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REFI NEWS
3.2
THE REFI
NEWS—ISSUE
3.2
Your
Guide to Home
Mortgage
Refinancing and
Credit-Related
Issues
In This
Issue
BE CREDIT CARD
SAVVY!
Things you may not know
about credit card
company practices that
can cost you money.
Credit card companies
are finding creative
new ways to generate
revenues at the expense
of their customers.
According to the 2005
Credit Card Survey,
released by Consumer
Action, a San
Francisco-based
advocacy group, some of
the new tricks are
among the most
aggressive yet. Make
sure you do not
unwittingly fall victim
to them:
Negative
Credit Activity:
Making a late
payment to your
mortgage or other
negative credit
activity can
cause a credit
card company to
increase your
interest rate,
even if your
payments to them
are always made
on time. This
practice, known
as 'universal
default' has
become
increasingly
prevalent, with
45% of credit
card providers
now engaging in
it.
Too Much Credit:
Surprisingly, you can
be penalized for having
too much credit. Things
like getting a new
credit card or even
inquiring about a car
loan can send a flag to
your credit card
company that you may be
considered high
risk—even if you
are not.
Two-cycle Billing:
This practice affects
people who normally pay
off their credit card
bills every month, but
every so often must
carry a portion of the
balance into the next
month's bill. The bank
calculates the interest
you owe based on a
30-day billing period
that is different
from
your credit card
cycle, so you could
actually still be
paying interest the
month after you pay
your bill in full.
Unfortunately you only
become aware of this
practice when you are
not able to pay your
credit card bill in
full for a particular
month.
Overseas Exchange
Fees: Most of the big
banks now charge a 2%
fee on overseas
purchases and currency
conversions, up from 1%
only a few years
ago.
Not
surprisingly,
consumers are not
taking these
practices
lightly. The
Better Business
Bureau received
17,060 complaints
against
credit-card
issuers in 2004,
compared with
15,700 in 2002
and 4,900 in
1999. Complaints
about credit-card
companies now
rank third in
terms of the
volume of
complaints the
BBB receives.
Five years ago,
the industry came
in at No.
12.
The best
way to protect
yourself? Read
the fine print on
your credit card
agreements and
check your
monthly
statements
carefully.
Source:
SmartMoney.com
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ALL HOMEOWNER TITLES
ARE NOT
ALIKE
Make sure to select
the title that is right
for you!
Most homeowners are
unaware that there are
different types of
titles they can take to
their home. But the
title you take can
affect the disposition
of your home in the
event of divorce, death
or other circumstances
that would lead to a
change in ownership.
Below are some of the
most common ways to
take title to a home.
Some of the title
holdings vary by state,
and each has different
advantages and
disadvantages. It is
always recommended that
you consult with your
attorney to determine
the best one for
you.
Sole
ownership: Also
called ownership
in severalty,
this is a common
way single owners
can hold title in
their name alone.
A married person
can also take
sole ownership,
but the spouse is
usually asked to
sign a document
giving up any
ownership
interest in the
property. When
the sole owner
dies, any
property held
this way is
subject to
probate court
costs and
delays.
Tenants in common:
This type of title
enables two or more
co-owners to take title
to real estate, and is
used in instances where
the co-owners are
living together but not
married, or if they are
just investors in the
property. Each owns a
specified interest in
the property, which
does not need to be
equal. The percentage
each owns is recorded
on the deed. Tenants in
common can sell or will
their share to whomever
they choose, which in
some instances could
mean that the remaining
tenant(s) in common
could wind up co-owning
the property with a
stranger.
Joint
tenancy with
right of
survivorship:
With this type of
title all
co-owners must
take title at the
same time, own
equal shares and
the surviving
co-owner winds up
owning the entire
property. In some
states, when
husband and wife
use this method,
it is called
tenancy by the
entireties. A
major advantage
is that probate
costs and delays
are avoided when
a joint tenant
dies. A major
disadvantage is
that a joint
tenant can sell
or give his
property interest
to a new owner
without
permission of the
other joint
tenant(s), so as
with Tenants in
common, the
remaining owners
could co-own the
property with a
stranger.
Living trust: If you
are looking to protect
your interests and
those of your family,
one way to hold title
to your home is to
establish a revocable
living trust. Living
trusts offer many
advantages, such as
avoidance of probate
costs and delays, as
well as privacy and the
virtual impossibility
of a court challenge by
disappointed relatives.
The cost to create a
living will is usually
less than $1,000. Until
the death or disability
of the owner of the
trust, the home and
other real estate in
the living trust are
treated
normally.
Your
home is a major
investment. The
decision as to
how to hold title
is something that
should not be
taken lightly. Be
sure to review
all your options
as well as the
ramifications of
each so that you
can make an
informed
decision.
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Top-
GETTING A FRESH
START—
THE BENEFITS OF DEBT
CONSOLIDATION
REFINANCING
If you are looking to
optimize your monthly
payments on everything
from college loans to
credit cards, or to
stretch your income a
little further each
month, then it may be
time to consider
refinancing. Switching
from an adjustable rate
to a fixed-rate
mortgage is one way to
accomplish this. An
alternative is called
debt consolidation
refinancing, where your
pay off old loans and
take out a new one. Why
does this make sense?
Over time, the interest
you pay on your various
loans and credit cards
gets compounded and may
be at higher non-tax
deductible rates.
Refinancing your
mortgage can give you a
fresh start, since you
are paying off your
high interest debt and
replacing it with a
lower interest mortgage
loan.
Though
the decision to
refinance is a
major one, it is
an excellent
opportunity for
homeowners to get
everything they
can out of their
biggest
investments—their
homes.
Our
Service
Guarantee...
If after closing a
loan with us you are
not completely
satisfied with our
service, simply write
us a letter within 14
days of closing,
explaining why and we
will pay you $500
– no strings
attached. Yes, our
service is that
good.
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Our Associates
“Make a
Difference”
We
are committed to making
your refinance process
as simple 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.
Sandra
Smith
Loan
Officer
When
asked what she
likes most about
being a Loan
Officer with us,
Sandra Smith
replies without
missing a beat,
“I like to
help make
people's dreams
come true.”
Even though she
has been here for only
a year, judging
from the glowing
accolades she has
received, Sandra
has definitely
made an impact on
her customers.
Sandra credits
her success to
her strong sales
background and
her genuine
passion for
working with
people. She feels
that tenacity is
a critical aspect
to solving
people's
problems, and is
not afraid to go
the extra
distance to find
a way to do a
refinance for
someone who has
been turned down
by other
lenders.
“It's
important to have
empathy for
people with
difficult credit
situations,”
Sandra explains.
“I always
try to be
respectful and
considerate of
their
circumstances.
They come to us
for help, and
it's our
responsibility to
find a way to
make things work
for them. It's
the part of my
job I love the
most - figuring
out a way to help
people who did
not think it was
possible, to
realize their
dreams.”
Working here
has been a great
experience for
me. I love my
job, my company
and my
co-workers. They
make every day a
real
pleasure.”
How
Sandra Has Made a
Difference for
Her Customers
“I cannot say
enough about Sandra. Of
all the lenders I've
spoken with over the
years, she was the most
caring and
knowledgeable. She made
me feel like I was
dealing with an old
friend.”–Donna
Moore-Brown, Albany
NY
“Sandra
went the extra
distance to
understand our
situation and
what our needs
were. She was
definitely on top
of things at all
times. We
refinanced in the
past with other
lenders who would
call us time and
again, always
asking us to send
them more
information.
Sandra got what
she needed from
us the first time
out, and made it
the easiest
refinance
we’ve ever
had.”—Anita
Perez, Rialto,
CA
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MORTGAGE
CHECKLIST
Regardless of whether
you are applying for a
purchase or
refinancing, lenders
require borrowers to
provide certain types
of information on their
applications and during
the interview process.
Having this information
at your fingertips
prior to applying can
help speed the process.
To help make the
mortgage process as
smooth as possible,
Homestar Direct has
developed the following
Mortgage Application
Checklist:
For Home
Purchase
Loans:
-
Sales
contract with
original
signatures,
along with a
copy of the
earnest money
check
-
Copy
of the
survey
For
Refinance
Loans:
-
Copy
of the
warranty deed
and any
current
mortgage
and/or bill
payoff
information
(copies of
last
statements)
-
Copy
of current
tax and home
insurance
statements/bills
-
Copy
of the
owner's title
insurance
policy
-
Check for
Payment of
Appraisal
Employment:
-
Name(s),
address(es),
and phone
numbers of
all employers
for the past
two
years
-
Relocation:
Copy of
employer's
relocation
agreement
Income:
-
Past
two years'
W-2 or 1099
forms
-
Last
30 days' pay
stubs
(including
bonuses
and/or
commissions)
-
Self
employed:
Past two
years'
complete tax
returns;
year-to-date
profit and
loss
statement
Current
Assets:
-
Two
months
original bank
statements
(all pages)
on all
checking,
savings,
credit union,
and
investment
accounts
(including
retirement)
Current
Liabilities:
-
Current
balance and
minimum
monthly
payments for
all
debts
Divorced
or Separated
Persons:
-
Complete
divorce
petition,
signed,
recorded
final decree,
and/or
separation
agreement
Rental
Properties:
-
Copies of
current
leases and
tax
returns
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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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