Let's face it folks, our country's economy isn't the best it's ever been, and a big part of the problem is the state of our mortgage market. How did it get to be this way? Well, a big part of the problem is that mortgage brokers are not providing all the information consumers need to make a good decision. The bigger problem though, is that we aren't asking them the right questions! No one prepares us for these things, so we can't really be blamed, but it doesn't matter if we're at fault when it comes to our money. Luckily, reading this article will help you figure out what information you need to make an informed decision.
Here are 5 pieces of information to demand of your mortgage broker before signing anything:
1) Yield Spread Premium - This is what the broker gets paid for marking up the rate of the loan above wholesale. The more of a markup, the more they get paid. It's the same concept as a car salesman being paid more based on how much more he's able to convince his customer to pay above sticker, only the salesmen is your broker, and the desk manager is the lender. There's nothing wrong with the broker making a living, but it's perfectly fair to negotiate this figure, to protect your own financial wellbeing.
2) Current Wholesale Rates and Par Pricing - When a broker hears "What are today's rates?" what they're really hearing is "What rate would you like to sell me today?" When you're asking about rate, make sure to be more specific. "What's today's wholesale rate for a 5 year fixed at par pricing?" It's critical to mention par pricing, as that's the actual wholesale rate before any broker markup.
3) Mortgage Loan Disclosure Statement - It's all very well to accept what your being told at face value, but as my father always said, "a verbal contract isn't worth the paper it's printed on." Brokers will be more than happy to offer the consumer a GFE (Good Faith Estimate), but GFEs leave out some valuable information, like the YSP. You're entitled to an MLDS, so make sure you get one.
4) Origination Fee - Make sure to take a look at the origination fee on the MLDS. Despite anything your broker tells you, this money goes directly to the broker's coffers, and is entirely separate from the YSP. Your broker's goal is to make a point in front and one in back. That's ridiculous. In total, a point is reasonable, in a ratio negotiated between the you and the broker.
5) No Fees/No Closing Costs - Nothing else in life is free, why would this be? Do you think the appraiser and underwriter are going to work pro-bono? Between the notary, escrow, title and other various services you'll need, the entire cost will be close to $3000. Obviously, "No Fees" companies make money elsewhere. Elsewhere would be the YSP. Sure, the deal may look great from the front, but the broker's surely making a killing on the back end.
Understanding these 5 key items will help you protect yourself from being taken advantage of. Be aware in advance; most brokers won't like being asked these questions, but what's more important, their friendship, or your financial wellbeing?
Copyright (c) 2008 Nick Kent
You've been working on a big project for a long time. Maybe you are writing a book or develop a major marketing campaign. You try to move ahead every day, but sometimes you just stop. Even a small task seems overwhelming. And when you take a day off, you feel guilty.
What's going on?
The Time Tyrants have taken over your schedule (and maybe your life). Here are 5 ways to stand up to them -- and accomplish more on your own terms.
(1) Get rhythm...your own rhythm.
When you're working on a book, job search, business start-up, dissertation, or special assignment, you often feel that the project has begun to consume your entire life. You can't afford to take a break, you say, let alone a day off.
But experienced professionals understand their own rhythm.
I once heard a talk by a writer who had written several book-length projects. She said, "Sometimes I'm really productive. I write five pages on my book! Then the next day I'm drained. So I review what I've written or organize my research files."
This writer knows her work style. She doesn't listen to the "experts" who tell her to force herself to write pages a day, no matter what.
Some writers can churn out 3, 5 and even 10 pages a day of quality writing. But she can't.
(2) Recognize when resistance means, "time for a break."
Do you ever find yourself staring at a blank screen, wondering why your mind refuses to create new ideas?
If you're starting a new project, you might need warm-up exercises. Writers typically develop a handful, such as "Write a memo to yourself about the project" or "Find an object in your home and tell a story around it."
But if you've been working nonstop for several days,weeks or even months, your mind may be screaming for a break.
When I get going on a project, I resist taking a day off to read a new mystery, go for a hike, or watch a good movie. But I've learned to turn off my Inner Time Tyrant who says, "You need every moment you can get."
So I take off. The next day (nearly always!) I wake up eager to work. I accomplish everything I need to do... and more.
(3) Discover the difference between randomness and laziness.
Psychologists who study our up-and-down activity blips have found a certain randomness operates in human productivity levels.
For example, an employee "Bill" varied his arrival time at work. When Bill was late, his boss yelled at him. When Bill was on time, the boss offered praise.
Sure enough, Bill responded. The day after the boss yelled, Bill was on time. And the day after the reward, Bill slacked off and arrived late. So, concluded the boss, praise doesn't work. And punishment does.
There was only one problem. A computer demonstrated that Bill's arrival times showed a pattern of random variation. In fact, the computer could predict quite accurately how Bill would perform - with or without praise and blame.
The same pattern has been found among students: some days you learn faster while other days you just don't get it. And some days you're productive and efficient, while other days you're sluggish.
If you've studied statistics, you probably guessed that we're talking about regression to the mean. People usually have an average level of productivity. When they work hard one day, they tend to slow down the next.
So here's an exercise. Suppose you have a writing project. You set a goal: write 500 words a day. For other projects, find a daily activity level that's easy to observe and measure.
For the next 30 days, track how many words you write (or how productive you are in the task you've chosen). Some days you'll write 1000 words, other days none, with lots of variation. Each day just record your word count, without judging your output. At the end of 30 days, calculate an average. And calculate again after 60 days.
You may find that your natural average is 300 words a day. You can lower your daily goals - or recognize that you work best with your random pattern.
Obviously, if you have a deadline, you have to increase your output. Professional writers typically write 1000-3000 words a day. Their mean might be 1500.
But if you're making acceptable progress toward a goal, you can begin to understand, accept and work with your natural rhythm.
(4) Remove the word "laziness" from your vocabulary.
When you're berating yourself for lack of progress - stop! Review your numbers. Chances are you're right on schedule, although you may feel your doing nothing.
(5) Ask yourself, "Do I really need to do this? And do I want to?"
I call this question the Magic Question because I find we tend to over-use the word "priority." Do you really need to complete the project at all? And if so, do you really need to be perfect in every way?
Sometimes the answer is "yes." You have a book contract. You need to maintain quality to satisfy your loyal audience (and of course pay the mortgage and the light bill).
Regardless, beating yourself up and feeling guilty won't work. If you're constantly falling behind, maybe it's time for a change of career - a chance to enjoy marching your life to a new beat.
But sometimes you realize the Time Tyrants have infiltrated your computer and your life. You're not being lazy. You're just looking for a way to get free from someone else's agenda make room for what's really important.
Both Nick Kent & Cathy Goodwin are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Nick Kent has sinced written about articles on various topics from Social Issues, Finances. Rate1st.com is an efficient, simple, and safe way for borrowers to compare rates from hundreds of lendering institutions without compromising their credit or personal contact information. For more information on. Nick Kent's top article generates over 14800 views. to your Favourites.
Cathy Goodwin has sinced written about articles on various topics from Debt Consolidation, Copywriting and Career Change. Cathy Goodwin, Ph.D., author, speaker and career consultant, specializing in mid-career transitions, decisions and escapes. Visit href="http://www.midlifecareerstrategy.com">Midlife Career Strategy Website Abolish your time tyrants and find freedom to. Cathy Goodwin's top article generates over 22200 views. to your Favourites.