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Take advantage of your VA eligibility and purchase a home with $0 down payment. If you have a VA loan already, talk with us and see if today's rates are low enough to lower yours through the easy qualifying and low cost streamline refinance.

A streamline refinance, also known as an IRRL, stands for Interest Rate Reduction Refinancing Loan. No appraisal or credit underwriting package is required by VA, however, some lenders still require the appraisal and credit report. A Certificate of Eligibility is not required.  Lenders may use an e-mail confirmation procedure with the Dept. of Veterans Affairs for IRRL in lieu of a certificate of eligibility. An IRRRL may be done with "no money out of pocket". This can be done by either paying a slightly higher interest rate which allows your Lender to pay all costs OR by including your costs in the new loan.

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testimonials

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"Throughout the process, Brent answered all of my questions patiently and was always available. In fact I know Brent worked on my loan while in Florida for Christmas. He kept the ball rolling and the process was completed in the time frame promised. There were absolutely no surprises at settlement. In sum, his manner and eagerness to work with me removed a great deal of the stress. I could not recommend Brent more highly."
Todd J.-- Potomac, MD

"Hey Brent, as promised here is my recommendation: Brent did an excellent job at keeping me up to date on recent interest rate changes. My wife and I locked in at a very low rate for our refinance and we're thrilled that we made the decision. This was our second transaction with Brent and was a real pleasure working with him."
Jason S.-- Rockville, Maryland

"Hey Brent,
A special THANK YOU to you for making my home ownership possible. I truly appreciate everything that you have done to save me money. Your service was excellent and outstanding. Thank you a million for taking the time to explain so much to me."
Theresa-- Silver Spring, MD

"Brent was extremely prepared, knowledgeable and professional. He worked with us every step of the way throughout the loan process, including through a somewhat complicated process at the end to obtain a loan payoff statement from an old account. He always kept us informed and updated, and was true to his word. Brent was very responsive and always available via email and/or phone. We would highly recommend him and use him again for our financing needs."
Sanjay Patel & Asha Subramanian, Zillow user-- Kensington, Maryland

"Getting a loan through Choice Finance was one of the easiest financial transactions I have ever experienced.  Brent exceeded all expectations in helping me choose a loan product, learn all of the details and get it through the final process.  I would use them again in a moment and would highly recommend them to anyone looking for a financial product"
Danielle Doane-- McLean, Virginia

"I wanted to follow-up with a thank you for all your hard work in getting our mortgage finalized. You were on top of everything. We were initially skeptical about working with someone in another state that we hadn't actually met but you came through as promised. We are very pleased with your service and fast response to our questions. We will recommend you to our friends and anyone else we feel is in need of a reliable and trustworthy mortgage consultant."
Fredrick and Carol Salmons-- Asheville, North Carolina

"Living out of state I was apprehensive working with someone who's office was in Maryland and not in North Carolina.  But, I thought if people are doing mortgages on-line that this could work.  Every aspect of the entire process was handled very well by Brent.  Brent's rates prompted us to consider him and were better than anything we could find locally here in North Carolina. Our closing went off on time and with all commitments being met. It was a 10 out of 10!"
Bryan Watson-- Charlotte, North Carolina

"Thanks Brent, you got it done, just in time. Brent was the one. I contacted more than one lender for my refi loan and my "Choice" was Brent. From the beginning he was honest and upfront with the process. Brent got it done just in time for my wedding. The new refi will save me hundreds monthly. Thanks for all your hard work."
Keya Joy--  Washington, D.C.

"I am writing this letter to recommend your mortgage consultant, Brent. My wife and I needed to refinance our home. We got in touch with Brent and he went straight to work within 24 hours he had most of the figures he needed to work up a general idea. We drove 1½ hours to bring the documents to him so he could get more done. We must say we have never worked with someone in the finance sector who has gone the extra mile as Brent did. He actually went as far as calling us for an update on the way to his wedding rehearsal. We were able to close on our new loan in a very short time and without any last minute delays. We really appreciate all he did for us and when we refi again, he will be the only number on the list."
Bryan and Sherry Harper- Frederick, Maryland

"I wanted to share the wonderful experience my husband and I had with Brent. He has been our loan officer for several years and not only is he extremely professional and accurate but has the perfect qualities that give the up most services to the consumer."
Veronica Connelly- Germantown, Maryland

"I would like to thank Brent for all his hard work helping us re-finance. I have known Brent for many years and knew he was the best person for the job. He made the process easy and painless. I have and will always refer others to him, for all of there questions and needs. Thanks again Brent for your insight and caring attitude."
Doug and Kimba Robinson- Hagerstown, MD

No town in Montgomery County is too small grew up in Montgomery county and loves the unique small town feel that you can still have so close to the big city. Brent knows Brookeville, Cabin John, Darnestown, Derwood, Garrett Park, Glen Echo, Glenmont, Hillandale, Somerset, Sunshine and Takoma Park very well... and they are just some of the small town jewels tucked away within the larger cities of Montgomery County.

Whether you are ready to apply for financing or just have questions as you make your decision, can be your partner in helping you choose the right path for you.  prides himself on the fact that his integrity and honesty are what make him stand out from the rest.  Let us help you make the right choices in this tumultuous market.

Each realtor has specific skills that make them the best of the best in their specified area of expertise.  Rather than referring you to one realtor, he would rather make sure to put you together with someone right for you and your situation! 

Articles
- Explanation of Option ARM loans
- Increase your low credit scores
- Should I refinance or take out a line of credit for my needed home improvements?
- HELOC versus HELOAN

Option ARM loans
Here’s how the loan works. You begin with a payment option usually at 1-2% then there is the IO <interest only > option a 30 year fixed rate payment and a 15 year payment.  Hence the “option” part of the loan.  The next part is where people get into trouble.  They only calculate a payment on the extremely low 1-2% interest rate.  The borrowers use the low rate and qualify themselves for more house than they can afford.  Let me give you a quick example.  Borrower takes out a 250,000 loan using an option ARM product.  They receive the four payment options I mentioned above.  The payments are calculated as follows.  Minimum payment $804.10 not including taxes and insurance <T&I>. IO payment at 6.75% $1,406.25 and the principal and interest <P&I> $1,621.50.

The last payment amortizes over 15 years and is $2212.27 per month.

Obviously you can purchase a much more expensive larger home if you are paying $804.10 per month than $1406.25 and that is the biggest misuse of these loans by the consumer.  The old saying “the devil is in the details” really applies to these loans.  As I said, they are VERY complicated and were used by loan officers who barely understood them, let alone the borrowers.  They have been misused by both parties. Let’s look at the details behind these transactions. The difference between your minimum payment $804.10 and your IO payment $1,406.25 is $602.15 per month. That money gets tacked onto the principal balance each month.  So after year one, assuming you pay the minimum payment, which most people do, you now owe instead $257,222.80 instead of the $250,000 originally borrowed. There are two ways these loans rise in cost.  In the most popular MTA program, the rates changes every single month.

So your payment was going up right?   Not really, according to the way these loans work, your minimum payment would remain the same for the first year.  What they didn’t tell you was every single month, the gap between the IO payment and the minimum payment widened every single month.  Pretty soon that $602.15 was in excess of $750 per month getting tacked onto the back end of your loan.  Its gets worse, once a year almost all these loans had a maximum payment increase of 7.5% so the gap widens yet again, month after month, year after year.  What most people don’t understand about these loans is that the minimum payment is fixed but the rate isn’t.

In fact, the rate has little or nothing to do with your payment, its little known factors such as the margin and index.  You don’t control them and you don’t get to set them either.  That is really what determines what your payment will be in the coming years; that and the free market.  I saved the best for last. Lenders have strict caps on how much negative amortization they allow you to have.  It ranges from 110% of the original loan amount up to 125%.  So if you borrow 250,000 and the cap is 110%, when your loan balance reaches $277,500 you will no longer be allowed to use the minimum payment feature. Same goes for the IO option also; it’s a fixed rate 30 year mortgage at a higher rate than the market normally bears.  So your payment of $804.10 just became $1621.50 per month.  So in a 2-3 year period your mortgage payment has doubled AND you have stripped most if not all of the equity in your home, so you can’t refinance it.   That wasn’t true just a short time ago when our homes were skyrocketing in value but that has stopped and in many cases our homes have lost value from last year.   That trend of sinking home prices is likely to remain for the next year at least.  In addition most of these loans carry stiff prepayment penalties.

Here are some warning signs that you are in a loan that can harm you:

1. You didn’t really understand how the option ARM worked but you are now in one.

2. You went with the stated income option to qualify for more home than you could really afford.

3. Home prices in your community have been falling recently.

4. You are approaching the principal cap thereby removing the minimum payment option.

5. You plan on being in the home for a number of years.

This is a recipe for disaster, which will lead to a foreclosure if immediate action is not taken. Consult a loan officer that you can trust, NOT the one that put you in the loan in the first place.  There are some things you can do, try and make the IO payment as the new minimum payment, at least you aren’t adding to the principal balance, you aren’t paying it off either but treading water is better than drowning.  You can also talk to your lender and see what can be done.  There have been a wave of foreclosures and more on the way.  Scores of lenders have gone bankrupt this year and more are on the edge. The worst they can say is no.  You can always sell the home if all else fails.

At this time, I have one lender that does loans to bail out option ARM clients, they loan to 125% of the value and put you on a fixed rate program.  The rate is higher than a conventional loan but if you owe more than the home is worth, this is probably the best option.

Increase your low credit scores
I have had a chance to review your credit results and want to take a few moments to explain your credit score, how it all works and tailor a solution for your situation.  Your score is on the low side, 612.  Actually there are three scores on your report, your low score is 590 and your high score is 645 therefore your mean (middle) score (and the score most commonly used by lenders) is 612.

The Bad News:  This is going to cost you thousands of dollars in higher mortgage payments over the life of the loan.  In addition to affecting your mortgage, a poor credit score will also cost you large amounts of money in higher car loan and credit card payments.
The lower your credit score, the higher risk you become.  Some things people don’t know that greatly effect credit scores is that deep within the fine print that we never read is a clause that says "..if you are late even once the credit company can raise your interest rate, sometimes as high as 30% APR..".  What’s worse is that when other companies find this out they can also raise your interest rate; even if you weren’t late with that particular company.
You can certainly still purchase a home with the credit score you currently have. In fact, you can buy a home with a score as low as 500. However, if you do, the rate will be significantly higher than what is currently available in the housing market, and you will be in what we call sub-prime land.  The points, fees and most importantly interest rate will be 1-3% higher than someone with a 680+ score.

The Good News: You can increase your score to 712 in less than a year which can save you thousands, sometimes tens of thousands of dollars on that new home you want.  First, I am going to explain how your credit got to that number and then we will go over what steps to take to increase your score to 712 next year.  Yes, it can and will be done and it’s not even that hard to do. I have seen scores go from 585 to 715 in less than a year.
Your score is 612 for the following reasons: 

• Several late payments of 30 days or over on a few credit cards.
• That one collection account that you didn’t owe or thought you had cleared up years ago.
• The one card that offered you a low or no interest transfer balance on for up to a year.
• All the different cards that you have because you saved 10% at Target or Kohl’s and never used again.
• The biggest mistake most people make is that … they don’t even know what is in their report and as time continues the score can get worse.

What to do to increase your credit score and save money:  I can’t repeat enough, the best thing is to review your credit once per year and ensure all the information is accurate and current.  Maryland residents get one free copy of their credit report per year. You do not need to pay the $20 to get copies of all three, one report should give you an idea of where you stand.  If anything is outdated, inaccurate or just plain wrong you need to challenge the credit report immediately. You can do this for no cost at the three major credit bureau websites.
www.equifax.com
www.transunion.com
www.experian.com

There are links to click to “dispute report” and the initial report is pretty simple.  Be prepared to wait several months for a final answer. The credit bureau will notify a creditor you are challenging and then the creditor will get back to the bureau. This is a much better way to proceed then calling the company directly. The reason is very simple; the company to whom you owe money can’t be trusted to actually fix your credit. They are after your money; and they have no interest in informing the bureaus that you have paid your debts.

If you do speak to a creditor, trust but verify.  Take careful notes of whom you speak, day, time, settlement deal, everything.  Don’t forget to get everything in writing. The turnover at these companies is quite high so when you call back, the person you spoke with may have moved on to another job.  My advice would be to get a proposed deal in writing BEFORE you send funds. Frequently a debt collector will tell you that they can’t give you anything in writing until you pay the debt. All you need is an outline of the proposed deal whatever it may be once you agree. Stick to your guns and if you find one company that won’t budge, tell them you only have a fixed amount of money to pay debt and move on to the next one.

The older the debt the better the chance you can settle it for less. Generally if amount is less than $200 they will not settle for less than the full amount. It never hurts to ask and then ask again. Never under ANY circumstances tell a debt collector that you are purchasing or refinancing a home.  They will never settle for less than the full amount because mortgage lenders require outstanding debts to be paid in full at the settlement table.

Know how much you owe. Debt collectors are allowed to continue accruing interest on your old debt. So your $500 may now be $800. That is the easiest thing for them to forgive. I would start out offering 40% of the original debt and slowly work to an agreement.  Again if your debt is old and you offer to pay towards the end of the month you have a much better chance of an agreement in your favor. Be prepared to walk away several times and stay polite but firm. If you are not getting the offer you like ask to speak to another representative or a manager and see if they offer you a settlement more to your liking.

Don’t pay late on anything ever again.  This is the easiest way to build your credit.  If you travel or are forgetful, consider setting up an automatic withdraw plan from your bank. Remember it only goes on your credit report if it’s more than 30 days late but you will pay additional money in late charges. Even one 30 day late can drop your score as much as 25 points or more and will stay on your credit report for 7 years. The good news is that if you get away from a late payment the less it affects your score.

Make sure you don’t have a credit card maxed out while others have zero balances.  People love the card that allows them to transfer high interest balances to no or low interest cards for a year or so. That’s great but 30% of your score is determined by available credit ratios. What this means is that if you have a card with a $5,000 limit and no balance, a card with an $8,000 limit and no balance and a $15,000 limit with a $14,850 balance; your credit score <and you interest payment> will suffer. Credit scores plummet when you have a maxed out credit card.  The ratios you want to understand and remember are 80,50 and 30. Those are the optimum balance ratios you want on your card. Take that maxed out $15,000 card and at least get the balance down to at least $12,000 but $7,500 would be much better.  Try and resist the lure of cash back or a free airline ticket, remember it could cost you a few thousand every year in higher interest costs on your new home loan.

You can also have too much credit.  When you get a new card and get a 10% break that day on your purchase and never use it again it hurts you. A large part of your score is based on available credit.  The computer that generates your credit score fears that if you have access to $25,000 or $50,000 of credit you one day may decide to use it. In a perfect world try and have three or four credit cards, open and active on your credit report. It’s all you really need for a great score. Don’t forget you can always turn down that credit increase limit if you don’t want it. Just try and use the cards you have every month. Even once a month will help you. Credit scores are improved by having the right type of credit, showing responsible use and not having too much credit.

Last is the length of your credit history. Some people who get themselves in trouble react by closing all accounts, even the ones they have had for 10 or 20 years. This is very understandable but a very bad idea. Another 30% of your credit score is based on your length of credit history. If you close all your accounts it makes your credit file look very young with no track record of repayment. Once you close an account it no longer factors on a positive note. The account must be open and active. If you must, cut them up but keep the card account open. If you really must close accounts due to the sheer number, then close the most recently opened ones first. Don’t do ANYTHING until after settlement though.

I hope this was a helpful guide to improving your credit score. There is nothing more frustrating for a mortgage banker to inform a new client they can’t purchase their new dream home the family fell in love with. Credit scores are the one barrier that a mortgage banker cannot get around. There are loans for every scenario and person out there, however, you must have a high credit score to have access to them.  If you have a 720 score you can have every and I mean every loan program possible. If your score is lower you may get the same program but pay a higher rate, or be forced to come up with a larger down payment. Or even worse, not qualify for the loan at all.

I am very glad you came to see me months in advance looking for a home so I could qualify you now and together fix the necessary problems so we have a smooth loan acceptance when you find the perfect home. So many people wait until they have worked with a realtor and found the home they want only to have loan problems and lose their dream home to someone else. Another common error is to get excited about a home, sign a contract, and then end up getting gouged on the rate and terms because you can’t walk away.  By working with me, a trained professional mortgage banker, you will be approved for the loan you need when the time is right.

Credit re-score | rapid rescoring- increase scores in 72 hours!

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Should I refinance or take out a line of credit for my needed home improvements?
The following is an actual scenario for a client of mine.  This client wanted to know whether he should refinance with cash-out, OR get a Home Equity Line of Credit for the Home Improvements. 

You have two options at this time. Wait and hope interest rates dip next year and take a HELOC now for your desired home improvements; or refinance now and roll that money into your new loan. Either way you will need to refinance before 12/1/07

I will provide you with the pros and cons of each as well as the numbers for both.

You currently have an interest rate of 5.375% set to expire on 12/1/2007

If we do nothing your new rate will be 7.375% That would make your new interest only (IO) payment $1,751.16 not including taxes and insurance. I can obtain a rate today of 6.625% IO on a 10 year ARM that would include the desired cash out you want now.  Your new interest only payment would be $1,739.06 on a loan amount of $315,000

That is of course better than letting your ARM expire which you would not want to do under any circumstances.

The positive is that you are now set for the next 10 years and have the added money to finish your home improvements thereby increasing the value of your home when you sell. The 10 year time period also fits comfortably in your expected move out date of 3-5 years. If you want to live there perhaps 5 years, I do not recommend a 5 year ARM, you might be cutting things a little too close. There are also certain tax breaks for refinancing, consult your tax professional how they may relate to your situation.  The con is of course that you are giving up the lower rate for a higher one.

Now for the second scenario. Wait and gamble that you can refinance next year for a lower rate than 6.625% and use up more time on your lower rate. The biggest problem is that we simply do not know what rates will be of course. To a certain extent I am guessing but there are certain trends we can not ignore. Rates are up over 1.25% over the last year. Prime rate has doubled in the last two years and I believe most industry professionals would agree on a slow but steady increase in rates for the foreseeable future. I concur with that general assessment. You could quite easily end up with a rate over 7.0% if these trends continue. One other problem is that if you want money for home improvements now and do not wish to refinance you can apply for a HELOC now for the desired funds. You will probably based on your credit obtain the best rate which is prime +0 That is now 8.25% That rate has been increasing in quarter point increments for the last two years. Your IO payment on 30,000 at prime would be $206.25 and would increase roughly every 3-4 months but a quarter point in rate.

That would make your monthly payments $1482 for your IO first and your IO HELOC and the second would not be fixed.

Now that is an increase of $257 per month from what you are now paying. However, say you wait until next November to refinance. You will save $257 per month for 11 months which is $2,820.07 if you wait until next November to refinance.. Say your new rate though is even 7.0% and you live in your home 5 more years. Your new IO payment would be $1,837.50 that in theory you would pay for 5 years. That is a difference of $98.44 per month. Say rates don’t go down and you keep the rate for 5 years, then you will pay $5,906.40 more than you would if you refinance now. The difference is $3,085.70 that you have now lost. If the rate is 7.25% the difference of course grows wider of what you have lost.

Another factor to consider is if you take a HELOC now and pay it off before three years, you will pay the closing costs associated with that loan. They waive them if you keep the loan three years but if you then roll the HELOC into the rate which would make sense (paying off higher interest debt for lower interest debt) then you would pay between $1,000 and $1,500 in closing costs. It varies by lender.
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HELOC versus HELOAN
A HELOC is a home equity line of credit, it allows you to have a sum of money to use as you need it.  It is a very flexible loan. You only pay on what you use like a credit card. But the interest is much lower. You are allowed to only pay the interest back for up to 10 years. I recommend paying more if your finances allow though.

What I like is that you are in charge of how much you repay every month, so if you take a trip or the roof does cave in you can make the lower payment, that’s part of the flexibility I mentioned.  

I have one on my home in case I ever need the money fast for something, a major car repair, a roof leaking something drastic.

It costs me nothing each month. In fact it cost me very little at all, all I needed was an appraisal. The rest of your closing costs are paid for by the bank, every single dime except the appraisal.  Assuming you qualify with credit and income, I can obtain for you a 6 month rate of prime -1.51 which is 6.74% at this time. After six months the rate adjusts to prime -.25 for the life of the loan. You also can payoff any credit card debt or any consumer debt at all and improve your monthly cashflow. Also, you can consult your tax professional but likely the interest would also be tax deductible much like the interest you pay on your first mortgage.

Example would be if you borrowed and spent $50,000 with the loan we are discussing the payment would be $280.83 for the first 6 months then 333.33 after that for the next nine years. That brings me to the negative aspect of this loan. Really the biggest and possibly only item I don’t like. Your loan will adjust when the prime rate changes. Now it could go down but it can also go up. Opinions are mixed as to what will happen with the prime rate. It currently is 8.25% which means you would be under that by .25%

Let’s look at the change in payments if prime went up by .25% That is generally how the Federal Reserve Board raises prime.  That same six month reduced payment would be 6.99% instead of 6.74, which means your new payment would be $291.25 instead of $280.83

Prime -.25 for the life of the loan would mean the payment would be $354.17 instead of $333.33

So the first six months it would cost you $10.42 more per month and after that it would be $20.84 higher per month.  I think you will agree not a good thing but not a cause for panic either.

HELOAN means home equity loan. The rate is fixed for 15, 20, 25 or 30 years. The payment is higher but you have the piece of mind knowing that no matter what prime does you are protected. Of course you will not be happy if prime drops back to 6-7%

You get the same possible tax break, and the possibility of improved monthly cashflow.  It’s easier to budget because you know exactly what your monthly payment and when the loan will be finished are to the day.

What I do not like on this loan is whatever amount you borrow you must begin to pay right away. No waiting for a rainy day or an emergency, you get $50,000 you pay on the full amount right away.

The rate is currently lower and of course does not float like the HELOC does.  It is a 15 year loan so that means you would pay $463.50 each month for 15 years at which time the debt would be retired.  Based on the projections I have you would qualify for $114,000 HELOC which would take you to 85% CLTV

You are not permitted with the program to exceed that loan to value. Other higher rate programs allow you to go higher but I don’t recommend but of course will do what you wish. It takes about 7-10 days and you could have full access to your new funds

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