Mortgage Central

This is where you will find the answers to just some of the myths in the mortgage lending world. These are just a few of the main ones that I run across constantly. We will add more mistaken myths to this FACT page as we determine if the myth is viable or just a one time thing.

It's True that Countrywide is being pursued by the Feds for Predatory Lending practices that equate to some $140,000,000 dollars! .......yet buyers, borrowers and Real Estate Agents still flock to them for a loan. WHY?

It is Federal and State law that all Arizona Mortgage prospective borrowers receive a COMPLETED and correct (in full) Good Faith Estimate (the official Federal form....not the "short form" some lenders use) and a correlating Truth In Lending showing the proper APR. These 2 mortgage forms will disclose any and all rate, terms and fees which will affect the mortgage Annual Percentage Rate, or APR. Any and ALL mortgage lenders, be it Bank, Broker or Internet lender, will have 3 days (by law) to complete and deliver these forms to your hand after taking an application. You have rights that protect you.

Go with a reputable lender.....just because they may be a BIG bank with many branches all over the Southwest does NOT mean that they play by the rules and it does not mean that they really care about you. They may care only about your money coming to them.

Arizona Mortgage Central, Inc. is locally owned and operated Phoenix mortgage shop. Utilizing our services is just like shopping with 92 different lenders all in the same day. With interest rates bouncing up, down and all around.......our services will save you time AND money.

PMI - The latest smoke screen devised by other lenders and builders. PMI is only tax-deductible for the 2007 tax year. It is NO LONGER tax deductible after that.

The difference in a mortgage payment based on a $200,000 loan from 5.5% to 5.75% is only $30.67 a month. The difference in the closing costs may be about $2,500. Paying $2,500 to save $30.67 a month is NOT that great of a deal unless you guarantee that you will stay in that same loan (and home) for at least 9 years. That is how long it really takes to benefit from buying down the rate today.

It is NOT just the lowest rate....the entire mortgage loan, as a whole, should be designed with YOUR best interests in mind.

Per the Arizona Administrative Code, Title 6, Sections 900 through 1001 clearly states that a Mortgage Broker is any person that "Directly on Indirectly making, negotiating, or offering to make or negotiate" a Mortgage or Deed of Trust is required to be licensed by the State Banking Department of Arizona. It is actually the Real Estate Agent that is NOT "qualified".

It is NOT as easy as just saying "6.0%". Mortgage Central, Inc. is approved with many Lenders. Each individual Lender has about 60 different mortgage programs. Of each one of those 60, there are about 7 different "sub-mortgages". That is about 28,000 different combinations. What will YOUR RATE BE? If you act like a mortgage broker.....you had better be a mortgage broker.

We do not advise, nor endorse, going to other "mortgage 'lead' generating sources". Those websites, such as "Lower My Bills", are NOT a lending institution. They will take your information and SELL IT, yes SELL IT to a licensed mortgage company, or possibly 4 mortgage companies. Those companies will then sell (or give) your information to one or ALL of their loan representatives. Your phone will ring OFF THE HOOK for several days if not weeks. It is doubtful that you will have a "great "experience, get the best deal and actually finish a loan. They are ONLY competing for your money....not your business. Once those mortgage companies that initially bought your info from the lead source, exhaust all possibilities of getting your business, on some occasions, they will SELL your info yet once again to yet another mortgage company. The nightmare starts over again.

Were do you think these places get their money (profit)? From mortgage companies that purchase your information. And were do you think those mortgage companies get THEIR money.......from charging you MORE to pay for the bill. That is why purchasing leads from a "lead generating source" is ILLEGAL in Arizona unless they are licensed in the State of AZ. Any entity acting as a mortgage company must be licensed as a mortgage company, this includes all websites and telemarketing companies. Mortgage Central, Inc. is licensed and Bonded in the State of Arizona.

WE DO NOT AND WILL NOT sell or attempt to sell, give or handout any of your information to other third party companies. Your information is looked over by management and then given to the proper Mortgage Consultant that would have the greatest knowledge in the type of loan that you request.

Your credit "FICO score(s)" used to have very little to do with qualifying for a mortgage loan.

In order to qualify for a 5% down loan, you must be at least a 680 FICO score or better....regardless of income. It's a nightmare....and hopefully it will soon change.

When a mortgage broker, lender or real estate agent (it is not necessary for the real estate agent) pulls a credit report - they immediately look for the "score". Most, then base your score versus their time to give you. The lower the score...the faster you are shown the door. While in fact...there are 1,000's of reasons for all different scores. For instance...a couple has been married for the past 20 years. They have shared the exact same credit cards and auto payments for ever. The husband's score is higher than the wife's. Why?

It is a REQUIREMENT for all lending institutions, in order to complete a "real property" (real estate) loan.....any and all "manufactured homes", be it single, double or triple wide, MUST have an "Affidavit of Affixture" in order to have any chance of qualifying for a real estate mortgage loan....PERIOD! This is also known as "permanently affixed" in the mortgage world. This is acquired by the local City or County building code office. Contact them for more information. If there is NO Avadavat of Affixture, then that mobile home is considered "personal property" (like a car or a boat) and does not and will not qualify for mortgage financing.

A second requirement is that the manufactured home may NOT have any additions built on, near or in the manufactured homes original structure. This becomes a liability for the lender do to possible reduction of the rigidity of the structure do to the addition. For instance...if an extra bedroom is added to the original property...it NO longer qualifies for mortgage financing.

Manufactured homes are INCREDIBLY HARD to get financed. A manufactured home is NOT "cheaper" by any means than your standard stick or block built home. About 2 years ago...the majority of lenders put their feet down and DISqualified almost all manufactured homes for lending.

If you have credit issues OR less than 10% verified, sourced and seasoned money down...you will NOT be receiving a mortgage loan on a manufactured home.

You will NOT be able to get any "cash-back" for debt consolidation or home improvements in the vast majority of cases (about 98% of the time)

BY A HOUSE...NOT a manufactured home. WHY?? Because basically, NO ONE can get a loan on a manufactured home.

Any home in the Phoenix Metro area has gone up in equity by an average of 27% in the past 3 years. And that is a basic average. Some have gone upwards of 45%. HOW MUCH DID THE APARTMENT OR HOUSE YOU RENT MAKE YOU in equity? ZERO! How much did you "save".....ZERO! How much did your landlord make? You can NOT....NOT afford to own a house.

About 99% of the lenders out there have STOPPED making mortgage loans on Manufactured Housing. There are just a handful of loans available. You WILL need a minimum (if you're lucky) of 5% down plus closing costs on a mobile home loan. Typically it is upwards of 20% down.

IN FACT, a stick built or a block home is a MUCH BETTER BUY. A plethora of home loans are available. Loans with as little as $750.00 out of your pocket. A HOUSE will go up more in equity than any mobile home on its best day. A HOUSE will receive BETTER AND LOWER rates than a mobile home. A HOUSE is easier to sell than a mobile home.

If you mortgage payment is $1,350 a month....would you want it to pay for a mobile home, or pay for a HOUSE that will appreciate in value in the hottest housing market in the USA?

Click here and let Mortgage Central, Inc. find the best loan created for you specifically on an individual basis.

I am already "pre-qualified"

.....and "they" said my loan is approved:

....9 months of "no problem"........then a problem.

I have talked with 1 in May & 3 in June that have been "pre-approved" and then it changes some how at the end.

"Pre-Qualifying" is a bad habit in the business. Borrowers usually think that they are APPROVED when they receive that wonderful "Pre-Qual Letter" and hand it to the real estate agent. You cannot receive a "real loan" without filling out a real loan application and proving some sort of documentation....be it Bank Statements, Check Stubs or even taxes...and don't forget a credit pull. I don't care if you are Bill Gates, any Lender (not a Real Estate Agent) still will want a credit report....though it is possible that may be all that they require.

Don't be mistaken if someone just quotes you a rate at random without inquiring on your information that will pertain to the loan. Inexperienced Loan Officers and "shady" Loan Officers will tell you the lowest rate that is in their head. Real Estate Agents also seem to be taught some horrible "qualifying" system in Real Estate School. Though, I don't know why.

Anyone can quote a non-existent super-low rate.

Watch how easy......"3.000%" (What does that really mean to me??)

PMI.....like a fungus, it just won't go away!

PMI, or Private Mortgage Insurance, is an insurance policy the YOUR LENDER takes out on you to "insure" or guarantee the payback of the mortgage. This insurance has nothing to do with your home. You are still required to carry Homeowner's (Hazard) insurance in case of an accident or natural disaster. They are two very different entities. All conventional loans are "backed" by the government up to 80% of the value of the home at time of purchase or refinance. For example, a home that sold or appraised for $175,000 must have a 1st mortgage loan amount of $140,000 or less to NOT have PMI attached to the payment. That's at least $35,000 as a down payment. Most people don't have or don't want to put that much down. Some people put that much down just to avoid PMI.

PMI IS NOT TAX-DEDUCTIBLE. It doesn't lower your payoff. It does make the Lender more money every month. (except for the tax year of 2007)

PMI IS NO LONGER guaranteed to "go away" or be "waived" once you can prove 20% equity in the property with a new or updated appraisal. The only way it can be removed is by refinancing or in 10 years of payments when PMI is automatically dropped (typically) or you physically pay down the balance to 80% of the ORIGINAL selling price.

Note: FHA loans always have MIP, not PMI. MIP stands for Mortgage Insurance Premium.. This fee is also monthly and is attached to ALL FHA loans AT ANY LOAN AMOUNT (with the exception of Condominiums). MIP NEVER GOES AWAY....It still remains even after a "streamline refi" through FHA. The only way it can be removed is by refinancing through conventional methods.

Just for the above reason...Mortgage Central, Inc. does not originate FHA loans. It just don't make sense to us. Does it to you?

"For Sale - NO QUALIFYING" - It's a great deal!

FHA and VA have not set up an "assumable...no-qualifying" since 1989. That is about 14 years ago folks. When you see those big ole' signs on the road or those ads that realtors run in the paper...the "deal" really don't exist. If you find a home that is built AFTER 1989...there is absolutely no way possible that the loan is "assumable"!!!! 99% of the home loans made in Arizona are "Deeds of Trust"....NOT "mortgages". The "Trust Deed" will say that the Lender trusts you to NOT let someone assume or change title with the County as long as the Lender has a lien against the property. It is hard enough to find a home built BEFORE 1989 that is truly and legally "assumable". Trust me folks...you can get in a lot of trouble and lose ALL of your money invested in the property!!! The buyer AND the seller will eventually lose big on "assumables".

Also....stay away from those horrid "Land Loans" or "Lease Option" contracts and WRAPS! What a mess...not to mention a possible "BREACH of contract" which now makes it illegal ! Consult a Real Estate Lawyer (not a Realtor) if you don't believe me, or just read that Deed of Trust that no one has ever looked at.

Copyright © 2002 Mortgage Central, Inc. Last modified: 05/06/2009

Copyright © 2002 Mortgage Central, Inc.
Last modified: 05/06/2009