Tag Archives: Kansas City Mortgage Loans

Kansas City Has The Lowest Average Mortgage Interests In The Country

Posted on by
Checking The Pulse Of The Kansas City Real Estate Market

I have covered in the past why it’s so important for home buyers to consider today’s historically low interest rates when evaluating their potential home purchase. I believe many Kansas City homebuyers will look back and realize the lower interest rate they obtained were much more important than the few thousand they might have “saved” by waiting for home X to drop their price – or for home Y to come on the market. Of course, NO ONE knows the future, so we’ll see.


What we do know is that today’s low interest rates will be a huge factor for homeowners who stay in their home an extended period of time. According to MSN.com, Kansas City is the only metro market in the United States with average interest rates below 5%. The average buyer can secure a 30 year fixed rate loan in Kansas city for just 4.94 — that is amazing!  Here’s the top 5 list according to MSN Money…

1. Kansas City MO/KS – 4.94%
2. Houston TX – 5.03%
3. Dallas TX – 5.06%
4. Virginia Beach VA – 5.06%
5. San Antonio TX – 5.12%


The article attributes the low interest rates in the above areas to the same things that have kept our local market from completely crapping out during difficult economic times – we didn’t see the huge fluctuations and appreciation that many U.S. real estate markets experienced.

Posted by Jason A. Brown

New 2010 Good Faith Estimates Haven’t Led To Self-Inflicted Injuries In Kansas City

Posted on by
Checking The Pulse Of The Kansas City Real Estate Market

The new 2010 Good Faith Estimate has been in effect for more than a month and I’ve yet to see any mortgage lenders, borrowers or real estate agents climbing buildings or jumping off bridges. The changes do however have people talking and will certainly change the way loans have been handled over the years. For the best mortgage lenders, these changes won’t have the same drastic effect they’ll have on shady or unorganized lenders. The lenders I know well have also taken on the changes head on in educating agents and borrowers alike about the changes.


The January 1st 2010 Real Estate Settlement Procedure Act (RESPA) has certainly made the Good Faith Estimate a lot more good faith — and a lot less Que Sara, Sara. Lenders will have to educate borrowers on what’s being charged for their loan, why they’re being charged each amount and in many cases, who exactly is charging the fees. I’m expecting it will clearly educate borrowers on the risks of ARM loans and other creative financing methods that are at the root of our current financial mess. I’ve read many places online that it will make it very easy to compare the Good Faith Estimate that was given out early in the process to the actual HUD-1 Settlement Statement that will be produced  for the real estate closing.

The new Good Faith Estimate requires that mortgage lenders show all the key loan terms and closing costs to borrowers. More importantly, if the lender half-asses a Good Faith estimate, the lender could be on the hook for overages in many instances. I’m thinking this will give home buyers some good assurance that the Good Faith Estimates will be reasonably accurate and minimize or eliminate the junk fees seen all too often over the years. Finding junk fees on the HUD-1 has put many a borrower in the difficult circumstance of not being able to fight it because they’ve already closed on their home sale.  And, if you’re thinking ahead like me, this seems likely to lead lenders to work closely with closing agents to build a comfort level that the fees quoted early on are  more-or-less guaranteed come closing time.

Different aspects of the new Good Faith Estimate (GFE) are defined at different tolerance levels. The one I’ve commonly heard referred to is the 10% tolerance of quoted fees. This applies to settlement service fees where the lender specifies the provider to be used in the transaction. But there’s also many that fall under zero tolerance, including fees the lender was in direct control of when they were listed on the GFE – such as the lender’s own origination fees, underwriting fees and processing fees.  Then there’s the unlimited tolerance for items that the borrower is in control of – such as title insurance, home inspections and homeowner’s insurance. You can see how the lender can’t be expected to guarantee the latter.

It’s worth noting that many lenders believe any money saved by the new GFE could be lost due to the extra time and costs required to make sure they are in compliance with the changes — all costs they’d likely want to pass on to consumers. But if lenders start erring on the safe side, competitors who are on the ball and quoting accurate fees and costs will undercut them and secure the borrower’s business. So I find it unlikely that lenders will simply quote high amounts on the GFE, because if they do they may go  out of business – due to having no business. The new Good Faith Estimate is a 3-page document  that provides a break down of loan costs in layman terms. ALL mortgage lenders are required to use  this document going forward and you can check out some of the most common GFE questions here on these 57 pages of frequently asked RESPA questions.

A down side that I’m pondering is whether lenders will refuse to give borrowers a Good Faith Estimate early in the home buying process. If they refuse until a buyer has applied for a home loan and gone under contract, this would keep a borrower from really knowing the costs of the loan until they’re already under contract. Although I could argue that’s no worse than what’s been dealt with before these changes were made. We’ll need several more months to see how things play out and make any definitive assessments of the effect of the new GFE. Irregardless, it’s as critical as ever that borrowers work with a reputable and trust-worthy lender. If you’re looking for a good lender to finance your home purchase or refinance your current home, here are three lenders that I would trust to handle my own Kansas City mortgage loan…

Jill Underwood with Pulaski Bank
Email: jill@jillunderwood.com
Phone: 913-915-0150
www.JillUnderwood.com

Alan Scarpa with National Bank Of Kansas City
Email: ascarpa@nbofkc.com
Phone: 913-253-0189
www.nbofkc.com

Rick Woodruff with Metropolitan Mortgage Corporation
Email: rick@e-metropolitan.com
Phone: 913-642-8300
www.emetropolitan.com
Posted by Jason A. Brown

Eye-Opening Details On FICO DAMAGE POINTS That Have An Effect On Kansas City Home Loans

Posted on by
Checking The Pulse Of The Kansas City Real Estate Market

You’ve heard me mention many times how important your FICO score is when it comes to buying a Kansas City home. The problem has always been that no one knew exactly how your FICO score was formulated.  In other words, we KNEW our FICO score but we didn’t know what exactly we’d done – or were about to do – to damage it (or improve it). Yes, there were educated guesses and common sense analysis came into play. There were even some crazy case studies done to see how certain credit factors impacted one’s FICO score. It’s great that there were a few out there willing to take one for the team and damage their own FICO score to provide us beneficial info.  But I’ve always wanted to know more about the closely guarded FICO algorithm. Well recently some of the secrecy was removed when Fair Isaac Corporation released some hypothetical FICO hit examples. They call them Damage Points and here’s a look at a chart that’s  been circling the internet…

Kansas City Credit Score Damage Points

Kansas City Credit Score Damage Points

You can see in the above chart, they have used two hypothetical FICO scores — one person starting with a 680 FICO score and the other with a 780. The first thing I noticed was the common theme of the person with the higher initial score taking a more severe hit for an identical infraction.  For example, notice how a foreclosure would knock at least 85 points off the 680 score BUT 140 off the 780 score!  John Ulzheimer, a credit industry expert, also did a study on his own FICO score using the FICO Score Simulator. If you go there, you must buy a credit report to test it out yourself. But if you want some free results, John Ulzheimer’s findings on his own FICO score concluded: a 10 point FICO hit for applying for a new store credit card; a 40-75 point FICO hit for missing a credit card payment (on a card that was current); a 50-100 point FICO hit for maxing out ALL credit cards; a 195 to 255 point FICO hit for declaring Bankruptcy. Very interesting stuff! You can also view the rest of John Ulzheimer’s findings.

Posted by Jason A. Brown

There Is A Lot More To Choosing A Kansas City Mortgage Lender Than Just The Interest Rate

Posted on by

Hands On The Heartland
Checking The Pulse Of The Kansas City Real Estate Market 

The first question many homebuyers ask a mortgage lender is “what are interest rates today?”. That’s a sensible question but the process is much more complicated than just having a lender quote an interest rate. For starters, if a lender answers that question without running the borrower’s credit report and asking a few questions then the rate being given probably assumes an “A” paper borrower – which most borrowers are not. In addition to knowing the interest rate, a borrower needs to be attentive to the fees the lender will be charging as well as making a decision on the quality of the estimated figures the lender is providing.

Choosing A Kansas City Mortgage Lender

Choosing A Kansas City Mortgage Lender

So, after the lender has pulled the borrower’s credit report and found out how much down payment the buyer will be making, the lender can provide the borrower with a Good Faith Estimate (GFE). Borrowers should look this GFE over closely to be sure the information provided includes all of the loan details like the appraisal, credit report, lender fees, third party fees, reserves, title charges, government charges, etc. Look closely at the lender fees aspect of the GFE because that shows the variable fees that a lender is in control of and plans to charge you. The fees could be called a Loan Origination Fee, Application Fee, Processing Fee, Underwriting Fee, Broker Fee, Discount Fee (to buy the interest down), etc. One lender may charge $100 for EACH of these fees while another may charge $500 for just one of the fees but charge no others. Another lender may mix it up some other way.

Don’t let yourself get caught up in how many separate fees may be present, what the fees may be called or even the individual amounts of each fee being charged. What’s important is the TOTAL amount of all the loan fees that will be charged by the lender. Knowing this amount allows you to compare one lender to another in regards to both the interest rate as well as the total loan fees. When weighing one’s options regarding interest rate and fees, generally speaking a borrower who plans to stay in a home 10 years will do better with a lender charging a lower interest rate but higher fees. A borrower planning to stay in a home 2 years will generally do better with a lender with a higher interest rate but lower fees.

As the name “Good Faith Estimate” would indicate, the document is simply an estimate of the costs the borrower may incur. They are far from being a guarantee and defining “good faith” will vary from one person to the next. This brings me to the third part of the equation – choosing a reputable lender and loan officer. Finding a lender with great rates and low fees could mean nothing if your lender blows the deal by not having the loan ready to close or if the lender pulls a huge fees switcharoo on you at closing. The more accountable the lender is, the more accurate the GFE is likely to be and the happier you’ll probably be at closing. The lender will certainly feel more accountable to you if the lender is your own bank or has been referred by a friend, family member or real estate agent.

Posted by Jason A. Brown

Comments Can Be Left Below…
Don’t see the LEAVE A COMMENT section below? 
First click on the headline at the top of this blog post.