Our last blog post addressed why interest rates move and how supply, demand and the overall health of the economy impacts rates. In this post, we’ll go into the components of an interest rate and what factors play a part in that “magic number”.

Interest rates have four major components, which also impact whether rates rise or fall:

• Inflation (the upward movement in the average overall level of prices) and its opposite, deflation, play a role as they are indicators of where the economy is headed. When either inflation or deflation gets too extreme, the Federal Reserve will often times adjust rates in an attempt to balance the economy, which will have an impact on mortgage rates.
• The real interest rate is the actual interest rate minus the rate of inflation.
• Liquidity risk is the money the lender receives for investing in something that is difficult to sell. Many mortgage loans are sold on the secondary market as investments, and when that market dries up, the liquidity risk increases.
• Credit risk is assumed when a loan may not be repaid on time or at all. One of the indicators in this area may be your credit score, with lower scores warranting higher credit risk because of the chance of non-payment.

Why is it important to understand these components? Because understanding the forces of economic conditions can help provide you with somewhat of a prediction about interest rates and where they may go in the near future. Ask about our interest rates on home loans today!

Contact AmeriFirst at 800-466-LOAN or feel free to contact us online and request additional information.

Tags: mortgage loan | interest rates

You’ve learned this week that if you save money, pay off your credit accounts and check your credit score, you can earn a lower mortgage interest rate. However, lurking in the dark shadows, and sometimes beyond your control is that menacing epidemic that has a stronghold on many Americans - identity theft.

According to the U.S. Department of Justice, identify theft is when another individual obtains your personal data to use it in a fraudulent manner for financial or economic gain. Aside from the miserable fact that someone is shopping using your credit card, identify theft can reek havoc with your credit score.

Aside from checking with the credit bureaus on a regular basis, what can you do to avoid being a victim of identify theft or fraud.

The U.S. Department of Justice offers these suggestions:

• Be suspicious of anyone calling to obtain personal information. For example, if someone calls you from the bank and says that they need your social security number, ask if you can call them back with that information. Your bank should already have that information on file and most banks will not call you. Also, reject any calls from someone asking for your social security number in order to award you with a valuable credit card or prize.
• When you travel, have the post office hold your mail. It’s a federal crime to tamper with someone else’s mail, however thieves do it all the time and can easily reach into your mailbox and remove personal mail and bills.
• If you need to convey personal information over the phone, be sure you aren’t in the middle of a public place. Retreat to a private room where no one else can hear your social security number of special passwords.

You should also consider purchasing a paper shredder. Plenty of identity thieves pride themselves on being stealth dumpster divers and can piece together enough information from the trash to “trash” your good name. Always shred documents you want to toss instead of just placing them in the garbage or only tearing them in half.

Source: http://www.justice.gov/criminal/fraud/websites/idtheft.html

Avoid letting someone else ruin your credit and good name! For more information about how AmeriFirst protects your information and keeps you safe, contact us today at 800-466-5626.

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We’ve addressed a few ways to save money for your home and how to earn a better interest rate through improving your credit score. However, do you know why having a good score helps your interest rate or which components of your financial life influence your score?

When you sit down with one of the loan professionals at AmeriFirst we’ll discuss your score which developed by the Fair Isaac Corporation. Scores range from 300 to 850--the higher the score the better. Commonly referred to as a FICO score, your financial lifestyle is weighed and measured several different ways:

• Payment history is 35% of the FICO score. Late payments and bankruptcies have a negative impact on your score.
• How much you owe is 30% of the FICO score. The more you owe compared to your credit limit, the lower your score.
• Length of your credit history is 15% of your FICO score. The longer the credit history the higher the score. However, if you have a negative payment history, your score will be lower.
• New credit applies to 10% of your FICO score. Your credit score will be weighed against a new credit accounts and the length of your credit history.
• Miscellaneous facts are 10% of your FICO score. A mix of credit accounts such as credit cards, installment loans and personal lines of credit can add to your score.

Source: http://www.pueblo.gsa.gov/cic_text/money/creditscores/your.htm

Our trained loan professionals can assist you with ways to improve your score and lower your interest rate. Meet with us today—call 800-466-5626 or click here to contact us online.

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The previous blog entry addressed a few common sense steps to help you achieve YOUR American Dream. A large part of affording that dream is earning the best rate for your mortgage loan. Your past and current actions influence your credit score which ultimately impacts your interest rate.

There are several steps you can take to improve your score. Scores range from 300 (less than stellar score) to 850 (perfect credit). Generally, scores at 620 or above are looked upon favorably. The experts at MSN Money have a few tips and ideas on how to get closer to the ideal score.

• Credit card debt. As mentioned in the previous blog, paying off your credit card debt in a timely and efficient manner will help shed positive light on your credit score. You should also check your credit card limit. If your lender is reporting a lower limit, your credit score could be artificially lower. Also, avoid wild shopping sprees that will increase your balance, even if you pay your balance off monthly. Also, use some of your older cards—well established credit cards shed positive light to credit bureaus.
• Obtain a list of past negatives. If you had an issue with the utility company over an old unpaid bill that went to collections in the past you can continue to dispute it. The smaller the balance and the older the issue, the less likely the credit bureau will want to verify or investigate the dispute.
• Fix errors on your credit report. Many times, inaccurate pay off information can negatively influence your credit report. Obtain the report and review it with a fine tooth comb. Items to pay close attention to include late payments, charge offs, accounts listed as bankruptcy, negative older items and accounts listed as “settled.”

Source: http://articles.moneycentral.msn.com/Banking/YourCreditRating/7FastFixesForYourCreditScore.aspx?page=2

For information about how to obtain a copy of your credit report, click here or call us at AmeriFirst at 800-466-5626 today!

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The ball has dropped, the revelers have gone home and you’ve officially welcomed 2010—the year you plan to purchase a home! News from the past year has heralded 2009 as being “the year to purchase real estate if you have the means.” Low prices and historically low interest rates have allowed some families to own their dream home. However, Americans continue to experience the fallout from the Great Recession which includes record high unemployment and a sputtering market.

How can you still afford to bag that dream home during turbulent times? The experts at Bank Rate Monitor offer a few common sense money saving tips for 2010 that should help you raise your credit score and provide a financial cushion.

1. Stop smoking. Aside from the obvious health benefits, a pack a day smoking habit costs from $1,825 to $3,650 per year. Plus smokers typically pay 15 to 25% more for health insurance premiums than non-smokers.
2. Exercise. More common sense advice but when you break down the savings of exercising 20 minutes a day, most Americans see prescription costs decrease by 70% and health care expenses by 30%.
3. Eat healthier. Eating healthier can actually save you money at both the grocery store and the doctor’s office. A four pound bag of potatoes costs the same as a small 10 ounce bag of potato chips. Plus fast food prices have skyrocketed, while continuing to provide the illusion of fast food being “inexpensive.”
4. Pay down your debt. Tack on a little extra to that next credit card payment and you’ll see an improvement in your credit score. A 2009 survey conducted by The Nilson Report says that the average American is $8,329 in some sort of credit card debt. Theoretically, if your interest rate is 15.99% APR and making payments of $167 per month it’ll take you 33 years to pay it off! The worst part is that you’ll pay $15,289 in interest alone! Reduce the amount of interest you pay by adding an extra $35.50 to your monthly payment and pay off your debt in five years with only $3,821 in interest.
5. Have an emergency fund. How can putting money in an emergency fund get you closer to purchasing a home? When you have an emergency fund, you are more likely to pay off life’s little surprises such as auto or home repairs with cash than turning to a high interest rate, debt building credit card.

Source: http://www.bankrate.com/finance/personal-finance/5-new-year-s-resolutions-that-save-money-1.aspx

Need more help to land your dream home in 2010? The professionals at AmeriFirst are here for you! Call us at 800-466-5626 or contact us online today.

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We’ve talked about how to prepare and what to do during negotiation. Also, we addressed who to turn to for assistance. However, we still need to discuss what to AVOID during negotiation. Doing and saying the right things can help you obtain a new home, however saying and doing the WRONG things can throw up a roadblock to ownership too.

During the real estate heyday a few years ago, buyers were walking on eggshells trying to do the right things to make their offer stand out. This includes offering more money than what the seller was asking or paying cash.

Those days are gone; however being a sloppy buyer can still prevent you from purchasing a home. For example:

• Don’t insult the seller. Many buyers are still holding out hope that they can sell their home for a higher price so when they receive an extremely low offer they can become angry and insulted. Although it is a buyer’s market, still make a reasonable offer. Your goal is still to obtain the property for the lowest possible price, but you don’t want to anger or insult the owner, which could ultimately eliminate you from even getting to the negotiation phase.
• Offer a price range instead of a hard price when making the initial offer. Don’t want to insult the seller with a lowball price? Present a price range such as $250,000 to $275,000 during the initial tipping off point. That way the seller won’t feel like you are offering your basement price (even if you are) and you won’t be shut out of negotiating.
• Don’t negotiate by fax or e-mail. There’s nothing more powerful than one-on-one negotiation. If you don’t want to be the person in the room, hire a powerful agent to negotiate on your behalf. Negotiating in person allows the seller to see the nonverbal cues along with your voice—all the components of successful persuasion.
• Don’t make it a game. It’s easy to start bargaining and negotiating, only to forget the purpose of why you are doing this. You are not here to “win,” you are here to purchase property for the best possible price. Don’t get emotional or allow your ego to make decisions for you. Sometimes something as little as $2,000 can break a deal because one side won’t “bend” for the other.

We want to see you succeed in your next purchase venture. Contact AmeriFirst today at 800-466-LOAN or click here to contact us online for more information about how to avoid shutting yourself out of a deal!

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Although after the last few blogs you know HOW to negotiate, maybe you don’t feel ready to throw yourself into the negotiation process. Enlisting the assistance of a professional is always a good idea no matter how skilled you are at the art of negotiation.

There are a few options you can use to help you negotiate your offer:

• Real estate professional: A good local real estate agent knows how to get you the best price possible. Many people have friends, family or neighbors who are in the real estate industry but you want to make sure you have a strong fighter on your team. Research who you will hire to present and negotiate your offer. Ask for references that list other buyers who have worked with that agent, especially those who were able to obtain the property for considerably less money. Additionally, ask the Realtor for a list of properties sold and purchased within the last 60 days in the intended area. Be sure that whoever you hire has a state approved real estate license.
• Real estate lawyer: Hire a real estate attorney to navigate your way through the negotiation process. The attorney can represent you in the negotiation process and offer advice and insight into how to get the best price for the property.

At AmeriFirst, we can also help! Our loan professionals have years of experience working with buyers like you to achieve their dream of home ownership. Contact us today at 800-466-LOAN or click and contact us online.

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In our last blog post we discussed what you need to do to get ready to negotiate your home price. Today we want to hone in on what you can do during negotiations and how to achieve the best possible price for your prospective property.

Once you’ve been pre-approved for a loan and have found that dream home or property you are ready to put on the gloves and negotiate! Whether you are working through a Realtor or on your own, stick to some of these key tips for negotiation success:

• Obtain information about your seller. In a down market, people are a little more desperate to “unload” their homes, especially if they are trying to avoid foreclosure or other legal proceedings. Although many sellers are still trying to sell their homes at 2006’s prices, knowing their motivation will give you the bargaining chips you need to back your offer. Useful negotiating information includes potential foreclosure, divorce, death or short sale.
• Learn about the strength of the particular market. Find out if homes are selling fast or slow in that area. Knowing the strength of that area will provide insight into whether you need to negotiate more fiercely in a strong market or if you can take your time and start with a lower price point in a weak area.
• Don’t let one point stall negotiations. If you can’t agree on one minor aspect of the offer, settle other points first. For example, if you want to include the furnishings in a prospective home, but the buyer wants you to pay more, don’t allow that disagreement to derail the entire process. Settle major aspects first such as price, closing and how you will pay (mortgage loan or cash).
• Maintain your poker face. Be ready to walk away if negotiations head in the wrong direction, such as exceeding your ceiling price. Just like the game of poker, you need to know when to hold them and when to fold them. Don’t show emotion because it could tip the buyer to your intrinsic motivation, giving him a leg up.
• Offer less than the original asking price on the first offer. A general rule of thumb is to reduce the price by 5%. Since most prices end up somewhere in the middle be sure you could live with that amount should the seller counter your initial offer. Don’t forget to include taxes, insurance and other costs to include with the sale price.

For more information on how to get the best price for your home, contact one of our AmeriFirst at 800-466-LOAN or contact us.

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We’ve discussed several aspects of home buying in the last few blog entries. We’ve addressed the variety of mortgage types, why pre-approval is important and how interest rates work. This week we plan to focus on the skillful art of negotiating your home price. This topic is typically a hot-button issue with both buyers and a sellers alike and understanding how to artfully negotiate your way to a price you both can live with takes more than simply throwing numbers into the wind.

Over the next week we’ll identify tips to negotiating the price you want. On the flipside we’ll also help you see where home buyers go wrong when trying to negotiate price and how to avoid making those mistakes. You also should know that you aren’t alone when it comes to price negotiation. We can help you indentify real estate professionals that can offer assistance and advice on how to get the optimum price for your real estate purchase.

Some tips to consider before making an offer or negotiating a price:

• Comparable homes/properties in the area. Ask your Realtor to provide you with several examples of comparable properties for sale in the area. You’ll want to review properties that contain the same land square footage, building under air square footage, building age, amenities and upgrades. If you aren’t working with a Realtor you can research comparables on sites such as www.realtor.com, www.costar.com or www.zillow.com.
• Know your market. Obtain property records of developments and structures surrounding your potential purchase. Consider property taxes, population growth, schools and municipalities.
• Agree on a ceiling price. Have a set price that you will never exceed. Talk to us about getting pre-approved before you enter into negotiation so that you have a firm grasp on what you can and cannot afford. Don’t forget to take property taxes and insurance into consideration before settling on a ceiling price.

We can help you with every aspect of the home buying process. Contact one of our trained real estate and loan professionals at AmeriFirst at 800-466-LOAN or contact us with your questions.

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It’s all about getting the lowest rate with the best terms when it comes to financing or refinancing your home or next home improvement project. This week we’ve focused on interest rates, their components and how indexing plays a part in monitoring the rate environment.

But when it comes right down to it, all we really want to know is how can I get the best rate for my loan (which of course, means the lowest payment amount)? When lenders determine the rate for a loan, they typically take several factors into consideration:

• Know your credit score. Many people wait until they are ready to purchase a home to check their score. It’s at that time they find many “surprises” which may stand in their way of obtaining the best rate. If you check your score often you can avoid some of the common pitfalls homebuyers run into and you’ll have time to remedy a sour rating.
• Choose the right kind of mortgage. Here’s where we can help. The government has specialized loans for first time homebuyers and veterans, for instance. Compare an adjustable rate mortgage to a fixed rate to determine the best rate situation for you. Don’t just assume that a 30 year fixed rate is going to be the best product for your needs.
• Determine if you should pay down your interest rate. If you have extra cash on hand and plan to stay in your home for a while, you can save a good amount of money if you pay discount points on your mortgage to lower your rate.

Keep in mind that every loan scenario is different. To determine your best interest rate talk to one of our loan professionals at AmeriFirst to review your situation. Contact us toll free at 800-466-LOAN or contact us online!

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If you keep hearing the word, “index” being thrown around in terms of interest rates and aren’t exactly sure what the term means, you’ve come to the right place! We’ve been exploring the world of interest rates over the last week and are focusing on the term “index” in today’s post.

The index is a daily published rate (you’ve probably heard of Prime, T-Bill or LIBOR before, all of which are indexes used in the pricing of loans) in which lenders use to base the final rate for a loan. In the case of a mortgage loan. The most common use of an index is with an adjustable rate mortgage (ARM), where the rate of the loan is based on an index plus a margin. While the margin may be a fixed amount, the index can change over time, causing the rate on the loan (and its payment) to change as well.

You can track your lender’s index rate to measure trends and monitor current market conditions which can ultimately assist you with financing or refinancing your loan for the best rate.

Check out our current rates! Call us toll free at 800-466-LOAN or send us a note and schedule an appointment with a loan officer.

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In the next few blog posts we will address the issue of interest rates and how they impact how much customers pay for a loan. While there may be fees and other charges associated with the origination of your loan, essentially, the interest rate is the price lenders charge for lending money to their borrowers. Rates are influenced on a national and global level, in addition to being driven by the specific type of loan product you select.

Interest rates play a game of “catch me if you can” with the consumer. Follow rates on a minute to minute basis and you’ll drive yourself nuts. However, a savvy consumer (along with a good mortgage partner) that keeps their finger on the Fed’s pulse can save thousands of dollars in interest over the life of a loan.

Generally speaking, interest rates fluctuate based on the laws of supply and demand. If the demand for credit increases, so do the rates – and of course the opposite is true. As you can see from the current economic climate, a bad economy typically means lower interest rates because consumers are not spending as they do during a fruitful market. Over the next few posts, we’ll dig deeper into the components of an interest rate and some of the terminology you’ll likely hear when applying for a loan.

Interested in our current loan rates? Contact a loan officer today at 800-466-LOAN or use our easy online form to request information.

Tags: mortgage loan | interest rates