Electric Loan Officer

Great news for our economy, is this the light at the end of the tunnel?

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Since the 2008 takeover of Fannie Mae and Freddie Mac (the two mortgage finance giants) by the US Government they (Fannie and Freddie) have received quarterly payments to balance their books/losses totaling $152.8 billion in tax payer dollars. This seems like a HUGE number considering they have only paid back $16.5 billion OUCH!

This “bailout” was the original plan to keep Fannie and Freddie buying mortgages and helping to restore the housing market. Fannie and Freddie are the secondary market that provides a “buyer” for the purchase of loans from “originating lenders” allowing the “lenders” to re-lend their money and keep the housing market moving. The agreement was for the two giants to make quarterly dividend payments back to the government as their financial position becomes stronger.

The third quarter of 2010 was the FIRST quarter since the takeover that the dividends paid back to the government were larger than the draws from the treasury. This is a great sign, but what could happen in the future quarters could be a different story. Because of the length of the foreclosure process being drawn out quite a bit longer Fannie and Freddie are losing more money than previously. The thoughts are that after they clean their books of the toxic loans originated in 2005-2008 that we will see less foreclosures in the future as the realistic and safe mortgage products that were originated starting in late 2008 early 2009 start to make up the majority of the market share.

-Justin, Electric Loan Officer

Need a Loan Officer you can rely on?

Whether you’re an agent or a borrower, fill out the form below and let me know how I can best serve you!

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How do you know you’re getting a good deal on your home loan?

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If you are like most first time homebuyers, getting a mortgage home loan may be a nerve racking experience for you. Not asking the right questions may end up costing you more money than it has to, but where do you begin?

You want to get a good deal, but what exactly is a good deal? Lets talk about this a bit and whats involved with calculating the interest rates and closing costs as there are MANY important factors that are involved. Credit score for one is very important, since this is what is rating your ability to make your payments in a timely fashion.

The investors who buy the mortgage loans want the best of the best, and the lower your scores are the higher your interest rate will be. On average your looking at about .375% higher rate for a 620 score versus a 740 score. Another important factor is the LTV (loan to value). Loan to value is the principle balance of your mortgage loan in comparison to the “market value” of the house. On a purchase the value is ALWAYS calculated using the purchase prince and on a refinance transaction its calculated using the appraised value. The lower the loan to value the less risk the investor takes by lending you money for a mortgage.

There are a few other important factors but the last major factor is the loan amount. The investors spend the same amount of money to foreclose on a $50k house as they do on $200k house, but the money made by the investor on a $200k loan is significantly more than a $50k loan. With this in mind we know that all invesments are based on risk, the lower the mortgage loan amount the higher the costs in interest and points.

This should give you a great understanding of how your interest and fees are calculated, so when you see that the national average for a 30yr fixed mortgage is 4.125% just know that this doesn’t mean everyone qualifies. I will volunteer my time personally to make sure you are in fact getting a good deal. I do not want to do your loan, I want to review your loan. If you have been offered a mortgage loan from a company, contact me and I will spend some time looking it over to make sure you are not spending too much and show you ways of saving some money.

-Justin, Electric Loan Officer

Need a Loan Officer you can rely on?

Whether you’re an agent or a borrower, fill out the form below and let me know how I can best serve you!

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