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Monthly Archives: October 2012

Research Your Lender, 11 point recommendation



Applying for a loan? Since you will be providing your extremely sensitive personal and business information to an individual and company, it is imperative that you take time to research and compare companies. In addition, will they follow through to provide the advertised radio or TV offer? How well do you know or trust them? By spending approximately 15-20 minutes, you may save yourself significant heartache and money through the process. Like any industry, there are good and bad apples, so looking into their history and track record can indicate the kind of experience you may have. Would you want to use a lender that received 83 complaints at the Better Business Bureau in the last year? Below is a simple step by step process that can help you research and compare lenders to better ensure your deal is the best one for you.

Company or bank name:

Contact:

Contact email address:

Contact phone(Office / Cell):

Address:

Website:

  1. Is the company licensed to perform mortgage banking?  Check this website: http://www.corp.ca.gov/fsd/licensees/
  2. Has the company been in mortgage banking for 10+ years? I prefer to use a company that began business before the “Great Recession” and conducted their business in a way that avoided many of the pitfalls, such as accusations of fraud or poor management.
  3. Is the company website professional, provide information about loans and processes, and lists owners and loan officers? I prefer unique websites that lenders have taken time and effort to create, versus a canned website used by many smaller and more expensive lenders. I also prefer a company that is willing to display staff and owners pictures and experience, which allows me to research their longevity in the business.
  4. Does the company website provide client testimonials? I prefer to review a long history of very happy and satisfied customers that are willing to write anything from a quick comment to lengthy statement.

    a. Was the testimonial written recently?

    b. Does it provide detailed reasons why they like the company so much?

  5. Does the loan officer and lender have a mortgage license?
  6. Is the company accredited by the Better Business Bureau? http://www.la.bbb.org/Home.aspx

    a. Is their rating A or better? I prefer an A+ rating.

    b. How long has the company been in business?

    b. Are there any unresolved complaints?

  7. Does the loan officer and company have a LinkedIn profile? http://www.linkedin.com/

    a. Do they both have 5+ years loan officer and business experience? I prefer to have a very experienced loan officer and company any unusual situations happen which might delay the loan process. Problem solving experience really pays off in this area.

    b. Is their profile professional, detailed and have 200+ connections?

    b. Do they have recommendations from subordinates, fellow managers, supervisors or clients? Recommendations go a long way with me, especially over the years.

  8. Google search the internet for client comments about the lender from:

        a. Consumer Affairs: http://www.consumeraffairs.com/

        b. Zillow.com http://www.zillow.com/advice/US/mortgage/question-discussion-guide/

        c. Credit Karma reviews: http://reviews.creditkarma.com/mortgages/1/ Any red flags?

  9. What are the reviews in their Yelp profile? http://yelp.com

    a. Do they have a 4 or 5 star rating? Four out of 5 stars is good for me.

    b. Are there recent reviews?

    c. Is the loan officer listed in the reviews and comments? Positive or negative experience?

    d. Read the “Filtered” reviews as well, at the bottom of the rest of the reviews. Even though these do not get in the primary viewing area, they could be very informative.

    d. Did many reviewers find the reviews helpful?

  10. Is the company donating to charities in the local community and nationally? 83% of the population want to use companies that are giving back to their communities or charities. I will utilize a company that is giving to charities over one that is not.
  11. Does the company website providing free educational tips? I like to see companies willing to provide free information to help the general population.
    – – –

    Example: I researched a local lender that a financial planner recommended for my client. The lender was recommended because he happened to be in the building, not because he had done a loan through him. That is red flag #1. I researched the lender to find out: the lender had been licensed for 5+ years, but the company had only been in existence for 2 years. Red flag #2. I wonder about lenders that recently started their business. Were they employed by a previous, potentially unscrupulous, lender that possibly committed fraud or bad business practices? When the lender provided a rate and fee quote, they did not include the appraisal fee. Red flag #3. Mistake or not, they may have been trying to make their quote look better than the competition. Either way, it was an error, and I prefer not to use lenders that create errors at the beginning of my loan. In addition, their website had no client testimonials or details about the owners, managers or loan officers. Red flag #4. After concluding my research, their fees were over $700 higher than the lender I found for my client. Ultimately I did not feel I could trust them. All of this is extremely important when providing your financial information.The lender I chose had the following:

    Munzing Mortgage Group

    Mike Munzing, Mike@MikeMunzing.com, 949-689-5626

    616 – #I S. El Camino Real, San Clemente, CA 92672

    1. Mike has 24+ years mortgage experience.
    2. Website is very unique and professional, providing more information than you would ever need. http://www.mikemunzing.com/
    3. Testimonials are on the left, 2/3 of the way down. Although nothing recently, the clients provide various positive comments.
    4. Yes, CA DRE Broker Lic. #: 00890921 * NMLS #: 329629
    5. No, he is not accredited, but he has no complaints filed against him in the 20+ years of business.
    6. Yes, with 500+ contacts and many recommendations.
    7. In 3 pages of searching through Google, I could not find anything negative.
    8. No search results found. Zero negative comments is great.
    9. His charities are political causes to improve the world.
    10. Yes, more times than you will ever need.

Years ago, I worked directly with Mike and found him to be highly experienced, ethical, devoted and resourceful in all aspects of his life. That is who I want to do business.

 
1 Comment

Posted by on October 30, 2012 in Finance, mortgage, mortgage refinance, refinance

 

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How to save $100’s to $1,000’s: 11 tips to manage your credit score



Credit scores have become one of the most important factors in today’s financial environment. Credit impacts: the amount you can borrow; if businesses will lend you money; how much it will cost you to borrow that money; the cost of homeowners and car insurance; and it may even affect your ability to become employed. For example, in conventional mortgage lending, these fees may range from 0 to 3.25% of the loan amount. So, for a $200,000 loan amount at 3.25%, the fee would be $6,500. Good credit means freedom to choose lenders, lower fees, multiple credit card offers and lower insurance rates and fees. Maintaining your credit rating is also very important. If your credit score drops, businesses may increase fees or close credit lines. Either way, everyone should be spending time using the techniques below to manage their credit.

Ways to manage your credit score:

  1. Pay all bills on time and before the due date. The best way to consistently help your credit score is to pay all your bills on time. Paying bills, such as utilities, credit cards, etc. by the due date may be difficult, but it is extremely important and is a great indicator that other more important credit payments will be made on-time. Cash flow can be challenging, but planning ahead and setting aside money to pay the bills will help you manage this and avoid costly late payment fees and finance charges.
  2. Keep balances low by paying off as much of the balance as possible. The second best way to improve your credit rating is to keep balances low compared to the credit limit, also known as your utilization rate. In general, if your monthly balance is 30% or less of the limit, it looks more favorable to the credit agencies.
  3. Keep old unused credit accounts open, if they have a positive history. This decreases the utilization rate, also known as balance to limit ratio. Even though you may not be using the account(s), holding it open keeps your credit score higher.
  4. Multiple credit cards with balances is good.  Contrary to belief, people with high credit scores are not debt-free.  But, they manage their accounts responsibly, even if they have had mistakes at times. Per a recent FICO report, “they hold an average of seven credit cards, four with balances. The average account is 11 years old, the oldest credit account on file was opened an average of 25 years prior, and the most recent credit account is an average of 28 months old. Some 58% of high achievers did not open an account in the prior year, and 26% opened only one new account.”
  5. SPECIAL TRICK – Paying off as much of the balance before the statement closing date. If possible, five days before each credit card closing date, payoff as much of the balance as possible. When the balance is reported to the three credit agencies(Experian, Transunion and Equifax), it will be lower than the amount you actually spent and thereby lowering the utilization rate.
  6. Request a current credit report and dispute inaccurate information. It may take months for items to be removed from the report, so immediately dispute, keep meticulous notes and keep checking to confirm it was removed. It may be worthwhile to pay for a new credit report every couple months in this case.
  7. Avoid applying for credit too often. If you plan to buy a car or home, multiple inquiries in a 30 day period will be counted as 1 inquiry by the credit bureaus. Each time you apply for a credit card or loan, the creditor requests a current report from one of many reporting companies.  They then review your credit score, payment history, balances, etc. These inquiries remain on your report for up to two years, the credit score will probably be lower, will look damaging for the first year, and alert potential lenders of possible lending risks, whether it exists or not. After you have purchased your home or bought a car, at a time when a drop in your credit score matters less, then apply for a new credit card(s). Or, apply for new credit after 6 months, so as not to adversely impact your score.
  8. Explore all options and resources before bankruptcy or foreclosure. These are devastating to your credit score. Reach out to creditors to negotiate better rates or terms or ask for temporary reduced payments or loan modification, etc.
  9. Pay by cash, debit card or check when possible. Even though you have credit cards and other loans, it looks much better to the credit bureaus and lenders if you do not need to use them.
  10. Getting married? Since the divorce rate is 50%+, you might consider adding your spouse as an authorized user or as an additional cardholder. If you separate or get a divorce, it will be easier to remove the spouse, without requiring to close the account and keeping your score higher.
  11. Be careful co-signing on a loan. Avoid co-signing on another person’s loan, as it may lead to missed payments or default. Lending money to relatives can be very risky. Unless you are prepared to help make the payments if the primary borrower can’t, then be very careful.

Managing your credit takes time and effort, but the rewards are lower expense and financial freedom.

 
 

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