Mortgage Insight

Granite Kitchens and Baths, OH MY?? or OH NO???

2008-02-27T13:12:00.000-08:00

In 2004 my friend found a good deal on a 10 yr old house that "needed some updating", okay cool no problem, by the house get a line at Home Depot and start doing some weekend handy man stuff and updating to sell in five years for a good profit. So with sound advice he started where, ________ and _________? You guessed it KITCHEN and BATHROOMS, because why? Because that's what brings the biggest return on investment. In recent years it has been well know that you can 1)Make your house much easier to sell and 2)Re-coup your invest in these rooms to the tune of 80% or better.

Well, with the HUGE inventory of houses out there, either bank owned or people trying to get out from underneath them, that staggering number may not be such a good investment. A recent study suggests that purchasers ability to shop, and the fact they the media has officially scared people enough to "Not get in over their heads" they are looking for the best bargin priced home, bottom line, no questions asked, this is their priority NUMERO UNO !!! Updating these days with granite and all the bells and whistles is only pulling 55% - 60%.

Simply put, if you are in this situation just be frugal and don't go overboard. Make it look clean and new but I wouldn't spring for the "Imported Italian, gold-leafed stamped, self cookie-making, granite counter top" that Fritzy and Ditzy, your Gucci wearing, overspending, 90% (debt-to-income) neighbors did 2 years ago just to make their house look good for the block party that she decided to host.

Anyway, now that I am off my FUN soapbox for the day, I have been getting a couple comments latly that I have really enjoyed so keep them coming.

Talk to you all soon

Mortgage Insight Specialist
Prosperity Financial
http://www.colomortgages.com/
303.666.6550
matt@myprosperityfinancial.com

So

RATES ON THE RISE...... BUT STILL VERY GOOD!!

2008-02-16T10:20:00.000-08:00

Well, some people missed their chance to receive historically low interest rates about 2 weeks ago. 30 yr fixed rates, with optium loan scenarios, were around 5.5% about two weeks ago. Some people decided to "Push" their bet that they would dip even more but were rudly awakened when in the matter of just hours and maybe days that same loan scenario was anywhere from .125% - .5 % higher. The key shop for bottoming out rates is to have your loan pre-approved and stay in constant communication with your broker and at just the right time choose to lock. A general rule of thumb that I use is; If you can make up the cost of doing the loan by improving your interest rate and terms in a matter of 36 - 42 months then it is probably worth it. Counting on the fact that you are going to be in that house for that period of time. Another key is to keep in perspective how little effect an 1/8 or even 1/4 of a percentage point has on your bottom line monthly payment. Often times you can make that up by shopping your insurance carrier. But, Matt, I have been with ABC Insurance for 20 years???? Well my answer is, What has your agent done for you to improve your rates???? He or she has probably just sent you 20 birthday cards!!!

Anyway, rates are still VERY GOOD!!! Anytime you can get an interest rate on a fixed mortgage for under 6.5% that is pretty good. Think of it this way mortgage companies are loaning you money for often times 30 or more years and only charging you 6.5%. Don't get me wrong they are making a lot of money on your loan but percpectivly your Credit Cards, Auto loans, small business loans, an secured or unsecured personal loans are making their respective lender much more money.

Any questions and.or comments are much appreciated!!!

Call 303.666.6550 or email matt@myprosperityfinancial.com

Mortgage Insight Specialist.

KNOW WHAT HELPS AND HURTS YOUR CREDIT SCORE !!

2008-02-09T12:04:00.000-08:00

Your credit score is important to your financial life, affecting the rates you get for mortgages, credit cards and insurance. Improving your score may save you thousands of dollars in interest. So would it help your score if you got rid of a credit card? Pay your bills on time and keep your credit expenditures under control, and you won't have to worry about your credit rating!

That's the short answer. But since virtually everything that makes up your credit score depends on something else -- depends on your credit mix, the number of cards you carry, the length of your credit history, your rate of credit utilization and myriad other things -- there is a longer answer, meaning that it is tough to pin it down to one specific thing.

In most cases, canceling a credit card won't help your credit score. In fact, it may actually hurt your score. You see, your credit score depends on how you shake out in five different credit-scoring categories, each weighted differently when calculating that score.

What counts in a credit score?

This chart shows how Fair Isaac Corp. values the various parts of your credit management to determine your credit score.

Source: Fair Isaac Corp. Canceling a credit card potentially can hurt you in at least two of the five categories -- and maybe even a third.

Credit-utilization ratio is key First, canceling a card could upset your credit-utilization ratio, the second most heavily weighted category in most credit scoring algorithms.

For example, assume you have three cards with total available credit of $20,000. Assume
further that your outstanding balances total no more than $6,000 of that available credit at any one time. Since creditors like to see a credit-utilization ratio of 30 percent to 40 percent or less, you're in good shape. Now, assume that you cancel a card with a zero balance and a $10,000 credit limit. Suddenly, your utilization ratio jumps to 60 percent, and your credit score drops. As counterintuitive as that seems, that could happen. Building good credit takes patience and persistence. But what about quick fixes? Many of these tricks are scams. But there are a few sneaky ways to legitimately give your score a boost when needed. Furthermore canceling that card could result in a double whammy to your credit score, because each card is scored individually, and then all your cards are scored together. If you've just canceled the card with a zero balance, you've lost a great individual score. Regardless, if you still want to cancel a card, make sure to pay down your other balances to keep that rate in line.

Second key is "Older credit is better" If you do cancel a card, you can compound your error even further by canceling the card that you've had the longest period of time and on which you've been making regular payments. By canceling an old card, the length of your credit history on open accounts will grow shorter. There's at least one more stratigy to consider if you are dead set on cancelling a card to help your spending habits. If you're intent on canceling a card, cancel a younger card or cancel one on which the credit card issuer doesn't report the credit card limit. You can find out which ones by getting a copy of your credit report. When you check your credit report there are codes that the credit bureau will tag on your file.

Most common reasons consumers are denied credit:
• Serious delinquency.
• Serious delinquency and public record or collection filed.
• Time since delinquency is too recent or unknown.
• Level of delinquency on accounts is too high.
• Amount owed on accounts is too high.
• Ratio of balances to credit limits on revolving accounts is too high.
• Length of time accounts have been established is too short.
• Too many accounts with balances.

One of the reason codes (reason No. 4) tells you if having too many cards has hurt your score. Common sense should tell you that the older you are and the better you manage your credit, the more cards you can have in your wallet before you reach the magic number that triggers the reason code.

Have a Healthy Mix:
Fair Isaac and VantageScore look for a healthy credit mix, a mix that might include a mortgage loan, a car loan, maybe a store card or two, three or four MasterCard or Visa cards and a home equity line of credit, or HELOC, for example.

Credit Cards are the Key:
They seem to be the key to the kingdom when it comes to credit scores: Don't cancel your cards!! Pay them off!! And after you've done that, don't send them back. Cut them up. Do that, and you have a zero balance enhancing your credit utilization rate. Do that, and you maintain your credit history on open accounts. Do that, and your credit mix looks good and you still have the available credit on the card you cut up. All you have to do is ask for a new card when you need it. Nevertheless, if you have a compulsion to cancel credit cards, do it the right way. First, cancel your department store cards; then cancel the newest MasterCard or Visa with the lowest credit limit, making sure to close the card from the company that doesn't report credit limits. Make sure to keep your credit-utilization ratio in line as you cancel, paying down balances on your other cards, if necessary, to keep it in line. Score one for the consumer!

Please feel free to call for questions ! Prosperity Financial 303.666.6550 !
*we are not a credit relief or credit counseling company, we just speak from experience!

Colorado Mortgage Insight......

HOW TO CHOOSE YOUR LOAN PROFESSIONAL???

2008-01-08T11:20:00.000-08:00

A BIG NATIONAL NAME or a small local educated company?

That is the question . . .

I have quite a few people ask me, “Why should I use you as a representative for my mortgage when I see CountryWide, Quicken and Lending Tree on TV?”

Well . . . that is a good question.

Here are a few things to think about. How do you think these BIG NATIONAL companies pay for commercials during the Super Bowl or other primetime events? (HINT HINT - - the expense is passed on to you.)
When considering a refinance or a purchase transaction, I encourage each of you to do your homework on mortgage brokers before choosing whom to work with. This is extremely important whether you choose a local company down the street or A BIG COMPANY that advertises on TV!

Consider these five points:

ONE:
YOU SHOULD NEVER HAVE TO PAY an "UP-FRONT" FEE or a "LOCK-IN FEE". Brokers and Lenders call this many different names, but initially you should NEVER have to pay a fee until your appraisal is ordered. Even then some brokers will roll the fee into the loan. NEVER, NEVER, NEVER pay anything to a broker or lender in your initial conversations.

TWO:
Ask where your broker is located. This does not mean if the company they work for has offices in your state. Where is this individual broker sitting when you are talking to them? If their answer is California, Florida, or any state other than the state you reside in, this is a big RED-FLAG! You must be able to trust this person to counsel you on the biggest, single asset you will have in your life. So, if they can't sit face to face with you either at your home or their office, then do you really want to use their services? Face-to-face, personal contact is extremely important when working with a broker.

THREE:
Local companies seem to be more passionate and care about neighborhoods that they are a part of. Often times, local loan professionals usually are a part of a network of local businesses such as Home Inspectors and Appraisers, Insurance Agents, Real Estate Agents, Home Improvement and Landscaping Companies, and other home service professionals who can save you money on the home transaction or other needs.

FOUR:
A key item that MOST people don’t think about is the fact that CountryWide, Quicken and Lending Tree lend their own money, meaning that they have their respective interest rate and that is the only rate available is you use them. As a broker, we are registered with approximately 20 different lenders. This means that we have no allegiance to any one bank so we can "shop" for the best rate. Therefore, the savings is passed on to you.

FIVE:
YOU CAN REST ASSURED WE WILL MANAGE YOUR MORTGAGE FOR YOU MUCH LIKE YOU WOULD YOUR RETIREMENT, 401K, OR OTHER INVESTMENTS! This is very important because your home is a very valuable asset.In looking for your loan representative, be VERY cautious, interview prospective candidates and make sure you feel comfortable. Be sure you find an honest loan professional that will produce clear and understandable numbers and options so you can understand the entire picture. Choose someone you can trust who is either a phone call and/or an email away. Also, someone who is willing and able to stop by your home to meet with you and answer any questions or concerns. You need to enter into a relationship with someone who can walk you through the process, educate you on all options, and "keep you in the loop" throughout the entire process, as well as coach you on future options.

IT’S OK TO TRUST YOUR GUT AND GO WITH YOUR INSTINCTS; HOWEVER, I ENCOURAGE YOU TO USE THESE TIPS TO HELP YOU CHOOSE WHO WILL BE YOUR GUIDE THROUGH THIS VERY IMPORTANT DECISION!!!

For any questions and/or advice, please do not hesitate to call 303.666.6550 or email me at matt@myprosperityfinancial.com

PRINCIPAL MORTGAGE INSURANCE (PMI or MI).... What you need to know !

2007-12-19T10:57:00.000-08:00

I had a client who had some questions about "Mortgage Insurance". He was very mistaken about his interpretation.

Here is what you need to know!

Most loan professionals have only two options these days for refinancing people out of an ARM (Adjustable Rate Mortgage) or other compromising loan situation. One option requires mortgage insurance and the other does not. The first option, where every lender now requires you to pay mortgage insurance, is when you have one loan that is above 80% LTV (Loan-to-Value). The second option, where you split your loan into two loans is commonly known as an 80/20 option. Rarely will they use all the remaining 20% on the second mortgage or HELOC (Home Equity Line Of Credit). With the second option, since the 1st mortgage amount is 80% or below, lenders do not require you to pay mortgage insurance.

If you choose the HELOC Interest Only option, the difference between the option 1 and the option 2 bottom line payments is very small. It is almost a wash, so it really boils down to the interest rate that you receive. Keep in mind on an Interest-Only HELOC you are only paying INTEREST! (You will not pay down the principal amount unless you make extra payments.)

If you choose the first option (one loan above 80% LTV) you will be paying the mortgage insurance; however, you will also be paying on the PRINCIPAL and INTEREST! This is the trade off. One advantage to this option is that if you have a household income of $100,000/year, you can write off all your mortgage insurance on your taxes.

Things to avoid in these situations are:
- An Interest Only on the first mortgage as well as an Interest Only HELOC just to lower your payment. This gets you nowhere with your principal balance.
- NEVER let a lender put a PRE-PAYMENT PENELTY on your loans.
- The bottom line payment isn't always the "BEST" option.

Other things to consider:
-Interest Only options are GREAT for older people with plenty of equity (70% LTV or below) that may be on a fixed income. Older people need to realize the likelihood of passing without a house payment at all is probably not VERY common or realistic.
- They also need to realize that their children will not be disappointed if they leave them a house with 30% equity. In this market that is NOT a liability at all.
- INTEREST ONLY programs are NOT bad. However, you must just be disciplined.

This can be very confusing so I hope has cleared up some questions and/or concerns about the different options. However, if you have additional questions or need some clarification, please do not hesitate to email me at matt@myprosperityfinancial.com or visit or newly renovated website http://www.colomortgages.com/

From my family to yours HAPPY HOLIDAYS !!!!

What you need to know about the FED rate cut !!!

2007-12-11T18:15:00.000-08:00

Hello again,

I decided to take a break from the "Resolution of 2008 plan" to give you some insightful news about the FED rate cut today!

This is what you as homeowners need to know about the FED rate cuts......

1: Their will probably not be much movement on LONG-TERM mortgages

Today investors reacted in a way of disappointment because they were expecting a rate sute of .5% rather than the .25%. The market has already priced that and adjusted rates accordingly; 30-year fixed rates have been falling for some time.
In July, the average rate on a 30-year fixed mortgage was 6.66%. Last week, it was 5.82%. So, a rate cut won't really do very much to lower long-term rates. They're already low. So if you want to refinance, it's a good time to start shopping!

2: ARM (Adjustable Rate Mortgages) resets will probably not to be as severe!

The Fed move today may be more significant to borrowers with adjustable-rate mortgages than what the government is doing in freezing subprime interest rates. Most resets on adjustable rate mortgages will reset in the middle of next year. Combined with the fact that the Fed is cutting rates, will make these resets more manageable for prime borrowers, and people "PRIME BORROWERS" (usually 680 credit scores and above) ARE NOT covered by recently announced foreclosure-prevention plan.
So, if you had an adjustable rate mortgage that started at 4.5% and your rate was going to reset at 7.5%, you may only face a rate reset of 5.7%. Still bad news, but more managable than before..... remember you have to stabilize first!

3: HELOCS (Home Equity Line Of Credits) will have better rates

Home equity lines of credit are cheaper after today. It may take up to three billing cycles to see the decrease in your bill. If you are thinking of consolidating debts or you need money for medical bills or college expenses, you may want to consider shopping around for a HELOC since lenders are likely to price in the Fed's cut immediately.

4: Keep your situation in perspective

This rate cut will not be the silver lining that cures the problems in the housing market. But since the Fed is in a rate cutting mode, and the immidiate effect on that will help consumers. The bad thing is that the Federal Reserve can't control things like the Credit Crunch and the impact of it, otherwise they have shown by these cuts that we would be in a lot better situation as a whole.

Were we need to look is inflation, job growth and the overall health of the economy as signs of when the troubled housing market will ease. There are 2 main issues here; One is inventory of houses on the market and, Two the affordability of houses today. Interest rate cuts won't do much to make that go away.

Folks we may be in for the long haul, so make the right decisions!!!

If you have any questions please do not hesitate to contact us @ 303.666.6550 or email me at matt@myprosperityfinancial.com

You can visit our website http://www.colomortgages.com/ for more insightful mortgage information, where you can also subscribe to our monthly financial newsletter !

Talk to ya soon,

The Mortgage Insight Specialist...

STEP 2 to the FINANCIAL RESOLUTION !!

2007-12-07T10:16:00.000-08:00

It's Friday!
Thanks for tuning into the 2nd Step episode. We had talked about recognizing the problem that we have fallen into. We found out what the problem is and now it is time to take the course of action. We need to realize that this is not an overnight process. Depending on how bad the situation you are in, this may take a while. Right now I want to hear you all pledge to change your habits and promise that you are in it for the long haul if need be. We can help you answer any questions that you may have and help develop a plan of action!

If we are "bleeding" in our financial stature then we first need to stop the bleeding and stabilize. We need to realize that this may take two transactions over the next year or two, to get you back in the driver's seat.

Spending habits: This is the first way to reach for the band aid while you and your mortgage professional figure out your plan. The most common area to improve in is on fluctuating bills such as food, gas, shopping. By writing these down, you will realize how much you really are spending a month on fluctuating bills.

Food:
- How often do you and your family eat out?
- Can you do your shopping at Walmart or big shopping at Costco or Sam's to save?(People do not realize that it is VERY hard to beat Walmart’s prices because theypurchase by the train load)
- How much do you spend going out to lunch with everybody at the office rather than packing a good old sandwich and chips or better yet last night's left-overs? (This will make your wife feel good because you liked dinner "so much you couldn't get enough" :)

Gas:
- Can you carpool with somebody - - you pay gas one week and they pay the next?

Shopping:
- Do you really need that new fancy thing-a-ma-jig or can it wait for a Birthday, Anniversary, or Christmas? (If you do HAVE to have it now, look at discount stores. Online is a great tool to use and a lot of websites compete for your business by offering deals or FREE SHIPPING!)

After I asked myself these questions, I saved:

Lunch = $90 over a month’s timeDinner = $195/month (approx) reduced from three times a week to once a week
Shopping = $33 shopped online and found my wife's Christmas present cheaper!

TOTAL = $318.00/ WOW my car payment was just paid!

The other way to cut a little spending is to take a glance at your steady reoccurring bills such as: Cable, Internet, Satellite TV, Cell Phone, Credit Cards, Phone, etc.

Ask yourself these questions:
- Do I really need long distance on my home phone when it is usually FREE on my cell?
- Do I really watch the Premium channels that I pay for?
- Do have the optimal Cell phone plan for my families usage and mine?
- Can I call my credit card companies and tell them that I am thinking of transferring a balance to another company that has a lower rate. Then I should ask them “What can you do for me to keep my card with you?”
- Do I really need the highest speed DSL or Cable Internet available; most of us use the Internet at work and just minimally use the home Internet. (And by the way, NO, the kids' concern about how fast the Internet connection should not be an issue!)

After I asked myself these questions I saved:
- Long Distance = $20/month
- Premium Channels = $23/month (had 2 that I never watched)
- Cell Phone plan = $38/month (bundled mine and my wife's and saved)
- Credit Card rate= Don't know exactly, but 3 cards lowered my rate by an average of 3.5%!
- Internet Connection = $15/month cheaper

TOTAL = $93.00/month, BINGO paid for my Auto Insurance for this month!

So all in all we saved about $410.00 in the first month of living like this.

Remember it is just that easy! I paid my car payment and insurance by just spending about an hour on the phone with some companies that I spend money with and vowing to change MY eating out habits. Unfortunately, I am not able to carpool, that would make a HUGE difference!

These are just simple ways to stabilize your financial situation while you work on putting your BIG PICTURE plan together. Using your home as a tool to get what you need financially is a HUGE asset that you have in your back pocket.

REMEMBER PLAN FOR THE WORST, BUT LEARN TO SAVE A LITTLE MONEY ON THE WAY!

Next up step three! We put the ball in motion!Please do not hesitate to call with any questions 303.666.6715 or drop me a line or two at matt@myprosperityfinancial.com and remember we have a ton of insightful information on our website http://www.myprosperityfinancial.com/Have a GREAT weekend!

The Mortgage Insight Specialist

FINANCIAL RESOLUTION IN 2008!

2007-12-05T12:12:00.000-08:00

Hello all,

I am calling for a MASS NEW YEAR’S RESOLUTION for 2008 here in Denver, Colorado and the surrounding areas across the front range! With all the news of how terrible our economy is here in Colorado and how the credit crunch is ruining America, I think we all need to make a conscious effort to make some wiser decisions and plan a little more effectively in 2008.

I know it is difficult because for so long we have been living a lifestyle that has been conducive to us being able to spend what we want. We all need to take a step back and look at the game from the other side of the board! A lot of people I talk to get into financial trouble because of ineffective planning. Back in 2002 or 2003 you moved into that nice 3,500 sq. ft. house on one of the beautiful Colorado golf courses, later in the year stopped by one the Denver dealerships owned by the greatest quarterback of all time, John Elway, picked up a new ride and then decided that you needed to finish the backyard, and put a hot tub in so you could enjoy the view of the Rocky Mountains once a month because work is keeping you too busy. The last thing on your mind was that we would soon be in an era where signing your name on a loan application and telling your local Colorado mortgage broker that you made somewhere around $120,000 last year, yeah that sounds about right, wouldn't be the norm anymore. Now your legit $80,000/month income plus commission can’t even come close to getting you that $1,300/month house payment on that beautiful Colorado golf course like it did a few years ago. It's not that interest rates have sky-rocketed, but rather the types of loans that you were able to qualify for over the phone and close in a week are just not there anymore due to the much tighter Underwriting guidelines that lenders have put in place to try to slow future foreclosures . . .

WOW, for all of us to be so naive???

WELL, you guessed it, WAKE UP, WE ARE HERE, whether we like it or not . . . so let's

PLAN FOR THE WORST, HOPE FOR THE BEST, AND YOU'LL BE ABLE TO TAKE WHAT COMES IN STRIDE !!!

We all know that it can be very difficult to change our ways, but we have to, and WE CAN, that's what makes this country we live in so great, we have a choice!!! We have to learn to protect our family’s biggest financial asset, OUR HOME! You know what it feels like to come home after a rough day, kick off your shoes, and know that you are in your safe haven . . . (BIG exhale). Just imagine that being taken away from you and you not having the means to fight back. Some careful planning and consultation can help to develop a practical and strategic plan that can satisfy your short term goals in order to maintain your long term dream of financial success.Many of us here in the Denver, Colorado area are in ARM's (Adjustable Rate Mortgages) with that cherry on top that they call "Interest Only" . . . and oh yeah the whip cream known as a "3-year pre-payment penalty". A few years ago these types of loans were so affordable and common that millions and millions of them are scheduled to adjust in 2005 after the 3 or 5-year introductory rate expires. Your rate may adjust as much as 3% in one month and get this; you are still just paying interest only!!! Putting people in this situation is HIGHWAY ROBBERY. Well, here comes the planning - - - we need to put everything out on the table, see what needs to be done, and develop a PLAN to keep your shoe-kicking off haven here in the most enjoyable city in the country, Denver, Colorado. We need to push toward a 30-year fixed rate loan. Very rarely will your house payment lower because you have been paying “Interest Only” which does not build equity. We must get you in a loan, which pays down the principal and builds equity. One option is to not necessarily lower your house payment, but rather address your monthly revolving and installment obligations thus lowering your total monthly obligations.

The first step is to figure out the problem. Sometimes this is not easy to do alone so feel free to either email me or give me a call. I may have some insightful information to help you develop a plan!!! We're not getting anywhere by sitting around and waiting for the "credit crunch" and the "market" to change, because quite frankly it may not for a while. Remember PLAN FOR THE WORST!!!

Stay tuned people; coming up is the next steps in completing your mortgage and financial 2008 resolutions!!!

If you have an ARM or Interest Only loan and would like some information and/or insight about your Denver area mortgage, please do not hesitate to visit our website that has numerous real estate and financial tools; http://www.MyProsperityFinancial.com/ or you can call me or one of our mortgage professionals at 303.666.6550 or toll free 866.898.7261!

From my family to yours, Have a GREAT Holiday!!!

Mortgage Insight Specialist