What $1500 buys

The winner of our "Win a FREE Mortgage Payment Sweepstakes" will win a free mortgage payment, valued at up to $1500. Here's just a few ideas for what you could buy with that money:

• One 40" LCD HDTV
  
• 652 gallons of gas (at $2.30/gallon)
  
• down payment on a new car
  
• annual surcharge for adding your new teenage driver to your auto insurance
  
• Take 75 of your closest friends to the movies (including popcorn, drinks and candy for all!)
  
• 15-20 dinners for two (including drinks, dessert, and gratuities)
  
• Pay your electric bill for up to a year (or more)
  
• Pay your cell phone bill for up to two years (or more)
  
• a start-of-the-art laptop computer
  
• a three-night vacation for two to London
  

Enter our Mortgage Payment Sweepstakes on or before March 15 at www.charleyfarleyhomeloans.com

Why Lenders Don't Want Your House

Most lenders will do almost anything to avoid foreclosure, says MSNBC, if you talk to the right people as soon as you can. This article explains why and what you can do to save your home.

Even better, says the publication, you can get to the right people, you have a lot more options for saving your house than you did a decade ago.

To learn more about the lending process, click here

Opt-Out of Receiving Unwanted Mortgage Offers

So you've applied for a mortgage with us and, within hours, you're getting flooded with offers for other lenders.This happened because when we check your credit to provide you a rate quote, one (or more) of the national credit bureaus takes our inquiry and sells it to other lenders.

This selling of "hot prospects" is a very lucrative side business for the bureaus -- who staunchly defend their right to sell applicants' personal financial information. (After all, they're the ones who provided us -- for a fee -- with your credit score, credit card balances, and other financial information, to begin with.)

The National Association of Mortgage Brokers disagrees. It argues that when credit bureaus sell overnight trigger lists to third-party lead generators, they fail to comply with a key provision of the Fair Credit Reporting Act.

When we check your credit, we are unable to tell the credit bureaus (Experian, TransUnion, and Equifax) not to sell our inquiry to other lenders. However, you can opt out of uninvited mortgage offers by visiting http://www.optoutprescreen.com or by calling (toll-free) 888-567-8688.

Opting-out via the optoutprescreen.com web site will prevent you from receiving "firm offers" for credit and/or insurance for five years. To permanently opt-out, you will need to complete and submit the Permanent Opt-Out Election form available through the web site

The Washington Post has published an excellent article on this topic, which you can read here.

Mortgage Triggers, Part 2

Here's why some mortgage companies purchase "trigger leads" for marketing opportunities:

• Trigger leads can be up to 50-80% cheaper than many types of internet mortgage leads.

  
  
  

• The information contained in trigger leads is highly accurate, because it comes form credit agency data.

  
  
  

• Potential borrowers are often open to second opinions and quotes. (Here at Compass smortgage, we offer a "Get a Second Opinion on Your Mortgage" program, although we do not purchase trigger leads at this time.)
  

And here's how mortgage companies use trigger leads to keep tabs on their existing borrowers:

• Track changes in the credit profile of current customers (delinquent debts, taking on too much additional debt).

  
  

• Early notification that a borrower may be selling or refinancing existing property.

  
  

• Advance notice that an exisitng borrower may be purchasing a new primary residence, or a second home, vacation home, or investment property.
  

Selling credit "triggers" is a highly profitable sideline for the big three credit agencies. But it's not a new one: triggers have been available to lenders for years. However, Web-based technology is morphing them into a totally new type of product.

MSN: The Myth of Perfect Credit

The highest-possible FICO score is 850, says MSN Money and Bankrate.com, but even people with the best credit don't usually exceed 825. Those last 25 points wouldn't save you money on a loan anyway, says the online resource.

Read the entire story here: http://articles.moneycentral.msn.com/Banking/YourCreditRating/PerfectCreditYouDontNeedIt.aspx

Mortgage Triggers, Part 1

When a potential borrower applies for a home loan or to refinance, a mortgage company puts in a "hard" inquiry to one or more of the credit agencies: Equifax, TransUnion, and Experian. Information contained in a borrower's credit report (years of credit history, late payments) is required to establish his/her creditworthiness. A favorable credit history can result in better interest rates and terms on a mortgage loan.

When the borrower's credit history is pulled from a credit agency's database, it creates a "trigger" within the reporting system. This trigger essentially alerts the credit agency to send information about the inquiry to credit data buyers. These companies then aggregate this data and sell it to their clients (often other mortgage companies.)

This is why you may receive calls and letters from other mortgage companies when you apply for a home loan or refinance. We don't sell your data -- we want your business and the last thing we'd ever do is sell your information to a competitor.

Tomorrow, we'll discuss why "trigger leads" are valuable to mortgage companies. And next week, find out whether you can "opt out" of the trigger system.

Help Your Realtor Sell Your Home, Part 2

Here are some more tips for creating a buyer-friendly home:

Staging
It’s all the rage these days - and for good reason. Staging doesn’t have to cost a lot of money, and the rewards of doing it can be huge. When you sell your house "as is" - or don’t stage - it can actually cost you money. Staging a home, on the other hand, can result in your home’s selling for a higher amount than it would otherwise.

TIP: Linger in the doorway of every room and imagine how your house will look to a buyer. Does your current arrangement of furniture and belongings show off your home’s strengths and meet the standards of a "buyer-friendly house"? 

For additional ideas on staging your home, download our exclusive "Selling Your Home" 8-page  brochure at www.CharleyFarleyHomeLoans.com/brochures/sell_realtor.pdf

Get a second opinion
Ask a friend or neighbor - one who is not afraid to be blunt - to walk through your house as a prospective buyer would. Get his/her opinion on how well it “shows”. Consider making any additional changes, depending upon your budget and schedule.

The Bottom Line
Your Realtor will help you sell your home by marketing it, bringing in potential buyers, helping you evaluate offers, and guiding you through the entire closing process.

Your job is to make your home look as attractive and inviting as possible, to improve your chances of getting the price and terms you want when you sell it.

Win a FREE Mortgage Payment

Visit the Compass Mortgage web site at www.charleyfarleyhomeloans.com on or before March 15 and sign up for our "Win a FREE Mortgage Payment Sweepstakes." (Links on the green navigation bar and in the red block on the top right of the site.)

Good luck!

The Home of 2015

What will the home of the future look like? The National Association of Home Builders (NAHB) took a took an educated guess at its recently-concluded annual convention.

Changes will come much faster over the next decade than they have in the past, due to the pace of technoloical advances. Overall, homes will be "greener" than today and there will be increasing emphasis on access for persons of limited physical ability (a trend that has already started as the baby-boomer generation greys).

The average square footage is likely to be in the same 2,400 sf. range that is found in today's new homes. The family room will replace the living room (which will either vanish or become a library, "retreat," or parlor). Ceilings throughout the first floor will be 9-feet high, with the second floor being 8-9 feet. More homebuyers will opt for three-car garages and for larger doors that admit SUVs.(So much for green!)

Source: MortgageNewsDaily.com

Help Your Realtor Sell Your Home, Part 1

Potential buyers are committing to a significant amount of debt when they decide to buy your property. Your job is to help them view it as their dream home. here are some proven tips and techniques...

First impressions count!
“Curb appeal” increases what someone may be willing to pay for your home. Potential buyers not only want to be impressed with your home, they want everyone else to be, as well. Make sure that your lawn, yard, garden beds, and driveway are well-kept and tidy, because appearances matter.

Cleaning
This is the most cost-efficient ways to spruce up your home. Make sure you scrub your home from floor to ceiling. Wash your windows, vacuum your carpets and drapes, and dust thoroughly. Remove dust, grime and fingerprints from all surfaces. Cleaning your light fixtures: can make a huge difference in the lighting in your rooms. Also, make sure your house smells good and is free of odors.

Tomorrow, I'll discuss additional tips to help your Realtor sell your home.

Refinancing ARMs Harder These Days, says WSJ

With rates on many homeowners' adjustable-rate mortgages rising, says the Wall Street Journal Online, some borrowers who would like to refinance into a new loan are finding they can't.

In some cases, that is because their loan carries a prepayment penalty, which would force them to come up with thousands of dollars if they refinance in the first few years.

Other borrowers, says the publication, are getting caught short by a changing housing market -- one in which home prices have flattened and lenders are beginning to tighten their standards after a long period of making mortgages easier and easier to get.

The challenges are greatest for homeowners whose credit has declined since they took out their last loan and for those who have little if any equity.

To read the entire article on Yahoo Finance, click here.

8 Big Mortgage Mistakes

MSN Money has a list of 8 of the most common (and costly) mortgage mistakes. They are:

• Not fixing your credit
  
  
• Not looking for first-time home buyers' programs
  
  
• Not getting pre-approved for a loan
  
  
• Borrowing too much money
  
  
• Not shopping around for rates and terms
  
  
• Paying junk fees
  
  
• Not planning for closing costs
  
  
• Not having enough cash on hand after closing
  

To read the entire article, click here.

More from Freddie Mac

During Q4 2006, 84% of new mortgages that were the result of refinancing were "cash out" loans. This resulted in $70.7 billion in equity pulled out of American homes in a three-month period.

Refinancing itself accounted for 46% of all mortgage loans during the fourth quarter.

A Freddie Mac spokesperson speculated that

"many families found it cost effective to cash-out equity through a new first mortgage, even though it raised their [interest] rate. With the prime rate at 8.25%, a home equity loan or line of credit based on that rate may not make sense if the financing need is large (like a major home improvement or college tuition payments) and will be paid back over several years."

Source: Mortgagenewsdaily.com

So How's the Real Estate Market Doing?

Freddie Mac issued its "February Economic Outlook" on February 8.

In addition to its usual economic forecasts, the report spotlighted defining moments of the 2006 market. Those that should interest residential homebuyers and sellers include:

• US Census Bureau inventories of new homes have begun to decline: down to a 5.9-month supply at year's end (compared to 7.2 months in July). However, keep in mind that these figures on new home sales are recorded at the point that sale contracts are signed. If a contract is cancelled, it is neither reflected in revised figures nor do these units return to inventory. (Cancellations were running as high as 30% last fall.)

  
  
  

• Excess inventories may continue to weigh on home prices over the long term and sellers are only reluctantly lowering prices as they slowly recognize the new reality of a buyers market.

  
  
  

• Single family starts in December 2006 were off 30% from their peak, but sales of new and existing homes were down 18% and 14% respectively. The decrease in new homes on the market may eventually -- maybe over as much as a year -- ease the inventory glut.
  
  

* Source: Mortgagenewsdaily.com

Hot Words to Sell Your Home

MSN reports on a Canadian study which has found that the right phrasing in real estate listings can speed a sale (and even boost the final price).

One tip: If you must sell, don't put "must sell" in your ad.

To read the entire article, visit http://realestate.msn.com/selling/Article2.aspx?cp-documentid=2856666

Key Factor That Boosts Home Values

An interesting study has just been concluded by the National Association of Home Builders that identifies how various features in a home impact the property's value. The association's Housing Economics Department created a house price estimator, based on data from the American Housing Survey, a nationally representative survey of about 60,000 housing units conducted by the U.S. Census Bureau in odd-numbered years.

Waterfront locations have the most significant positive effect on home values, the study determined. This applies to homes in every census region and in every type of setting. For example, being on the waterfront raises the value of a standard home in a Midwestern suburb by an average of 43 percent, and in a non-metro areas in the South by 44 percent. In the central city of a large California metro area, being on or near water raises the value of a home by 41 percent.

The characteristic with the largest negative effect on home values is the presence of abandoned buildings within one-half block or about 300 feet of the home. Bothersome trash, industrial buildings, inadequate shopping and bad roads also have a significant negative effects on the price of a home. For more information about the house price estimator, check out the model online at: www.nahb.org/estimator/.

(Source: www.jimwoodard.net)

Are Open Houses Good or Bad?

Mortgage News Daily looks at the pros and cons and concludes that the jury is still out:

For the seller: Many buyers rely on the Internet and open houses in their home search. Many "free-lance buyers" (those who don't use Realtors) are newer Americans who don't quite understand (and are thus afraid of) the process or younger/tech-savvy individuals who really want to do it themselves. If you don't host an open house, these buyers may never see your property.

For real estate professionals: Sunday is prime-time for selling real estate and listing agents prefer to spend that time working with their own buyers. Even so, open houses can be an excellent way for Realtors to connect with potential new customers.

50-year mortgages?

Yes, you read that right. Bankrate.com discusses the loan program and whether it's a viable alternative to interest-only loans.

The bottom line? Although it's tempting to have lower month payments, you won't be building equity. (In fact, depending on fluctuations in the real estate market over the next ***half-century***, you could end up owing more than the house is worth.)

Compass Mortgage offers a number of 15-year and 30-year mortgage loan programs that allow you to buy a house you can afford while also building equity. For details, contact us today at (603)472-2272 or visit www.CharleyFarleyHomeLoans.com

Improve Your Score by Managing Your Credit

Manage your credit for the LONG RUN. In the long run, your scores will be determined by time and good financial behavior which should include the following:

• Pay your bills on time. Late payments and collections can have a serious impact on your credit score.
  
  
• Reduce your credit balance. If you are “maxed” out on your credit cards, your score will be low. Try to keep your credit card balances below 50% of the available limit. EXAMPLE: It’s better to have two credit cards with $10,000 limits where you owe $5000 on each than to have one credit card with a $10,000 limit that is maxed out.
  
  
• Do not apply for credit frequently. A lot of inquiries will give the appearance you may be taking on more debt than you can afford. Each inquiry can cause up to a 5 point drop in your credit score. The actual amount of damage depends on the number of inquiries, time period and other factors in your credit file.)
  
  
• Don’t close any old accounts. Your credit score is largely determined by the length of your credit history. Closing older accounts can make your credit history look younger than it actually is, which can hurt your score.
  
  
• Avoid over-consolidating. If you consolidate your credit card balances onto one low rate card and the balance on that card goes over 50% of the high credit limit, your credit score will go down.
  
  

Building a good credit history over time - by paying bills promptly, establishing a variety of accounts, and keeping balances below 40% of your credit limits - is the best strategy for having and maintaining excellent credit.

Reverse Mortgages and Baby Boomers

CNN reports that baby boomers are creating unprecedented demand for reverse mortgages.

Renowned as being spenders rather than savers, says the news provider, boomers are proving to be only too happy to borrow against all or some of their home to finance their retirement lifestyle.

Reverse mortgages allow boomers to borrow against the equity in their homes, providing additional funds to support themselves in retirement. Debt and interest builds up over time and may be repaid by the beneficiaries of the estate when they sell the home.

Research group Datamonitors says most people take a lump sum of between $40,000 and $50,000 and splurge on a new car or holiday. Others elect to take a few hundred dollars extra each week to support a more comfortable lifestyle.

Home Equity Advantages, Part 2

Cash-out programs allow borrowers to receive up to 80% of the loan-to-value ration for their home. In other words, the lender would pay off the borrower’s existing loan and provide cash up to 80% of the home’s value. (For example, a homeowner who refinances a home valued at $300,000 -- and whose balance on his existing loan is $200,000 -- would be eligible for up to $40,000 cash.) Homeowners can then use that money to help pay for a college education, investments, or purchase a vacation home. All related closing costs, financing costs and prepaid items can be rolled into the new loan amount, further maximizing your borrower's cash flow potential.

If the interest rate offered for your refinanced mortgage is significantly higher than your current rate, cash-out refinancing may not be a sensible choice. In this case, a home equity loan or line of credit (HELOC) might be a better idea. While cash-out refinancing is a replacement of your first mortgage; HELOCs are separate loans on top of your existing first mortgage.

The opportunity to use the equity you have built up in your home is one of the benefits of homeownership. When you need cash for a home improvement project, to pay off high-interest consumer loans, or to finance higher education, you need not look any further than your own front doorstep.

To learn more about home equity loans on your New Hampshire property, call Compass Mortgage at (603)472-2272 or visit www.CharleyFarleyHomeLoans.com.