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Mortgage information and advice from a St. Louis Mortgage Banker – Part 3 of a series

Dennis Norman

Dennis Norman

By: Dennis Norman

Today we pick up where we left off yesterday with my E-View TM with respected mortgage banker, H. John Frank, President of Paramount Mortgage Co. here in St. Louis.

If you missed part one or two, there are links to both at the end of this post. And now, part three of the E-View TM:

Q-I have seen a lot of reports about “jumbo” loans and rates being artificially high on those loans. What is a “jumbo” loan and have the rates been affected in a negative way as a result of the mortgage mess?

H. John Frank, Jr., President, Paramount Mortgage Co.

H. John Frank, Jr., President, Paramount Mortgage Co.

A- Jumbo loans are ones that exceed the FNMA (Fannie Mae) loan limit. In most states, this limit is $417,000. There are fewer and fewer investors who make these loans because they are not as marketable (investors can always sell their ‘conforming’ loans to Fannie Mae or Freddie Mac if they need to raise funds). Without this constant outlet, the liquidity of these loans is diminished, thus demanding a higher yield for the product.

Q-I’ve heard stories of home buyers and home owners that, in an effort to find the “best” deal, shopped around extensively for home loans, many times using the ease and convenience of the Internet.

Unfortunately they later found they negatively impacted their credit score because of making multiple applications for a home loan. I have also heard recently that these types of inquiries no longer negatively impact credit score. Can you please shed some light on this and if it does still impact credit, make suggestions on how someone can protect themselves?

A-Typically, people who ‘shop’ for the best rates via the Internet or just using local lenders, do not hurt their score with the multiple inquiries as long as this is done in 30 day increments.

People must learn that just because one lender “offers” them the lowest rate, it doesn’t mean they are getting the best deal. Rates are important, but fees can be killers. Borrowers are promised certain rates and fees when they originally apply for their loan, then ‘little’ things change the scenarios and rates ‘mysteriously’ go up, often times not know to the innocent, or not so innocent, borrow until the day of closing. Too late to change when a seller and/or agent are breathing down their neck to close on their loan.

I’m going to stop here today but will pick up tomorrow where I left off.

To contact John for help with your financing needs, or with questions, you can reach him by phone at (314) 372-4300, email at hjfrankjr@paramountmortgage.com or you can visit his company website at http://www.paramountmortgage.com/.

To read part one of this series click here.

To read part two of this series click here.

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