Guardian Angel: SMU Alum Wade Betz is a Man With a Plan

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Sure, he’s from New Orleans, but as most Dallas transplants, Wade Betz got to North Texas as soon as he could, which was to attend SMU. And sure, there’s some tension between his LSU-loving family and his SMU ties, but we’ll forgive him! There’s so much more to Betz, though, a loan officer at Guardian Mortgage and this month’s Guardian Angel.

As Betz sees great things ahead for Dallas, we see great things ahead for him, especially because Betz takes great care of his relationships with this friends, family, and his customers and enjoys an extremely high referral rate compared to his peers. Find out what makes Betz an exceptional mortgage professional after the jump!

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Guardian Angels: Whether Cycling or Caring For Clients, Mark Watson Steps Up

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It’s true: Some of the most amazing, dedicated people in the mortgage industry work for our hometown lender, Guardian Mortgage. These are the same folks who answer phone calls after hours, always greet you with a smile in the checkout line, and volunteer to make our communities better. In short, these people step up.

That’s what Mark Watson does. Watson, who is this month’s Guardian Angel from Guardian Mortgage, takes the time to make sure his client has an excellent experience no matter the size of the loan, ensuring that they become the industry’s most sought-after client: A happy referral generator.

We were absolutely thrilled to chat up Watson, who is an avid cyclist. Besides being an all-around great guy, he knows the mortgage business backwards and forwards, and has the kind of experience that clients seek. Find out more about Watson after the jump!

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James Reed

There are a few things we are suckers for over here at CandysDirt.com… gorgeous houses and gorgeous men. Especially those who have served in the military! Let me put it this way: I will not be needing my hormones for a few weeks after this interview with Guardian Mortgage Guardian Angel James Reed! Guess what folks, he is as hot on the inside as he is out: a total family man with old-fashioned integrity who has saved lives and even jumped out of airplanes! Now he’s saving financial lives every day as he helps home buyers navigate the crazy world of mortgages. James, you can “roger that” with us anyday!

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Meet Gracie Morrow. Speaks Fluent Mandarin and Hails From The Down Under

Gracie Morrow (12)Welcome to Guardian Angels by Guardian Mortgage Company. We bring you profiles of the real people behind Guardian Mortgage’s superior mortgage lending service.

As you know, I am passionate about local businesses and banks, none more so than when it comes to mortgage lending. After hearing of countless horror stories, and experiencing one of my own, I would not get my mortgage from one of the “Big Three” banks if they paid me. Local mortgage companies like Guardian hand-pick loan officers for a great customer service experience to make home lending as smooth a process as possible. They hold your hand as you obtain a dream mortgage for the home of your dreams.

Meet Gracie Morrow! (more…)

With rates falling as they have over the past few years, a lot of people refinanced their homes and investment properties. And yet, rates keep falling to historic lows. Does it make sense to refinance again?

Rents On The Rise in Dallas/Fort Worth: Changing Face of the 2012 Homebuyer

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So with rents averaging around $1000 for a two-bedroom apartment in the Metroplex, it is almost cheaper now to buy than rent. Does this have the troops stirred up about home- buying again? Yes…maybe. More agents are telling me how the market for first time homebuyers is picking up in Dallas. I went north to Plano and talked with André Kocher of Keller Williams and Wade Betz of Guardian Mortgage Company about the new, more fiscally conservative homebuyer coming in for loans.

Candy: We’ve seen the good news that home sales continue to rise in our area, the investors are loving Dallas, but who are these new homebuyers? Do they really exist?

André: They do! By and large, they are a more conservative and cautious group. They are interested in buying a home because the historic low rates mean they could own for less than they are renting. However, they want to make sure they don’t get into trouble down the road.

Many of our clients have studied Dave Ramsey and are practicing his tenants. (Editor’s note: Dave is a financial media guru who teaches followers to have a zero tolerance for debt.) They are out of debt or working to get out of debt. They are saving up higher down payments – around 10% for conventional loans – and they are interested in 15-year mortgages. Many are keeping their mortgage payments to 25% or less of their monthly income.

Candy: That means they are buying smaller homes. Surely not every homebuyer is so well-behaved fiscally speaking?

André: Of course not. There are still folks who want to buy a house bigger than they can safely afford or who have a lot of debt hanging over their heads. In cases like this, my wife Kelli and I will often take them aside and talk to them about getting out of debt first, or looking at a less expensive home – to get their financial house in order before applying for the loan. We’ll even direct them to a Dave Ramsey course, if they are interested. We want them to be successful, not disappointed.

Candy: André mentioned 15-year loans – is there really that much difference between 30-year and 15-year loans when the rates are so incredibly low to begin with?

Wade: Practically no one would be upside down on their mortgages right now if everyone had a 15-year loan. It is the best “forced savings” plan you can do for your family. Not only are the rates lower for a 15-year loan, but you are paying down principal – fast. Seven years in a 30-year loan and you’ve barely touched your principal. Seven years in a 15-year mortgage, and you’re halfway done.

Candy: Wowzers. What about getting a 30-year mortgage and then making extra payments?

André: The biggest problem with that approach is that people start off with good intentions, but rarely have the discipline to keep up with the payments and they are paying at a higher interest rate. If they can afford the higher monthly payments, they really should get a 15-year loan.

Candy: How much higher do 15 years cost on average?

Wade: About 50%. On a $100,000 home you might pay around $1,000 a month with a 30-year loan and $1,500 with a 15-year loan. From what I can tell, homebuyers are getting the message. In 2011, 15-year loans made up 37% of my conventional loan portfolio – a huge jump from 8% in 2010.

Candy: Speaking of rates, what are the latest rates?

Wade: Earlier this month (Feb.) we closed conventional loans at 3.25% for a 15-year loan and 3.875% for a 30-year loan. Rates like these are not going to last indefinitely.

Candy: What about investors? Are you seeing the same kind of conservative approach from them?

Wade: It depends on why they are buying the house. A younger investor who is planning to rent the home – and boy is this a great time to be a landlord – will generally go for a 30-year loan for cash-flow purposes. Since the tenant is paying the mortgage, the investor is less sensitive to the higher rate. Investors generally put in as little as they can – 20% down is the minimum required.

An exception to this is an older investor who is looking to cash out his properties and retire. This investor wants to own the home faster and plans to sell when the market has recovered. He may put down a higher down payment – there’s a price break at 25% down – to speed up the process and get a 10-year or 15-year loan.

André: Investors have to be in even better financial shape than regular homebuyers to get a mortgage. I tell my clients who are new to this that they are entering a business venture with the bank. They have to prove that the property will pay for itself and that there’s enough revenue to cover the mortgage. If your tenant leaves unexpectedly, can you pay the mortgage for 2-3 months while you find another one? What if rental rates drop 10%? Can you still pay the mortgage?

Candy: Thanks guys, I agree it’s a great time to be a landlord. Unfortunately, the costs of home ownership are about to go up!

 

According to Bankrate.com’s recently announced 2011 Closing Costs Survey, Texas once again has the second-highest closing costs in the country, behind of all places, New York – ouch! While the nationwide average is $4,070 (up nearly 9% from last year), Texans pay $4,944 on average. This is the fifth year in a row we’ve had the dubious honor of being #2. I chatted recently with Marcus McCue, SVP of Guardian Mortgage Company about why our closing costs are so high and what, if anything, can be done about it.

Candy: What’s with all the fees going up up up?

Marcus: Several factors impact costs – some are in the lender’s control, and some aren’t. Assessed by the lender, the “Origination Charge” includes the lender’s costs to provide financing – like processing and underwriting fees.

Third-party fees include title, appraisal, postage/courier and survey charges. In Texas, the state’s Department of Insurance sets one overall fee for title insurance, title search and settlement services, so title agencies compete on service, not price. The standard owner’s title insurance premium (which protects the homebuyer) on the purchase of a $225,000 home purchase with an $180,000 loan is $1,450. Although the seller on resale contracts typically pays this premium, it is much higher than the $605 national average from the Bankrate.com survey. If you add the $240 lender’s title insurance premium (protects the lender) on the same loan, then the total title insurance premiums is a whopping $1,700.

Candy: According to the survey, origination fees went up by over 10% this year nationwide, why is that?

Marcus: Much of the increase is a result from the stricter mortgage regulations the government has imposed over the past year. More paperwork and regulatory compliance means more staff, which means higher costs. Even in areas where additional staff is not required, required software updates and revisions increase costs. Nearly all software vendors with products focused on the mortgage industry have made significant changes to become compliant to changing government requirements for disclosures, quality control and document revision. This additional cost for making these changes is passed on to the mortgage companies using the software, which then results in higher costs for borrowers.

Candy: What can a homebuyer do to reduce closing costs?

Marcus: First, make sure your lender goes over the Good Faith Estimate (“GFE”) with you carefully so you understand all the fees and where they are coming from. If you are reviewing more than one GFE, then check each lender’s “origination charge” against each other. Again, this is the cumulative total of the lender’s cost associated with providing the financing. This fee can vary greatly from lender to lender.

The “required services that we select” section of the GFE includes items that are required by the lender, but are solely selected by the lender. The most common of these fees are the appraisal, credit report, flood certificate or the upfront mortgage insurance premium on FHA financing. Charged by vendors selected by the lender, these costs are passed-through, so you may see differences from lender to lender. Because you are not able to provide the lender with other vendors for these services, you should consider these fees with the “origination charge” when deciding which lender has the best loan terms for you.

The “required services that you can shop for” section of the GFE includes things like pest inspection or the cost of a survey. Unlike the services the lender selects, you have some options here. These are again pass-through costs, but you can lower them by identifying a lower priced provider and making the recommendation to the lender. If you see a lot of variation among lenders on this item, it may be worth your while to source another provider.

In addition, if you are refinancing a loan within seven years of your last loan closing, you will qualify for a “re-issuance” credit on the owner’s title policy. You will have to pay a new premium for the title policy to be renewed and extended to the new loan, but this credit will reduce the cost of that new premium. This credit is on a sliding scale, with the largest credit being a 40% reduction of the premium if the refinance occurs within two years of the last closing. This credit is available from all title companies, so it does not require using the same lender or title company from the last closing.

Candy: Is there anything else that can be done to reduce closing costs?

Marcus: Obviously, the lenders have some control over their own fees. Last week Guardian Mortgage announced we joined the Lenders One Mortgage Cooperative of independent lenders. One of the big benefits of being part of a cooperative is collective buying power. These cost benefits from the cooperative will allow us to keep our costs lower than our competitors as they continue to increase their fees to accommodate those aforementioned changes with government regulations and compliance. In addition, we will be able to offer more services to our customers and provide better training to our staff. It’s exciting news for our customers and us.

If you have additional questions about your particular situation, feel free to contact Marcus McCue at (214) 473-7944, [email protected] or on facebook.