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Archive for the ‘Tips’ Category

Summer is right around the corner, with many schools wrapping up the year in the next few weeks, many parents are asking themselves what to do with the kids when they get out of school.

The reality is that with today’s hectic lifestyles, it’s getting harder and harder to find the time to plan out fun activities for kids during the summer.  But here are a few tips that may help make the process easier.

Summer Reading

While reading a book probably isn’t the first think your kids think of for ‘summer fun’ – as a parent it’s a good idea to make this a high priority right from the beginning.  A good recommendation is to start with at least 30 minutes a day towards reading and set goals for the end of the summer much like your kids do each quarter with “AR Points” in grade school. By helping re-enforce good reading habits during the summer, you can help make sure that reading is a lifelong habit and not just something kids do during school.

Additionally, it’s easy to find books that follow a certain theme.  So if your kids like action or adventure there are many books at the public library they can find to make them happy.  Also many of the local libraries feature fun activities like story time for the younger kids as well as organized games and puzzle gatherings for the older kids.  And no matter how old your kids are, you could plan an end of summer day reward if they hit their goals with the books they’ve been reading.

Enjoy Living in Louisiana

Louisiana is a vibrant place, with many people choosing to visit to the Bayou state for their vacation plans. Why not share in this excitement and plan to do something that otherwise may be overlooked during the school year when we are too busy to get out and enjoy the sights and sounds.

Here in St. Tammany, the UMC Museum in Abita Springs is an awesome adventure for all the family in which the history of New Orleans regalia and wonder are on display. Thousands of memorabilia items have been collected over the years and are captured in this wonderful and wacky mystery house; this day trip is sure to captivate even the most dubious of visitors.

Across the lake, the Children’s Art Museum in New Orleans will also be hosting a variety of family-packed fun events which change weekly, ensuring you won’t be without ideas or places to go! With an attention to creating an educational and exciting environment for all ages, the Children’s Art Museum should be on everyone’s to do list this summer!

Other Ideas for Local Summer Fun:

• Take a day trip and visit the campus of LSU.
• Arts and crafts are a fun way to spend time together designing new artwork
• Enroll kids in a cooking class or take time at home to teach them how to cook the basics
• Volunteering can be a fun and rewarding experience for kids during summer and there are no shortage of great volunteer opportunities around our area
• The Mandeville Trailhead has a free splash area for the kids as well as easy access to yummy treats at the Shiver Shack
• Fontainebleau State Park has been recently renovated to include a splash park in addition to other fun activities like fishing off the pier, enjoying the sandy beach, playing at the park or overnight camping

Have Fun This Summer!

So now that you know what to do with the kids when they get out of school, we hope that you have a wonderful and safe summer with lots of fun for all the family!

There are a variety of mortgage loans that are available to homeowners who want to purchase a home. It’s important to be aware of the various loan options so that you can make the best decision based on your long term goals and the monthly payment you can afford. Here are the top five mortgages to be familiar with.

Fixed Rate Mortgage

A fixed rate mortgage is exactly as it sounds; your monthly payment will be fixed over a period, generally 30 years, although you can take out a fixed mortgage for 15 or 10 years. The interest rate does not change over this time, which makes this mortgage the safest, most popular choice. In fact, fixed rate mortgages account for 75 percent of all loans. Their greatest advantage is that the homeowner knows exactly what their monthly payment will be.

Some homeowners worry that by taking out a fixed rate mortgage, they won’t be able to take advantage of lower interest rates if the rates do go down. The good news is that with a fixed rate mortgage, the homeowner can refinance. The only stipulation is that the homeowner has to pay closing fees. Although fixed rate mortgages are predictable and widespread, they do have higher interest rates than with other loans.

The first payments will go mostly toward interest, providing you with a better tax break early on. As time passes however, more of your payment will go toward the principal instead of the interest. Nevertheless, your payment will always stay the same. Fixed rate mortgages are best for borrowers that intend to stay in their homes long-term and appreciate the stability of fixed monthly payments.

One Year Adjustable Rate Mortgage

A one year adjustable rate mortgage has an interest rate that fluctuates based on the market. The advantage to this loan is that the interest rate is lower than what you pay for a 30 year fixed mortgage. Also, homeowners can qualify for a larger loan amount while having a smaller monthly payment, allowing them to get a more valuable home for less.

The drawback to a one year adjustable rate mortgage is that the loan is unpredictable. One year a homeowner may be paying a small mortgage, but the monthly payment can skyrocket the next. Each year on the anniversary of the loan, the payment changes according to a specific schedule that occurs after the fixed period at the beginning of the loan.

For some borrowers, an adjustable rate mortgage is a great option, even though it’s not as steady. If you’re someone that needs the lowest possible payments over the term of your loan, planning on transferring over your home in the near future or require the flexibility of loan terms, an adjustable rate mortgage may be a great choice for your situation. Also, you can pay off the principal of your loan without being faced with prepayment penalties.

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Are you applying for a mortgage? Make sure you come prepared to ask the right questions, as the more you know, the better decisions you can make. Here are the top ten questions to ask your mortgage lender – jot them down or program them into your smartphone today.

Question #1: What is the interest rate on this mortgage?

Currently, the interest rates are low, but just because the lender is flashing around low rates doesn’t mean you’ll get them. You have to qualify to get the lowest rates, and a low credit score can hurt your chances. So before you take for granted that you’ll be offered a low interest rate, be sure to ask what your specific rate is.

Question #2: What are the closing costs and will I receive a good faith estimate?

Most lenders will provide you with a good faith estimate that details the chargers you will be assessed for their services, also known as closing costs. Since many lenders expect you to pay for closing costs out of pocket, make sure you know what these costs will be as soon as possible.

Question #3: Are there any potential delays that may impact my closing?

As long as you provide honest, upfront information to the lender, the process should go rather smoothly. Some of the factors that can delay the process include changing jobs, having a decrease in your salary or changing marital statuses. Be sure to let your lender know of these changes immediately if they are to occur.

Question #4: What are the qualifications for the loan?

Generally speaking, conventional loans are the most difficult to receive, but other loans have less strict criteria. Be sure to ask about the various loan options and the qualifications for each. First-time homebuyer programs for example, have incentives for new homebuyers.

Question #5: What is the down payment for this loan?

The rate and terms of your loan will be dependent on how much you put down. Most lenders ask for 5 to 20 percent of the total loan amount, and the more you put down, the lower your payments will be and the better terms you’ll have.

Question #6: Can I lock in my interest rate?

If you’re approved for a low interest rate, ask your lender about locking in the rate, but do so with caution. There may be fees to lock in through your lender, and you never know, the interest rates may go down further.

Question #7: Will I have to pay points on my loan?

Many lenders charge prepaid mortgage interest points in order to lower your interest rate. Many of these points have little to no benefit to the borrower, so be sure to ask if you’ll be paying for points and what kind of points they are.

Question #8: What documents do I need to provide?

In order to keep the process moving along smoothly, you’ll want to have the necessary documents in place. Most commonly, these documents include proof of income, bank account information, IRS Form and credit reports, but ask your lender for more specifics.

Question #9: Is there a prepayment penalty on this loan?

Prepayment penalties can kick in when you go to sell your home, reduce the principal balance by a certain amount or refinance. If there is a prepayment penalty, find out how much the penalty is and how the amount is calculated.

Question #10: How long will the process take?

Although lenders may say two weeks, it’s best to expect 45 to 60 days to have the loan application processed. If there are any obstacles or changes along the way, that will slow the process as well. It’s always better to be safe than sorry!

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What are Prepayment Penalties?

Whether you’ve recently applied for a mortgage loan or are considering doing so, it’s important to familiarize yourself with prepayment penalties. Prepayment penalties are exactly as they sound; they are penalty fees charged to the borrower for paying off their loan before a certain time period. Generally speaking, the penalties are six months of interest payments, although this varies depending on the lender.

Do all Lenders Charge Prepayment Penalties?

Not all lenders charge prepayment penalties, which is why you’ll want to ask your lender if they do charge these fees, and if so, what the costs are and how they are calculated. NOLA Lending for example, does not generally write loans with prepayment penalties and explains to borrowers how these penalty fees are not a concern on most conventional and government loans.

If there are prepayment penalties however, the lender only charges the penalties if the loan is paid off before the sixth year, more specifically, in the second or third years. The penalties are designed to recoup some of the losses the lender may be faced with since the lender didn’t have time to make up for some of the costs it advanced.

Types of Prepayment Penalties

Prepayment penalties can be “hard” or “soft”. When the prepayment penalty is hard, that means that the fees will be assessed because the homeowner is selling or refinancing the home before the time period is met. When the prepayment penalty is soft, that means that the penalty is forgiven due to other circumstances.

Nevertheless, prepayment penalties can be expensive. Take a $200,000 mortgage loan for example. If you choose to pay off this amount in two to three years, you could be hit with six months of interest at 6 percent, which would come out to an additional $6,000 of penalty fees. Essentially, these fees are what deter homeowners from paying off their loans too soon and therefore, give lenders the time they need to regain their losses.

Final Thoughts

No matter the case, it’s always important to discuss prepayment penalties with your lender before signing. These penalties should never come as a surprise to the borrower and should be detailed in such documents as the Good Faith Estimate and Federal Truth in Lending. If you have an excellent credit score and are being told by your lender that you will have a prepayment penalty, be sure to get another opinion from a trusted lender.

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Maintaining good credit is a bit like staying in good health – it requires a fair bit of work and just a little bit of luck.  Yes some people are guilty of being inattentive to their credit in the past, but the more common scenario we encounter is when people suffer through unfortunate scenarios like a job loss, divorce, health crisis or even having your identity stolen…all of which can lead to credit problems.

All it can take is one missed payment and you are jarred with a seemingly never-ending bout of “bad credit,” but fear not; in this blog post we are going to show you a few “insider tips” on how you can help fix or improve your credit!

Tip #1 – Get the Facts in a Credit Report

Surprisingly, some people think their credit is worse than it actually is, so it pays to review your report with a mortgage professional to ensure you have the facts.  So the first step when trying to fix your credit score is to assess the real damage, so to speak, with a credit report. While this can be stressful, please try to bear in mind that we will also show you how to amend and correct your credit report.

If you are applying for a mortgage, we will run a credit report for you.  However if you are not quite ready to apply, there are many free trials available online which can show you your credit report in minutes.

Tip #2 – Pay down your credit card balances

Paying off your credit cards may seem like a great idea and if you can afford to do so, then by all means go ahead. But did you know that if you “pay down,” and reduce your balances to less than 30% of your total balance, and maintain a small balance, it could have a much better impact your credit score?

This is because lenders look at the amount of “available credit” you have when you apply for a mortgage.  If you are maxing out your credit limits on a monthly basis, than you have fewer options for things like unexpected home repairs.  And we all know that life is full of unexpected surprises like those!

Maxing out may also indicate that you are having trouble balancing your spending habits with your income – another warning sign that lenders look for.  Therefore, keeping sensible balances gives the appearance of using your credit responsibly, and indicates that you can manage your debts and income.  Plus it shows that you have “borrowing capacity” in the event of an emergency.

Tip #3 – Document, Document, Document

All too often we see borrowers who claimed to have paid an outstanding debt that is reporting negatively, but don’t have the documentation to back this up.  When this is the case it can be very difficult to remove the negative ratings.

The bottom line is that no matter what you do to pay off, pay down, or resolve credit issues – you must document everything!  If you send off a double payment to a creditor, make a copy of the check before you send it.  Or if you are wiring money to pay off a collection, keep a copy of the receipt.  Another good practice is to use certified mail when you are sending checks, that way you have a receipt of when your payment was received by the creditor.

It’s not always necessary to document every payment you make, but if you are attempting to catch up or pay off a debt, this is absolutely critical especially if we will need to present that documentation to a credit rating agency for updating.

Lastly, a few additional tips to consider for those with credit issues:

• Set up payment reminders in advance so you don’t accidentally forget a payment.
• Take advantage of automatic payment plans when possible so your bills are paid automatically.
• Sign up for e-banking which will allow you to pay bills instantly online and keep closer tabs on your payments and balances.

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?

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!

The process of getting your kids ready to head back to school in the fall takes longer than just a day or two to wrap up. As a busy parent, you need to be ready for that first day of school no matter if your child is entering kindergarten or heading off to high school. Throughout the summer, you can do things to help your child prepare for the new school year and it often is easier to do if you plan in advance.

Here are some things that can help you to get your child ready for school

1. Is your child reading? Children of all ages should be reading on a daily basis. The more frequently he or she reads, the more he retains and the better he is able to glean more information from the material. Reading daily is something parents should instill in children from a very young age.
2. Practicing English and math skills can be a challenge especially when flashcards are so boring and dull. The good news is that there are now computer games online to help make it all a lot more enjoyable.
3. Be sure that supplies are in check, too. Find out what your school requires and then pick up items throughout the summer to keep the costs in line. It is a good idea to buy all of what you may need throughout the school year during these low cost sales.
4. Is your child sleeping well? The best way to prepare him or her for school is to get into a regular bedtime routine. Getting enough, quality sleep is critical for maintaining the ability to function properly at school.
5. Set up a place in their bedroom, living room or another location in the home that allows for study. A desk, paper and other supplies gives the child a location to do homework and to create a routine for getting work done efficiently.
6. Pick up clothing and other items the child may need, such as school bags, throughout the summer. Finding great sales can help you to save a substantial amount of money.
7. Be excited about school so that they are excited about going back to school, too.

Going back to school does not have to be a hassle. By planning, it is easier for you to achieve success that first day of school and for the many days that come after it throughout the school year.

A mortgage calculator is a handy tool, but it cannot replace a mortgage professional. A mortgage calculator can give you a ballpark figure for what you can afford, however, based on your income and, depending upon how sophisticated the calculator is, the local tax rates and the cost of homeowner’s insurance for the properties you’re considering.

Caveats

Homeowner’s insurance rates will vary considerably depending upon where the home you’re looking at is located – especially in southern Louisiana – where the ability to get private coverage or having to go with the state Fair Plan may make or break your mortgage application!

You have to take this into account and using national averages is really not that useful as a means of determining how much you’re going to end up paying for this necessary cost. An insurance company is really the only reliable source for this info, or a mortgage broker that can find out from an insurance company for you.

You’ll also want to make sure that you consider taxes into the equation. These will vary from place to place and not all online mortgage calculators even consider this. If your taxes are around $3,000 per year, you can count on that amount being added to the cost of owning your home. This may put the cost of the home over the edge for you where affordability is concerned.

Make sure you take into account the fact that a mortgage calculator just gives you a number based on a percentage. For instance, a mortgage broker works with you in a way that mirrors how a bank will determine your suitability for a loan. This will include taking into account the amount of expenses you have already. Your car loan, insurance payments, credit card debt and so forth will all factor into how much you can afford in the way of a mortgage.

A mortgage calculator will usually just give you a percentage, somewhere between 28 and 33 percent, of your total income and factor in a few other numbers to determine how much you could borrow.

Calculators Have No Lending Authority

A mortgage calculator is handy and can give you some rough ideas of your borrowing capacity. However, it’s important to remember that banks don’t make lending decisions based on what these calculators say you can afford.

So while a mortgage calculator can get you started, give you an idea of how much you should seek and so forth, it takes a home mortgage professional to really determine how much you can borrow.

As mortgage lenders, one question we are often asked is whether or not you can refinance a home mortgage into just one person’s name.  There are some cases where you may want to have your mortgage debt in one name only. This can be done, but it will depend upon a couple of things:

Credit Ratings

In most cases, it will require that the person who is taking the debt into their name be able to qualify for it on the basis of their credit score and income alone. The refinance, however, is secured by the property, so this isn’t quite as hard as you may think. In most cases, one member of a married couple will be able to do this without any difficulty.

What About the Title?

You should still be able to leave the title in both names, even if the refinancing is only done under one name. The refinancing is just a loan and it’s used to pay off the first mortgage. This should only affect the financing, not the actual ownership of the house from a legal standpoint.

How Do We Do It?

NOLA Lending will help you fill out all the paperwork for the refinance and get you started on the process. Changing from one name to two will usually just be a matter of letting your lender know that this is something you want to do. Beyond that, the process won’t be any different than applying for any other form of refinancing.

Before getting started though, we will check the new borrower’s credit, so that aspect of applying for the loan will not change. The only difference will be that the paperwork will contain one name rather than two and that the refinancing will be done completely against one person’s credit and income. If that person happens to have excellent credit, it may be worth it to remove someone else from the application and to have it written against the name of the person who has the better credit. The loan is secured, of course, but credit still does play a part.