February 2, 2011


What is a rate lock? Why would I need one?

Interest rates change hour to hour, day to day, week to week...you get the picture. If you're somewhere between the application and the closing process, that can be nerve-wracking!

Locking in your rate means your lender will guarantee that rate for a specific period of time, between 15 and 90 days, which means you don't pay more if the rates go up. There is usually a fee involved with this, and it gets more expensive the longer you want the lock for.

What is PMI, and do I need it?

PMI, or private mortgage insurance, is an insurance policy to protect your lender in case you default on your mortgage. Your bank may require that you purchase it, especially if you plan to make a down payment of less than 20% of your home's purchase price, which means you have a loan-to-value ratio (LTV) greater than 80%. You purchase PMI through a third-party insurance company, and pay it through your monthly mortgage payments. How much it costs depends on several factors, such as:
  • Your credit score
  • How much you're borrowing
  • How much your down payment is
  • The term, or length, of your loan
  • Whether your mortgage is fixed rate or variable
Once your LTV is below 80%, you can refinance your mortgage to get rid of the PMI.

What is the loan-to-value ratio? Why do I need to know that?

Loan-to-value (LTV) tells you how much equity you have in your home relative to how much you owe on it and what the house is worth. You can figure it out using simple math.

First, determine your equity: If your home value is $300,000 and you owe $200,000 on your mortgage, you have $100,000 in equity. Next, divide your equity by the value of your home. If you have $100,000 in equity, and your home is worth $300,000, your LTV is 66%.

LTV is important to know when you plan to refinance your existing mortgage. If you have high LTV-over 80%-you have lower equity, and may only qualify for mortgages with higher interest rates. You probably will need to purchase PMI as well. If you have lower LTV, you have higher equity, and may qualify for better mortgage rates.

Is the interest rate and the annual percent rate (APR) the same thing?

No, but they are very close. The interest rate is how much it costs to borrow the money from your lender. The APR is the total cost of your mortgage for the life of it, and accounts for additional fees like closing costs, origination charges, lender points, and private mortgage insurance (PMI).

What are points?

Points are percents. One point equals one percent. In the mortgage world, paying your lender points upfront is a way to get a lower interest rate on your mortgage or refinance so you can pay less over the life of your loan.

Is Embrace Home Loans a brokerage or a direct lender?

We're a direct lender for Fannie Mae, Freddie Mac, and an approved Ginnie Mae issuer for FHA insured mortgages. At Embrace Home Loans, you can get the loan you need. As a direct lender, you deal with us, and only us. We'll lend you the money you need, whether it's for a new home, a home renovation, a college education, or to get ahead on your high-interest debt. And we can do it in as little as 21 days. Don't put off your brighter tomorrow. Click the apply now link and fill out our quick, no-obligation, and confidential form. You may call me direct at (301) 354-8251 or email me and I will get back to you as soon as possible.

January 27, 2011

And then there was snow!

Photos taken January 26, 2011 in Frederick, MD

Rush hour on January 26th 2011 was a evening many of us will remember for a long time to come. The National Weather Service called for 4-8” of snow to fall during rush hour and this time they were spot on.

The snow wreaked havoc on so many people trying to make it home ahead of the storm. People were stranded for over ten hours and others gave up and slept in their cars.

I played chicken with the storm and this time I won! Had I left a few minutes later from the office I would have been sleeping on the side of the road too, sphew!  Next time I won’t cut it so close because eventually my luck will run out!

I hope everyone who was stuck for hours has now made it home safe and sound. Now it’s time to go outside and make a snowman with my kids and enjoy the weather!

January 24, 2011

Domino Effect & the Mortgage Fiasco

It hardly requires a crystal ball to foretell that this sparkling New Year will soon be sullied by the ongoing mortgage mess. Joining last year's headline-grabbing robosogners and rocket dockets will be this year's new players: the title insurance companies.

As New York Times columnist Ron Lieber recently wrote, title insurance companies will likely be the next institution to have their mettle tested by the mortgage fiasco, which is feeling more like a chronic condition than a crisis by now.

When we think of title insurance, if we bother to think of it at all, it's as the largest fee on our home settlement statement at closing. Unless we're buying the home outright, our mortgage lender requires us to purchase title insurance in case someone should turn up claiming to be the rightful owner of the property. Warning: spoiler alert.

January 18, 2011

What a trip!

I have had a wonderful break from the hustle and bustle of the mortgage industry. We have been planning a trip to Park City, Utah for months now; today is our last day here, time flies when you are having fun! Although I have visited Park City before, this is the kid’s first time. We had been skiing as much as possible prior to our trip here and as luck would have it my oldest son broke his collar bone two days before we were to leave Maryland. Since we had booked the trip so far in advance and we were meeting many of our friends out here we couldn’t reschedule. Unfortunately, my wife and my son Brian had to stay back home, but with any luck next time we will all be healthy at the same time and be able to return together; I can’t wait!

January 12, 2011

Dump the Junk and Stop Unwanted Solicitations

"Stop Unwanted Communications from Marketers and Spammers"

Most of us already know about the Federal Trade Commission’s national 'Do Not Call List' which will help stop telemarketing calls, but there are other resources you can utilize to help dump the junk.

Federal Trade Commission’s Do Not Call List: Don’t forget to add your cell phone and fax numbers too.

DMAchoice™ is an online tool developed by the Direct Marketing Association to help you manage your mail. Direct mail is divided into four categories: Credit Offers, Catalogs, Magazine Offers and Other Mail Offers. By visiting the DMAchoice™ website you can request to start or stop receiving mail from individual companies within each category—or from an entire category at once.

DMAchoice's™ email Preference Service (eMPS) can help you control the number of commercial emails you receive.  You can register with the eMPS removal file online and the registration is good for five years.

OptOutPrescreen.com is the official consumer credit reporting industry website which to accept and process requests from consumers to opt-in or opt-out of firm offers of credit or insurance.

Under the Fair Credit Reporting Act (FCRA), Consumer Credit Reporting Companies are permitted to include your name on lists used by creditors or insurers to make firm offers of credit or insurance which were not initiated by the consumer. The FCRA also provided you the right to “Opt-Out”, which prevents Consumer Credit Reporting Companies from providing your credit file information for Firm Offers. Through this website, you may request to Opt-Out from receiving Firm Offers for either 5 years or permanently.

January 10, 2011

D.C. Region Poised for Nation's Biggest Housing Gains

Homeowners in the Washington area can uncross their fingers -- 2011 is expected to be the best year for home prices the region has witnessed since the recession, with experts saying the area's market recovery will be tops in the nation.
The region's relatively strong uptick in prices over the last year -- second in the nation -- gives analysts reason to believe the Washington market could see a 6.5 percent increase in home prices over the next 12 months, according to a new report by Clear Capital, which tracks real estate trends. It's the biggest increase the firm is predicting across the country.

"D.C. prices are already going up for all homeowners who have purchased a home in last two years," said Alex Villacorta, senior statistician at Clear Capital. "So they are likely to see positive equity in that purchase."

January 4, 2011

Preparing Your House for the Market

If you're selling your home, make sure your home has "curb appeal." Remember, you can't change a first impression. If your home looks like a diamond in the rough, think about putting a small investment into cleaning up the outward appearance.

Imagine that you are seeing the property as a potential buyer. You'll want to do a little yard work - clear away dead shrubbery, and trim your trees and lawn. Weed the flower beds or plant some flowers that will bloom in season. Make sure the driveway is not stained, and if you can't afford to paint the home entirely, at least make sure the front door and immediate entryway is immaculate.

Fresh and clean are still the keywords to making a good first impression once the potential buyer walks through the door. Unless a particular window is facing an eyesore or a neighboring building, open the drapes and let the sunshine in! Put your dog in the back yard or garage so he's not jumping on the new people who just walked in.... they might have allergies! There is much you can do to improve the look of your home, without investing a great deal of money.

Call me to get a copy of my pamphlet, "33 Ways to Sell Your Home Fast." I'd be happy to share more tips with you and assist you in obtaining financing for your next home as well.

January 3, 2011

Why Pay Private Mortgage Insurance?

Private Mortgage Insurance (PMI) is required by most lenders when a borrower puts less than 20% down on a purchase loan. Paid for by the borrower, PMI not only protects the lender from foreclosure, it also enables many buyers to qualify for loans and purchase real estate when they couldn't have otherwise. On January 1st, 2007, legislation went into effect making PMI tax deductible for new borrowers whose personal adjusted gross income is $100,000 or less. This has created additional opportunities for many buyers to finance a more expensive home or, in some cases, to obtain a lower monthly payment, while reducing annual income taxes.

An alternative financing option that borrowers may also consider involves taking out two home loans concurrently. The second loan, commonly referred to as a "piggyback loan", can take the form of a traditional home loan or a Home Equity Line of Credit (HELOC). It supplements the borrower's funds to help them achieve a 20% down payment, eliminating the need for PMI. However, in most cases PMI can be cancelled once the accumulated equity has reached 20% of the home's value, while a second home loan will have to be paid back in full regardless. Factor in the new PMI tax benefit, and a borrower's monthly payment may actually be lower with PMI versus a piggyback loan scenario.