The mortgage planning process is different than the typical “shopping for a mortgage” experience.

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The typical shopping for a mortgage experience includes:

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Wasting your valuable time trying to save $25/month by comparing rates, fees and closing costs among different lenders.

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Wasting your valuable time trying to baby-sit the mortgage company you’ve reluctantly chosen to work with.

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Being promised one thing and then getting something different.

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Being “sold” on one mortgage product over another.

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The mortgage planning relationship is about you:

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Receiving valuable financial advice and guidance that can literally save you hundreds of thousands of dollars.

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Trusting a professional who is committed, qualified and equipped to deliver what they promise.

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Experiencing a “concierge” level of service when you are in the market to buy a home, refinance your mortgage or make cash flow changes to enhance your lifestyle.

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Implementing a defined financial plan of action in helping you achieve your life goals and dreams.

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Maintaining an ongoing high trust relationship with a team of financial advisors who can help you make necessary changes in your debt, cash flow and home equity planning strategies.

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This is a relationship, not just a transaction. As such, it requires a defined system of accountability in order to work effectively. The Mortgage Planning Process consists of the following five steps:

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1. Establish and define the client-planner relationship.

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Mortgage Planner Should:

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Ask you for information about your financial situation and your time frame for results and success.

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Gather all the necessary documents before giving you the advice you need.
Clearly explain or document the services they will provide to you.

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Explain how they will be paid and by whom. Unless you are willing to pay a flat fee for mortgage and real estate equity advice, mortgage planners are typically compensated through a commission structure set up with the lenders.

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You Should:

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Clearly explain how financial decisions are made in your household and include all the key decision makers in consultations with your mortgage planner. Be prepared to share personal and financial information with your mortgage planner in order for them to be able to advise you on how best to achieve your goals.

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2. Analyze and evaluate your financial status.

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The mortgage planner should analyze your information to assess your current situation and determine what you must do to meet your goals. Depending on what services you have asked for, this could include analyzing your credit situation, real estate equity, debt situation and cash flow.

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3. Develop and present mortgage planning recommendations and/or alternatives.

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The mortgage planner should offer mortgage planning recommendations that address your goals based on the information you provide. The mortgage planner should go over the recommendations with you to help you understand them so that you can make informed decisions. The mortgage planner should also listen to your concerns and revise the recommendations as appropriate.

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4. Implementing the mortgage planning recommendations.

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You and the planner should agree on how the recommendations will be carried out. The mortgage planner may serve as your “coach,” coordinating the whole process with you and other professionals such as CPAs, CFP® professionals, attorneys, Realtors, builders, insurance professionals and other qualified advisors.

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5. Monitoring the mortgage planning recommendations through a quarterly or annual mortgage and equity management review.

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You and the mortgage planner should agree on how you will both monitor your progress toward achieving your goals. During this review, your mortgage planner can adjust their recommendations, if needed, as your life changes. Most often, this process involves periodic assessment of:

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Your fluctuating cash flow needs.

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Changing market interest rates and mortgage strategies.

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Income and career alterations.

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Family changes including:

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Children’s financial needs.

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Caring for elderly parents.

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How your real estate equity and investments are performing from both a cash-flow and “internal rate of return” perspective.

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CMPSinstitute.org

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via Richmond-area home sales jump 23% in 2nd quarter | Richmond Times-Dispatch.

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APR calculations have lost their uniformity.  With the introduction of the new Good Faith Estimate this year the industry has developed and adopted different ways of calculating APR.  The new GFE was supposed to make shopping and comparing loan programs easier.  In many ways it has simplified thing, most notably by requiring all lender fees to be summed up in the adjusted origination charge.  For mortgage originators who do no intend to service the loan the yield spread premium (YSP), costs paid by the lender for the borrower, is sometimes not included in the APR calculation.  When this is the case, the APR is higher for the non-serving lender (broker) versus that of a servicing lender, even though the actual cost to the borrower are the same, Since over disclosure has been accepted by the industry, our processing and closing staff routinely re-disclose TIL statements, as the method for calculating the APR seems to vary by date / document preparer.  We want to make sure there are no hick-ups on your loan that will hold-up closing and sent you a TIL with an APR calculated not including the negative fee being paid for you (YSP).

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The new GFE regulations were created with intentions to help the consumer, but in practice have actually made things more confusing.

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www.paulcantor.info

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Low mortgage rates and the financial reform act mean that now is the time to buy a home.

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Mortgage Rate Recap

Jul 19, 2010

Last week; a good one for mortgage rates.. Mortgage rates fell about 8 basis points. TheDJIA -101, gold -$17.00, crude oil -$0.32. Not so good for the economic outlook. The NY Empire State and the Philadelphia Fed business index, both weaker than forecasts; and the U. of Michigan consumer sentiment index plunged to 66.5 frm 76.0 well below estimates. Consumers still are not confident about the economic outlook

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This week may be interesting for the bond market and mortgage rates. Only three major economic reports are scheduled.  Two days of semi-annual congressional testimony by Fed Chairman Bernanke. The first day of testimony has the potential to influence changes to mortgage rates more than many of the monthly or quarterly pieces of economic data that we see regularly.

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The first economic report of the week comes Tuesday morning with the release of June’s Housing Starts. This data gives us an indication of housing sector strength, but is not considered to be of high importance. Analysts are currently expecting to see a decline in new home construction starts. However, this data most likely will not have much of an impact on mortgage rates Tuesday unless it varies greatly from forecasts.

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Fed Chairman Bernanke will speak before the Senate Banking Committee Wednesday and the House Financial Services Committee Thursday mornings at 10:00am ET. His testimony will be broadcast and watched very closely. Analysts and traders will be looking for the status of the economy and his expectations of future growth, particularly inflation concerns that will lead to changes in key short-term interest rates. This should create a great deal of volatility in the markets during the prepared testimony and the question and answer session that follows. If he indicates that inflation may become a point of concern, we will likely see the bond market fall and mortgage rates rise.

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Mortgage rates drop to new low of 4.57 percent | Richmond Times-Dispatch.

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Why a Mortgage

Jul 18, 2010

A mortgage is a debt that is secured by real estate. Mortgages play a large role in the financial markets. When used properly mortgages go beyond the role of providing a way to achieve the American Dream of home ownership: They provide a means of wealth creation, a low cost method of reducing cash outflows, among a host of other benefits.

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Mortgages help people manage their lives more effectively. It is important to make sure on has the best mortgage to fit his/her situation. A mortgage is one of the largest debts taken out by households, and choosing the the wrong mortgage program may cost hundreds of thousands of dollars. It is more important to choose the best mortgage for ones needs than to get the absolute lowest rate on the wrong loan product.

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Is your mortgage right for you?  Will it be right for where you want to be?  Happy to discuss if anyone’s listening.

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