prioritylending Archives - Page 2 of 15

Offense Doesn’t Need to be Offensive

Written by Elise Loan Tucson on September 25, 2019. Posted in Home Loan. Leave a Comment

American Football, Running Back, Football Player anology for credit

Pulling credit. For numerous reasons, when I’m in the middle of taking a mortgage application, and I ask the borrower for her/his social security number, I often get these responses:

“Do you really need to pull my credit?”

“Can we wait to pull my credit until . . . ?”

“I’m not comfortable giving that to you.”

They don’t flinch when I ask them how much money they make or what they have in the way of monthly debts, but when I ask for their social, you’d think I was asking for intimate measurements or nuclear launch codes. They forget that they came to me (I wasn’t standing on the street corner soliciting) in search of the amount for which they can qualify.

In today’s environment, though, many of us as agents and originators are actively soliciting people’s business – we’re not just waiting for our phones to ring or our inboxes to fill. Because of this go-on-the-offense behavior, we want to be very careful that we’re not being lumped in with Zillow and other marketing monsters who are just looking to grow a database that can be sold or leveraged.

To that end, we’ve come up with a new way to help pulling credit scores without buyers having to share their social security number OR their birth date. Additionally, it’s a soft pull, which means it has NO EFFECT on their current scores. When you as an agent come across a buyer who is reluctant to have her/his credit pulled, sometimes you’re sitting precariously on the horns of a dilemma because you don’t want to show them houses until they know what they’re qualified to purchase, but you don’t want to let them go and get scooped up by another agent. Because of that, we give you this service to keep in your back pocket and keep them in your sphere.

This is the essence of 21^st-century customer service: protecting your clients’ privacy while providing you with value. Give us a call so we can show you how this is done – you’ll be glad you did.

Credit: Crush or Be Crushed

Written by Elise Loan Tucson on August 29, 2019. Posted in Home Loan. Leave a Comment

Canceling Credit Cards, is this a good or a bad idea?

Often, when someone has clawed and dug their way out of debt, they destroy their credit cards and cancel their accounts. Many do this because they blame the credit cards and look at them as plague-carrying rats. In other words, they fail to acknowledge that a credit card is an inanimate object which has absolutely no power to make them do anything – instead, they use them as the scapegoat and have learned little from their experience except how much it stinks to be in debt.

Admittedly, there are those who destroy their cards and cancel their accounts because they absolutely HAVE TO remove any and all temptation to assure they never go back down that rabbit hole. They recognize they just don’t have the willpower, and you have to respect that.

Whatever motivates a person to want to take these extreme steps, canceling credit cards is the absolute worst thing they can do in the long run. To understand the impact of canceling a credit card on your credit score, you need to understand how that number is derived. There are five factors that go into calculating your credit score.

Calculating your credit score

Payment history
Credit utilization
Length of credit history
New accounts
Credit mix

Of these factors, your payment history carries the most weight in determining your score, followed by credit utilization and then the length of your credit history. New accounts and your credit mix (having a mix of loans, credit cards, mortgages, etc.) carry the least weight.

Canceling a credit card, obviously, directly affects payment history, credit utilization, and length of credit history – in other words, canceling a credit card completely nullifies the first two and it puts an end to the last one.

Your credit utilization is a measure of your debt against your available credit and, ideally, it should be kept at 30% or less. If your utilization exceeds that threshold, your score could take a hit. Therefore, if you have a total line of credit worth $10,000, you should make it a point to never carry more than $3,000 in balances at once.

If the temptation to go on a shopping spree with a newly zeroed-out credit card is far too strong, let me make a suggestion: take a look at your monthly bills (utilities, insurance, cell phone, etc.) and choose the ones that don’t vary too wildly and total less than 30% of your available credit. Put those bills on autopay with your credit card and pay that ONE bill in full each month when it arrives; then take that card, fill a Ziploc bag with water, place your credit card inside the bag, and chuck it all into the freezer . . . but don’t cancel the account. If you feel the “need” to use that card, the time it will take to chisel away the ice or have it thaw SHOULD be enough of a deterrent. You think I’m kidding, don’t you? I’m not.

Keeping that credit card open, used, and paid off each month will do wonders for your credit score. Conversely, canceling credit cards will stall any efforts to improve your score. The old saying of “credit never sleeps” is true, and many have learned it means how debt and its interest are unrelenting, but with today’s article, we should take it to mean that it never stops HELPING us improve our credit scores if we control it.

When you are ready to apply, have a look at our mortgage checklist.

Too Clever by Half is Dumb

Written by Elise Loan Tucson on August 23, 2019. Posted in Home Loan. Leave a Comment

Recently, I came across a post on Facebook. This was by an agent that purported to show why it’s so much smarter for a seller to use a realtor versus an iBuyer. This is new. Being “in the business” I knew this to be a truth as incontrovertible as water is wet and fire burns. I’m not the intended audience for this post, but I was curious to read through it. To see how she chose to prove this incontrovertible truth.

Genius carving in stone

From the outset, the post recognizes that there are some things about using an iBuyer. This can be attractive to a seller. Chief of which is the “convenience” of being able to close the transaction in a matter of days. In fact, the headline reads “Is the convenience worth the cost?” Cool. Then it goes on to outline other figures with sales prices, commissions, service charges, and so on. This is where the wheels fall off the proverbial bus. At the bottom of the post, below the pertinent numbers, you see two figures. One is “Total Net using a Realtor”. The other is “Total Net using an iBuyer”, both followed by numbers with NEGATIVE signs. So, should I consider a realtor versus an iBuyer?

Even though I’m “in the business”, I had to stop and readjust my brain. I did this to put these numbers into context and see what they meant. After I did that, I immediately thought your average seller is going to think about two things after reading it.
What?
Selling a house is a NEGATIVE experience with or without an agent, less negative with an agent – weird.
The POSITIVE message of the entire post was completely lost. The questions posed in the headline (“Is the convenience worth the cost?”) go unanswered. Because whoever created the post was trying too hard to be too clever by half.

I’m inserting here a version of the Facebook post that actually answers the question. This leaves EVERYONE with a clear understanding of why it’s better to sell through a Realtor. Additionally, how much more money can be generated with the Realtor’s help? If you want something like this for posting on social media, here’s what to do. Send an email to ggreene@plmnow.com, and I’ll brand it for you and send it back in a post-friendly format.

realtor versus an iBuyer

In this business, we all use jargon and terminology when we’re communicating with one another. It’s faster in most cases. But the moment we’re standing in front of a customer we need to stop talking “Nerd” and use English. This ensures everyone understands one another. Additionally, it makes the customer feel more comfortable. that we’re not talking down to them or over their heads. Communication only takes place when the message is UNDERSTOOD. If not, then we’re all a bunch of Talking Heads, and we need to START making sense.

For any more information or direction on this subject get in contact with Priority Lending LLC today.

Rates Don’t Have to be a Gamble

Written by Elise Loan Tucson on August 8, 2019. Posted in Home Loan. Leave a Comment

Rates Don't have to be a gamble

Since the Fed’s announcement last week and the ongoing . . . uneasiness surrounding a trade war with China, the markets have been a little less than settled. And that’s been a very good thing for interest rates. In real estate and mortgage circles, I’m not hearing any complaining.

What we do continue to hear, though, are borrowers thinking out loud about how much lower the rates can go and whether they should act now or wait. Speaking for myself, I’m not a wizard of wall street, and I don’t have a crystal ball to tell me exactly where rates will be at 10:37 a.m. on September 2, 2019, so I will admit that my GUESS about what rates will or won’t do is just a guess. Now, I’ve been doing this long enough and surround myself with some VERY SMART people so I have experience and resources to have a fairly good idea where things are headed.

With that said, let’s get back to all the financial armchair quarterbacks who are stuck in analysis paralysis. I’m going to share one thought with you that one of those very smart people I know has shared with many. It’s not meant to give you any additional insight into what the market will or won’t do – it’s simply intended to act as a loving but resolute slap in the face and snap you out of your self-induced trance. Here it is:

“Don’t fight for an extra eighth down in rate unless you’re willing to lose a quarter.”

We will always seek out the very best rate for you and your borrowers for obvious reasons, and we’ll lock it when it’s to your advantage. We’ve done this a couple of times before. In many cases, we have a “float down” option so that even after the rate is locked, if market conditions change favorably between the lock and when we close, we can float the rate down to take advantage of the favorable change. On the flip side, if you’re trying to outguess the market and want us to hold off because you THINK it’ll drop from 3.875 to 3.75, that may not end the way you hope it will – the market, like a three-year-old, is unpredictable. Let us do a little babysitting for you so you can enjoy the experience of buying a home!

Contact Priority Lending LLC for any help today. Contact us to get started.

Underwriters Are Not Evil (Not All of Them)

Written by Elise Loan Tucson on July 17, 2019. Posted in Home Loan. Leave a Comment

On a recent loan, we needed one simple document from the borrower’s bank, nothing more. We weren’t seeking lost pages of an Ernest Hemingway novel. I’ve read some of his stuff, and anything lost can stay that way, if you ask me. The borrower went to one branch and they were told that what we were requesting was impossible. We’ve obtained this type of document hundreds of times before on other loans. So I was confident we weren’t asking for anything exotic. Even so, the teller insisted to the borrower that they couldn’t provide what we were seeking. They gave him something else. Something that WOULD NOT stand with the underwriter (which I was certain it wouldn’t in the first place).

After reviewing the document he sent over from the bank. I regrouped with the borrower and asked him to return to the bank and ask in a different way. He called me back about twenty minutes later and told me that I would never believe what happened. I told him I’m pretty sure I’ll believe him. I see weird stuff every day. He went to a different branch this time and the teller gave him EXACTLY what we had requested the first time. I burst into laughter.

Then I collected myself and apologized to the borrower saying, “I’m sorry about that. I shouldn’t laugh, but it’s all I can do when I come across these situations, and they happen all the time.” To that, the borrower said, “I don’t see how you can deal with this kind of thing on a daily basis without drinking on the job.” This is coming from a guy who teaches high school so his own level of “grin and bear it” has to be through the roof.

I shared that little piece of . . . absurdity. So I could share this with you. There’s a very solid reason underwriters are so persnickety and insistent. Things carried out in a certain way and documents look so for a reason. You could say it’s because they hold the gold, so they make the rules. Or, you could say that they’re getting ready to lend. This is the largest chunk of money an individual will ever borrow in her/his lifetime. So they want to make sure everything is in order. Either of those two answers is correct, but the REAL answer is far more simple: they’re covering their butts. Everything they do from the moment they touch a loan application is to make sure blame is not for anything. What must their home lives be like?

In the case of my teacher buying a house, the form he needed had to show the money going out. It also had to show the transactions to show that the account had enough money. The fact the statement showed that after the transfer there was a balance of $XXX should be enough. Evidence there was enough money in the account for the transfer to go through. To an underwriter, they have to show that the account holder didn’t walk in that day. Then hand the money to the teller, and then transfer that money out. Sourcing and seasoning rules don’t allow that, and the underwriter has to make sure of that. The underwriter didn’t make that rule (or any of the rules they’re tasked to follow). Their continued employment depends on their sticking to it. They’re forced to be the devil about the details.

Whether you’re a seasoned real estate agent or a first-time homebuyer, the next time you think the underwriter is being unreasonable or especially stubborn, bear in mind that 99% of the time they’re just doing their jobs – they’re just covering their backsides. If they’re like me, the older they get and the less exercise they undergo, covering that area becomes a bigger job by the day. To borrow a notion from the Rolling Stones, have some sympathy – even if you still think of them as the devil.

Find out exactly what an “Underwriter” is here.

You may also find our page on “Mortgage Terms” interesting.

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