Monday, October 19, 2015

Are you prepared when rates rise? Are you in the best mortgage that you can obtain?

Rates on mortgages are still very low, but we know that at some point rates will go higher as the Fed starts implementing their rate increases. 
Is the rate over 4% on your current mortgage?
Do you have an adjustable rate mortgage and want to fix in your rate to be safe?
Do you want to stay in your home and need cash for improvements/upgrades?
Do you have a second mortgage and want to look into consolidating both loans?
Right now is the best time in years to complete a quick mortgage check-up before time runs out! 
Bob McCormick, President
Toll Free 800- 328-0144

Sunday, October 4, 2015

Self-Employed? Credit Issues? Prior Short Sale or Foreclosure?

Self-Employed and have issues with debt ratios/lack of income on tax returns?  Credit Issues?  Prior Short Sale or Foreclosure?
As a full service mortgage company we also offer Alternative loan programs for borrowers that do not qualify under the standard Jumbo or Fannie Mae/Freddie Mac or FHA guidelines.   Most large banks and banking companies prefer not to offer these programs, but we do.  A few options are:
No Income Verification options for self-employed borrowers on owner-occupied homes
No Fico Score Programs
580 Fico Scores for FHA loans (FHA Portfolio Guidelines)
Bridge Loans for client's that need/want to purchase prior to selling current home
Foreclosure or Short Sale?  We have loan programs that can help you qualify after 1 day
For these, or any loan question or price quote, please do not hesitate to contact us.
Bob McCormick, President
Toll Free 800-328-0144

Friday, August 7, 2015

Why Your Mortgage Lender Asks for More Than Is Required

Great Article For Borrowers-  (FYI- We don't have overlays at all...   :) )

Why Your Mortgage Lender Asks for More Than Is Required

July 29, 2015 1 Comment »
Why Your Mortgage Lender Asks for More Than Is Required
It’s no secret that there is a lot of confusion surrounding mortgages. One of the main gripes is that requirements aren’t the same across different banks and lenders.
See why every mortgage lender will disappoint you for more on that.
Unfortunately, it’s very difficult for lending standards to be uniform from bank to bank because of the complexities of mortgage financing.
First off, no two borrowers are the same, so just because your neighbor got approved over at Wells doesn’t mean you will.
The same goes for properties – like snowflakes, no two are exactly the same…well, maybe some tract homes are, but their locations aren’t.
There are also many different types of loans, including those backed by the government, such as FHA and VA, and those quasi-backed by the government, such as Fannie Mae and Freddie Mac.
For the record, that latter group of mortgages is also backed by you, the taxpayer, thanks to the reckless lending that took place before the latest mortgage meltdown.
The risk appetite of lenders is also quite variable.

Overlays Add to the Confusion

type of overlay
On top of this already confusing situation is the prevalence of credit overlays, which are additional requirements individual banks and lenders put in place above what is asked of them when receiving a guarantee from Fannie, Freddie, and Ginnie Mae.
For example, even though you technically only need a 500 credit score to qualify for a FHA loan per HUD, most lenders ask for much higher scores.
This is a common type of overlay, in fact, the most common, according to a recent survey conducted by Fannie Mae.
But instead of originating mortgages based on agency guidelines, skittish lenders are requesting higher credit scores, lower LTV limits, lower DTI ratios, and more paperwork.
Just take a look at the chart above and you’ll see that nearly half of banks that impose overlays want a higher-than-necessary credit score.
If you’re wondering why they do this, it’s for two main reasons. First, they want to make higher quality loans, which should keep their default risk low and profits high.
Secondly, they implement such overlays to reduce the chances of having to repurchase loans they sell to investors.
Call the overlays a buffer or a cushion to keep the lender at arms length from any nasty situations that may arise, even if unnecessary.  It’s like when you overpack your suitcase just in case…

Finding a Lender That Doesn’t Impose Overlays

lender type
While you might be annoyed that your lender is requiring more than Fannie, Freddie, or Ginnie require, know that not all lenders impose overlays.
In fact, only about 41% of lenders that deliver loans to the GSEs or Ginnie Mae said they apply overlays.
And most (64%) do so on a “limited basis,” meaning on 20% or fewer of their loans.
However, overlays are more common on loans acquired or originated via the wholesale channel, which includes correspondents and mortgage brokers. If it’s not happening under their roof, requirements will likely be more stringent.
For the record, large and mid-sized lenders are the most likely to apply overlays, while smaller institutions are more likely to originate based on agency guidelines.
Credit unions are the least likely to impose overlays (84% don’t), followed by depository institutions (73% don’t).
Conversely, 61% of mortgage banks are likely to ask for more than is necessary.
So if you can only qualify for a mortgage based on the agency guidelines, perhaps seeking out a smaller credit union or local bank is the way to go.
Of course, results may vary, but this does give us an idea of where it might be easier to get a loan.

Sunday, July 5, 2015

Large Bank? Mortgage Banker? Mortgage Broker? Direct Lender? Which Offers The Best Rates?

Large Bank? Mortgage Banker? Mortgage Broker? Direct Lender?

Over the past few years I have had many clients whom are shopping for the lowest rates and costs share with me various different stories when speaking with each type of lender.  It is important to mention that the majority loans are sold by ALL lenders on the secondary market (Fannie Mae, Freddie Mac, FHA/HUD, etc.).  Thus, we all offer the same products but just operate in different manners.

One large bank told a client  "We are one of the largest banks in the United States so we have the lowest rates and costs."  Another mortgage banking company said to the client " We are a mortgage banker, we lend our own money so we offer the lowest rates and costs", while another said to a client "We are a direct lender! We offer the best pricing in the market!"

I can make it very, very simple for anyone that is shopping for a mortgage loan.  There are only TWO numbers that matter :  The Net Origination Fee and the Note Rate.

The Net Origination Fee is the cost of the loan from the lender.  It is not the cost for the appraisal, credit report, flood fee, tax service fee, title fees, recording fees or any prepaid cost (interest, home and property tax insurance escrow account set up or home insurance premium).

The second is the Note Rate.  This is the rate that you are paying on a monthly basis (3.75%, 3.875%, etc).

That is it.  Very simple.  When shopping for rates and costs you just need to ask these two questions:  "what is the net origination fee and what is the note rate."

The variance in these two questions by a large bank, mortgage banking company, mortgage broker or direct lender will be dependent on their rate and cost "mark-ups", office overhead expenses, commissions paid to loan officers and profit margins set by each company.

So, to answer the question "Who Offers The Lowest Rates With The Lowest Costs?" It comes down to these "mark-ups" to the rates and costs that each company is willing to offer.

It is best to shop at least a few companies so that you can compare.

I welcome you to visit us at to see how we operate.  We are confident that our business model offers our clients the lowest rate and costs in the industry.

Thank you!  Bob McCormick, President

Wednesday, June 24, 2015

How your credit score affects your mortgage rate

How your credit score affects your mortgage rate

Mortgage » Basics »
Magnifying glass on levels of credit scores © Feng Yu -
The most influential determinant of your mortgage rate is your credit score. The higher your credit score, the lower the interest rate.

One percentage point makes a big difference

Monthly principal and interest payments on a 30-year fixed-rate mortgage for $200,000
Interest rateMonthly principal and interest
Not only is a high credit score vital in getting a low mortgage rate, it influences whether you can get a home loan at all. Buyers below a certain threshold, typically a FICO score of 620, have a better chance of striking oil in their bathtub than securing a mortgage. It's possible, but it will require some digging.

Loan-level price adjustments by credit score

Credit score rangeLTV less than 60%LTV 60.01% - 70%LTV 70.01% - 75%LTV 75.01% - 80%LTV 80.01% - 85%LTV 85.01% - 90%LTV 90.01% - 95%LTV 95.01% - 97%
Greater than 740-0.25000.
Less than 6200.501.50333.
Source: Fannie Mae
A credit score of 740 or more should qualify for the best mortgage rates from most lenders. Depending on the lender, the mortgage rates offered to the highest and lowest credit tiers can vary as much as a full percentage point and a half, says Louis Spagnuolo, a former vice president of mortgage banking at WCS Lending in Boca Raton, Florida.
Good credit can save you thousands on your mortgage. Check your credit score for free at

What lenders look for

Lenders prefer borrowers with low balances, a long history of on-time payments and a mix of credit utilization -- for instance, a car loan and a couple of revolving accounts such as credit cards.
"Lenders look at several variables on the credit report: outstanding debt; the outstanding debt relative to the total available debt; the length of the credit history; and the pursuit of new credit -- how many inquiries are on your report," says Matt Hackett, underwriting manager at Equity Now, a direct mortgage lender in New York.

How to clean up your credit

Ideally, you'll check your credit report a year or so before buying a home. That gives you time to correct errors in the report and change ways you use credit to improve your score.
Get credit reports from Equifax, Experian and TransUnion. Make sure you get reports from all three. The information they contain can vary. Scour everything from the way your name is spelled and previous addresses to checking that each and every account is yours and reported correctly. If an account has been closed, make sure that is accurately reported.
"Sometimes people will quickly glance over their information and that's it. But you should take the time and look at the account numbers," says Steve Katz, senior marketing communications executive for TransUnion.

Correct and wait

All three credit bureaus make it easy to dispute errors online.
If everything is correct, pay down balances and let time do the rest.
The credit reporting agencies do charge a fee if you want to know your credit score. Lenders look at all three scores and use the middle one, Hackett says.

What else you can do

If you're buying a home soon, try not to apply for new credit. Though it's not always avoidable -- for instance, if you need a car loan or college financing -- you should resist opening several new lines of credit in a short time. Multiple new accounts can decrease your credit score.

Read more:
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Tuesday, May 26, 2015

Understanding Your APR- From Yahoo Article

Do You Really Understand Your Mortgage APR? 

Everyone wants to know they're getting a fair and reasonable mortgage offer. The federal government supports the annual percentage rate disclosure (APR) as the benchmark barometer of loan cost when mortgage shoppers begin their quest to find a good deal on a home loan, which is why it's so important to understand what goes into a mortgage APR and how you can harness this knowledge to find the best loan for you.
Quick APR Tidbits
The annual percentage rate is a disclosure seen in the origination of new credit or in advertisements of various credit products such as loans and credit cards. You won't, however, see APR on a mortgage loan statement as the APR is used as a cost measure at application. APR is simply a function of the costs of the mortgage loan added to the interest rate and re-amortized based on the size of the loan you're seeking over the loan term (e.g. 360 months for a 30-year fixed-rate mortgage). The sole purpose of APR disclosure is to make credit shopping easier.
  • The APR does not change your loan amount.
  • The APR does not change your payment.
  • Your note rate is what determines your principal and interest mortgage payment.
Why Your APR Is Higher Than Your Note Rate
The annual percentage rate is higher than the note rate because APR takes into consideration the fees (whether or not you are actually paying them) adds them to your loan amount and re-calculates the figure over the loan term, thus the APR rate disclosure is higher. This rate vs. APR relationship can seem convoluted because you are not paying the fees based on the APR rate, but rather the note rate, as the note rate is the real cost of funds.
For example, it is not uncommon to see a 30-year fixed-rate mortgage with a note rate at 3.875% and an APR of 4.137%. The 26 basis points spread between the 4.137% and a 3.875% is the fees disclosed as expression of cost based on the size of the loan you are applying for.
APR can be best used to distinguish amongst mortgage offers in order of priority, starting with the highest APR offer, and working down.
Keep in mind that a mortgage with a lower note rate and a higher APR may actually be a lower cost mortgage for you than a loan with a lower APR but a higher note rate. How long you keep the mortgage plays a big role in the cost of the loan.
What You Need to Examine When Comparing Mortgages
  • Loan term
  • Loan program
  • Loan amount
  • Note rate
  • Total payment
  • Closing costs
  • Recapture
Remember that examining the APR of a mortgage offer can only help with determining which mortgage offer has better terms and fees. The APR does not take into consideration which mortgage loan makes the most financial sense for you because it is not the driver of your monthly principal and interest payment or closing costs.
Some Extra APR Tips
If you're getting a no-cost mortgage, where your lender is providing a credit for closing costs, the APR is still calculated as though you're paying the fees because your lender must disclose it appropriately to meet federal regulations in the origination of residential mortgage loans.
If the APR is more than 0.25% higher than the note rate, pay closer attention. The majority of the time the mortgage has discount points associated with it, which is by far the biggest driver of higher APR. If you received disclosures that show a substantially higher APR than the interest rate and you don't understand the disparity between the annual percentage rates on your disclosures and/or mortgage quote versus the note rate ask your loan officer. Don't be afraid to ask questions even if they seem silly or redundant.
As a well-informed mortgage consumer, you have a duty to yourself to make certain you understand all of the many intricate facets of the mortgage loan you are seeking. Doing this discovery research will help you make the determination as to which mortgage loan is most suitable for you.
Keep in mind that one of the biggest factors in what determines your note rate is your credit score. Taking some time before applying for a mortgage to build a good credit score can save you thousands over the life of your loan. You can check your credit scores for free on to see where you stand and make a plan to improve

Sunday, April 5, 2015

Is now the time to refinance your mortgage?

Interest rates on home loans are historically low. That means now is the time to dig out your mortgage loan paperwork and consider whether refinancing is right for you.
Five years ago, the government started injectingtrillions of dollars into the U.S. economy. Conventional wisdom suggested that rising interest rates were soon to follow. Some even predicted the collapse of the dollar and hyper-inflation. Instead, inflation is down, the dollar is the strongest it's been in 10 years, and interest rates have fallen to the lowest levels in decades.
When refinancing, you take out a new, lower-interest loan to pay off the old one. Here's how to find out whether it's a good option:
First, check the current interest rate on your mortgage loan. Let's assume you have a balance of $200,000, with monthly principal and interest payments of $1,013 at a rate of 4.5%.
Next, shop around. Call two or three mortgage brokers and find out the interest rate you can obtain on a new loan. They'll ask for your household income, the value of your house and the current balance on your mortgage. If you don't know how much your home is worth, contact your local property tax office for an assessed value.
Ask the brokers to give you the interest rate and payments on a mortgage similar to the number of years left on your current loan. Also ask about a shorter-term loan, which usually has a lower interest rate.
When shopping for a new mortgage, you may be tempted to reduce your payments even more by lengthening the term of your new loan. While the benefit is more spending money per month, you can end up paying more in interest. I strongly suggest obtaining a new mortgage that is equal to or less than the number of years remaining on your current loan.
Then, get an estimate of all other costs, including title insurance, an appraisal and a closing fee. Lenders sometimes charge "points," or origination fees, which are also part of your closing costs. One point equals 1% of the loan's value. Mortgages described as "no-cost" or "zero points" do not carry this cost, but the interest rate may be higher.
Now, calculate how long it will take to recover your refinancing costs. Getting a new loan makes financial sense if you are able to break even soon.
Let's assume you find out you can obtain a new loan with a similar term at 3.65%. The monthly payments are $915, and the closing costs are $1,900. The new payment is $98 less than your current $1,013. Divide the $1,900 closing cost by the $98 monthly savings. The answer, 19, is your break-even point, the number of months you need to keep the house to recoup the costs.
If your break-even point is 24 months or more, or if you intend to sell your home in the next two years, refinancing may not make sense. No one knows what curves life may toss us, and looking two years ahead is my comfort level.
Remember that a lower rate doesn't automatically mean refinancing is in your best interest. How much you save monthly, your closing costs and how long you plan to live in your home are key variables in determining whether you should refinance your mortgage.

From -Rick Kahler, CFP, is the president of Kahler FInancial Group in Rapid City, S.D., and a member of AdviceIQ, which is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY

Wednesday, January 21, 2015

Time to Refinance? Our APR rates are still lower today than other lenders on Bankrate!


Don’t Overpay for your Mortgage!
Save Up To .25% or More on Your Rate Versus the Competition!

Having worked for a few of the large banks and mortgage banking firms prior to starting Mortgage Quest in May 2000, I learned how and why these mortgage companies need to mark-up their rates that are offered to the public: large overhead expenses including office salaries, commissions, large rent/office space, several layers of management, extra quality control costs due to large staffing, etc.

Mortgage Quest was established with a business model that has reduced these large expenses so that our operating margins are the lowest in the industry and the need to mark-up interest rates was eliminated:

If you would like a rate/fee comparison please contact me so that you
 "Don't Overpay for your Mortgage!"

Bob McCormick, President

 Visit us at

14362 N Frank Lloyd Wright
Suite 1000
Scottsdale, AZ 85260

Office: (480) 905.1135
Fax: (888) 570.6740
Toll Free: (800) 328-0144
23 Corporate Plaza
Suite 150
Newport Beach, CA 92660
Office: (714) 362.4740
Fax: (888) 570.6740
Toll Free: (800) 328-0144

Wednesday, January 7, 2015

FHA to lower cost of mortgage insurance


In a move designed to bring more first-time homebuyers into the housing market, President Barack Obama said Wednesday the Federal Housing Administration (FHA), the government insurer of home loans, will lower its annual insurance premiums from 1.35 percent to 0.85 percent.
In a statement, the White House said the move was part of the president's efforts `"to expand responsible lending to creditworthy borrowers.'' The president is scheduled to talk about improvements in the housing market at a speech on Thursday in Phoenix, one of the hardest-hit markets of the housing crash.
Stocks of the nation's home builders rose on the news Wednesday, while those of mortgage insurers fell.
"This action will make home ownership more affordable for over two million Americans in the next three years," said Julián Castro, U.S. Department of Housing and Urban Development Secretary. "Since 2009, the Obama administration has taken bold steps to reduce risks in the mortgage market and to protect consumers. These efforts have made it possible to take this prudent measure while also ensuring FHA remains on a positive financial trajectory. By bringing our premiums down, we're helping folks lift themselves up so they can open new doors of opportunity and strengthen their financial futures."

Tuesday, January 6, 2015

A Few Facts About Reverse Mortgages with Mortgage Quest

A Few Facts About Reverse Mortgages with Mortgage Quest

  1. Closing costs are comparable to a conventional mortgage (see our website at to see how we are able to offer the lowest costs and rates in the industry).
  2. At least one borrower needs to be 62 years old
  3. Must be your Primary Residence.
  4. The lender or bank does NOT own the home – YOU OWN THE HOME, you keep the title!
  5. There are no income or credit score requirements to qualify.
  6. No monthly mortgage payments are required.
  7. The home does not have to be free and clear or have a lot of equity.  Although enough equity is needed to pay off current liens and/or mortgages.
  8. There is no limitation on how the funds can be used. 
  9. Funds can be received in monthly payments structured as needed, line of credit (with a growth rate), lump sum, or a combination of these.
  10. Social Security and Medicare are not affected because it is a loan, and not considered income.
  11. Medicaid can still be received with the reverse mortgage.
  12. At the time of sale if the home is sold for more than the loan balance, the borrower(s) or their heirs receive the difference.  The bank does NOT keep the difference!
  13. The loan is non-recourse which means there is no personal liability to the borrower or their heirs. 
  14. Just like any mortgage, borrowers are responsible for property taxes and insurance, association dues (if applicable), maintaining the property and abiding by the terms of the loan. 
  15. HUD regulates reverse mortgages.  Thus, a very protected loan.
  16. Borrowers must complete counseling from an approved HUD Counselor on how a Reverse Mortgage works.

Please contact me with any questions you may have on this or any mortgage program.

Bob McCormick, President

 Visit us at

14362 N Frank Lloyd Wright
Suite 1000
Scottsdale, AZ 85260

Office: (480) 905.1135
Fax: (888) 570.6740
Toll Free: (800) 328-0144
23 Corporate Plaza
Suite 150
Newport Beach, CA 92660
Office: (714) 362.4740
Fax: (888) 570.6740
Toll Free: (800) 328-0144

nmls 175743 Equal Housing Lender

In-House Bridge Loans Available (purchase before selling and remove contingency)

Mortgage Quest a dba of McCormick Lending Group, Inc. We offer In-House Bridge Loans for borrowers who want to purchase a new pro...