’ll be amazed how far it will get you.

Before shopping for a home equity loan there are several questions you need to have answers for.

First, is a home equity line of credit right for you?

If you are in a situation where you have to borrow money in a hurry, home equity lines are a great source of credit. Home equity lines of credit offer easy access to your home equity and even tax advantages you won’t find with other loans. The downside of tapping the equity in your home is that you are using you home as collateral on the loan. If the equity loan you choose comes with a large balloon payment at the end of the loan, you could place your home at risk if you are unable to make the balloon payment. If you move and need to sell the home most equity loans require full payment at the time of sale. Many home equity lines allow you to write checks against your equity; this ease of access to your money could lead to spending when you don’t need to. If you are not careful you could piddle away the equity in your home with frivolous spending.

There are options available to you other than home equity loans. If you take out a second mortgage on your home you are paid in a lump sum. Second mortgages usually come with fixed interest rates making them less risky than home equity loans.

Second, consider how much you really need versus how much you can borrow.

Your home equity lender will evaluate your credit history along with your income and debt ratio. Depending on the outcome of this you may be allowed to borrow as much as 85 percent of the value of your home. Make sure you fully understand the loan terms and how the loan works.

Interest rates from home equity lines vary widely between lenders. You can save a lot of money by doing your homework and shopping from a wide variety of equity lenders. Make sure you are comparing the annual interest rate for the loans. The interest rates lenders advertise are based on interest paid. To make an accurate comparison compare all fees, including closing costs, points paid up front, and any annual fees you must pay. This will allow you to make an informed decision on a home equity line of credit or a second mortgage loan. Remember loans with variable interest rates typically come with a low introductory period. When this period is over your interest rate and payment amount could increase dramatically. Taking out a second mortgage with a fixed interest rate could shield you from surprises in your monthly payment amount.

If you decide on an adjustable rate loan, make sure you understand the periodic cap. This cap limits the amount your interest rate can change at once. Look for loans that come with lifetime caps as this will limit the amount your interest rate can change over the life of the loan. Ask your lender which index your interest rate is tied to. Indexes such as the prime interest rate are used to set your adjustable interest rate amount. Your lender will charge a margin on top of this index when setting your monthly payment amount. Finally, ask your lender if you have the option of converting to a fixed interest rate at a later time. If you do your homework up front and shop around, you can certainly find an excellent home equity or second mortgage for your financial needs.