Do credit inquiries hurt my score?

This is a great question and a common one!  Many potential home buyers are afraid to let a lender pull their credit report because they think it will drop their score.  This is actually a very harmful MYTH and let me explain why.

Mortgage lenders use a scoring formula developed by Fair Isaac called FICO score.  FICO ignores mortgage inquiries for the most recent 30 days prior to scoring!  In fact, even when looking more than 30 days back all inquiries made for a mortgage within a 45 day window are only counted as one inquiry.  This means that having your credit checked out for a mortgage is not harmful to your score immediately and have little to no long term impact.

This is important because when home buyers wait until they find a house to have their credit pulled, there are often surprises that hurt their chances of obtaining a loan or getting the best rate.

I just met with a couple a few weeks ago that wanted to buy a new home in the Tega Cay area.  They are very credit worthy but didn’t realize that there was an error on their credit report.  By coming to me early we identified the problem and within a few weeks they were able to clear it up… before needing to lock in a rate or close on a loan!

If you are thinking about buying or refinancing the FIRST THING you should do is have a lender pull your credit!  Most lenders will do this for free and you might save yourself a lot of time and money.

Olan Carder
Loan Officer
NMLS# 97565

8600 Sam Furr Road, Ste 250
Huntersville, NC 28078
Phone: 980-721-7478
Fax: 704-247-2601
ocarder@1asmc.com
www.charlottemortgageonline.com

Post From Loan Officer Olan Carder

This is always the million dollar question. I get asked more than anything else, “Where are rates? Where are rates going? What are rates about to do?”

This is a tough question for the average loan officer because although we deal with rates all day everyday, many loan officers don’t understand the economic factors that drive rates or frankly don’t have time to pay attention to it.

Fortunately I subscribe to a wonderful service that keeps me informed on these factors and world economic events. Although no one can predict for certain what the future may hold, I do get great predictions from well informed experts, and they are typically very accurate.

Right now they are advising folks to FLOAT their interest rate if they are closing within the next 30-60 days. Rates have been on a downward trend for the last month and until we see something major change in the economy or see a strong change in the trend the smart money is floating.

This means rates should stay the same or slightly improve over the next couple months. If you are in the process of buying a home or refinancing, please consult your lender directly for lock advise. Many lenders offer some kind of float down or rate protection which makes locking a no-brainer, so if you would like more info on that shoot me an email. I am always happy to help!

Olan Carder
Loan Officer
NMLS# 97565
Phone: 980-721-7478
ocarder@1asmc.com
www.charlottemortgageonline.com

Mortgage rates have increased slightly in the last couple months but overall, today’s rates are still affordable.

Here’s a brief  history of 30 year mortgage rates for the last 20 years.

In 1990, rates averaged 10.5%. Rates showed a steady decline year to year until 2004. Rates in 2003 where around 5.6% then jumped to6.4% in 2004. Rates declined again to 5.8% 2005. The roller coaster ride continued in 2006 when rates were up to 6.7%. Rates then began a slow decline through 2010. 

Recently rates dipped into the mid 4% range and are now back in the 5% range. Its hard to predict what rates will do in the coming year but rates are still low.

Call me for questions, market trends,  etc.

Carmen S Miller
Century 21 First Choice
Fort Mill, SC
803.322.3479
carmen@carmensmiller.com
homesfortmill.com
seetegacay.com
aboutfortmill.com
tegacaywaterfronthomes.com

The newly passed Frank Dodd Bill has a risk retention rule that states anyone originating a home loan must retain 5% in reserves against that loan. Basically Congress is requiring lenders to put a little more skin in the game. This sounds like it makes sense, but let’s take a closer look at what this might mean for the market and for homebuyers.

First of all, this rule applies to conventional loans only, not government insured loans (FHA, VA or USDA). The majority of loans written in the US are conventional, especially loans with a down payment of 5% or more. This new rule would force some lenders to stop offering conventional mortgages altogether which could in effect force more mortgages to go FHA. This is not good for the US taxpayer because FHA loans have a higher delinquency rate and the program loses money.

An amendment to the bill allows mortgages that fall under certain guidelines to be exempted from the 5% risk retention. These are called QRM or qualified residential mortgages. The problem facing us is that what “qualifies” a mortgage loan to be exempted has not been determined and Wells Fargo has written a letter to 6 Federal regulators saying that the standard should be only loans with a 30% down payment or greater.

If this is adopted as the standard it will basically mean most mortgage lenders in the US will stop offering conventional loans because almost no one can afford the 5% risk retention. Lenders do not typically make 5% when they originate a mortgage loan, so basically every loan a lender would write would cost them money until the loan was eventually paid off.

So, why would Wells Fargo write this letter? Because they are one of the only lenders in the world large enough to actually handle this and by doing they could gain a significant advantage in the market and maybe even drive some lenders out of business… real nice!

Will the consumer win? No… Because if one or two banks have a monopoly on a certain loan type do you think the pricing will better or worse? Do you think closing will take longer or be quicker? There is absolutely no scenario under which this works out well for the industry, the market or the consumer.

See my latest video

Mortgage Update  Tuesday December 14th 2010

Rates are on the move AGAIN! The MBS Market is down over 100 basis points again and rates are headed for or are already at 5%. I will keep you posted through the week.

Why are rate going up? The risk of inflation has increased which creates risk on the yield of the mortgage backed securities. This has caused the mortgage bond prices to fall.

There are two main factors in the global economy driving this fear of inflation. One is the extension of the US tax cuts which will keep the national debt high and China announcing they are taking measures to slow their economy to head of inflation. See my video for a detailed explanation.

If you want to be added to my distribution list, Register Now

Olan Carder

The Blood Bath Continues!

Ok guys, we have lost another 100 Basis Points today so in the last 48 hours we have lost 234 basis points int he mortgage bond market! I am not sure how to put that into perspective but HUGE is not nearly a big enough to describe it.

Most lenders are going to be quoting around 4.75% now on 30 year fixed. 5% isn’t far off…

I will keep you posted if anything changes.

If you have received this indirectly and would like to be added to my distribution list, Register Now!

Olan Carder

Loan officer Olan Carder with American Security Mortgage sent out a video today to real estate agents with a couple mortgage tips or recommendations. Here is recap of Olan’s message…

Olan’s first message is about potential home buyers. If you are waiting for the new year to make a home purchase decision or closing, you may want to know mortgage rates are inching up slightly. Olan sees momentum in the bond market to move rates up in the future. So you may want to consider locking in a rate now in case there a chance rates go higher the first of the year.

Another mortgage tip is about mortgage tax deduction if you closed on a home this year. Most know you can use your mortgage interest payment as a deduction at tax time. What you may miss is some or all of the upfront insurance premium costs or funding fee for government type loans, FHA, VA, USDA, are also tax deductible. Check with your tax consultant to see if you qualify for this type of deduction.

For more tips or questions, contact Olan Carder

Olan Carder

FHA has reduced the UFMIP and increased the annual MIP… what does this mean for your buyers? Is conventional the king again or is FHA still the best way to go for most first time buyers? See my Fort Mill Mortgage video update for Oct 2010.

http://youtu.be/c-JRCg4Ymtg

The Federal Reserve does not set mortgage rates. Mortgage companies don’t even really have control over rates going up or down on a daily basis! Who is really behind the mortgage rate market? Well, interestingly enough it could be YOU! The general investing public has a huge impact on mortgage rates moving up or down. Watch this video to learn more…

Locking in your rate at the right time could save you thousands of dollars!  You wouldn’t invest in the stock market blind would you?  If you couldn’t follow a stock and do research about a company you probably wouldn’t buy any stocks.  Most people lock in a mortgage rate without any insight into the MBS market.  If you want to learn more about mortgage rates and products contact Olan Carder at ocarder@1asmc.com.  Ask to be put on Olan’s RateAlert email and he will forward you updates throughout the day so you know the truth about mortgage rates!

USDA loans are used to help low to moderate income families buy homes in rural areas.  Most of the communities right outside of Charlotte are eligible and USDA has quickly become one of the hottest programs today primarily due to its zero down payment and no PMI.  USDA is funded each year through Congress, and like most years they are running behind on getting the appropriate funding passed.  Most years it really isn’t a problem and lenders keep on lending because USDA shifts some money around to cover the shortfall but this year might be different.  Below is an alert directly from USDA…

This message is to notify you that program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010.

Once funding is exhausted, the Agency will not issue Conditional Commitments “subject to receipt of appropriated funds.”  This is because it is not certain when additional funding will be available. 

Limited funding may become available for disaster areas declared in 2008, or in disaster areas declared for Hurricanes Katrina and Rita.  Limited funding may also become available as prior Agency commitments are de-obligated, however, such funding will be very limited. 

We apologize for any inconvenience this may cause you.  Should you have any questions, you may contact the Single Family Housing Guaranteed Loan Division at (202)720-1452.

********************************************************************************

Please call your congressmen and ask them to RUSH this funding through.  Many people don’t know a lot about USDA mortgages but they are VERY common in NC and SC!  Thousands of families may be affected by this if people don’t join together and make some noise in Washington.  USDA Rural Housing is ran very efficiently and has lower default rates than FHA or other similar programs.

Please take action today. 

Olan Carder
American Security Mortgage
Mobile: 980-721-7478
www.charlottemortgageonline.com
ocarder@1asmc.com

How hard is it to get a mortgage in the current economy?

I am constantly confronted with wildly different views on what getting mortgage is really like today.  To hear some people talk one would think getting a mortgage is nearly impossible, and yet others make it seem easier than ever.  I find that typically the truth lies somewhere in the middle.

As a mortgage lender I can tell you without hesitation that it is harder to get a mortgage than it was 2-3 years ago.  Right now it is near impossible to find a mortgage unless you have a 620 credit score and 3 years ago you could get 100% with a 580 credit score pretty much anywhere!  The problem is that your perspective can make something look much worse than it is, and as a lender my perspective tells me that things aren’t that bad…

#1.  Mortgages are harder to get, NOT because lending requirements are too strict now but because they were too easy a few years ago!

A few years ago you could borrow too much too fast.  Many lenders didn’t check income thoroughly enough and allowed higher debt for people with the worst credit!  Today loans are readily available for anyone that has descent credit and can actaully afford the monthly payment.  Income and debts are thoroughly verified to ensure people don’t make a huge mistake that would hurt them, the local enconomy and the lender.

#2.  You do NOT need a huge down payment to buy a house!

I keep hearing people talk about this imaginary 20% down requirement that appearantly every other lender in the world is stuck with!  I am offering loan with zero to 3.5% down everyday.  There are a ton of government programs available to help people with low to moderate incomes with down payment money and closing costs.  People with higher incomes should be able to provide a 3.5 to 5% down payment.

#3.  Loans can still be closed quickly!

Many lenders have suffered from severe backlogs this year.  Here at WR Starkey Mortgage we are still closing loans in as little as 2 weeks!  If you want to take advantage of the $8,000 tax credit there is still time!

Getting a mortgage today is not very difficult for people with moderate credit, income and cash.  You don’t need a small fortune or a huge paycheck and with homes more affordable than ever now is the time to buy.  Rates are still very low and first time homebuyer tax credit runs out Dec. 1st, 2009.  If you have always wanted to own your own home, there was never been a better time to try.  I offer all of Carmen’s clients a FREE Pre-Approval service, just visit my website at www.LoansByOlan.com or call me at 980-721-7478.

Are there still mortgage available for First Time Homebuyers with limited funds and credit?

Many FTHB’s (First Time Homebuyers) have heard you need 20% down or perfect credit to get a mortgage right now.  Lenders have been in the news a lot, and the natural reaction is that when lenders struggle or fail, loans are harder to get.  I am not denying that there are less loan programs now than 24 months ago or even 24 days ago, but there are still great programs available for the FTHB!
Let’s take a look at the programs available today…

#1  USDA Rural Housing Loans

Everyone has heard of USDA Choice beef, but most people are unaware that USDA also has a housing division.  Rural housing loans were created to encourage home ownership in rural areas, and this loan quickly becoming a popular choice for first timers.  USDA loans offer 100% financing and no monthly PMI!  Combine that with low fixed rates and you have yourself a great mortgage program!!

The only drawbacks are income limits (which are generous) and area restrictions.

#2.  FHA Mortgages

It’s hard to find someone who hasn’t heard of FHA.  It’s an oldie and goodie!  FHA has great loan limits and no income limits, so almost all first time buyers can use FHA.  Only 3.5% is required for down-payment and credit requirements are fairly easy to meet.  FHA is certainly the most widely used programs for the first time buyer.

#3.  VA (Veteran Affair) Loans

If you have served our country with the Armed Forces, you might qualify for a VA mortgage!  VA offers 100% financing and no monthly mortgage insurance, similar to USDA.  Loans are available up to $417,000.  If you aren’t sure if you are eligible, I can help you find out fast.

If you would like more information about mortgages available in your area, please give me a call at 980-721-7478.  You can also visit my website at www.LoansByOlan.com.

Contrary to rumor, mortgages are not that hard to find!

Homebuyers have returned to the market, and sales are increasing but too many are still sitting on the sidelines.  There are First Time Homebuyers that would love to take advantage of the $8,000 Tax Credit but don’t think they can!  Fear of the unknown keeps people from pursuing their dreams everyday.  This is a real shame.

I have heard strange rumors like, “You need 20% down to buy right now, right?” or “You can’t get a mortgage without perfect credit!”  These rumors are FALSE, and the truth has been buried beneath an avalanche of bad news.  Let’s take a look at some facts about the current mortgage market in North and South Carolina…

• Credit score minimum for most home loans = 620 NOT 740 or even 700!  620 can qualify you for an FHA, USDA, VA or even some conventional mortgages!!
• Average 30 Year Rate = 5.08% last week (taken from Freddiemac.com)
• Down Payment Requirements are low!  3.5% for FHA, 0% for USDA, 0% for VA loans and only 5% for Conventional!
• Banks ARE LENDING! I can’t speak for other banks, but here at WR Starkey Mortgage we are closing loans in less than 3 weeks on average.

If you want to take advantage of the first time homebuyer tax credit you need to act NOW.  The credit expires Dec. 1st of this year.  You must be closing by that date, but there is still time if you start looking now.  Start here by seeing what you can afford.  For more information you can contact:

Olan Carder at 980-721-7478 or visit my website at www.LoansByOlan.com.  Pre-approval is FREE!

VA mortgage loans offer 100% financing to Tega Cay homebuyers!

If you have ever served in the armed forces you might be eligible for VA home loan.  The Department of Veteran Affairs offers lenders a guaranty on the loan so lenders can offer qualified veterans a 30 year fixed rate mortgage with no money down and no monthly mortgage insurance!

Your VA entitlement does not guarantee you a home loan. You still have to qualify based on your income and credit.  If you have ever served and you aren’t sure if you are eligible, I can check it for you FREE of charge.

VA home loans are available up to $417,000!

There is a funding fee charged on VA loans based on usage, but you might be exempt if you have any VA related disability.  10% or more disability means you don’t have to pay the funding fee, and even if you do, the fee can be rolled into the loan!

Interest Rates on VA loans are averaging between 5% and 5.5% right now for 30 Year Fixed.  For more information you can contact Olan Carder at 980-721-7478 or visit www.LoansByOlan.com.

Rates are at record lows, but do you qualify for those rates?

If you haven’t heard about these record low mortgage rates in Tega Cay, you might want to check into having the internet hooked up to that rock you’ve been living under.  The news is everywhere that mortgage rates are super low, but the real question is, “Can you qualify for them?”

It really doesn’t matter how great something is if you can’t get your hands on it.  That is one of the reasons why record low rates have not magically lifted this economy back to health.  Many people haven’t been able to refinance into a better situation because they can’t qualify.  Let’s take a look at why…

1. Home values have dropped in many areas.
2. Credit scores now affect what rate you get!
3. Loans people used to buy their home a couple years back, no longer exist!

If your home value has dropped below what you paid for your home, you are probably stuck.  Lenders are trying to make safer loans (the ultra-risky loans are what got us here) so they are not going to lend over the value of the home.  Fannie Mae and Freddie Mac has just issued new programs that help your current servicer to refinance your loan.  If you have a value problem, start with you current company.

Credit scores now have a huge effect on what rate you get.  If your score is below 740 you might now get the best rate, and if your score is below 700 you could be paying more than a point (1% of your loan amount) or more to get a good rate.  If your loan is $200K that means the same rate costs you $2,000 more… OUCH!  Have a lender pull your credit immediately and determine if your score is where it should be.  I offer a FREE credit analysis to my customers.

If you needed a “Stated Income” or “No Doc” to buy your house, you might be out of luck.  Have a lender review your financials to determine if you can qualify for a “full doc” mortgage.  Again, this is something I offer FREE of charge.

Hopefully you can take advantage of these record low rates, but one thing is for sure… the sooner you start the sooner you will find out!  Call Olan Carder at 980-721-7478 for more information or click here to visit my blog.

It does not look like mortgage rates are going to fall much below current record lows as lenders become flooded with refinances.

The Federal Reserve has been on a mission to get long term interest rates lower in order to help spur the economy.  One of the biggest areas of focus has been mortgage rates, with a promise of $500 Billion to purchase mortgage bonds.  This promise was just raised to $1.25 Trillion for 2009 alone!

One would think that with the Fed buying $1.25 Trillion worth of mortgages this year that rates might fall even lower than the already record lows,  but most analysts think that not.  The problem is that when lenders are paying overtime to try and process all the mortgage applications they already have, there is not much incentive to offer lower rates.

Many brokers have complained to me personally that it is taking 2-4 weeks to get their loan files underwritten by the big lenders right now.  That means that if you lock an interest rate for 30 days, your loan might not close on time and you might lose that rate lock.  The good news is that rates probably won’t be much higher so you can just lock again.

Most experts think rates will be between 4.75% and 5.5% for the remainder of this year, but I have not found anyone in the industry that predicts sub-4.5% rates.  If you want to buy or refinance you should get started right now to reduce the chances of delay.

Myers Park Mortgage is running 24-48 hours in underwriting right now.  Our processing systems have always allowed us to deliver superior service in this market and right now those same systems are keeping us weeks ahead of the competition.  If you would like more information please call Olan Carder at 980-721-7478 or visit me online at www.charlottemortgageonline.com.

Have you ever wondered what a “good” credit score looks like?

Read below to find out…

A “good” credit score is a very relative term because “good” means different things to different people.  I know mortgages, so although I have an idea of what a auto lender might think is a “good” score, I can tell you for sure what it takes to get a mortgage!

The current minimum score for most home loans is 620.  You will find a lot of information online that suggests FHA loans do not have a minimum and that is true.  The problem is that the lenders who provide the FHA loans have put their own requirements on top of what FHA requires.  It will be next to impossible to find a loan right now if your score is less than 620.

The original question was about “good” not minimum so let’s look at how your score can effect your terms.  Fannie Mae has come up with a pricing grid that determines an extra cost or lower cost based on your credit score.  I will give you a real life example so it is easier to see the true dollar costs…

If you were buying a home and the loan amount was $200,000 and you were putting 10% down, you would be charged the following based on your credit score:

720+ would be $0.00 extra charge but no discount
700-719 would be an extra $1,000 in cost
680-699 would be an extra $1,500 in cost
660-679 would be an extra $3,500 in cost
640-659 would be an extra $4,500 in cost
620-639 would be an extra $5,500 in cost
Below 620 would be an extra $6,000 in cost (if you can even get approved)

If you would like to know how to maximize your credit score so you can benefit from the BEST rates for mortgage loans, car loans and credit cards, please call Olan Carder at 980-721-7478.  You can also visit our partner company, HOPE USA, that specializes in credit education by clicking here.

Rates improved today after a sharp decline in stocks!

PRICING EXAMPLE:
I was able to lock in a customer today at 4.875% on a 30 year fixed mortgage.  The loan amount was $275,000 and it was a purchase loan for their primary residence.  They put 20% down and had a 746 credit score.  The APR was 5.023% and the origination fee was .875%.

The good news in this crazy market is that mortgage pricing yields are returning to normal after over a month of basically no difference between 5% and 6%!  Higher rates are once again offering more yield to the lender so low / no-cost loan options will be back available at decent rates.

Tomorrow might be a good day to lock in based on market movement.  There is a good chance rates will open very low tomorrow morning and could come back during the day.  If you would like more information on rates and your specific situation, please call Olan Carder at 980-721-7478.  You can also apply online at www.charlottemortgageonline.com.

The time of waiting for the “bottom” is past… now is the time to buy Real Estate!!

There has been a time for people with money to spend to sit on the sidelines and wait out the proverbial “storm” in the market.  Whether stocks or real estate the values have been in free-fall mode, and buying just didn’t make a ton of sense.  I believe that time is over and here’s why…

1. The affordability index for homes is at a record high!!!   This means houses have never been more affordable since we started keeping records on it!
2. Home sales have also hit record lows!  The Pending Home Sales index is at its lowest point since they started it too!  That means deals are out there right now.
3. Major analysts and investors are now surfacing saying the stock market is either at or very near bottom!  Consumer confidence (and therefore home sales) will go up as confidence increases.
4. Rates are still awesome!  You can lock in 30 year fixed rates in the low 5′s or high 4′s!
5. There is a $8,000 first time tax credit good only through Dec. 1st of this year.  Click here to learn more!

Considering all the evidence, there has truly never been a better time to buy a home.  If you have the money and credit to buy a house, WHY WAIT?  Homes are more affordable than ever and deals are everywhere!  Don’t wait until the market rebounds 10-20% and pay too much.  Get started now because buying a house takes time.  Get in line before the next boom.

Please call Olan Carder @ 980-721-7478 for more information about mortgage programs and rates.

Can 11th Grade Economics 101 predict mortgage rate trends… you bet!

I learned in high school about Supply and Demand.  When Demand is high the price will follow, and likewise when demand is low.  When Supply is high prices drop and right now there is a huge supply of mortgages being written.  When lenders make new mortgages they have to sell more mortgage bonds and right now lenders have an abundance of new loans from January.

What does our high school economics class teach us… if there is a huge supply of these mortgage bonds that need to be sold right now then price must go down.  If mortgage bond prices fall then rates go up.  Right now rates are on the rise and even though “Demand” is gotten them low and will keep them relatively low for a while, “Supply” is pushing them a little higher at the moment.

Where are rates today?

For a $250,000 loan I could offer 5.125% with an APR of 5.2576% on a Conventional 30 Year Fixed.  This would assume a purchase or refinance at 80% loan to value, credit score of 740 or better and a primary residence.  The origination fee would be 1.00% with no points.

There are many factors that go into a mortgage quote.  If you would like more information about getting a mortgage loan in Tega Cay or Charlotte please call Olan Carder at 980-721-7478.  You can also apply online by visiting my website at www.charlottemortgageonline.com.