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REFI NEWS
1
WELCOME TO
THE REFI
NEWS—ISSUE
1
Your Guide to Home
Mortgage Refinancing
and Credit-Related
Issues
In This
Issue
Introducing The REFI
News
Your Source for
Informed
Decision-Making About
Mortgage Refinancing,
Credit and Your
Financial Future
In today’s
uncertain times, owning
a home and making ends
meet can be a financial
burden. Mounting debt
can jeopardize both
your credit rating and
your ability to achieve
your financial goals.
But there is a way out,
and for most people a
light at the end of the
tunnel. You can
consolidate debt, send
your children to
college, construct that
much-needed addition,
and more by leveraging
a valuable asset - the
equity in your
home.
It is for this reason
that we
have created The REFI News, a
no-nonsense
informational
resource about
mortgages,
refinancing,
credit, and debt
consolidation.
This quarterly
newsletter will
empower your
financial
decision-making
by answering the
questions you
should be asking and
showing you ways to get
out from under the
burden of
debt.
We believe
knowledge is
power. Please
feel free to
contact us with
any questions you
may have or to
complete a
no-obligation
loan application
at (877) 858-REFI
(7334). You can
also visit us on
the web at www.homestardirect.com
to learn more
about refinancing
and debt
consolidation. We
look forward to
helping make your
dreams of
financial
security a
reality.
Sincerely,
Steven Weiss
Branch Manager, Metrocities
Credit
Reports
How They Work, What
Your Rights Are, and
How to Improve Your
Rating
Credit reporting
agencies maintain files
on millions of
borrowers. The
information contained
in a credit report is
compiled from a wide
array of creditors
including retailers,
credit card companies,
banks and other
financial institutions
that have extended
credit to an
individual. Other
information comes from
court records, and from
the individuals
themselves. The
agencies maintaining
these files usually
receive monthly
updates, ensuring
information is kept
current. A report
typically includes
types of credit used,
outstanding balances,
the length of time
accounts have been
open, and whether bills
have been paid on time.
It also tells lenders
whether the individual
is seeking new sources
of
financing.
Along
with the credit
report, lenders
can also buy a
credit score that
has been
formulated based
on the
information
contained in the
report. By
comparing this
information to
the patterns in
thousands of past
credit reports,
the score
identifies your
level of future
credit risk. Your
credit score is
constantly
changing based
upon your
financial
activities. Past
credit problems
affect your score
less and less as
time passes.
Lenders pay more
attention to
current repayment
patterns than
past bad credit
activities,
especially if
there is a valid
reason or life
circumstance that
explains past
issues.
Correcting
Credit Report
Errors
It is very important
that you review your
credit report to make
sure the information it
contains is correct,
especially prior to
making a large purchase
such as a car or a
home. While small
errors may have little
or no effect on your
score, you may be
denied financing or be
forced to pay higher
interest rates based
upon significant
mistakes. You can
request a copy of your
report by contacting
the credit reporting
agencies
directly:
*
Equifax: (800)
685-1111,
www.equifax.com
* Experian (formerly
TRW): (888) 397-3742,
www.experian.com
* TransUnion: (800)
888-4213,
www.transunion.com
Under
the Fair Credit
Reporting Act,
you have the
right to dispute
the accuracy of
the information
in your file. If
you find an
error, contact
the credit
reporting agency
right away. By
law, they must
investigate and
respond to you
within 30 days.
If you are in the
process of
applying for a
loan, immediately
notify your
lender of any
incorrect
information and
the steps you
have taken to
remedy it.
How to Improve Your
Rating
There are many steps
you can take to improve
your credit. An
experienced financial
planner can develop a
personalized action
plan to put you on the
path to better ratings,
lower interest rates
and greater
opportunities to secure
financing.
Check
Your Credit
A study conducted by
the Public Interest
Research Group found
that up to 70% of
credit reports
contained errors.
Source:
carreonandassociates.com
Less is More –
Applying for Too Many
Credit Cards Can
Actually Harm Your
Credit
We all get offers for
credit cards in the
mail. Many are even
pre-qualified, and
offer high credit
limits. Why not take
them all? Won’t
that show the banks
that you’re a
good credit risk? Not
necessarily.
• Many lenders
look at your total
credit limit on each
account to determine
whether they want to
give you additional
credit. Say you have
ten Visa cards with a
$5000 limit on each,
and five have a zero
balance and the other
five have $100 each.
Although your actual
debt is $500, some
lenders may evaluate
you on the basis of
$50,000 of debt because
you
could go out tomorrow
and charge that
much.
•
In addition,
every time you
apply for a card,
your credit
report reflects
an inquiry made
by the credit
card company. Too
many inquiries
can send the
wrong message to
potential
lenders.
•
Lastly, large
credit lines can
be a strong
temptation to
charge beyond
your means,
resulting in debt
that you cannot
pay.
The
bottom line: Only
apply for what
you need.
A NEW BREED OF MORTGAGE
COMPANY
Not every borrower has
a perfect credit
rating. Not everyone
wants a loan for the
same reason. Not every
mortgage loan is A Homestar Direct
loan from Metrocities
Our
approach is
simple and
comfortable. We
work with you to
determine your
needs and what
you hope to
accomplish, then
we tailor a loan
to your specific
financial
situation. We
don’t
expect all of our
customers to fit
into the same
mold – we
offer customized
service and
customized
delivery.
We
are a direct
lender. No broker
fees and lower
overhead costs
mean you save
money. At the
same time,
without a
middleman, the
process becomes
faster and more
efficient. Each
customer receives
a free credit
analysis and
closings generally
take place within 30
days. We view our
customers as people,
not just names on a
file.
Here’s
what some of our
customers have to
say about their
experience:
“Loan officer
Jerry Gerardi is one of
the most caring and
professional people I
have ever had the
pleasure of doing
business with. He made
everything easy and
carefree. I felt that I
was in good hands. I
was comfortable with
the entire process.
Jerry is very
knowledgeable about all
of
the products he offers
and very willing to
explain it all to
someone like me who
knows very little. I
wish more companies
could be so fortunate
to have such a
beautiful human being
working for
them.”
-Nancy Martinez, Bay
Shore, NY
“After
speaking with
your refinance
officer Mr. J.
David Borges, I
realized he was a
very special
person with whom
I could do
business…Everything
about this man
was outstanding.
He gave my wife
and I a good
lecture of what
we should do to
get back in the
driver’s
seat. We followed
his instructions
and my refinance
has worked out
just fine. I
would not
hesitate to
recommend him and
the company to
anyone in need of
help.”
-Dudley Fullen,
Brooklyn NY
Our
Associates
“Make a
Difference”
We
are committed to making
your refinance process
as comfortable as
possible. Our
“Make a
Difference”
initiative recognizes
the achievements of our
loan officers and staff
in going above and
beyond the call of
duty. In our first
issue of The REFI News,
we are pleased to
profile a stellar
member of our
“Make a
Difference” team,
Ms. Sonya
Newman.
Sonya
Newman
Team Leader
Of her 14 years in the
mortgage industry,
Sonya spent five as a
mortgage processor
before going into
sales, where she has
been working for the
last nine. Every day,
she employs her strong
determination to her
work at Metrocities, which
enables her to develop
the right mortgage for
every customer’s
unique situation. A
genuine “people
person”, Sonya
prides herself on
giving everyone
a high degree of
personal, one-on-one
attention to ensure
satisfaction with every
loan, making sure every
step of the mortgage
process runs smoothly
and swiftly for her
customers. It’s
this commitment to
taking care of people
that makes Sonya such a
valuable member of
Homestar.
How
Sonya Newman has
“Made a
Difference”
for her
customers:
“We would like
to personally thank Ms.
Sonya Newman, who made
this whole process so
simple and pain
free…She went out
of her way to make what
we assumed would be a
humiliating experience
into a pleasant
one.” -Samuel L.
Goldfarb
“…Ms.
Newman (helped)
me to attain a
fresh financial
outlook. It is
with heartfelt
appreciation that
Ms. Newman should
be recognized as
having
‘made a
difference’
in my happily
being on the road
to financial
recovery.”
-Darcel R.
Hayes
Check
Your Credit
A study conducted by
the Public Interest
Research Group found
that up to 70% of
credit reports
contained errors
Source:
carreonandassociates.com
ASK
STEVE
Deciding which
mortgage is right for
you can be a confusing
process. Homeowners
sometimes don’t
understand what type of
mortgage they have. In
addition, they may not
know or are
embarrassed to ask the
right questions to
determine if the
mortgage they are
looking at is the best
one for them. We are
dedicating this first
column to the basics
– things everyone
should know prior to
obtaining a mortgage.
Whether you are a
first-time home
purchaser or a seasoned
veteran, see how much
you know about
mortgages by reading
the responses to the
questions
below.
What is
the difference
between a
fixed-rate
mortgage and an
adjustable rate
mortgage?
Fixed rate mortgages
are those where the
interest rate is the
same year to year, so
your monthly payments
are fairly consistent
throughout the term of
your loan. Fixed rate
mortgages are available
for terms of 30, 20, 15
or 10 years, with the
most common being 30 or
15-year mortgages. An
adjustable rate
mortgage, also known as
an ARM, is one where
the rate changes on a
schedule after a
preliminary fixed
period. The rate
increase or decrease is
based on a particular
index. A common used
index is the one-year
U.S. Treasury Bill. A
wide assortment is
available, with the
most common ones being
5 and 10 year
Adjustable Rate
Mortgages.
What are
the benefits of
an adjustable
rate
mortgage?
Adjustable rate
mortgages can be the
way to go for people
with high debt or
credit difficulties, as
these mortgages tend to
offer discounted
interest rates for the
first few years. This
allows the homeowner
the opportunity to
clean up their credit.
In addition, lower
monthly payments will
free up their cash
flow. After a couple of
years, the homeowner,
with an improved credit
profile, then has the
option to refinance to
a more stable fixed
rate
mortgage.
If a
mortgage is
adjustable, when
is the first
adjustment?
First adjustment times
vary according to the
terms of the ARM. For
example, a 1-Year ARM
would adjust after its
first year, while a
10-Year ARM would
remain fixed for the
first ten years of the
loan before the first
adjustment.
How
often will an
adjustable
mortgage
adjust?
Adjustment frequency
depends upon the type
of ARM you have. For
example, a 5-Year ARM
is not the same as a
5/1 ARM. The 5-Year Arm
is a 30-year loan where
the rate changes only
every five years, while
a 5/1 ARM remains fixed
for the first five
years and then may
adjust every year
thereafter for the
remaining 25 years of
the loan. The benefit
of selecting a mortgage
loan that adjusts more
frequently is that its
initial interest rate
is usually much lower
than one that adjusts
at longer intervals.
However, it carries
more risk if market
conditions cause rates
to rise. Be certain you
have a clear
understanding of the
adjustment schedule
before committing to a
loan.
What is
the maximum the
rate can increase
when it
adjusts?
Most adjustable rate
mortgages have a cap
that limits how high
the interest rate of
the loan can increase
over its lifetime. Most
ARMs also have an
adjustment cap, which
limits the amount of
rate increase for each
adjustment.
What is
a prepayment
penalty and how
do I know if my
mortgage has
one?
Some mortgages carry a
penalty if you pay them
off early, either by
refinancing, selling
your home, or making
extra payments to
reduce the term of your
loan. It is critical to
determine if your
mortgage carries a
prepayment penalty,
which must be disclosed
at the time you apply
for your loan, so that
you can avoid paying
additional fees when
you go to
refinance.
Steven
P. Weiss, Branch
Manager of the Homestar Direct
group of Metrocities Mortgage,
has assisted
customers with
mortgage and
financial issues
for over 20
years. Steve
invites readers
to contact him
with their
mortgage-related
questions at
Homestar Direct,
115 West Century
Road, Paramus NJ
07652, or
emailing him at sweiss@homestar.com.
Select questions
will be printed
in future issues
of The Refi
News.
Call
Toll Free: (800)
684-8853
www.HomestarDirect.com
Disclaimer:
The content of
this newsletter
is for general
information
purposes only. It
is not intended
as financial or
investment advice
and should not be
construed or
relied on as
such. Before
making any
commitment of a
financial nature
you should seek
advice from a
qualified and
registered
financial or
investment
adviser.
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