John Saari "The Mortgage Buddy"

Owning a home is like having a forced savings account for your money. You are constantly making your monthly mortgage payments and depending on the current market conditions you are building equity, and financial security. What you may not have realized, is that there is an easy way to speed up this process of increasing your equity and subsequent net worth, while still making the same monthly mortgage payment that you have been making all along. Yes that's right, you can pay down your mortgage more efficiently by utilizing a bi-weekly payment schedule for your monthly mortgage bill. A bi-weekly payment involves making half of your mortgage payment twice a month. The bi-weekly arrangement will not lower your compound interest that you are required to pay but it does have several equity building benefits.

How Does the Bi-Weekly Mortgage Payment Work?:

Essentially, you are making an extra payment a year by letting the calender schedule work for you. Since there are 52 weeks in a calendar year you are making half of your monthly mortgage payment 26 times over the course of twelve month period. So if you are making 26 payments over the course of the year, that comes out to 13 monthly mortgage payments for the same amount of money. As a result, you would have made an extra payment a year.

The bi-weekly mortgage schedule is a great way to cut off about 5yrs on your mortgage term and save you tens of thousands of dollars in interest. The larger the loan balance and the higher the interest rate the more in interest you will be able to save.

There are numerous benefits that can result in paying down your principle balance faster that you may not be thinking about at this point in your life but are worth considering.

Benefits of the Bi-Weekly off in the Horizon:

1. College fund- The increased rate of forced savings will lead to more equity and the possibility to pull that equity out of your home for your child's education in the future

2. Retirement- Being able to shave off 5yrs of mortgage payment can make a big difference as to what age you decide to stop working. Imagine starting your fixed income retirement at 60 instead of 65

3. Remodeling- Having paid down your mortgage faster means you may have the opportunity to use some of that equity for the home improvement of your choice later on in life.

4. Emergencies- Life can throw you road blocks that we don't always see coming and sometimes we have to tap into that equity for a financial emergency.

It's amazing how just taking the simple step of setting up a bi-weekly option could have all of these unrealized benefits 10 or 15 years into your mortgage schedule.

Now there can be a couple of down falls. Some banks take advantage of the bi-weekly payment and charge you a set up fee of about $300 and then a monthly fee of $10 depending on the bank. I have yet to find a solid reason why except that they want to make up some of the interest they will loose by having the mortgage paid off earlier. None the less, when you look at the big picture it's not large price to pay to create a faster and larger equity position.

If you are interested in a bi-weekly payment schedule talk to your bank or lender and see if they offer it. If they don't, and not all banks do, try adding a little bit of extra money to your principle every month and watch your mortgage payment begin to benefit you.

It is our responsibility to empower our clients with knowledge to make well informed decisions that can have a dramatic positive impact on their lives. The bi-weekly payment advantage is an easy but over looked tool. Spread the word.

The mortgage underwriting process can best be described as a rock fight from start to finish. The key to today's pipeline is preparation on the front end of the transaction and having the biggest rock for the fight. Another key to success is having a client that will follow direction and not fight you every step of the way. The kiss of death to keeping time-lines in check are when clients say things like "I think I have given you enough" or "I shouldn't need to get you that for my loan". GRRRRR is all you can say and try and explain that we are trying to make it by the gate keeper and working with me will be the best way to do that.

I'm sure many of you can echo the same frustrations. We all continue to arm ourselves with better procceses or better tools for our clients in hopes to streamline the transaction process. Every now and then you get a client that makes it all feel worth it beyond the compensation factor. I recently took over a loan after a client was turned down from their local bank. My team and I were able to push through the red tape and close the purchase from start to finish in just under 3 weeks. Not the ideal situation I want for all of my business but sometimes it all comes together and my team makes The Mortgage Buddy look good.

Below is a nice testimonial of appreciation from my client.

All I can say is that we are in our new house in record time, and we owe our new success to John Saari and his financial wisdom.

From day one he was supportive and diligent and made my wife and I feel that we made the right choice contacting him. Not only did he work through our credit issues in the past, but we got a rate for thirty years that we never dreamed imaginable.

John was always available night and day by phone and email to keep things moving and take care of everything.

By far the best financing experience we have ever had. He made us comfortable, was honest and met every need we had to purchase our home.

I have, and will continue to recommend John and his group to anyone. You will not be disappointed!!!

Thank you again John,

You showed us that it can be that easy when dealing with the right people.

Chaulk up another success story to Activerain. It's been about a year since I embarked in my blogging journey. Just a loan officer with a passion for his work and a willingness to learn. What had started on Activerain, now has me writing a blog for my local news paper. It's not the big time yet, but it's the 3rd largest newspaper in MA behind the Boston Globe and the Boston Herald, and it all started here on Activerain.

I have learned so much over the past year by reading the posts of the amazing writers and social media experts on this great site. I know I still have an enormous amount of learning to go, but my Activerain education has pushed me out of my comfort zone. I now live by the phrase "Get comfortable with being uncomfortable". I first heard that from the sales book author John Chapin and it really transcends so many different things in life. When I started as a "rain maker" I didn't know the first thing about rain dances but I knew I had the enthusiasm and drive to dance up a storm. I can say now it's starting to at least look cloudy and the rain is right around the corner.

Activerain continues to be a sort of home base for me. I have started to branch out with my writing and my social media content, but I always return to Activerain to pick up some knowledge. What a power pellet is to PacMan, Activerain is to real estate community.

What Active Rain Has Given Me

Social Media Education: Expanding business Facebook page I didn't a year ago

Twitter: I have used the Twitter tips to gain a loyal following of about 1,000 Twitter followers @mymortgagebuddy

YouTube: YouTube page with mortgage product updates

WordPress: I have started learning how to write a WordPress blog

Other Ideas: Developed self branding, joined a local BNI chapter, just started writing for the local newspaper, worked on a political campaign, devoloped a free mortgage app for smart phones called "freemortgagebuddy"

I could go on and on with the knowledge and ideas I have accumulated will learning to make it rain. No where else on the Internet have a I found a site that takes so many like minded real estate professionals that put their self interests aside and are willing to share ideas and teach others.

Thank you Activerain

Calling all FHA mortgage holders who want to take advantage of the historical low interest rate environment that the government has facilitated for us. FHA has an amazing opportunity for current FHA customers to dramatically reduce their monthly payment and skip a month on your payment, it's called the FHA Streamline Refinance. This program will provide you the vehicle to obtain the historical low rates that are available right now. According to the many rate sheets I see on a daily basis, FHA fixed rates have been under 4% for a 30yr fixed rate. If you have fixed rate over 5% this is for you.

FHA Streamline History:

The FHA Streamline loan has been around since the early 1980s but has only recently gained popularity with the combination of decreased home values and low interest rate enviornment.

How Do I Qualify?

• Must currently have a FHA loan
• According to FHA you don't have to have a minimum credit score to qualify but the majority of lenders have their own "underwriting overlays". Most banks require a 640 middle score and a couple will go down to a 620.
• Must show proof of employment although not proof of income
• Must not have any mortgage lates in the past 12 months if you want to refinance without an appraisal, 1 mortgage late with an appraisal

Can I Really Streamline my FHA Loan Without an Appraisal?

YES YOU CAN Every FHA loan in the US has a unique FHA case # that is assigned to it. Think of like it's own medical record number. When we look at doing the FHA Streamline, I can access that FHA case# much like a doctor uses your medical record number to pull up your history. The FHA case # will contain the underwriting information from your last FHA transaction whether that was a purchase or a refinance. Most important of that information is the appraisal value from that previous transaction. FHA will permit us to use that value for your new FHA Streamline.

What is the Cost of The FHA Streamline?

FHA Streamlines without appraisals do not permit lender fees, points, attorney fees, or escrows to be added to your current loan balance. There are only two amounts that get added. The first is your new upfront FHA insurance. Currently that is 1% of your loan amount. If you have had your current FHA loan less that 3yrs you will get a portion of that new amount reduced. The other amount that can be added is up to 2 months of mortgage interest. Most lenders do this to allow you to have a month off on your mortgage. The loan still has all the basic fees laid out above but we use a portion of the bank profits to cover the costs of the loan.

What I try to do for my clients is have them hold on to their current mortgage payment and bring that to closing. That amount covers the remainder of the cost of the loan and that months' mortgage obligation.

EXAMPLE: If we were closing in Jan. you would not make your Jan. payment to your current lender. You would instead bring that amount to closing. Your new payment would then start in March. IMPORTANT- If you have a escrow shortage or taxes or insurance that are about to come due, then sometimes it can be more than a mortgage payment, but I like to keep it as close to a payment as possible.

How Often Can I Streamline my FHA Mortgage?

You can streamline every 6 months, although with rates being so low right now this might end up being the best opportunity in history.

How Long is the Process?

I have developed a system that will allow you to work closely with me and my processor to close your FHA Streamline in as little as 3 weeks.

For more information click here.

Mortgage underwriting after the credit crisis of 2008 and 2009 is like navigating a downtown Boston St. after a harsh New England winter, it's full of pot holes. These underwriting pot holes can deflate your hopes of an on time closing if you don't know have the vision to see what lies ahead. The most frustrating of these obstacles areincomplete bank statements and sourcing deposits in your checking and savings account. A required underwriting condition with most purchase loans, whether that's conventional or government, is to provide the last 2 months worth of bank statements.

When providing these statements, it's very important that these are full bank statements that include your

• NAME
• ADDRESS
• FULL ACCOUNT NUMBER (no partial #s or Xs)
• ALL PAGES of the statement. (if it says 1 of 7, provide all 7)

It is also important that we evaluate the bank statements together prior to signing the purchase and sales agreement to make sure that the down payment money and any deposits can be "sourced".

What does it mean to "source" a deposit?

Essentially to source a deposit means to create a paper trail for that deposit. As a client/loan officer team, we have to be able to clearly document where that money came from. The banks need to make sure that these are legal sources of money as well as make sure that you have adaquet down payment funds. When an underwriter analyzes a complete bank statement they are going to pay special attention to the deposits into your account that are NOT direct deposit. This includes; transfers from other accounts, check deposits and cash deposits. If these are larger amounts, meaning over $400, or they total over $1,000 in one 30 day period we will need to "source" them. The list below will provide you with a guide of what is required for each of these 3 types of deposits.

Transfers: For a transfer we need to follow the trail of where it came from. This would include providing documentation of source of the tranfer. If it came from another account we would need a full statment from that account. Same would be true if it came from a brokerage account.

Check Deposits: For a check deposit, underwriting will require a copy of the check and a brief explanation as to what that check is for. They will then determine if that is an acceptable source.

Cash Deposits: For a cash deposit, underwriting will need a copy of the deposit slip and an explanation as to where the cash came from.

IMPORTANT TO REMEMBER - Most underwriting guidelines will not allow you to use cash deposits to count towards your down payment. For example: if you have $5,000 in your checking account and $2,000 of that money is from a cash or check deposit that cannot be traced back to employment income with a copy of a pay-stub, or rental income with a copy of a rent receipt, the underwriters can back that money out of their calculations. In other words, that $5,000 is now only $3,000 because that check or cash deposit cannot be "sourced".

Never make a large deposit or transfer into your account while your loan is in underwriting without first discussing it with your mortgage professional.

As you can see it is very important to be up front with your mortgage professional about what is included on bank statements. By taking the time to review the paperwork throughly at the beginning of hte process you will save time, aggrevation, and improve your chances of a successful on time closing.