Protect Your Identity

Recent Nationwide Data Breach!

• Heartland Payment Systems, a nationwide credit card processor, announced that cyber criminals have hacked into their computer network gaining access to customer information associated with the 100 million card transactions it handles each month.

• Heartland provides services to over 250,000 retailers and restaurants nationwide.

• Tech security experts said this breach could set a record. With more than 100 million transactions per month, they could discover that several months' worth of transactions were captured.

In today's world we all are at serious risk of identity theft. It is my belief that we need help protecting our identities. Approximately 15 million Americans are victims of identity theft each year, according to Gartner research firm. Proactive safekeeping of your personal information, including your birth date, social security number and credit card numbers, may be the most effective weapon against identity theft. Doing so takes a lot of time, time that many of us may not have. Luckily, there are companies out there that can help. I have been a customer of Zander Insurance for a year now and I have been nothing short of content with their services. I receive notices and emails with valuable information (such as that provided above) and they give me peace of mind, which I deem very valuable! In the event of a data breach, and other such alarms, Zander Insurance recommends that you take the following steps:

* Cardholders should examine their monthly credit /debit card statements closely and report any suspicious activity to their card issuers immediately. Cardholders are not responsible for unauthorized fraudulent charges made by third parties.

* Check your credit report 3 times per year by going to www.annualcreditreport.com. If you suspect you may be a victim of ID theft, please login to the ID Experts member site and file a theft report.

These are just a few things you can do to help protect yourself against identity theft. For more information on Zander Insurance and how they can help you, visit www.zanderins.com.

Recasting Mortgages

Recasting is known as an adjustment to the current mortgage, a recalculation, or reamortization of the loan that does not involve the issuance of a new mortgage guaranty insurance certificate. The major benefit to the borrower is the potential for substantially reduced mortgage payments - without the cost of refinancing. Sometimes this happens when a borrower comes into a large sum of money and is able to pay down their mortgage. However, recasting most frequently occurs when a borrower is in financial distress and needs to refinance their mortgage to lower monthly payments.

It works like refinancing, where the lender pays off the previous mortgage and re-issues a new loan for a lower amount and there is a twist: the amount of the new loan is lower because the borrower must take a portion of the equity he got out of refinancing and put it towards the loan instead of a boat or remodeling or college tuition, making a significant payment of principal. The payments drop because there is a reduction in the principal amount owed, but they also drop because the amortization schedule has been lengthened to allow more time to pay the principal. If a mortgage is recast instead of refinanced, there are no closing costs and fees, usually just a small flat fee.

A numbers example: You put 10% down on a $300,000 home. The $270,000 is financed at 6% over 30 years, with a payment of $1,619.00.

You then pay an additional $50,000 to the lender 1 year down the road. And by paying a re-casting fee (usually $250 - $450), the new loan balance of (approximately) $220,000 is amortized over 29 years, providing a new payment of $1320.00.

Not all lenders offer customers the ability to recast their mortgage. Originating lenders often sell the loans they originate to investors. The investors aren't willing to provide that level of flexibility to borrowers, so the loans can't be recast. Call First Colorado Mortgage Solutions at (303) 651-7803 for a free consultation to see if considering a recasting feature in your next mortgage would make the most sense for you. It could easily save you thousands down the road.

Pre-Qualified vs. Pre-Approved

You’ve found the perfect house, you’ve spoken with your lender, you even have a pre-qualification letter … does this really mean you are approved?

Contacting a lender and getting pre qualified for a mortgage usually consists of not much more than a five minute conversation and a review of the borrower’s credit report by the loan officer. This means your application for a mortgage has not been reviewed by an underwriter, checked against the lender’s guidelines, or verified any of your income, assets, or employment that you verbally disclosed during your time of your application with the lender.

Getting pre-approved by a lender involves providing your lender or loan officer with a specific combination of some of the following documents that pertain to your loan scenario: signed loan application and disclosures, pay stubs, tax returns, W2’s, bank statements, drivers license, divorce decree, child support verification, etc. In other words, until the underwriter can verify the statements in your application, you are not approved.

Getting from a pre-qualification to a pre-approval is very quick and easy to achieve. Simply staying in touch with your loan officer and providing them with the documentation they request in order to process your loan application is all it takes. The lender can then continue to tailor your needs and get you the right mortgage to buy your home.

Remember, before you start shopping for a new home, make sure you have a pre-approval, not just a pre-qualification.