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Articles written by Michael Scharfe


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  • Mortgage Minute: Credit inquiries

    Michael Scharfe|May 16, 2024

    A frequent question I get asked when someone applies for a loan is whether pulling their credit report is going to affect their credit score. The answer to that question is “it might.” In general, inquiries have a small impact. A single inquiry can lower your score by less than five points. Inquiries only represent one type of characteristic and account for less than 10% of the score. Credit scoring models use specialized logic that accounts for rate shopping for student, auto and mortgage loans. In general, student loan, auto and mortgage rel...

  • Mortgage Minute

    Michael Scharfe|Apr 25, 2024

    If you’ve been in a situation where you just applied for a loan, had your credit pulled, and then start getting phone calls from various creditors; you are not alone. This is called unsolicited credit or “trigger leads.” Trigger leads are created by credit bureaus. Once you apply for a loan, your information can be sold by the credit bureaus to other lenders. Trigger leads can be frustrating. You may experience a large number of phone calls, texts, e-mails, etc. from various creditors. These trigger leads are primarily geared towards givin...

  • Mortgage Minute: A year in review

    Michael Scharfe|Mar 21, 2024

    It is hard to believe that one year has passed since this first Mortgage Minute article came out. It has been fun working this up every month. I would like to thank those who encouraged me to write the article, those who provided ideas, and those who have helped review and fine tune each article that has come out. Back in March of 2023, there was optimism that mortgage rates would drop from the average 30-year rate of 6.85% that was prevalent at that time. A quote that I had in that first article from bankrate.com stated “Depending on what t...

  • Mortgage Minute

    Michael Scharfe|Feb 22, 2024

    Construction loans can be a great way to help you achieve the goal of building your dream home. Construction loans are typically a 12-month line of credit. Funds are disbursed from this line to pay the contractor to build your home. During this construction period, you are only required to pay the monthly interest, which is based on the principal amount of the loan. Once the construction of the home is completed, the construction loan will either be converted to a traditional mortgage loan, or it will need to be refinanced into a mortgage...

  • Mortgage Minute - Temporary Buy Downs

    Michael Scharfe|Jul 20, 2023

    Last month I wrote on the availability of buying down the rate where the borrower pays an upfront fee to have the rate reduced for the life of the loan. There is another option when buying down the rate that is called a temporary buy down. The most common option is a 2-1 buy down. With a 2-1 buy down, the interest rate is 2% less than the regular rate for the first year and 1% less than the regular rate in the second year. Then, in the third year, the rate changes to the regular or permanent rate (known as the Note Rate) for the remaining term...

  • Mortgage Minute - Acronyms

    Michael Scharfe|Mar 16, 2023

    Whether you find them in a text message, reading a report, or — might I say — choosing a mortgage loan, acronyms are everywhere. Some of the most frequently used ones in the mortgage world are FHA, VA, and RD. FHA stands for Federal Housing Administration which is affiliated with HUD (another acronym which references the Department of Housing and Urban Development). An FHA loan is a government-backed mortgage that is insured by the Federal Housing Administration. FHA loans allow for lower minimum credit scores, lower down payments, and the...