There is an article in the October 13th edition of the Los Angeles Times in the real estate section. It tackles the subject of in-house mortgage brokers that work either for builders or real estate companies. According to the article, broker owned mortgage companies offer very competitive interest rates. Many builders offer "incentives" to buy homes, especially in this market, but in order to qualify for the the above mentioned incentives and discounts, you must use the brokers mortgage company. Hmmm. That's interesting, isn't it?
Real estate owned mortgage companies also state they are competitively priced and offer one stop shopping for the "benefit" of their clients. At one time, during a recent survey I found many in-house mortgage companies to be over 1% higher on a jumbo loan than what I was offering. So a higher interest rate is a "benefit?"
Real estate owned mortage companies have been around for several years now, so this is nothing new. The pressure that is being placed on Realtors to use these services, however, is unsurpassed. At some point you have to ask, who's interests (so to speak) are being served?
The article suggests you shop around. If you are considering using an in-house mortgage company, get at least two other quotes from other companies, and compare their fees as well as the rate.
Pretty sound advice. If you find yourself being pressured to use an in-house mortgage broker, remember you cannot be forced to. Your transaction is not dependent on using any in-house service. If you feel your Realtor is being too pushy then politely inform him or her that you plan to shop for a mortgage professional...the same way you plan to shop for a real estate professional.
Sunday, October 14, 2007
Wednesday, October 3, 2007
Cramer rants, but are you listening?
Happy October everyone!
A few days ago I saw Jim Cramer, the host of CNBC's Mad Money tell a national audience not to buy a house for at least a year, or you will lose money. Many thoughts crossed my mind. First what makes Mr. Cramer think that his revelations are so brilliant? Business colleges and talking heads have been forecasting the fall of the real estate market every year for the past 5 years. You knew at some point they were going to get it right!
Second, people don't buy homes just for the purpose of investments. People move up, have children, get promoted, downsize, they buy homes for any number of reasons! There are plenty of people out there gushing with delight in the bad news concerning the housing market. Maybe these people think it brings them headlines or makes them controversial. But what if Mr. Cramer is wrong? What if interest rates drop and all of the sudden homes are more affordable than they have been in years? What if someone finds the home of their dreams and it's 30% lower in price today than it was a year ago, should they hold off buying because Jim Cramer says so? In my mind here's a better question, is Mr. Cramer prepared to reimburse everyone who listens to him and passes up a great deal, and then ends up spending more if prices go up??
So the next time Jim Cramer tells you to don't do something, I hope you will consider a few "dont's" of your own: don't watch his show and don't buy his books and then let's see what he has to say.
A few days ago I saw Jim Cramer, the host of CNBC's Mad Money tell a national audience not to buy a house for at least a year, or you will lose money. Many thoughts crossed my mind. First what makes Mr. Cramer think that his revelations are so brilliant? Business colleges and talking heads have been forecasting the fall of the real estate market every year for the past 5 years. You knew at some point they were going to get it right!
Second, people don't buy homes just for the purpose of investments. People move up, have children, get promoted, downsize, they buy homes for any number of reasons! There are plenty of people out there gushing with delight in the bad news concerning the housing market. Maybe these people think it brings them headlines or makes them controversial. But what if Mr. Cramer is wrong? What if interest rates drop and all of the sudden homes are more affordable than they have been in years? What if someone finds the home of their dreams and it's 30% lower in price today than it was a year ago, should they hold off buying because Jim Cramer says so? In my mind here's a better question, is Mr. Cramer prepared to reimburse everyone who listens to him and passes up a great deal, and then ends up spending more if prices go up??
So the next time Jim Cramer tells you to don't do something, I hope you will consider a few "dont's" of your own: don't watch his show and don't buy his books and then let's see what he has to say.
Subscribe to:
Posts (Atom)