KMG Blog

Mortgage Principles from My 2 1/2 year old and Dora the Explorer

There is a lot to be said for children's shows.  And, if you're a mortgage broker in Idaho and/or Washington (or anywhere else in the nation that requires licensing and education, for that matter), and see the deadline for continuing education credits creeping up on you, might I suggest my 2 1/2 year old or Dora the Explorer?

Besides teaching children about numbers, letters, colors and shapes (in English and in Spanish), did you know Dora also teaches about finance?  At least my 2 1/2 year old thinks so.

We were watching a particular episode, one I have seen a ga-gillion times.  Dora and her best friend, Boots, are on a quest to "Play Park" and along the way they want to buy some ice cream.  Having seen this episode a ga-gillion times, I know that it takes "8 coins" to buy an ice cream cone.  I cease the opportunity, run to our coin jar and grab, what I think, is 8 coins.

When Dora and Boots finally meet up with the ice cream truck, I whip out my "8 coins" and we start counting.  To my surprise, I only grabbed 7 coins.  Gabby, straight faced and as serious as she can be, says:

"Well, Mama, I don't have 8 coins. 
I guess I can't buy any ice cream today."

And, though I am priding myself for having the foresight to grab the coins in the first place, I neglected to think of the consequences of not having any ice cream in the house.  I say, "I guess you're right, honey.  Maybe next time."

So, if you're in the market for a house, KMG Mortgage Group is here to help you.  We will gladly sit down with you and discuss your options and your goals of home ownership: including how your mortgage will fit into your overall budget, which includes ice cream cones.

God bless and happy holidays!

Rates Take a Nose Dive Yesterday!!!

Mortgage rates plunged by the most in at least seven years yesterday as the Fed pledged to buy $600 billion of debt.

If you have been considering buying a new home or refinancing your existing loan, now is the time to do it.  Submit your loan application with KMG Mortgage Group (a licensed Mortgage Broker in Idaho and Washington).

Without getting too personal, I think you ought to know.  My parents are in the process of buying a home.  We had their loan submitted, approved, and docs were drawn with one lender.  When rates plummeted, we resubmitted to another lender and LOCKED their loan 1/2% LOWER than the other loan.

Why use a Licensed Mortgage Broker and not a bank or direct lender?

Having worked for banks, direct lenders, and Mortgage Brokers, I am the perfect person to ask.  And the above scenario with my parents is the PERFECT example.

I will try to explain, without getting too technical, why you should use a Licensed Mortgage Broker:

• Banks do not, contrary to popular opinion, lend their own money.  All loans are underwritten to a lender's guidelines.  These loans are then "packaged" and sold on the "Secondary Market" where they are bought and sold as commodities.

*Note: with all the recent news about the so-called "Mortgage Crisis," I'm sure there isn't a person alive who hasn't at least heard the words "Secondary Market" or "Mortgage Commodities."

• Banks have, what we call in the biz, "corresponding" relationships with lenders.  "Corresponding" relationships mean, that while a bank underwrites their loans to a lender's guidelines, they are COMMITTING to delivering that loan - just as it sits - including your LOCKED interest rate.

So, what does this mean to you?  If interest rates drop significantly, like yesterday, a Bank Loan Officer can't simply pull your loan and take it to another lender.

Banks undergo audits quite frequently by their "Corresponding" lenders.  Part of this audit includes looking at "pulled" files.  If your loan has been "pulled" and taken to another lender (regardless of the reason), the bank is fined.

Some would argue this point.  Remember, I used to work in a few banks.  I've seen it happen.

• Because Banks must maintain these "Corresponding" relationships, they must adhere to a certain quota or, in other words, a certain number of loans delivered to the lender.  For that reason, banks (typically) have only 3 or 4 lenders they use.

*Note: KMG Mortgage Group, while the number of lender we use has gone down recently due the mortgage shake-up, still has over 60 lenders we use and we are NOT committed to delivering a certain number of loans to them.

We are NOT even committed to delivering a loan once it is locked.  If your rate drops, we pull the loan and go somewhere else.

• Both Bank Loan Officers and Mortgage Brokers make money from the lender based on your interest rate.  Banks are not required to disclose this figure.  Mortgage Brokers are.  Sound fair?  Some in my industry say not.  I say "Sure!"  I don't have anything to hide.  I don't rake my customers over the coals.  If your Loan Officer is AFRAID to tell you how much they are making (and put it in writing), perhaps they are making TOO MUCH!

So, get moving and submit your loan application with KMG Mortgage Group today.  We will happily use our "shot gun" approach - submit your loan to as many lenders as you qualify for.  Whoever comes back with the LOWEST rate is who we will use.

Happy Thanksgiving to you and your family!

Be Christmas for a Child in Need:
Operation Christmas Child

Kevin and I have participated in the shoebox drive for Operations Christmas Child (OCC) for the past 15 years, and have led this worthy event with our church, Lake City Community Church here in Coeur d'Alene, for the past 5 years.

If you're not familiar with OCC, I'll be happy to introduce you:

Operation Christmas Child brings joy and hope to children in desperate situations around the world through gift-filled shoe boxes and the Good News of God’s love. Since 1993, more than 61 million shoe boxes have been packed, shipped, and delivered across the globe. People of all ages can be involved in this simple, hands-on missions project while focusing on the true meaning of Christmas—Jesus Christ.

In previous years, shoe boxes have gone all around the world to children who, otherwise, wouldn't get a Christmas. This year boxes will be sent to the following countries:

AFRICA:
Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Congo, The Republic of Congo, The Dem. Republic of Cote D’Ivoire, Equitorial, Guinea Lesotho, Gabon, Ghana, Guinea, Kenya, Liberia, Libya, Madagascar, Mali, Malawi, Mauritius, Mozambique, Morocco, Namibia, Niger, Rwanda, Senegal, Sierra Leone, South Africa, Sudan, Swaziland, Tanzania, Togo, Uganda, Zambia & Zimbabwe

ASIA & PACIFIC:
Cambodia, China, Fiji, India, Indonesia, Kazakhstan, Kyrgyzstan, Mongolia, Nepal, Papua New Guinea, Pakistan, Philippines, Tajikistan, Thailand, Turkmenistan, Uzbekistan & Vietnam

CARIBBEAN:
Dominican Republic, Jamaica, St. Vincent and Grenadines, Trinidad and Tobago

EUROPE:
Albania, Armenia, Azerbaijan, Belarus, Bosnia & Herzegovina, Bulgaria, Croatia, Estonia, Georgia, Kosova, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Serbia, Slovakia & Ukraine

MIDDLE EAST:
Iraq, Jordan & Lebanon

NORTH & CENTRAL AMERICA:
Belize, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama & U.S. Native Americans

SOUTH AMERICA:
Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru & Uruguay

Please watch the following video to see if this is something you and your family would enjoy. It has become a family tradition in our home and we look forward to it every year.

If you are would like to pack a shoebox or two this year, Lake City Community Church will be happy to accept your generous gift beginning Friday, 11/14 and ending Sunday, 11/23.

Or, if you're not in our area, please feel free to visit the OCC website to find a drop-off location nearest you.

Merry Christmas and God Bless!