Understanding mortgage rates and penalties
Highlights from two premier blogs, Rain City Guide and Bloodhound Blog:
Ardell DellaLoggia from Seattle's Rain City Guide has the best explanation of subprime rates and prepayment penalties. Here are the conclusions from her post.
"People talk about sub-prime and pre-payment penalties like they are something bad. In fact they are giving someone a chance who maybe has a hard time convincing people that he’s “a safe bet”.
If you have a credit score of 700 or more, you really shouldn’t be worried about pre-payment penalties and sub-prime loans. The only time they can creep in to people with high credit ratings is when you are buying more than you can really afford or your other debts are higher than they should be for you to spend that amount for the house. So make sure you know your ratios. Your “front end” AND your “back end”. But that’s another story for another day."
Now read why it's all about risk, Understanding the Basis for Prepayment Penalties.
Morgan Brown, writing for the Bloodhound Blog out of Phoenix has an interesting post on shopping for a loan originator rather than a rate. As I pointed out a while back, finding a great home is easy, finding a great real estate agent isn't, Morgan suggests if "you shop for your mortgage professional first and then start talking mortgage programs with the people you feel comfortable you’ve chosen to conduct business with, you will end up with a good deal that is realistic. Plus it will come from someone providing honest service. The best way to ensure you’re getting a good loan is to ensure you’re working with a good person first."
Please read, When Banks Compete, You Lose.
I spend time every day reading blogs from around the country, mostly real estate, a few others of interest. While Seattle and Phoenix are a great distance from Charleston ( and I was very fortunate to have the opportunity to live in both of these wonderful cities in the early 90's), these are 2 must read real estate blogs, certainly among the foremost authorities in the real estate blogosphere. Make sure to Visit Rain City Guide and Bloodhound Blog. Learn and enjoy.