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I’m sure by now you’ve noticed that fixed rates on mortgages are at or near historic lows. Many people who have been able to take advantage of these rates have done so already. But there are many people who feel like they don’t qualify right now, or aren’t ready to buy just yet, who are VERY interested in figuring out whether or not rates will stay this low…and if so for how long. Well you don’t know unless you try!

With this as the daily backdrop in our industry, it’s not hard to understand why the question of “how long will mortgage rates stay this low” seems to be the first question I get asked when speaking to borrowers or others we do business with!

The truth is I don’t know how long rates will stay this low. No one can say for sure. However there are certain indicators that we look at which may lend some important insight.

What does the FED say?

The money quote recently released by the FED (shown below) offers an encouraging statement about the key financial question of 2012. In short, the FED suggests that lower mortgage rates may hold steady well into 2013.

“The Committee currently anticipates that economic conditions – including low rates of resource utilization and a subdued outlook for inflation over the medium run – are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.”

While this may appear to be fantastic news, and the FED is well known for their accurate forecasts in the financial world, it is important to remember they do not set mortgage rates. Mortgage rates are driven by the financial markets.

However, the FED is not alone in its official opinion. There seems to a growing number of financial indicators that strengthen the belief that lower mortgage rates might be here for the immediate future.

The question of economic recovery

The economic problems of recent years are well known to everyone by now. But you may not realize that today’s low mortgage rates are at least partially a result of the government’s desire to stimulate the economy. Lowering the federal funds rate makes borrowing money more attractive and encourages the buying and selling of homes, which happens to be an important part of our economy.

Opinions vary greatly on how quickly we will recover from the recession, but generally speaking you can expect that as the economy becomes more stable interest rates will begin to rise.

How quickly the economy recovers, and how quickly interest rates will rise (and to what levels), remain to be seen and are very difficult to predict. However, inherently I think we can all agree that the economy can’t stay this bad forever, and that sooner or later rates will climb back to “normal” levels.

What should you do?

While we can’t predict when rates will increase or by how much, it seems like a fairly safe statement to say that they probably won’t get much lower than they are now! So if you’ve been watching for rates to dip much below their current level you may need to be prepared to wait.

If you have NOT yet taken advantage of these lower rates, a few things to consider include:

If you currently have a mortgage and have not yet refinanced, let a mortgage professional  review your rate and terms to see if a refinance makes sense for your situation. There is no cost and no obligation.

Review your other debts and cash flow needs to consider if a cash out refinance might help given the lower fixed rates and tax benefits of having a mortgage versus unsecured or revolving debt.

Get pre-qualified to see if you might qualify for a mortgage to buy, especially if it’s for the first time. Even if you don’t qualify right now, we may be able to help you make a plan to get in a position to buy before rates change for the worse.

Rates this low have been especially attractive to investors who rely on positive cash flow on rental properties. If you have been considering purchasing investment property or refinancing now may be a good time to get a quote and have us run the numbers to see how they may apply to your situation.

It may not seem like a logical situation, to charge a mortgage application fee, but many mortgage companies do so, and it is legal for them to do so.

Why would any mortgage company charge an application fee like this? The bottom line is that it helps them to turn a profit. In short, when you apply for a mortgage, someone has to take your information and process the application.

To offset the costs of that process, especially in situations where you do not go through with the loan, or do not qualify, this application fee can help to cover those costs of the lender.

What happens when you apply for a mortgage loan?

1.    The first step is to meet with a local loan officer to pre-qualify and determine your potential eligibility for a loan.

2.    The 2nd step is to submit your completed application to an underwriter who will analyze the credit history and the score of the applicant. This gives the first indication as to whether or not the lender will consider the borrower.

3.    Most of the time, there are contingencies involved in the approval process. For example, you may only qualify for the loan if you prove your income. However, sometimes there are other options available to those who do not otherwise qualify. For example, the lender may say that if you provide proof that you paid off a debt or that you have documentation that supports your current asset values then you may qualify for a lower interest rate.

4.    The loan officers will still need to review the process and will need to ensure that all data is in process properly. The loan officer also works with the applicant through the process. He or she may ensure that document is available and received, and determine if the loan will move further through the process.

Keep in mind that not all lenders charge these fees, but many do to help offset the costs of all the work that a loan officer needs to do in an instance where the mortgage loan is not approved. This happens in many cases, in fact. The costs will also range significantly from one lender to the next, depending on their fee structure.

In some cases, the applicant pays the fee upfront while in other instances, the applicant will pay it with closing costs. In all cases, you should be informed of the fee prior to actually applying for the loan, or you may not be able to apply until you pay the fee.

You don’t have to go very far to find the news that mortgage interest rates are at historic lows.  And with rates this low, common sense might tell you it’s time to lock in that low fixed rate loan, right?

Not so fast!

Remember that when fixed rates are low, that means adjustable rates are even LOWER!  So that attractive 4% fixed rate might look good, but a 2.5% adjustable rate might look even better.

So now that we’ve established that low rates also apply to adjustable rate loans, let’s take a closer look at the factors that might help you determine if an adjustable rate loan is right for you.

What is an adjustable rate mortgage?

A variable-rate mortgage, adjustable-rate mortgage (ARM) or trackers mortgage is a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets.

Basically what this means is that the borrower benefits from reduced margins to the underlying cost of borrowing compared to fixed or capped rate mortgages, allowing adjustable-rate mortgages to be a great way to save you money today.
Benefits of an adjustable-rate mortgage include:

• Statistics show that adjustable-rate mortgages owe back less over time than traditional fixed-rate mortgages.
• Mortgage maturities can be applied for up to 25 years instead of the 10 year maximum for traditional fixed-rate mortgages.
• Adjustable-rate mortgages allow the borrower to pre-pay principal (or capital) early without penalty.

Adjustable – as the name implies, are flexible to your financial needs. In this ever changing financial climate, secure yourself with a mortgage that can flex and change to keep up with your ever changing life.

3 signs an adjustable mortgage rate might be right for you

• You need the lowest possible payments for your mortgage over the short term.  If money is tight, or you would like to put a plan in place to save the maximum amount on your mortgage payments than an ARM might be the right choice.
• You may be transferring or selling your home in the near future.  ARMs offer the lowest mortgage payment options over the short term, so if there is a good chance you will be selling or moving before the fixed term ends an ARM makes sense.
• You need flexibility of terms.  A fixed rate mortgage is just that – fixed.  But there are several choices with ARM loans including 1, 3, 5 and 10 year fixed rates that can suit a variety of needs.

Choosing between an ARM and Fixed Rate

It can be a daunting experience when considering a new mortgage. Whether you are looking to refinance or to start a new mortgage, where do you start looking? With a multitude of mortgages, technical jargon, and everyone trying to commit you to monthly repayments, it’s hard to know where to turn for help.

The best advice I can give you when shopping for a mortgage is this:

• Research the different options available to you.
• Always ask questions if you are unsure of what is currently available.
• Develop a relationship with a mortgage lender.  If you simply shop around all the time you may simply get a quote.  But a good mortgage lender can be like a financial advisor and give you advice you NEED to hear instead of what you WANT to hear.
• Don’t be scared to say, “No, this isn’t right for me.”

NOLA Lending will never steer you into a mortgage we are certain won’t meet your exact needs. One of our examples of a mortgage which might be of interest to you is the adjustable-rate mortgage.  The lower initial payments seem great, but for some borrowers it may not make the most sense.  Our job is to provide you with sound advice based on our experience to help you make this decision.

If an adjustable-rate mortgage is not the right solution for you, fear not. We have a mortgage solution for everyone.  Just ask NOLA Lending how we can help you today and one of our friendly advisors will go through each option with no obligation.

How do I apply for an adjustable rate mortgage?

If you do decide an adjustable rate mortgage is right for you – NOLA Lending is proud to offer a wide range of adjustable-rate mortgage services to meet your specific requirements. Whether you are a first time or current homeowner, NOLA Lending is confident they can find the right refinancing, or adjustable-rate mortgage to suit your needs.

Why not contact one of our fully trained members of staff today to find out how you could save money by switching to an adjustable-rate mortgage today?

Many people have heard the phrase “jumbo mortgage” and most likely know that it refers to a really large loan.  But did you know that some houses in your neighborhood may require a jumbo mortgage and do you know what the loan limits currently are?

So how exactly do lenders define what qualifies as a jumbo mortgage? Actually it’s the government that sets this designation for loan amounts higher than what is considered a “conventional” or “conforming” loan.  This means that, as of 2011, any amount borrowed over $417,000 in most states and $625,500 in some areas where property values are higher, including Hawaii, Alaska and California is a jumbo mortgage.

Considerations for jumbo mortgages

Keep in mind that a jumbo mortgage is not always given to those who can afford to make the payments on it. This is because there is a significantly higher amount of money going out to pay for this type of home mortgage , the risks are higher to the lender. This leads to limitations on who will purchase these loans.

If you want to obtain a jumbo mortgage, it is a good idea to invest in it only if you are confident you can qualify. There are often more limitations on things like the following:

1. The interest rate is likely to be higher than that of a conforming loan. There is more risk and therefore that means a higher cost to the borrower in the form of interest.
2. Most lenders require at least, if not significantly more than, 20 percent of a down payment. The higher the down payment, the more likely the lender will provide the loan to you. In fact, it is best for borrowers to put down enough to keep the loan under the jumbo mortgage rate if possible.
3. Because of the high foreclosure rate for homes of this value, many lenders have restricted lending for these types of purchases. Finding a lender who is willing to provide you with this type of loan can be limiting.
4. Limitations to the property.  Jumbo loans are often used for larger homes and estates – but those can often be difficult to establish a market value for, especially if the home is somewhat unique or there is a lack of comparable sales.

A jumbo mortgage is a good option if you have no risk of losing your job or not having the money necessary to purchase the home. Keep in mind that your mortgage payment, interest and the terms for these loans vary just as they will vary for any other type of mortgage loan. Comparing interest rates is also very important for those individuals who plan to obtain a jumbo mortgage. If you want to buy a home, and the value is high, find out from your mortgage lender what you need to do to qualify.

It’s one of the most stressful things mortgage originators, realtors and buyers ever face – last minute emergencies with closings.  Without careful and considerate management, it is easy for a client to find themselves in a strung-out paperwork battle and a fight against time.  But fortunately, the mortgage lending process doesn’t have to be this way for you.

Let’s take a look at the different steps in the lending process and how you can avoid being left with little to no time left on the clock!

The Lending Process explained

In theory, the lending process shouldn’t be a difficult process to tackle; it essentially breaks down into six basic steps:

1. Application
2. Pre-approval
3. Contract
4. Conditional Approval
5. Final Approval
6. Closing

Theoretically, once the mortgage application  is complete, it can be pre-approved with validating documentation and a contract can be drawn up so that the client can progress. This should take a reasonable length of time and come with as few complications as possible.

However, not every lender makes life as simple as NOLA Lending!  But even NOLA Lending sometimes gets stuck with last minute issues during verification (usually things the buyer didn’t disclose) or if someone such as a 3rd party drops the ball.

Common problems in the lending process

Unfortunately, some lending agents from other companies often choose to incorporate drawbacks into the lending process. NOLA Lending always advocates against these tactics and aims to secure your loan as quickly and accurately as possible.

Other lenders can delay your closing by a few extra weeks for any number of reasons such as:

• Lack of experience
• Poor management
• Incompetence
• Lack of communication

How a 30 day contract can be misused

Let’s take a look at how you could lose time and money by negotiating with an irresponsible lender.

First, understand that if you write a 30 day contract to close but you have the lender wait 10 business days for inspection and responses the close date is already in jeopardy.  A lender cannot get officially started without ordering an appraisal, so if you put that on hold for inspections the lender may not have enough time to close.

Below are steps to understanding a 30 day contract, title, and submitting the file for approval from a lender’s prospective:

1. Receive ALL client docs including the contract.  Delaying sending the lender a document can “pause” the whole process.
2. Order title
3. Order appraisal
4. Order insurance
5. Request additional documentation from clients and/or agents
6. Lender waits…
7. Documents are returned (hopefully quickly)
8. The loan is presented to the underwriter
9. Lender waits…
10. Underwriter issues conditional approval
11. Lender works approval and requests all required items from 3^rd parties
1. Updated income or assets should be obtained
2. Missing signatures on real estate forms should be completed including amendments, etc.
3. Explanation letters may be required
4. Updates or corrections to appraisal or title, or any other issues should be addressed
12. Lender waits… until everything is received from ALL! We cannot submit for final approval without these final docs!
13. Once ALL documents are received from ALL parties, submit for final approval and Clear to Close.
14. Receive final approval and Clear to Close
15. Send closing package
16. Close!

After a successful closing!

This may seem like a simple process, but let’s take a look at what is really going on here.

• The contract is written – so far so good
• The clock starts 30 days counting down – Those 30 calendar days are really only about 22 business days
• Lender waits on inspections (only if Agent or Client requests the lender to do so).  This may mean up to 10 – 12 days of additional delays
• Now there are only 18-20 days left and counting down quickly
• All paperwork must ordered from different parties which can take time while we wait on what we asked for
• The time in between dwindles down to about 5 business days or less of close very quickly

As you can see, not everything is quite as simple as it seems. Unfortunately, these delays are all too common.

How a 30 day contract can be further delayed

Other legitimate examples of how the lending process can be delayed can include:

• Insurance company waits until the last minute to submit insurance as it is needed long before the close date (express a sense of urgency with your insurance agent)
• Clients employer takes a while to provide information (same as above)
• Client takes a while to produce docs (work urgently and diligently to provide info & docs)
• Agents may take a while to produce required certificates or inspections

So if a poor lender wastes valuable time and everything doesn’t come back to the lender within 48 hours from the closing, and it takes 24-48 hours (generally) for an underwriter to review submissions; last minute issues can appear quickly, and worst of all, appear to be all the lenders fault although it really is not.

Study documents at the closing!

How to get the most from the lending experience

NOLA Lending wants you to know there are many responsible lenders out there and we hope you chose one of us to work with, and that there are simple ways you can help combat unnecessary delays in the lending process.

Here are some quick tips NOLA Lending advocates to help you save valuable time and money:

• Research the company you are going to work with
• Talk to an loan agent and see if you agree with their attitude and competency
• Make sure you uphold your part of the contract and submit paperwork immediately
• Feel comfortable being able to discuss the progress with your lender
• Feel comfortable being able to discuss any discrepancies
• Use “Full Disclosure” with your lender

NOLA Lending wishes you the very best in your lending process and hope that you have a fulfilling and profitable experience. If you have any questions regarding something you have seen here, or about lending in general, please feel free to contact one of our friendly agents at NOLA Lending in Covington who will be more than happy to answers any and all questions, with no obligation.

So what are you waiting for? Find out how NOLA Lending in Covington can help you today!

A second mortgage is a second loan taken on a home where a current mortgage is in place behind your first mortgage. This type of loan is commonly called a home equity loan.

To get one, you need to have equity in your home, which means you need to have a home where the value of the property is higher than the amount of money you owe on the home through your current mortgage. If you have this, you may be able to qualify for a second loan.

How do you get a 2^nd mortgage?

Here is a quick explanation of how a second mortgage works. If you own a home that is appraised at $200,000, for example, and you currently have a mortgage on the home where you still owe $140,000, you have up to $60,000 worth of equity in your home. You may potentially be able to borrow from that $60,000 through a second mortgage.

Here are some facts about these loans:

• This is a second secured mortgage. If you default on this second loan, you could lose your home because of doing so.
• You can use the money from a secured loan for anything you need to, including consolidating debt, doing home improvement or even taking a dream vacation. However, keep in mind that you are putting your home under more debt to do so.
• The interest rate on a second mortgage is generally lower than on unsecured loans, such as credit cards and personal loans. The repayment terms are often affordable. It is because of these factors that many people turn to second mortgages instead of getting a credit card out to make that expensive purchase.
• You will need to qualify as you would any other loan. You will need to have a high credit score and have the income available to repay your loan. If you are not employed or have a low credit score, you may not qualify for the loan.
• Most lenders will not give you a loan that would put you at 100 percent of your home’s value. Some lenders require 20 percent of the home’s value to remain in place.

For many people, a second mortgage is an ideal way for you to invest. However, there are limitations and risks. Before borrowing, be sure you are getting the best loan available, with the lowest interest rates. You may also want to consider your ability to repay the loan in a timely fashion as a default on a 2^nd mortgage can lead to foreclosure even if you stay current on your first mortgage!

Find out if you qualify for a 2^nd mortgage by completing our Quick Online Application today!

A mortgage loan is probably the largest loan you will ever take on, and certainly the most complex. Getting a loan these days is not easy, but with a bit of planning and preparation, you stand a better chance of getting the loan you want.

Our tips for getting the mortgage you want:

• Before you request a rate quote , do your homework. Do some looking around to see what interest rates are and begin to think about the type of loan you need. It is a good idea to use a mortgage calculator to help you to get an initial idea of how much you can afford in a monthly payment. However, read our prior blog post for a few words of caution regarding mortgage calculators.
  
• Ensure your credit report looks good and is accurate. Avoid making significant purchases at this point and pay down the debt you have. You want the best credit score possible before you apply.
• Contact a national or local financial institution, mortgage lender or credit union and request a quote. A quote should not require any cost to you, but it will tell you what the lender can offer to you. You want to compare loans from several companies.
• Determine the down payment requirements. Most lenders require 20 or more percent from homebuyers unless you obtain mortgage insurance (MI) which can drastically impact the terms of your loan.
  
• Negotiate to get the lowest interest rate possible and the terms you want. You may get the lower to cover some of the closing costs, too. The key here is to ask for the best offer possible.
• Provide all documentation to back up the details you provide on your mortgage application. You want to ensure you have the most up to date information because the lender will require verification.

Don’t try to “do it yourself”

Getting a mortgage loan is definitely not a DIY process these days. With the changes to the lending market in recent years, it’s never been more important to talk to a qualified, professional loan officer to help you make an informed decision about this important investment.

This is a very common question, especially with first time home buyers. A parent may wish to cosign on a mortgage loan if he or she wishes to provide help to their child to qualify to purchase a home. Many adult children may not have good credit or adequate experience with credit to obtain a mortgage on their own. By cosigning, a parent can help the child to get the loan he or she wants or needs. However, there are good and bad things about this process that you should know about.

How it works

When a parent cosigns on a mortgage for a child, the child and the parent partially own the home together. While the child may live in the home as a primary residence and be the primary person responsible for repayment of the loan, the lender can come after the parent as a way to get payment if the child stops making payments towards the loan. This can negatively affect both the child and the parent’s credit score.

The parent will need to go through the application process with the borrower and will sign legal documents with the lender at the time of the loan closing. As a result, the parent’s credit score and employment information is taken into consideration during the application process. In addition, the child’s information is also used.

Words of caution

It is possible that a parent cosigning on the loan can actually help the child to get the loan, but he or she still needs to be able to make monthly loan payments. It is often necessary then for borrowers to consider whether they can afford to make payments and if the loan is the right one for their long-term needs. If a parent does not want to make payments for the child, he or she needs to ensure that the child has the ability to make payments on his own.

Lenders may have special limitations or restrictions for borrowers who wish to apply in this manner. It is a good idea to ensure that you provide all information to the lender at the time of your application to ensure that the lender considers the borrower’s ability to have a cosigner on the account. When this happens, it could help the individual to qualify for a lower interest rate, better terms or just to get the loan when he or she may not have otherwise been able to do so. For the right situation, cosigning can be an ideal way to get the loan you want.

Halloween is a time for creativity and there are many ways to pull off a fun party if you turn on the creative juices. The goal of your party should be to make things fun for everyone, which often means that you need to be different from everyone else. The good news is that it can be just as fun to plan a party like this as it is to attend it.

Tips for Success

Look at the following tips and Halloween party ideas. They are just places for you to get started. Use them as a starting point for your own ideas and creations.

1. Start with the decor. You will need to consider decorations that scream Halloween – sometimes literally. It is a good idea to create as many decorations as possible to keep costs down. Focus on things that are scary, but only as scary as it remains fun for your youngest visitors. Spider webs, witches, window clings and fun lights make parties like this fun.
2. Be creative with food, too. Choose foods with a range of Halloween themes, like punch with floating, candy eyeballs. You can create cupcakes with fun Halloween themes, too. Be as creative or as simple as you want to.
3. Dress the party always. Each person in the family may wish to be a member of a group, for example. Dressing up is one of the best parts of the event. Plan to dress up with as much detail as possible to impress your guests.
4. Get the music right. You can find a collection of Halloween songs available at this time of the year to play. You may also want to use spooky sounds of creaking doors and howling dogs to play in the background if you are creating a particularly scary Halloween event.
5. Get a lot of people involved. Make it something you do together in a block party, for example. You can also get numerous people to compete for the best party theme.

The fun of Halloween is being creative in your own way. Determine what you want your party to include and then make it better by making it spookier or more interesting. Shocking people is a good way to go, but only to the level that is acceptable for those who plan to attend. The more creative you can be, the more you can achieve with your Halloween party. 

Working moms have the hardest job in the world – taking care of a family while still working full time or part time. Being a mother means taking on the responsibility of raising a family and no job outside the home is more important or more difficult to do.

However, many moms have to work, and when they do they double up on responsibilities. So, how do they do it? If you are a new working mother or just want to know what the secret is, realize that the process takes time to learn and perfect. 

Tips for working moms

Look at some of the things working mothers do to accomplish all they do. It is never an easy task but for many moms, it is definitely worthwhile to do.

• Efficiency. Most working moms have a lot to do in a given day and get it done because they have a schedule that works. On the other hand, when things go wrong, they find a way to prioritize to make the important things get done anyway. In short, there is rarely anyone to step in and do what moms do.
• Setting Priorities. Many moms have to juggle things that need to be done by the level of importance. Things that can get done today do get done today while those things that can wait, wait. Juggling between the many responsibilities a mother has in any given day means taking the time to learn what their priorities need to be.
• Selflessness. Most of the time, mothers do not have a lot of time for themselves. Those that work outside of the home, or manage businesses at home, have little time for their own needs and desires. Reading that book, playing on the computer or just having down time never really seems to happen.

The question is not how do working moms do it, but rather, how could they not? Most mothers adore their children and want to spend a great deal of time with them. That feeling of having arms wrapped around your neck and a big “thanks, Mom” from your child makes all the hard work that goes into every single day easier to manage and makes it definitely worthwhile.

Most moms do what they need to because they have a sense of responsibility and a passion for being everything their family needs them to be. That is powerful.