Many consumers take out loans in order to afford major purchases and investments, such as . Loan Officers assist clients in applying for loans and structuring the loan package.
Responsibilities
A loan officer acts as intermediary between the for whom they work and who wish to obtain a loan from that institution. Mortgage loan officers represent banks or lenders who provide homeowners and buyers with residential , or companies with commercial mortgages. Mortgage loan officers often build relationships with real estate agencies to gain recommendations from , who are in contact with consumers and/or firms buying property.
In addition to helping borrowers apply for loans, loan officers help verify their and likelihood of repaying the loan. Loan officers may also assist clients who find it difficult to qualify for traditional loans. They may help clients decide which loan is most suitable for them and explain loan details.
Licensing
Loan officers working in banks or credit unions currently do not have specific licensing requirements. Those working in mortgage banks or , though, may have specific licensing requirements as designated at a state level. While college education is not a requirement for the position, loan officers generally have a bachelor's degree in economics, finance, or a similar field.
Loan Officer versus Mortgage Planner
Loan officers provide a valuable service to both borrowers and lending institutions. However, borrowers who seek to compare multiple lenders and find the best long-term solution may be better served by an . Our Mortgage Planners are experts who have undergone extensive training in home financing, real estate equity management and ethical business practices. They offer borrowers the choice benefits of a mortgage broker coupled with a long-term financial vision. They analyze a customer's current financial situation, help them formalize their long-term financial goals into an achievable plan, and recommend financing options and loan programs that help borrowers realize their extended objectives, and build their net worth.
Mortgage Planners are experts who have taken their careers to a higher level through extensive training in home financing, real estate management and ethical business practices. They analyze a customers' personal situation and prepare Mortgage Plans tailored to fit their individual needs. Mortgage planners offer additional services beyond what a typical loan officer or mortgage broker can do for a borrower.
In addition to just showing the borrower loan offers, a mortgage planner can:
Review the customers' current financial situation (mortgage, income, )
Recommend loan products and strategies that can assist the borrower to maximize the advantages of
Put together a 5 to 20 year plan that shows the customer "bottom line" effects of different types of home loans (e.g. how much equity they will have, how much they will still owe on their mortgage, how much savings they will have accumulated, etc.)
Mortgage Planner Training and Education
America's Lending Partners has licensed and trained mortgage planners on staff to assist you with every aspect of the loan process - whether you're a first-time home buyer or seasoned homeowner looking for smarter strategies to borrow and save. Our mortgage planners receive ongoing education in the following areas:
Cash flow management
Real estate equity management
Debt analysis
Real estate investment analysis
Current and emerging mortgage product options
State required annual continuing education
The Mortgage Planner Advantage
In addition to providing you with a series of informative and educational reports tailored to your individual financial situation, our mortgage planners will:
Conduct a personal consultation to understand your goals
Provide a cost analysis of multiple mortgage options
Offer guidance and expert advice in determining the best loan option
Negotiate with multiple lenders to obtain the best deal on the chosen mortgage product
Work with you to improve your cash flow, increase your net worth, and minimize taxes (consult with your tax advisor)
Be available as a long term advisor to ensure your plan remains successful over time
Provide a complimentary Rate Watch service and an annual Equity Review
And best of all...there is absolutely no extra cost for this service! how a mortgage plan can help you find better ways to borrow and save smarter.
A second mortgage is another name for a . A second mortgage is a loan backed by the in a home. Second mortgages, also called second liens, are an attractive option for homeowners who want to borrow additional cash for a variety of purposes - , , auto purchases or even family vacations.
The main advantage of a second mortage over or is the interest is usually , depending on the borrower's financial situation. However, it's always a good idea for a borrower review the tax implications of their individual situation with a qualified tax advisor.
How It Works
With a traditional second mortgage, the borrower receives a lump sum of cash that is paid back to the lender in payments of plus interest over the life of the . The borrower is in complete control over the funds and how they are spent.
Getting the Best Deal
Obtaining a second mortgage is a simple and quick process, but there are many lenders and competitive offers to choose from. With free, no obligation service, you can get up to four second mortgage loan offers, and then choose the one that's best for you. Or you can speak with one of ALP's experienced Mortgage Planners, and find out how a second mortgage fits with your long-term financial goals.
Compound interest, or interest that is added to the of an account, is a critical factor in many areas modern financing, including . Compound interest is often characterized as having a 'snowball effect,' because over a longer period of time it can have a significant impact on the balance of an account.
General Example
The concept of compound interest involves the recursive accrual of money. For example, let's say an individual opened a monetary account that saw interest compounded on a monthly basis. He or she opened the account in January with an initial monetary deposit. In February, a fractional interest payment would be added to the balance based on the initial deposit, and would thus marginally increase the principal balance. The March interest payment would be calculated based on the initial deposit plus the interest accrued in February. So this payment is said to be compounded into the principal balance, and would nudge the principal balance up a little higher.
This pattern would continue until this account closes or the balance is reduced to zero. Any money withdrawn from the account would negatively affect the principal balance, and thus the amount of interest accrued each month. If no money was ever withdrawn from the principal balance it would continue to increase at ever more noticeable levels. For the first few years the increases would be barely noticeable, but eventually they would appear quite dramatic.
Compound Interest and Mortgages
In the context of , compound interest often comes into play when a pays slightly more than his or her minimum monthly payment each month. The extra amount is applied to the principal balance, which then fractionally reduces the amount of interest required the next month. Because the minimum monthly payments of a mortgage are usually fixed, the amount applied to principal will gradually increase, even if no more than the minimum payment is applied going forward.
Before you go car shopping, you do your homework. Not only should you know what type of car you're looking for and what features are important to you, you should also have a plan of how you're going to pay for it.
Auto Financing Options
Knowing your car financing options before you set foot in the showroom can save you hundreds of dollars and give you the negotiating power you need to get a great deal.
There are several different places to obtain an auto loan - banks, credit unions, or other financial institutions. Typically, credit unions offer the most favorable rates to their members, but with some research, you may be able to find a better deal through your local bank or even a private . It pays to shop around!
You can also obtain financing through the dealer or auto manufacturer. Sometimes, dealers or manufacturers offer special financing incentives or promotions designed to entice customers to purchase, particulary when their have an overstock of certain model vehicles. While its possible to get a great auto loan deal through the dealer or manufacturer, its best not to count on this type of financing when you walk into the showroom. These programs often have restrictions on the or require a certain to qualify for these programs. Read the fine print!
Another great option for financing your auto purchase is with a . If you own your home and have built up some , you may be able to obtain a home equity loan at a lower than an auto loan, and take advantage of the tax deductability that auto and personal loans don't offer. But it's always wise to consult your tax advisor first to make sure that a home equity loan is a smart financing option for you.
If you own your home and are interested in obtaining a home equity loan to finance your new or used vehicle purchase, can help you find a great deal fast. Fill out our short form and get up to 4 different lenders competing for your loan. Or if you prefer a little more expert advise, speak directly with one of our licensed, experienced , who can help you choose which home equity loan program and term fit with your current financial situation and goals.
Know Before You Go
The best way to auto shop is with a pre-approved loan from a trusted lender, so you know your spending limit and have a solid financing option lined up before you sign a purchase agreement. Then, keep your options open and consider any special financing that the dealer or manufacturer is offering. But beware, offers of no or low , zero percent financing, or low interest rates coupled with a high down payment, need extra scrutiny. Know your numbers - down payment, interest rate, term of loan - before you shop and be familiar with your options.
Also, don't be afraid to ask for a written quote. Most reputable dealerships will honor a written quote for at least 24 hours, so you can have a little time away from a potentially high-pressured sales environment to consider which type of auto financing is best for you.
Mortgage lenders is a broad term for the financial institutions that extend money to via . Mortgage lenders have access to vast amounts of money used to provide the financing for home loans. They are literally the money behind the scene!
Types of Mortgage Lenders
Some mortgage lenders are "direct" lenders, meaning that they will work directly with prospective borrowers. Other mortgage lenders only offer loans through mortgage brokers and mortgage planners. These types of lenders are referred to as "indirect" lenders. Most large mortgage lenders have both direct and indirect sides to their operations, though they may not always offer the same loan programs through both sides.
Loans that are made through indirect lenders are often cheaper for mortgage lenders to originate because a mortgage broker or mortgage planner is doing all of the leg work with the borrower - completing the application, obtaining the necessary documentation, ordering the appraisal and title search, etc. Indirect lenders tend to have lower overhead costs and are usually able to pass along some of the savings to borrowers through lower and more competitive loan programs.
The Cost of Funds Index (also known as COFI) is an interest rate benchmark similar to the . It is calculated on a monthly basis, and published on the last business day of the month. The COFI is a weighted average of paid by financial institutions in , , and . The interest rates measured relate to the checking accounts, savings accounts, and CDs of the institutions in question.
Use with Mortgages
In addition to being used as a general lagging indicator of interest rates, the COFI is used to determine interest rates for some . This is especially true of mortgages originated in the Western United States. The COFI does not utilize interest rate caps, but is considered a stable, low volatility index. This has made it an attractive reference for some newer and more complex mortgage products, including .
As with other interest rate benchmark influences, the COFI does not affect any other . Such reference rates only influence adjustable rate mortgages.
Valuable Information
As with the base index, many COFI-based mortgages do not include rate caps. Such mortgages can be dangerous for unsuspecting . When applying for an adjustable rate mortgage, it is advisable to identify the mortgage's interest rate benchmark. The mortgage's should also be noted, as well as the introductory fixed rate period and any mortgage prepayment penalties. These factors can have a significant impact on how the mortgage evolves and what course of action the borrower should take.
If the concepts behind the COFI overwhelm you, with a mortgage professional, like a mortgage planner. can help you select the best mortgage for your financial needs, and explain how to use your mortgage to secure your home and plan for the future.
As a result of their dynamic nature, price differences often arise between markets. Arbitrage is the practice of benefitting from these discrepencies.
Within the context of a , arbitrage is also sometimes referred to as mortgage funds investment. It involves maximizing the amount of interest one pays to a , so that one takes full advantage of both the lower interest only monthly mortgage payments and the nature of one's mortgage contributions. The savings achieved are then placed into an investment vehicle with a higher interest rate, to help grow it over time.
Benefits
The benefits of arbitrage can be huge. Conventional wisdom states that paying off one's mortgage as soon as possible is universally the best strategy. But while this tactic is right for many people, some or investors would be better served using arbitrage. You can grow your significantly by leveraging the yield curve of an and building the return wisely in the correct investment vehicle. The results can be similar to those yielded by and, over time, yield ever increasing profits.
It is worth remembering that the nature of an arbitrage-friendly mortgage equates to approximately a 2% reduction from the actual mortgage interest rate for people placing in the 35% tax bracket. That is to say, an interest only mortgage at a 7% interest rate would actually be equivalent to about 5% once the tax deductible return is factored in, assuming the combined payments do not exceed the maximum deductible amount.
Risks and Caveats
Clearly, arbitrage in any context requires discipline, knowledge and farsightedness. And -based arbitrage is no less demanding. Obtaining an adjustable rate mortgage, the ideal product for maximum arbitrage return, is easy in today's climate. But a side effect of this strategy is that the property's will not diminish over time. If this factor causes you distress then pursuing mortgage-based arbitrage is not the right course of action for you.
Increases to one's monthly mortgage payments do not negatively impact the effects of arbitrage, because the higher the payment, the greater the tax deduction, up to a given point. However, from a perspective, increased payments can create stress and financial concern for some people. And one should never embark on a financial strategy that could result in the loss of one's home. Mortgage-related arbitrage should only be done if one has the financial resources to compensate for the potential loss from an awry investment.
One of the biggest mistakes one can make when practicing mortgage arbitrage is to not invest the savings correctly. Failure to act sensibly with the savings one achieves will jeopardize the whole arbitrage concept, and increase the long-term risk of financial stress or . These risks are heightened if one has an and only pays the minimum monthly payment.
Additionally, choosing an unstable or imbalanced investment vehicle can endanger one's overall investment, so diligent research and a diverse strategy is essential. And when looking for an investment vehicle, one should not only take into account the , but also any ongoing fees that will be incurred. Such fees eat into the net profit returned by the investment, and can equate to fractions of a percentage point lost on a regular basis.
Lastly, the loan balance elligible for arbitrage does not include any principal payoffs, and cannot exceed 1 million dollars on an initial property purchase. When obtaining a on an existing , the maximum amount eligible for arbitrage is $100,000.
Proper Usage
Some people may be uncomfortable with utilizing arbitrage. People who do not fully understand it, who deem it too risky a practice to involve their home in, or those who don't have the resources to compensate for a downturn in one's investment should instead pursue a more traditional mortgage strategy. Embarking on any financial strategy that you feel uncomfortable with or do not intimately comprehend is especially dangerous when it involves the roof over your head.
However, savvy investors or people who own properties may feel more at ease using arbitrage to take advantage of their properties. But even so, it is worth noting that arbitrage is an advanced concept and should not be taken lightly.
Mortgage-related arbitrage can be explained in detail by one of America's Lending Partners' . These well-trained, knowledgeable mortgage professionals can show you how to leverage your mortgage to secure your financial future and increase your net worth.
Homeownership has traditionally been a major goal for many Americans. And it's easy to understand why: the sense of empowerment and the psychological reasurrance that come from owning the roof over one's head are powerful emotions. For many people, homeownership embodies controlling one's own destiny. And from a financial perspective, homeownership offers many practical advantages too.
Benefits and Responsibilities
Most American homeowners who have not paid off their home in full are entitled to a Federal . In this scenario, the deduction equals the amount of interest paid on the mortgage over the previous year. And when you consider that the majority of an monthly mortgage payment goes to interest, it can add up to thousands of dollars per year, even if you have a relatively low . Homeowners paying an may be eligible to claim their entire monthly payment as a tax deduction.
But homeownership also brings extra responsibilities, especially legal responsibilities. And new homeowners are often surprised by some of the additional expenses related to homeownership, especially when compared to renting an apartment. , , , and hazard insurance: some or all of these aspects may require additional expenditure throughout the year. Homeowners may also be surprised to receive bills for garbage collection and sewer service. And on top of these expenses, homeowners must also allot money for general home maintenance, which can vary dramatically from one property to another.
If you're a try to estimate these extra expenses, and make sure you include a monthly buffer to cover them in your . If you're unsure how much some of these expenses will be, talk to friends or colleagues who live in the area in which you're planning to buy: expenses range from one neighborhood and home type to another, so their insights will be better than any generic projections.
Getting the Best Mortgage
If you're looking to you should consider the free, no obligation service provided by . One simple, secure form can yield up to four mortgage offers, which you can then accept, refuse, or negotiate. Existing homeowners who are seeking to cut their monthly mortgage payment could also benefit from this service by refinancing their existing mortgage. If you'd prefer to work with just one dependable professional, ALP's service could be perfect. A can help to evaluate your mortgage needs and goals, and develop a no obligation mortgage plan for you to work with.
Buying property can be complicated and fraught with legal requirements and hurdles. It is the job of a real estate broker to act as a point of contact between a prospective buyer and the seller. Real estate brokers who belong to the National Association of Realtors (NAR) are also sometimes referred to as realtors. Representatives of a real estate broker are known as real estate agents.
Responsibilities
Use of a real estate broker is usually not mandatory for property sales or . But most buyers and sellers consult with a broker to a lesser or greater extent, to ensure their transaction goes smoothly. In many cases a real estate broker will only represent either the buyer or the seller, but not both. In such scenarios, an agent of the real estate broker will need to work with an agent of another broker, who represents the other involved party.
Real estate brokers also assist with price negotiations, offer insights into local real estate trends, and provide various other helpful input to their clients. In return for sharing their knowledge and advice, a licensed real estate broker is typically reimbursed with a commission or other monetary payment.
Licensing
Throughout most of the United States, an individual seeking to become a real estate broker must be licensed. To become licensed as a broker they must usually have sufficient practical experience as an agent, and then pass an educational course that involves both coursework and one or more exams. Real estate brokers and agent can be licensed in multiple states. Some states allow lawyers to fulfill the role of a real estate broker in property transactions.
