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Welcome to Mortgage Education Training

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					Remember These Statements
 Most

highly successful RMLOs are not naturally talented, but they are well-trained. information presented here really isn’t difficult to understand; its just new.

 The

Mortgage Industry Split in Two  Fixed and Adjustable/Hybrid  Refi and Purchase  Prequal vs. (Pre)Approval  A (agency) vs. BCD/Nonprime  Conventional vs. “Govies”  Equity lenders vs. Agency lenders  Transaction vs. Relationship

Mortgage Industry Split in Two  Non-conforming and conforming  Buyer and seller  Buyer’s agent and seller’s agent  PMI and No PMI  Broker and Banker  Originator and processor  Understaffed or overstaffed

Mortgage Industry Split in Two
 Ethical

vs. Unethical  Liars vs. Truth-tellers  Trained vs. Untrained/Incompetents  Order-taker vs. Planner  Local vs. National  Fully-documented vs. No-doc  Phone vs. Face-to-Face

Recommended…
Guttentag’s Mortgage Encyclopedia  www.MtgProfessor.com  “Mortgages 101” e-book  www.Mortgages101.com  Cruise Websites list  Cruise Amazon lists
 J.

Recommended…
 www.BankRate.com:

Free online

mortgage basics class  www.homeloanlearningcenter.com Free online homebuyer education class  www.radian.biz Free homebuying manuals

Recommended…
 www.owningyourfuture.gov/oyf/buyi

ngahome.cfm - “Owning your future” homebuying website from the US Department of Housing and Urban Development. (The information on this website is in the public domain.)  http://freddiemac.com/corporate/buyo wn/english/preparing/right_for_you/

Why We Do What We Do

Because of home equity, the
average American homeowner aged 35-64 has ___ times the average net worth of a renter in the same age category.

05  10  25  30  40  50  60


ICED and RAW

ICED:  Income  Credit  Equity/DP

RAW:  Ready  Able  Willing

(2 of 3)

(3 of 3)

What Mortgage Loan To Get?
30-year fixed-rate loan:  Payments are locked for the life of loan, but borrowers pay for this predictability in the form of a higher rate.  These loans are good for buyers who are going to keep their loan for 7 years or more.

What Mortgage Loan To Get?
30-year fixed-rate loan:  Almost always the wrong choice, but chosen by many homebuyers anyway, probably out of tradition, or pressure from their elders.

What Mortgage Loan To Get?
Adjustable (ARM):  Interest rate fixed for a set period, then fluctuates every month, six months, or year according to schedule.  The borrower accepts a shared interest rate risk in exchange for a lower initial rate and lower monthly payments.

What Mortgage Loan To Get?
Adjustable (ARM):  The shorter the ARM term, the lower the rate.  Good for buyers who will move or refi in a few years.  Hybrids are popular, too.

What Mortgage Loan To Get?
Interest-only:  Borrower makes interest-only payments for a set period, then may have to make principal payments.  Payments are lower, and no scheduled amortization occurs.

What Mortgage Loan To Get?
Interest-only:  Payments can be around 20% lower than fully-amortizing loans.  Good for buyers who think their income will rise in the future, and for buyers who think the home will increase in value.

What Mortgage Loan To Get?
Piggybacks/Combos:  Two loans  Allows buyers to avoid paying PMI or avoid paying “jumbo” rates.

What Mortgage Loan To Get?
Piggybacks/Combos:  Good for buyers whose PMI would cost more than the interest on the 2d.  Plus, that interest is, unlike PMI, tax-deductible.

About Giving Advice
 Don’t

give tax advice. You

likely aren’t qualified to do so, and it is not your role in the mortgage transaction to do so anyway.  Send borrowers to: www.irs.gov

About Giving Advice
 Don’t

give an opinion on the direction of interest rates.

Don’t confuse knowledge for wisdom. Send borrowers to
www.bankrate.com  Never give legal advice!!! (UPL)

Mandatory Reading

Three booklets:
 HUD

Settlement booklet  CHARM booklet  When Your Home Is On The Line (HELOC booklet)

Mandatory Reading

Other:
 www.HUD.gov  www.FTC.gov  www.MyFico.com

booklet

What is the Most Important Question to Answer When Deciding Which Mortgage Loan to Select?
 How

long…

What is the Most Important Question to Answer When Deciding Which Mortgage Loan to Select?
 will

the borrower keep the mortgage? (Not how long will the borrower stay in the home.)

Borrowers Need You


More than half (52%) of all US homeowners in a recent survey said they were not at all or only somewhat knowledgeable about their mortgage options when they bought their home.

Borrowers Need You


Of the 48% who said they were knowledgeable about mortgage loan options, 55% were homeowners over the age of 55, 54% were divorced, widowed, or separated, and 51% had at least a college education.

Borrowers Need You


Homeowners said prospective homebuyers should understand how much of a home they can afford to buy (55% mentioned this as their first or second piece of advice), should research the best mortgage loan options for their needs (45%), and should get pre-approved for a mortgage loan before searching for a home (36%).


				
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posted:11/6/2009
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