RE/MAX 440
John F. O'Hara

John F. O'Hara
731 W Skippack Pike  Blue Bell  PA 19422
Phone:  610-277-4060
Office:  215-643-3200
Cell:  267-481-1786
Fax:  267-354-6973

My Blog

Knowledge Is Power When Mortgage Shopping

January 15, 2015 2:42 am

The Consumer Finance Protection Bureau (CFPB) recently reported that half of consumers do not shop around for a mortgage when purchasing a home. Informed consumers, however, are more likely to research mortgage options, especially if they are familiar with available mortgage rates.

According to CFPB Director Richard Cordray, consumers seek to understand the lending process, but are intimidated by its complexities. The report also found:
Three out of four consumers only apply with one lender or broker.
Fewer than one out of four borrowers actually end up submitting a loan application to more than one lender or broker. These consumers are not filling out applications with multiple lenders to see which one can offer them the best deal.

Most consumers get their information from lenders or brokers, who have a stake in the outcome.
Seventy percent of consumers report relying on their lender or mortgage broker ‘a lot’ to get information about mortgages. While lenders and brokers can be valuable resources, they have a stake in the selling of the mortgage, so what is best for the lender or broker is not always best for the consumer.

Borrowers who prioritize the terms of the loan over the characteristics of the lender are more likely to shop.
Among all borrowers – those who shopped and those who did not – 42 percent said having an established banking relationship with the lender is “very important.” Since most borrowers likely only have a few banking relationships, this likely inhibits shopping.
Failing to shop means money lost for consumers. Those who consider the product offerings of multiple lenders or brokers may save substantial sums. For example, interest rates can span more than half a percent for a conventional mortgage for borrowers with a good credit rating and a 20 percent down payment. For a borrower taking out a 30-year fixed-rate loan for $200,000, getting an interest rate of 4 percent instead of 4.5 percent translates into almost $60 saved per month. Over the first five years, the borrower would save about $3,500 in mortgage payments. In addition, the lower interest rate means that the borrower would pay off an additional $1,400 in principal in the first five years, building greater equity.

While many risky features of mortgages are now restricted or unavailable in the marketplace since the financial crisis, mortgages still have different terms and features. Key components include the loan term, loan type, and interest rate. Loan terms typically vary between 15 and 30 years. Loan types include Federal Housing Administration (FHA), Veterans Affairs (VA), and conventional loans. Interest rates can be fixed or adjustable, and the rates vary across lenders, even for the same consumer and for loans with otherwise identical product features. Consumers can shop for a mortgage by researching and inquiring with multiple lenders, applying for mortgages with multiple lenders, or applying for different kinds of loans.

Source: CFPB

Published with permission from RISMedia.


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Prep Your Car for Freezing Temps

January 15, 2015 2:42 am

When it comes to winter car care, many motorists think of antifreeze and batteries. When temperatures drop, vehicles need extra attention, according to the Car Care Council.

"Winter magnifies existing problems such as pings, hard starts, sluggish performance and rough idling, and very cold temperatures reduce battery power. If you haven't had your vehicle checked recently, a thorough vehicle inspection is a good idea so you can avoid the aggravation and unexpected cost of a breakdown in freezing weather,” says Rich White, executive director, Car Care Council.

Keep your vehicle maintained and operational over the winter months with these tips:

1. Keep the gas tank at least half full; this decreases the chance of moisture forming in the gas lines and possibly freezing.

2. Check the tire pressure, including the spare, as tires can lose pressure when temperatures drop. Consider special tires if snow and ice are a problem in your area.

3. Have the exhaust system checked for carbon monoxide leaks, which can be especially dangerous during cold weather driving when windows are closed.

4. Allow your car a little more time to warm up when temperatures are below freezing so that the oil in the engine and transmission circulate and get warm.

5. Change to low-viscosity oil in winter as it will flow more easily between moving parts when it is cold. Drivers in sub-zero temperatures should drop their oil weight from 10-W30 to 5-W30 as thickened oil can make it hard to start the car.

6. Consider using cold weather washer fluid and special winter windshield blades if you live in a place with especially harsh winter conditions.

7. As a precaution, motorists should be sure their vehicle is stocked with an emergency kit containing an ice scraper and snowbrush, jumper cables, flashlight, blanket, extra clothes, bottled water, dry food snacks and needed medication.

Source: Car Care Council

Published with permission from RISMedia.


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