Thursday, April 22, 2010

10 important questions to ask lenders when buying a home

Once you've narrowed the lender field to a short list of finalists, it's time to compare their offers.

Here are the 10 key questions to ask at application time to help you find the best overall mortgage loan. If you have already selected a lender and are ready to apply, make sure you have the answers to these questions first.

1. What is the interest rate on this mortgage?
To determine exactly what you'll pay over the term of the loan, you need to know the rate. Rates change quickly, and if your credit is less than perfect, you may not be offered the lender's lowest figure.

To effectively compare different lenders' programs, ask for the annual percentage rate (APR) of the mortgage interest, which is generally higher than the initial quoted rate because it includes some fees. But beware: the APR found in advertisements can be misleading. Mortgage lenders don't always include all the fees they charge in the calculation that determines APR, so customers who use that figure to shop rather than an itemized breakdown of rates, points and fees may end up comparing apples to oranges.

2. How many discount and origination points will I pay?
Lenders may charge prepaid mortgage interest points to lower your interest rate or other points that have no benefit to you at all. Find out how many you'll be expected to pay and which kind of points they will be.

3. What are the closing costs?
Mortgages come with fees for various services provided by lenders and other parties involved in the transaction. You want to know what those fees will be as early as possible. Lenders are required to provide a written good-faith estimate of closing costs within three days of receiving a loan application.

4. When can I lock the interest rate, and what will it cost me to do so?
Your interest rate might fluctuate between the time you apply and closing. To prevent it from going up, you may want to lock the rate, and even points, for a specified period. Ask your lender if lock fees apply

5. Is there a prepayment penalty on this loan?
There may be a prepayment penalty on your loan. Some penalties are 1 percent of the loan amount, others are equal to six months' interest, some apply only when you refinance or reduce the principal balance by more than 20 percent, and some kick in if you sell your home. Find out the duration of any penalty period and how the penalty is calculated. Some lenders offer lower interest rates to buyers who accept prepayment penalties.

6. What is the minimum down payment required for this loan?
The rate and terms of your loan will be based on a down payment figure, typically 3 percent to 20 percent of the buy price. If you can put more money down, you may be able to lower your rate and improve your terms; if you come up short, you may be required to get mortgage insurance.

7. What are the qualifying guidelines for this loan?
These requirements relate to your income, employment, assets, liabilities and credit history. First-time homebuyer programs, VA loans and other government-sponsored mortgage programs typically offer easier qualifying guidelines than conventional loans.

8. What documents will I have to provide?
Most lenders will require proof of income and assets before approving your loan, and may require other documents as well. Buyers with excellent credit may qualify for a no-documentation or "no-doc" loan, but they can expect to pay a hefty down payment and higher interest rate.

9. How long will it take to process my loan application?
The answer will depend on a number of variables. When the loan business is brisk, underwriters get backed up, verification takes longer, appraisals move slower and other bottlenecks develop along the loan pipeline. Lenders may say two weeks, but 45 to 60 days is probably more realistic in most cases. You'll need their best guess to determine how long to lock in your loan.

10. What might delay approval of my loan?
If you provide the lender with complete, accurate information, the loan process should run smoothly. If the underwriter discovers credit problems, however, there could be delays. Make sure you notify your lender if you change jobs, increase or decrease your salary, incur additional debt or change marital status between the time you submit an application and the time the loan is funded.

Put these 10 questions to your leading candidates and compare their answers. The results should lead you toward the mortgage lender that is right for you.

The above information is per

Sunday, April 04, 2010

Real Estate Brokerage Scams in Dallas/Fort Worth Area

The Texas Real Estate Commission Standards and Enforcement Services Division (TREC) has received complaints
against a group of individuals and companies that have been doing business in the Dallas/Fort Worth area. The
individuals and companies named in the complaints represent themselves as real estate agents and real estate brokerage
companies but do not hold Texas real estate licenses. Owners of real property, tenants, buyers, and investors claim to have
lost large sums of money related to the group’s real estate schemes. Among other things, the complainants allege that the
group takes and keeps deposits for properties over which they have no authority or no control. They allegedly do not pay
rent to property owners on property they claim to manage for those owners, or take large security deposits from tenants
and then keep the money. They take deposits or earnest money on properties that they claim are available for a short sale
but in reality are days away from foreclosure. Apparently, much of the solicitation of potential victims has been
conducted through
Before a consumer gives personal information, money, or financial information to a person claiming to be a real estate
agent, they should verify the identity of the person and check whether that person actually holds a Texas real estate
license. License information can be obtained by doing a “licensee lookup” on TREC’s website,, or
by calling TREC Monday through Friday between 7 a.m. and 6 p.m. at 1 (800) 250-TREC or (512) 465-3942. The public
should be aware that Texas laws provide that consumers who use licensed Texas agents have the financial protection of
the Real Estate Recovery Trust Account if they suffer actual damages caused by misconduct of a real estate licensee in a
real estate brokerage transaction and later obtain a civil court judgment against the licensee that cannot be collected from
the licensee. Consumers who use unlicensed individuals or companies to perform real estate brokerage activities are not
eligible to be reimbursed by that account.
Based on information filed with the complaints, the group allegedly hires unsuspecting people to perform real estate
brokerage services, such as showing real properties for sale or lease and writing contracts or leases, and misrepresents to
the “employees” that a real estate license is not required in order to perform those services. These employees are also
apparently solicited via craigslist. Unlicensed real estate activity can be subject to conviction for a Class A misdemeanor,
punishable by up to one year in jail and criminal and civil penalties.
If anyone has questions or information regarding this activity or about other activities that require a real estate license,
they should contact TREC at the number above. Also, additional information and a TREC complaint form can be
obtained from the website above.
The mission of TREC is to assist and protect consumers of real estate services and foster economic growth in Texas. Through
its programs of education, licensing and industry regulation, the Commission ensures the availability of capable and honest real estate service providers. More information at: