Skip to main content

Posted August 24, 2015

Going to the Fountain of Youth
A recent New York Times article (“Attracting Young, Diverse Mortgage Bankers – Aug. 21, 2015) details the efforts of a company called Radius Financial Group to reach out to and cultivate younger candidates to become Loan Originators, among other things.  Keith Polaski, COO and a founder of Radius, describes the mortgage banking demographic as “55-plus-year-old white guys and gals,” and states, “If we don’t do something about creating the next generation of mortgage bankers, we’re going to old ourselves right out of business.”  It’s a logical connection that younger homebuyers are going to gravitate toward a younger demographic of both mortgage bankers and real estate agents.

Dave Stevens of the Mortgage Bankers Association echoes this sentiment and has approached realtors to establish training programs for younger professionals.  The mentality behind this, of course, is to create a dynamic that presents a younger “face” to the up-and-coming homebuyers.  And that’s where the training is crucial: while it’s nice to have the young “face”, it’s absolutely vital that knowledge and expertise are a part of the overall package.
With that said, the 40-plus-year old buyers should not be discarded – there are a lot more of them than those who are under 40 – but it’s clear that the market for the younger buyers is only going to grow.  Business as usual is not going to attract these younger buyers – let’s be sure not to “old ourselves right out of business.”

Bi-Weekly Mortgage Payments Doubling Your Pain?
It’s a classic means of paying down your mortgage faster: take your monthly mortgage payment (PITI), cut it in half, and make that half payment every two weeks.  By the end of the year, you will have made 26 of these payments for a total of 13 full payments.  Nothing wrong with wanting to pay off your mortgage early!

Recently, however, a payment processing company called Paymap was fined $5 million by the CFPB for defrauding their customers.  In addition to making completely unsupported claims of how much a consumer will save though this bi-weekly payment program, they were telling their customers that the mortgage payoff schedule was “every two weeks” – in reality, Paymap was withdrawing the payment amount every two weeks from their customers’ accounts, but they were waiting until the first of the next month to transfer the funds to the mortgage servicer.  The payment schedule did not change. 

Two recommendations to avoid such a debacle:

Pay an extra “twelfth” in your monthly mortgage payment.  For example, if your mortgage is $1200, add another $100 to your payment for a total of $1300.  At the end of the year, you will have made the equivalent of 13 monthly payments.  No muss, no fuss.

Or, give your mortgage a “raise”.  If you receive a raise of 5% at work, add 5% to your mortgage payment.  By tacking on a “raise” of $50 to $75 each month, you’ll significantly reduce the number of years on a 30-year mortgage. 

Comments

Popular posts from this blog

Numbers Don't Lie, But Wherein Lies the Truth? (Posted November 21, 2016)

Said with enough conviction, you can make almost anything sound true.   Preface the fabrication with “according to a recent bi-partisan government study,” and you’re three quarters of the way to selling the lie to a lot of people.   Seriously, try this. The next time you’re at a dinner party or having coffee with friends, pepper this little tidbit into the conversation: “I read something really interesting the other day.   According to a recent bi-partisan government study – I think it took them three years to get it all done – middle-aged men who drive either a Toyota Camry or a Honda Odyssey have more testosterone than younger men who drive either a Ford F150 or a Dodge Charger.”   You’ll get some raised eyebrows and looks of mild disbelief, but don’t let that deter you.   Just lift up your hands, palms outward, and say, “I just think it’s interesting, and it makes sense when you think about it” – and then change the subject to something completely u...

Dumb as (or Smart as) a Box of Rocks (Posted June 27, 2016)

Obviously, you all want to know what Brexit means to the economy and the housing market specifically.   So do I!   But since my crystal ball is at the cleaner’s, let’s give the Brits and the European Union a little time to work out the terms of their separation and look at something else.   What’s a “fad ”?   With the help of Google, this is what I got as a definition: “an intense and widely shared enthusiasm for something, especially one that is short-lived and without basis in the object's qualities; a craze.” In April 1975, an advertising executive by the name of Gary Dahl invented the Pet Rock.   The idea came from his sitting in a bar with some friends who were complaining about the cost and time required to take care of various types of pets.   He marketed his “pets” by placing a rock in a box cut and shaped like one you would get at the pet store to carry home a puppy or a kitten.   Along with the box and the rock, a booklet was included...

Left Behind (Posted April 4, 2016)

It’s highly likely that almost every single one of you already read the Yahoo! Finance article about the survey that Chase recently completed.   For the seven people who decided to take a nap under a rock last week, I’m going to share some of the major talking points here – the rest of you can step away and have an ice cream or paint your cat’s toenails.   First off, the survey shows that an ALARMING 68% of Americans are starting the home search on their own (gasp!) with 45% using a computer or laptop (as opposed to some other type of technologically advanced processor like a microwave oven) as the first step in this search and 13% using their mobile devices.   (In other related news from the Department of the Obvious, scientists have found that fish still have no use of a bicycle and looking directly at the sun is inadvisable.)   With numbers like these, we should just throw in the towel and join the circus, right?   Here’s the weird thing: in the ...