Know Your Mortgage Fees, and You’ll Never Pay Too Much for Your Loan

If you buy new windows, you’ll not only pay for the windows, you will also pay an installation fee. When you purchase a car, you pay tax, title, assumption fee, etc. Just about every major purchase comes with extra costs or fees, and home loans are no different. Most people think they don’t have to pay costs on a loan, because they are paying interest on the loan (they figure this is their fee – a premium on the money). A mortgage, however, does not come free.

While some are mandatory, others are not. Follow these guidelines, and you’ll never pay too much for your purchase mortgage or refinance loan.
The origination fee — The fee that bothers people the most is the origination fee, or what some mortgage people call a broker fee. This is often confused with points, but should not be. Points are something completely different. The origination or broker fee is what you pay the loan officer to originate or create and complete your home loan, whether it’s a purchase or a refinance. All mortgage people charge them, whether they work for a mortgage brokerage or for a bank.

Remember, if you’re told there is not a broker or origination fee, chances are you’re paying a higher interest rate, and this is how they’re making this fee. The origination fee is the primary way mortgage brokers make money. The company gets the entire fee, and your broker or loan officer gets a percentage of that fee – somewhere between 30 and 65 percent.

So, if your mortgage broker charges you two percent on a $100,000 loan, this is $2,000 for his company or bank and up to $1,300 for him. You may think this is an outrageous amount of money, especially considering that this is just one of the costs you have to pay, in order to complete you loan. It might be, and then again, it might not. It depends on what type of loan you get, how much work is involved in closing it, and the quality of the service you get. Here are a few guidelines on what you should be willing to pay in origination or broker fees.

Bad credit’s effect — If you are a sub prime borrower, or someone with credit problems, expect to pay more – up to $3,000 or $4,000. Remember, sub prime, or non-conforming, borrowers have some type of baggage that makes them difficult to get approved, which is a huge part of the mortgage professional’s job. They may, for example, have a recent bankruptcy or foreclosure on their record, or a civil or criminal judgement, tax liens on the property, or very little equity in their home. These are problems that good mortgage professionals can get around, but it takes a lot of time and effort.

I once helped an elderly gentleman on a fixed income refinance his home, and he had 14 liens against his home, all of which had to be satisfied, before his mortgage could be paid off, and he could get a new loan. I had three weeks, and probably 25 hours of time, just clearing these liens. One of them was a defaulted car loan on a car he didn’t even have. He owed $3,000, hadn’t made a payment in three years, and the bank was still after him. I had to negotiate with the collection agent from that bank, and get them to take $1,800 to satisfy the loan, which I would work into his new mortgage. After many telephone conversations and some very hard selling, they agreed, and I wound up getting it done.

Now, I would have normally charged a minimum of $2,500 (over five percent of the loan amount, in this case) for this type of work, but there was not enough equity in the house to get that much origination in the loan. I actually did it for less than $1,000 ($500 of which was mine), just because I wanted to help this man, who needed the cash he was going to get from the new loan to put a new roof on his dilapidated house. This is just one example of when it’s acceptable to pay more in origination fee, even though this man didn’t have to do so.

Conversely, let’s assume you’re refinancing your home in a
perfect scenario. You have perfect credit, lots of equity in your home, plenty of cash reserves, and the paperwork is very easy. The loan officer says he can complete your loan in two weeks, most of which will be consumed by the work of other people, such as title agents and an appraiser. This origination should not be much more than one percent of the loan amount and even smaller, if the loan amount is over $150,000. This is a loan that mortgage people refer to as “A Paper.” It is very easy to close, and takes very little work, so the loan officer can make his money on volume, by doing lots of these types of loans. I always charged $1,500 or less for an A Paper loan.

So, begin learning your closing costs by finding out what the origination fee is (remember, most of the time it’s negotiable). One to two percent of the loan amount is acceptable, unless extraordinary circumstances exist.

Exercises and Workouts – The Secret To Becoming Naturally More Active

If you are someone hoping to make improvements in your health, there is no question adding more activity to your day is on your list of “things” to do. No matter how you look at it, a mobile body is healthier than one that is immobile, and as the saying goes: “a body in motion stays in motion.”

Often the hardest part of being more mobile is getting the process started. So this said, what can you do to ensure you are not sitting around? How can you become one of those people who naturally craves exercise? It is not as hard as you may think.

Here are a few tips to keep in mind…

1. Think Activity, Not Exercise. First, you will want to think of activity, not exercise. Some people have an aversion to doing any “exercise” and for them, forcing it will have an adverse effect on their thinking.

When people instead focus on activity – merely moving their body, it becomes more natural for them, and they become motivated to do it and keep at it. Try this technique for yourself.

2. Get A Friend to Join In. It is also a smart idea to get a friend involved as well. For instance, invite a friend to go for a power walk with you or have a co-worker join you for a lunch yoga class. Sometimes just being in the company of others is enough to spark added interest in the physical activity.

3. Make It A Habit. It is also vital you focus on making it a habit as well. You want to become more active and stay active, not just have it be a fleeting thing. Try and set a time each day to get busy and stick with that time as best as possible.

If you can do it five days in a row, the chances you keep doing it will be much higher.

4. Go Slow. Finally, go slowly. Do not think you are going from being a “couch potato” to “exercise enthusiast” overnight. Realize it does take time, and you will not get there right away. Be patient with yourself and the process. If you show yourself some understanding and self-love, it will be much easier to go about this process without hitting so many bumps in the road.

There you have a few essential tips to keep in mind as you become someone who enjoys physical activity which gets their body moving for good. Think of this as a lifestyle change, not something you are doing temporarily.

Although managing Type 2 diabetes can be very challenging, it is not a condition you must just live with. Make simple changes to your daily routine – include exercise to help lower both your blood sugar levels and your weight.