Your Home and Your Mortgage- Get Smart, Inspect, and Protect Your Investment

In Mortgage Loans & Rates by Jo Garner0 Comments

How to make a home inspection a good investment for you as a home buyer and as a home seller? Brandon Thompson of Home Team Inspections will be talking about the scope of a home inspection and some of the most important items where a home inspection can save someone the most money.  I will be covering some areas of your mortgage financing to inspect to make sure you are not losing money.  Get smart, inspect and protect your investment.

What do YOU want to inspect a little further when it comes to real estate or real estate financing?  Let’s stay in touch!   Subscribe my emailing me at Jo@JoGarner.com  and you will get the latest real estate financing info, blogposts with show notes and podcasts every week. We will not sell your email address. We want to stay connected with you.

To Your Success,

Jo Garner, Mortgage Loan Officer NMLS# 757308 (901) 482-0354 www.JoGarner.com

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LET’S TALK REAL ESTATE!

Good morning, Memphis!  Welcome to our internet listeners and podcast listeners across the 50 states! You’re on Real Estate Mortgage Shoppe. I’m your host, Jo Garner, Mortgage Loan Officer.  You can connect with me at www.JoGarner.com.   Our general topic is YOUR HOME AND YOUR MORTGAGE-GET SMART, INSPECT, PROTECT YOUR INVESTMENT.

If you have a question or comment text me now at (901) 482-0354 or call me directly off the show at the same number (901) 482-0354.  You can call us while we are live in the studio at (901) 535-9732 Today is July 29th, 2017.

HOME INSPECTIONS AND GETTING SMART WITH YOUR MORTGAGE

Today on Real Estate Mortgage Shoppe we are covering how to make a home inspection a good investment for you as a home buyer and as a home seller. Brandon Thompson of Home Team Inspections will be talking about the scope of a home inspection and some of the most important items where a home inspection can save someone the most money.  I will be covering some areas of your mortgage financing to inspect to make sure you are not losing money.  Get smart, inspect and protect your investment.

INTRODUCING BRANDON THOMPSON OF HOME TEAM INSPECTION SERVICE

Sitting across the studio table from me is Brandon Thompson, owner of Home Team Inspections.  Brandon is the guy to call before you list your home for sale. If you are a homebuyer, Brandon is the guy to come out and inspect the home you are about to buy. Get smart and let him inspect to protect YOUR pocketbook.  Brandon, tell our listeners a little bit about you and what you do for your customers at Home Team Inspection. 

THE MORTGAGE DETECTIVE-GETTING SELF-EMPLOYED BORROWERS QUALIFIED

Inspectors like yourself, Brandon, are great at informing your clients of the strengths and areas needing improvement on a home that helps the homeowner or home buyer make good real estate decisions.  As a mortgage loan officer, I put on my detective hat, pull on my Columbo coat and do some sleuthing of my own to help my customers make good mortgage decisions.

  • My cracker jack assistant, Susan Belew and I work with a lot of self employed borrowers. Some of our borrowers own just one sole proprietorship business. Others own several companies, C-corporations and partnerships. Since these borrowers can legally write off expenses and deductions to reduce the amount they have to pay to the IRS, Susan and I put on our detective hats and pull out our magnifying glasses.
  • Here is a common occurrence in our office.  I get a call and the customer says, “ My wife and I have sold our home and are set to close on our new home the same day we sell our old one.   We have good credit and we own a successful business.  But we just got told by the mortgage company that we don’t make enough money to qualify for the new house because we don’t show enough income on our tax returns after tax deductions. What are we going to do? The clock is ticking.  Can you help us?”

Once they send in their tax returns, I flip them over face down and start from the back of the return and move forward instead of starting on the front page.   Having been a mortgage officer for almost 30 years, I have learned a few detective tricks on how to pick out certain types of expenses that I can legally add back to my customer’s income.  By the time I move from the back page to the front page of the tax return, many times I have all the income they need to qualify for the mortgage. It doesn’t work 100% of the time, but so many times it feels good to be able to assure the customer they will be able to make their plans work. I get asked often, “How did you figure that out?”  My answer, “It’s elementary, my dear Watson.”

Do you need a mortgage expert to pull out the magnifying glass for YOUR mortgage deal?  Call me.  But you have to talk with me personally so I can work with you.  You can connect with me at www.JoGarner.com or call me directly at (901) 482-0354. MAKE YOUR PLAN. LET’S WORK YOUR PLAN. IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY!

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HOW CAN A HOME INSPECTION SAVE YOU MONEY

We look at all the major systems of the house and the best way I can help home buyers save money is simply letting them know if there are any issues that need to be corrected and especially finding problems early. For instance, we have a lot of crawl spaces or basement/crawl spaces here in Memphis, especially inside the 240 loop, and something I’m always on the lookout for is mold. We always report any mold or fungus we see in the crawl space no matter how advanced it is, but even if it’s a very light layer of mold, the home buyer should take efforts to have the mold re-mediated before it gets worse and correct whatever issue caused the mold to occur. Most often, it’s poor ventilation, moisture intrusion, no moisture barrier, etc. But we can help them to understand that the issue needs to be corrected or else the problem will continue to worsen. The same rings true for all other matters in the home, but this is just an example.

Roof?

We pay special attention to the roof and it’s one of the first items we inspect when arrive. Water is the enemy for any home and your roof is the first line of defense for shedding water away. We always make every effort to walk the roof so we can get a close up view and see all the little details that could cause leaks. Penetration points such as the chimneys, plumbing vents, heating vents, etc are looked at very closely because those are the number one area leaks occur. We also look for how many layers are installed, we try to age the roof, look for granule loss, improper installation, etc. Basically, if it looks like there are any issues, we inform the buyer to have it repaired and further evaluated by a licensed roofer. HomeTeam uses a team of inspectors and in many cases brings a licensed roofer to be a part of the initial inspection… I can elaborate on that.

Electrical?  Aluminum wiring? Recalled electrical boxes? 

Electrical is another very important systems in your home and we spend a lot of time evaluating the main and sub electrical panels during our inspections. Some homes built or remodeled during the late sixties and early seventies have aluminum wiring and we always make mention of that in our reports so the buyer can have the electrical further evaluated by a licensed electrician. Problems with Aluminum wiring are that the wire expands and contracts causing arcing, ie. Fires, if improperly installed (no paste). But just because a home has aluminum wiring isn’t a reason to walk away, there are ways to correct the issue at the receptacles and in the panel to lessen the likelihood of any arcing.

Federal Pacific Panels and Sylvania Zinsco panels are always something we look out for as well. These types of panels are known to be problematic and studies conducted have shown they have a much higher than normal failure rate, so again we advise that an electrician check those panels out prior to purchase. It can also be a problem with insurability, so it’s recommended that the matter be discussed with their agent to see which direction they should go.

Knob-and-Tube Wiring is the oldest form of electrical wiring and something we also look for. Many homes in the older areas of town still have this wiring. Generally speaking, the wiring can create fire hazards, but we always recommend an electrician check it out. If the home has this wiring, it may be a challenge getting an insurance policy, but your agent should be able to help you make any decisions regarding how to move forward.

Faulty plumbing?

We run the water a lot when we’re on site so we can catch any leaking that has occurred. But besides leaks, we look for any old cast iron or galvanized steel piping that has a tendency to rust from the inside. So water flow and if possible, a visual inspection while we’re under the house, can tell us if we have anything to be concerned with. And generally if you’re buying an older home, we always recommend having the sewer line scoped prior to purchase, because unless we see problems with water overflowing on site, we can’t tell whether there’s a problem in the ground. I can elaborate on the subject, but it can be a very expensive problem if the sewer line has any problems… we don’t scope the sewer line, but can make the call if the customer wants us to, to have a plumber do that… highly advisable in midtown, east Memphis, etc.

Worn out heating or air conditioning system?

So we do a full functionality test during our inspection. We look for any signs that the system may be having problems, or could cause problems. For instance, a lot of homes here in the midsouth have the air handler in the attic, so it needs to have a catch pan and a means to either shut itself off or drain excess water if it were to have a condensation leak. We also look inside the furnace to check out the visible area of the heat exchanger, etc. If we see any sign that the furnace may have problem, we recommend a HVAC technician further evaluate it. At the buyer’s request, and for an additional fee, Home Team can provide an HVAC technician as part of the initial inspection…. I can elaborate on that.

Foundation problems

We’re always on the lookout for foundation problems. We look for any signs that there may be an issue and if it looks serious enough, recommend a professional further investigate. The subject is very broad, but we’re looking for cracks that have certain characteristics like, lateral shifting, or moisture intrusion, which could be problematic and very expensive to repair. Foundation problems can be very expensive to repair, so if there is a problem, it’s best to catch it early and correct whatever is causing it. Most of the time, it’s improper drainage due to lack of gutters or improper grading around the home. It’s really a case by case basis…

Drainage problems

Drainage problems go hand in hand with foundation problems. Remember, water is the enemy, and if the home isn’t properly shedding water away from the home, it can cause all kinds of damage. I always use the Grand Canyon as an example of how powerful water can be…. But besides foundation problems, it can get inside the foundation wall to the basement or crawlspace, which can cause mold and rot, destroying the structure of the home.

Mold or other hazards

We’ve mentioned mold under the home, but when it gets inside the home it can cause health problems etc. Home Team can do air quality testing to see if there is a high concentration of mold inside the home. If it’s suspected that there may be a mold problem, ie. Smell it but can’t see it, we advise having an air quality test done. If the mold is visible, we can also take samples of the mold to confirm that it is actually mold and whether the type of mold is harmful.

Appliances that are not working or could be about to stop working

We inspect hot water heaters, furnaces, etc… but they’re installed, we run your dishwasher, check the refrigerator, stove, etc. If there are any problems, we let the buyer know about it. And if we suspect that the appliance is getting old, let the buyer know that they may need to budget to replace the appliance sometime in the future.

Lead based paint

We always mention that a house built prior to 1978 could potentially have lead based paint. We can test for it, however if you suspect that your home has lead based paint, lowes and home depot have test kits you can purchase to find out. Generally speaking, its mainly a hazard for small children because it’s sweet to the taste and they like to eat it. It can create some health problems if consumed… We usually don’t make a huge case about lead paint, because almost every home built prior to 1978.

What type special tools do you use to test the effectiveness of the airconditioning

None, other than a temperature reading at the supply and return ducts to ensure the differential is correct. If the unit isn’t cooling properly based upon temperature readings, we recommend the unit be further evaluated by a licensed HVAC tech. If it’s suspected that the HVAC system has problems, we can provide a licensed HVAC tech as part of our initial inspection, as part of our TEAM. He can check coolant levels and provide a more thorough examination of the equipment… but generally, if we suspect there is a problem, we refer to a licensed tech do a thorough inspection.

Moisture

The advantage of having a professional inspection done before you sell your house

Knowledge, Negotiation power, etc… and not only that, the buyer needs to know what they are buying. Like I said, most homes have some sort of problem, big or small, and buyers need to know what they’re getting into. We help buyers make that informed decision about whether the home is the right home for them. There are lots of details we look at that the general home buyer doesn’t know to look for… Hire a professional.

The advantage of having a professional inspection done as a buyer before you pay for an appraisal

The home could have a material defect that could be so expensive to repair, that it doesn’t make sense to purchase the property. If you have the home appraised prior to an inspection, then you’re out the cost of the appraisal and the home inspection… whereas if you hire us first and we find something you can opt to back out prior to paying for the appraisal.

MORTGAGE MARKET NEWS

Before we go to break, let’s take a look at the mortgage market news this past week. Mortgage rates have been paralyzed a low in-the-trough levels.  Next Tuesday brings an important inflation report which could get rates moving again.  

Here’s another headline – About 12 million people will get a little better looking credit score next month as the national credit reporting agencies wipe from their records two major sources of negative information about borrowers: tax liens and civil judgments. But mortgage companies will still get information on these from other sources.

Stay tuned for more on getting your money’s worth on a home inspection and more.

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QUESTIONS ANSWERED BY BRANDON THOMPSON:

 

  • How Can a Home Inspection Company Add Value to the Real Estate Process?

 

A home inspection is now a common practice for clients who are looking to buy or sell a home. In addition to performing a high-quality inspection, a good home inspection company adds value for all parties involved in the transaction. How?

They Understand Your Time Is Valuable

Most real estate transactions are time sensitive, and the typical home inspection can last anywhere from 2.5 – 4 hours. HomeTeam Inspection Service cuts this time nearly in half by utilizing a team of inspectors. This approach allows for more time slots available each day, and greater availability when you need an inspection.

They Utilize Technology to Simplify the Process

The home inspection process—from scheduling to report delivery—should be convenient for you and your clients. Offering several scheduling options—over the phone, online or through an app—provides greater flexibility. HomeTeam offers real estate professionals an app on their mobile phone that allows them to call or email HomeTeam, schedule an inspection online and view all past inspection reports with the click of a button.

They Offer a Full-Service Solution

Home inspection companies offer a wide range of services, starting with the basic whole house inspection and then adding additional services that include items your client may or may not need. Since different homes, different clients and different regions require different types of inspections, choose a home inspection company that offers a la carte services like pest or mold inspections.

They Handle Coordination for You

Valuable time is often spent calling and coordinating various types of inspections from several different service providers. HomeTeam schedules any additional inspections for you and your clients. Therefore, you only need to make one call, or indicate the services you would like in your online booking, and they’ll be scheduled at the same time as the home inspection.

They Present Themselves as a Professional

Recommending a home inspection company with a professional brand image serves as an extension of your professionalism. Home inspection companies that show up in uniform with branded vehicles help make the client feel at ease. Be sure the home inspection company your client chooses provides email and text message reminders of the inspection time, as well as a verbal introduction to the home. They should also review their findings and answer any questions.

Ask the Expert: What Are the Best Ways to Prepare for a Home Inspection?

A: Today, home inspections are almost universally recommended by every real estate professional. When it comes to clients—especially first-time buyers—many are not familiar with the home inspection process, and what they can expect. Here are a few things that can help clients prepare for a home inspection.

Choosing a Home Inspector

All home inspection companies are not created equal. Outline criteria that distinguish a reputable home inspection company, like finding out if a company is licensed and certified (in states where applicable). Encourage clients to look at how professional a company is. Do they have a professional website? Do they arrive in uniform with marked vehicles making them easily identifiable? Do they deliver an electronic report with photos? Verify that they have both errors and omissions and general liability insurance, which covers the agent and the inspector. Consider how convenient it is to work with them. Do they make the experience easier with online scheduling? Do they text or email reminders about the inspection? Do they schedule any additional inspections that would be requested by the client, like pest and mold inspections? Each of these criteria will help enhance the client’s overall home-buying experience.

Homebuyer Preparation

It is important for buyers to understand the inspection process and how to maintain perspective. Home inspectors are generalists who have a wide range of knowledge that allows them to evaluate the readily accessible systems and components of a home, and having a home inspection enables clients to make informed decisions with confidence. Some buyers are more comfortable when their agent attends an inspection with them. This also allows their agent to assist with any seller issues.

Home Seller Preparation

Listing agents can help their clients prepare for the best inspection possible by reminding them that a clean and orderly home gives the impression of a well-maintained home. Encourage them to have the HVAC serviced and cleaned prior to the inspection. Check plumbing for leaks and examine ceilings for water stains or signs of other water damage. Let the client know that having a pre-sale inspection can lead to a smoother transaction and will likely identify issues the buyer’s inspector would uncover. If the house is vacant, make sure all the utilities are on and be sure the inspector has clear access to the attic, crawlspaces, heating system and garage.

After the Inspection

Agents and clients should read the home inspection report in its entirety. Follow up with the client to see if they have any questions after reviewing the report.

Knowledge Is Power

Preparing clients for a home inspection and giving them a better understanding of the home inspection process will ensure a more positive experience.

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Let’s Talk Home Inspections – Evolution, Scope, Benefits and Tips

THE EVOLUTION OF HOME INSPECTIONS

The industry started in the 1960s by contractors & remodelers looking to make some additional money. While it did provide limited protection to buyers, the industry was largely unregulated, unstandardized and unlicensed.

The first standards of practice were created in the 70’s, and we saw further upgrades to the SOP as well as courses, regulations and testing.

In the 90’s the boom began and we saw the home inspections performed on over 75% of transactions. Several franchise organizations began to emerge at this time and there was shift towards full-service, professional companies. Most independents home inspectors began to adapt or left the industry. Professional organizations began to create standards of practice and some states began requiring inspectors to be licensed.

Today, a home inspection is almost universally recommended by any real estate professional and a home inspector is viewed in the same light as other professionals (real estate agents, appraisers, lenders, title companies, etc) to help buyers make educated purchase decisions and limit agent liability. In fact, home sellers are now getting their homes inspected prior to listing the property as a way of improving their chances of a higher priced transaction with fewer problems.

What is a Home Inspection?
A home inspection is a snapshot in time of the home at the time of inspection. It is important to be aware of what types of items are included in the inspection and what is outside of the scope of this inspection.

It is important to be aware of what types of items are included in the inspection and what is outside of the scope of an inspection. The purpose of a home inspection is to visually examine the readily accessible systems and components of the home and to report on items thought to be unsafe or have major defects.  Items that are defective or unsafe will be described in a written report.  

The inspection is a snapshot of the home at the time of the inspection and is not meant to be any sort of warranty or insurance on the home, but rather to provide you and your clients with an unbiased opinion of the home from a professional home inspector who is a generalist, with a wide range of knowledge in a variety of areas. If any areas indicating needing further exploration, we will recommend that a specialist in that area be brought in.

State Requirements/Regulations

Insert any state specific requirements and/or regulations here

Outside the Scope

Cosmetic items, minor repairs and routine maintenance are not considered major defects. While they may be mentioned as a courtesy, they are often not included in the report.

Home Inspectors cannot inspect for code compliance because we are not code inspectors employed by the state or city. This makes it illegal for us to complete a code inspection.

Lastly, a home inspection is non-invasive. This means that we do not do things such as pull off light covers, or remove drywall to look behind a wall.

COMPONENTS OF A HOME INSPECTION
During your home inspection, your inspector will look at many items that fall into 9 main categories.

The Structural System –  including the floor, wall, ceiling, roof structures as well as the foundation. Keep in mind that we don’t see homes exposed like this and we do not have x-ray vision. Talk a bit about foundations, poured concrete, concrete block, etc. horizontal cracks and any cracks that are ¼” or more, or that widen as they go up that would indicate a possible structural concern.  Talk basement, slab and/or crawl space.

The Exterior System – such as the all siding & cladding, exterior doors, decks & porches, eaves & soffits, walkways & patios. Looking at the grading and drainage. With decks, we pay special attention to the structural supports and deterioration.

The Roof System – such as the roofing materials, drainage systems, flashing, and chimneys. Specific areas where there would be any roof penetrations (chimney, venting, stack)

The Plumbing System – such as interior supply & distribution, waste systems, water heaters, venting, and sump pumps.

The Electrical System – such as outside service components, disconnects, service panels, overcurrent protection and a representative number of fixtures, switches and receptacles. Manufacturing GFCIs and the proper wiring of outlets are common areas inspectors will put in reports.

The Heating and Air Conditioning System – such as furnaces and their components as well as other heating equipment, humidifiers, air filters, central cooling.

The Interior of the home – such as walls, ceilings, floors, steps, railings, countertops, cabinets, garage doors & openers. Areas of specific focus would be windows and doors to ensure security. Also, we look for signs of water penetration/staining throughout.

Insulation and Ventilation Systems – such as actual insulation materials, ventilation of attics, foundation areas and any mechanical ventilation. It is common to see inadequate insulation in many homes. Additionally, with the push towards energy efficiency, we often see added insulation that covers soffit vents.

Fireplaces Solid Fuel Burning Appliances –  including all chimney & vents. Chimney fires are a concern so we look at the condition of the firebox, observing any creosote buildup and cracks in the bricks. Inspectors will often recommend any fireplace be cleaned and re-inspected upon moving in.

Benefits of a Home Inspection

The home inspection process helps buyers to make a better educated decision about their purchase and offers protection for the buyer and the real estate agent.

A verbal introduction to the home helps the buyer understand the home they have chosen to purchase and the written report provides documentation about the home with a summary of items and photos that can be referenced after the inspection and provides the information necessary to make an informed decision.  

Knowledge is power and a home inspection gives buyers peace of mind about their purchase and helps to make informed decisions with confidence, no matter what the age or condition of the home.

Tips for Buyer’s Agent

It is always best to prepare your buyers, especially younger ones, for the inspection. Remind them that no home is perfect and everything is fixable. Help client to understand inspection process and maintain perspective. If possible, attend the inspection and communicate with the listing agent. At HomeTeam, we educate clients onsite with a verbal walk through but are available for questions after the inspection as well.

Tips for Listing Agent

Listing agents can help their clients prepare for the best inspection possible by encouraging them to have the HVAC serviced and cleaned.  Check plumbing for leaks, look for ceiling stains and signs of other water damage and have any leaks repaired and damage repaired.  Remind the client that a clean and orderly house also gives the impression of a well maintained home. Let the client know that having a pre-sale inspection by a home inspection company can help to ensure a smoother transaction and will likely identify issues the buyer’s inspector would uncover. If the house is vacant, make sure all of the utilizes are on and have clear access to attics, crawlspaces and garages. (defects in home that cannot be inspected are excluded from responsibility and report)

Tips for After the Inspection

After the inspection it is important to set reasonable expectations with your buyer and seller. HomeTeam includes a reasonable expectations page in every home inspection report and agents and clients should read the report in its’ entirety. It’s also important to remember that a home inspection is not a home warranty, but simply a snapshot of the home at the time of the inspection.  

Tips for Evaluating Home Inspection Companies

  • The following information can assist is evaluating home inspection companies:
  • Do they have proper certification/licensing?
  • Are they professional? Do they have a professional website with a sample report, uniforms and marked vehicles making them easily identifiable?
  • Do they have E&O Insurance
  • How available are they, such as, do they answer their phone?
  • How easy is it to begin and work through the process, do they make my experience easier with online scheduling and the latest technology such as an electronic report with pictures?

AFTER THE HOME INSPECTION
An inspector cannot “fail” a home and he will not give a home a score or even a passing grade.  The process is designed to give you good and accurate information so that you can make good decisions, with the assistance of your Realtor, as you move through the process.  The inspector will not give you advice on whether to buy the home or not… he will not financially appraise the property or give advice on the contracted price… again, that is the job of the Realtor you have wisely hired to guide you through the home buying and selling process.  Only the Realtor, who is also professionally trained, is in the position to deal with all these issues to your benefit.

AFTER THE HOME INSPECTION
If the inspector does find problems, it does not necessarily mean you should cancel the purchase contract.  Only that you will know in advance what to expect from your home.  Once the inspection is completed, you should thoroughly read the inspection report and do a thorough review of the report with your Realtor will help decide the next course of action.  They have the experience and expertise to review your inspection report with you and put it in the proper context of the market place.

THANK YOU
To protect your investment and give you and your family the confidence that you are making the right decision, contact a professional home inspector.  Their expertise will give you a much better idea of what to expect from your new home.  Please ask your real estate agent how to find the professional home inspector that’s right for you.  Thank you for your attention!

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QUESTIONS ANSWERED BY JO GARNER:

 

  • Where are some good areas you inspect on mortgage terms to protect your customers from losing money?

 

  1. One of the first places I look for savings is in how to reduce the mortgage insurance my customer has to pay. Since private mortgage insurance only helps the lender and not the borrower, I look for ways to reduce or eliminate the amount of mortgage insurance a customer has to pay.
  2. Mortgage insurance is not the same thing as credit life insurance. Credit life insurance pays the mortgage off if the covered person passes away.  That kind of insurance does benefit the homeowner.  But mortgage insurance protects the lender in case the borrower defaults on the mortgage.  
  3. Borrowers must pay private mortgage insurance on conventional loans if the loan-to-value on the home is greater than 80%.  In other words if they borrower puts less than 20% down on a home purchase.  A good loan officer inspects further to see if there are ways to lessen or eliminate the amount of private mortgage insurance the customer has to pay. There are mortgage insurance programs that have just a monthly fee, a split fee with a portion paid up front and a lesser amount paid monthly.  There are programs where another party can pay one lump sum mortgage insurance amount and the borrower doesn’t have to pay any mortgage insurance.
  4. FHA is a government loan with 3.5% minimum down payment. FHA charges a 1.75% upfront mortgage insurance that is added to the base loan amount so the customer doesn’t have to pay it in cash upfront.  But the customer is still paying interest on that amount and the upfront mortgage insurance takes up some equity in the home. FHA also, in addition to the 1.75% upfront mortgage insurance,  has a monthly mortgage insurance that is paid for the life of the loan on loan with more than a 15 year term and less than 10% down.  A short 15 year loan or a 30 or 20 year FHA with 10% down, the mortgage insurance monthly drops off when the loan balance is paid down to an 80% loan-to-value
  5. Here’s an example of a mortgage customer that came in getting the government FHA loan with the $15,000 Tennessee Housing Development Agency down payment assistance.  She and her agent had found a few houses that she really liked, but every time she would fall in love with a home and  put an offer on the house, she would be disappointed to find out that someone got their offer accepted over hers because the other person was not asking the seller to pay as much of their costs as my client was having to do.
  6. We got her approved for the $15,000 down payment assistance program since she was buying in an eligible area for that program. We used part of the $15,000 to pay my clients closing costs so she would not have to ask the seller to pay it. This made her offer more competitive than the offers coming in from other people who were having to ask the sellers for all of their costs.  We used most of the $15,000 assistance program to pay down her loan to under 90% loan-to-value so she would not have to pay the monthly mortgage insurance for the life of the loan.  The mortgage insurance would go away once the loan got paid down under 78% loan-to-value.  By getting smart, doing some inspecting on these loan terms in the beginning, we were able to save this lady thousands of dollars over the course of time.
  7. I recently had one of my former mortgage customers call me and she told me it was time for her to move.  “Where I live now is just too big for me.  I want to    sell this home and use my profit to pay down on a new home. I want a smaller home and a smaller payment. How is the best way to structure the new loan?”

I inspected the prices on mortgage rates between a 30 year fixed rate and a 20 year fixed rate.  The payment on the 30 year was lower and we picked a rate with the best price.  We also discovered that if she put down just a little bit more to buy the new home, it would put her in a better price bracket, saving her overall much more than the small amount extra she could put down.

She had some bragging rights on her mortgage terms and appreciated the extra time I spent double checking her pricing options.

 

  • Where are some other areas where you have to pull out your detective hat in the mortgage business?

 

  1. The mortgage business is sort of like the real estate business, you have to wear a lot of hats. You are the cheerleader, the facilitator, the therapist and the detective too. I always say my mortgage clients are the very best of the best.  But it can be a stressful time for some people depending on their circumstances.
  2. My cracker jack assistant, Susan Belew and I work with a lot of self employed borrowers. Some of our borrowers own just one sole proprietorship business. Others own several companies, C-corporations and partnerships.   Since these borrowers can legally write off expenses and deductions to reduce the amount they have to pay to the IRS, Susan and I put on our detective hats and pull out our magnifying glasses.
  3. Here is a common occurrence in our office.  I get a call and the customer says, “ My wife and I have sold our home and are set to close on our new home the same day we sell our old one.   We have good credit and we own a successful business.  But we just got told by the mortgage company that we don’t make enough money to qualify for the new house because we don’t show enough income on our tax returns after tax deductions. What are we going to do? The clock is ticking.  Can you help us?”

Once they send in their tax returns, I flip them over face down and start from the back of the return and move forward instead of starting on the front page.   Having been a mortgage officer for almost 30 years, I have learned a few detective tricks on how to pick out certain types of expenses that I can legally add back to my customer’s income.  By the time I move from the back page to the front page of the tax return, many times I have all the income they need to qualify for the mortgage. It doesn’t work 100% of the time, but so many times it feels good to be able to assure the customer they will be able to make their plans work. I get asked often, “How did you figure that out?”  My answer, “It’s elementary, my dear Watson.”

  1. Other sleuthing work is done researching erroneous credit entries that keep borrowers shackled. I work with some very resourceful folks with our credit reporting agency.  Over the years I have learned a thing or two about being able to spot errors that may not be so obvious to others.  Our credit agency works through the three major bureaus to correct mistakes for our mortgage clients.   
  2. For some borrowers in unusual circumstances, it can be some exciting detective work finding the exact right loan program or combination of loan programs that help them today and also with their plans 5 years down the road.  It is astounding how many profitable deals are lost because the borrowers did not know the right loan product to make the transaction come to fruition.   A very common occurrence, I am talking with someone who calls after listening to this radio show or one of our podcasts.  They tell me about the biggest deal that got away. They had a chance to buy a house for about $100,000 that needed about $20,000 in repairs and would have been worth $175,000 if the bank had the bank not turned them down because their underwriters would not allow the repairs to be done AFTER closing. That particular bank did not offer a Renovation and Repair loan.  I have TWO renovation and repair loans that could have helped that borrower if they had just come to me first.  

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REAL ESTATE TIP OF THE WEEK: Jo Garner shares a tip regarding a well-known bit of wisdom-“All that glitters is NOT gold.”  When you get a really low interest quote in the mail or over the phone, it is time to INSPECT and PROTECT yourself.  Many times the mortgage companies making the offer leave out some fairly large fee items when they give you an initial estimate of cost.  For example some states have specific transfer fees or taxes on the sale of homes and on the mortgage.  There are other taxes or recording fees very specific to the location of the property that have to be paid at the closing table.   Send me your estimate. I have friends at a title company in your city and state.  Let me inspect your offer for accuracy. If it is accurate, let me try to meet or beat their offer. Jo Garner, Mortgage Loan Officer NMLS#757308 (901) 482-0354 jo@jogarner.com www.JoGarner.com  

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ANNOUNCEMENTS:   

  • Talk Shoppe offers free networking & education to anyone interested in real estate or in business. Talk Shoppe meets every Wednesday 9A-10A CT at Nova Copy Conference Center at 7251 Appling Farms Parkway Memphis, TN 38133 Dell Self of www.SpeakThroughMe.com will be presenting “Clearing the Clutter From Your Message.”    Dell helps speakers and she turns writers into authors.
  • Talk Shoppe events are free thanks to advertisers like Gwen Christensen, owner of Builders Floors and Interiors in Memphis.  Gwen can get you better pricing and a good quality flooring installation for less than the big box stores www.buildersfloorsandinteriors.com
  • Thanks to Mary Jane Lessley of Signs Now at 4945 American Way in Memphis, TN. for financially supporting Talk Shoppe’s free education and networking to the business community.  Point people to YOUR business or YOUR event.  (901) 368-0784
  • A free exhibit about Millington history, curated by Rita Hall, opens on Thursday, July 27 in the Lobby Display Cases of the Vasco A. Smith County Administration Building, 160 N. Main Street in Downtown Memphis.  It will run for four month.
  • FOR THIS PODCAST OF REAL ESTATE MORTGAGE SHOPPE AND MORE, GO TO JOGARNER.COM
  • Real Estate Mortgage Shoppe reminds you that IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY.

 

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ABOUT BRANDON THOMPSON, HOME TEAM INSPECTIONS

Brandon

Brandon Thompson, Home Team Inspections

Direct (901) 848-2388

Appointments (901) 562-0988

TN Home Inspector License#: 1553

ASHI Member#: 263050

NACHI Member#: 17020732

HomeTeam Inspection Service – Memphis

Brandon Thompson – owner of HomeTeam Inspection Service Memphis. I am a member of ASHI (American Society of Home Inspectors) and NACHI (International Association of Certified Home Inspectors), Memphis Area Association of Realtors, Women’s Council of Realtors, BNI, and I’m a licensed home inspector in the state of TN.

HomeTeam Inspection Service is the leading home inspection company in North America. For more than 20 years, home buyers, home sellers, and real estate professionals have recognized HomeTeam for being fast, trusted and accurate. And just as the name implies, we make every inspection a team effort. Because your time is valuable, we bring a team of professionals to your home inspection. This assures you of an efficient and thorough inspection.

I’ve lived in the Memphis TN area since 1998 and have spent the last 19 years working full-time for the Air National Guard as an IT Specialist. I earned my degree in Business Management from the University of Memphis with a minor in Real Estate Finance. My love for real estate started early on while working with my father on a couple of remodeling projects and developed over the years as a home owner and DIYer. I’ve always wanted to work for myself and I wanted do something to help people. I love the fact that I’m able to help buyers make one of the most important decisions of their life.

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About Jo Garner

cell: (901) 482 0354

 jo@192.232.195.219

www.JoGarner.com

  Twitter: @jogarner

Jo describes her job description: As a mortgage loan officer, my job is to give my client the benefits they want from their financing terms– listening to my client and determine what’s of the most value to THEM–  What is their comfort level on a house payment, how much are they comfortable paying down, what type of financing do they need to get the house they want to buy or refinance. Different clients have different priorities in life—some are buying their first home with very little down payment funds.  Some are recovering from medical challenges, divorces or preparing to send children to college and some are embarking on a long term goal of buying properties to build rental income. Whatever their personal priorities are, my job is to put together a mortgage with comfortable terms that will help them achieve their goals.”

Jo Garner is a mortgage officer with extensive knowledge in tailoring mortgages to her customers who are refinancing or purchasing homes all over the country.  She offers conventional, FHA, VA or other loan programs for refinancing and purchases.  

Jo can help you look at rent vs buy, when it makes sense to refinance, how to get the best deal on your home  purchase financing.   

Jo Garner  has been in the real estate/financing business for over 20 years.  She got her start in Portland, Maine where she first began her real estate career. She received her real estate education from the University of Southern Maine  and was personally mentored in San Diego, California  by Robert G. Allen, author of Nothing Down, Creating Wealth and The Challenge. 

On moving back to West Tennessee in 1987, she went into business buying and selling discounted owner-financed notes secured on real estate.  In 1990 Jo went to work for a residential mortgage company and has been a mortgage loan officer for over 20 years.  Her goal is to offer excellent, affordable service to her customers, tailoring the loan programs to the specific needs of her cli

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