MISSION POSSIBLE- DISCOVER THE SECRET OF SMART DEBT VS BAD DEBT
http://192.232.195.219/audio-podcasts/
HIGHLIGHTS FROM THE PODCAST:
MARKET NEWS
LOOK BACK MEMPHIS TRIVIA CONTEST
QUESTIONS ANSWERED BY TOM KING:
- Talk about the government mandated “firewall” between the appraisal companies and mortgage companies?
- How can you use an appraisal to help eliminate private mortgage insurance?
- What king of market sales comparables will an appraiser use to determine the value on a home?
QUESTIONS ANSWERED BY JO GARNER:
- You mentioned some examples of Smart Debt vs Bad Debt in the earlier part of the show. What are the most common types of the switch from Bad Debt to Smart Debt that you see from your clients?
- What is your philosophy on when to use adjustable or variable rate debt vs fixed rate debt?
- What are some ways you can make Smart Debt even Smarter?
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REAL ESTATE TIP OF THE WEEK
Announcements:
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Good morning Memphis! Good morning across the country on iHeart Radio and BOCI Radio. You’re on the Real Estate Mortgage Shoppe program and I’m your host, Jo Garner, mortgage loan officer with Evolve Bank and Trust. If YOU have a real estate question or topic YOU would like to talk about, give us a call on the air. There may be others out there who will be glad you brought up what they wanted to hear about. Sitting across from me is Tom King, long-time real estate appraiser with Bill King Company. <Tom introduces himself and his company and makes a few comments )
(Jo)—plays James Bond movie theme in background> Today or general topic is “MISSION POSSIBLE-DISCOVER THE SECRET OF SMART DEBT VS BAD DEBT.” Tom and I are taking this mission VERY seriously—we have clandestinely switched to our secret identities. Tom is really AGENT double O 7 (and you thought 007 was Sean Connery or Pierce Brosnan—but now you know the real story—at least OUR version of it) And today, I have slipped on my alter ego-Secret Agent 99. All of this to Discover The Secret Of Smart Debt vs Bad Debt. If you want to help us crack the code or if you just want to talk about our favorite subject –real estate—give us a call on the air at <(901) 535-WREC (901) 535-9732>
But, before this recording self-destructs, let’s go to the market news for the week. Last Monday mortgage rates started ratcheting up, due to investors pulling money out of bonds to buy stocks. As a result, mortgage rates went up with the stock market. But yesterday, mortgage rates fell back down to a 4-day low. 30YR FIXED – 3.625-3.75% 15 YEAR FIXED – 3.00-3.125 Evolve still has the jumbo special mortgage product with rates under 4% on loans over $417,000.
<Tom talks about what he is seeing in the market this past week>
(Jo) Tom, right now there are multiple opportunities to turn bad debt into smart debt and make it WORK for you. Smart debt is debt that earns you a greater return than what the investment cost. Here is an example of a debt that works FOR you and not against you— I have had customers come into my office. Due to a family crisis or job loss, they have racked up credit card debt of over $35,000 that now carries double digit interest rates. Their house is now valued at about $200,000. They owe $100,000 on the first mortgage with a rate of 5.5%. We refinance the house, pay off the $100k first mortgage and the $35K in credit card debt . The Principle and interest payment on the existing first mortgage was $852/mo and on the new loan amount of $135,000 with the lower rate in the high 3’s, the new principal and interest payment is $635/mo—–$217/mo less than the old payment. Not only can we reduce the first mortgage payment by over $200/mo but because we paid off the credit card debt of $35,000, we also eliminated over $1,000 per month in credit card debt. The MOST important secret to KEEPING this refinance arrangement as Smart Debt and not bad debt is the fact that the family crisis has passed and no more debt is being accrued on the credit cards.
<Tom comments>
(Jo) While we are cracking the code on deciphering what is good debt vs bad debt—here’s another example of good debt —–I have several long-standing customers who are real estate investors. Most of my customers have stable jobs making a comfortable salary and they live frugally. When they save enough money to put down on buying a rental property or when they sell an investment property at a nice profit, they use the money to buy an additional rental property at a good price so they can make a comfortable profit each month renting out to tenants. They keep doing this over and over with the end result of a very lucrative rental income besides the income from the job. After awhile, who needs the job? They are free to be their own boss, control a self-directed IRA, making money on top of their money—but you must MAKE YOUR PLAN, WORK YOUR PLAN & IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY-That is using smart debt vs bad debt.
<Tom makes comments>
(Jo) We are talking about “MISSION POSSIBLE-DISCOVER THE SECRET OF SMART DEBT VS BAD DEBT.” If you have a real estate story about Smart Debt vs Bad Debt, or if you have a question or comment regarding your real estate deal or financing plan, call us on the air at (901) 535-WREC (901) 535-9732.
Tom King, you are a very experienced appraiser and you have helped some of our listeners over the years make smarter decisions on whether to buy a house or refinance one based on estimated values. What can you do for people considering having an estate sale, or settling on the value on a home in a divorce settlement or maybe someone considering buying rental property?
<Tom launches his topic>
2nd segment after 9:15 break—It’s time for the Look Back Memphis Trivia Contest. The Look Back Memphis Trivia Contest is brought to you by Memphis notable historian, Jimmy Ogle www.jimmyogle.com,. Jimmy Ogle offers free historic walking tours in downtown Memphis. To get his spring and fall schedule, go to www.jimmyogle.com. Our Look Back Memphis Trivia contest is sponsored by Shelley Baur, president of Greater Memphis BNI, for the “Building Balance in Business” FREE speakers series launching Thursday April 16. The Topic is timely, “The Impact of Healthcare Reform.” For more info, call Lloyd Caldemeyer, 901.338.2501”
is giving away a $25 gift card to the first person with the correct trivia answer. If you know the answer, call us at 901 535 WREC 901 535-9732.
Garner # 49 04/11/15
WDIA Radio – AM 1070 – The Heart of Memphis
Question: I became known as “The Goodwill Station” when reformatted in 1948.
Who am I?
Hint: My owners were Bert Ferguson and John Pepper
Hint: My call letters come from the name of John Pepper’s daughter – Diane.
Hint: Nat Williams, B.B. King and Rufus Thomas were some of my first deejays.
Final Hint: DJ Mark Stansbury still plays The Best of Gospel Music every Sunday afternoon at 4:00 p.m. – for 57 years now on my station!
Answer: WDIA Radio Station. Active since 1947, it soon became the first radio station in America that was programmed entirely for African Americans in 1948. It featured black radio personalities; its success in building an audience attracted radio advertisers suddenly aware of a “new” market among black listeners. The station had a strong influence on music, hiring musicians early in their careers, and playing their music to an audience that reached through the Mississippi Delta to the Gulf Coast.
The station started the WDIA Goodwill Fund to help and empower black communities. Nat D. Williams, a syndicated columnist and high-school teacher, started Tan Town Jubilee in October 1948. This was the first radio program in the United States to appeal to black listeners, and WDIA soon became the number-2 station in Memphis. After a switch to all-black programming, WDIA became the city’s top station WDIA is known for its community efforts throughout the years. A.C. Williams, a former disc jockey for the station, helped create the Goodwill Fund in 1954. Originally, the fund provided transportation to school for disabled black children. Later the fund expanded to include college scholarships, establish boy clubs, provide 125 Little League Teams to Memphis and neighboring communities, and help provide low cost supplemental housing (Wilson).
Many music legends got their start by working at WDIA, including B.B. King and Rufus Thomas. Elvis Presley was greatly influenced by the station. B.B. King joined WDIA in early 1949. He had a daily 15-minute show, promoting first a patent medicine called Pep-Ti-Kon, and later Lucky Strike cigarettes, the first major advertiser for the station. The next year he took a DJ position on an afternoon show previously hosted by Maurice “Hot Rod” Hulbert. King credits his days on the station for building his audience and launching his career, describing the station as providing a sense of freedom.
Last Week: Margaret Polk. The aircraft was the namesake of pilot Robert K. Morgan’s sweetheart, Margaret Polk, a resident of Memphis, Tennessee. Morgan originally intended to call the B-17, Little One, after his pet name for her, but after Morgan and his copilot, Jim Verinis, saw the movie Lady for a Night, in which the leading character owns a riverboat named the Memphis Belle, he proposed that name to his crew.
Jimmy Ogle gives free walking tours in Downtown Memphis during the Spring and Autumn, with the Spring, 2015 tours with the next Bridge Walk being April 12, then May 17 and the next TUESDAY TOUR being April 14 (Cotton Row). Go to jimmyogle.com for the 2015 Spring season schedule and locations.
Shelby County Courthouse: Third Thursday each month at 12:00 noon – next is Thursday, April 16 and May 21.
QUESTIONS ANSWERED BY TOM KING:
- Talk about the government mandated “firewall” between the appraisal companies and mortgage companies?
- How can you use an appraisal to help eliminate private mortgage insurance?
- What king of market sales comparables will an appraiser use to determine the value on a home?
____________________________________________________________________________
QUESTIONS ANSWERED BY JO GARNER:
- You mentioned some examples of Smart Debt vs Bad Debt in the earlier part of the show. What are the most common types of the switch from Bad Debt to Smart Debt that you see from your clients?
- Repeat the examples from the first part of the show.
- What is your philosophy on when to use adjustable or variable rate debt vs fixed rate debt?
–If the loan is short term –less than 5 years term –and you have investments that presumably will increase if bank overnight rates go up, then you should be comfortably hedged against rate increases—enjoy the lower interest rate for awhile on the adjustable program.
If the debt is longer than 5 years and you do not have investments set up to offset overnight bank rate increases, then to be on the safe side, convert the debt to a fixed rate program to avoid interest rate risks.
Told story about the older couple who was about to sell their home with a lot of equity but needed to go ahead and close on new home first. Adjustable rate was good because they would soon sell their old home and pay down a huge amount on principle. The key was the arm program adjusted every year, calculating the new principal and interest payment ONLY ON THE UNPAID BALANCE—paying MUCH less in interest rate costs, even if the rate increased every year after that (assuming the life time cap on the rate is 5% or less.)
- What are some ways you can make Smart Debt even Smarter?
- Get rid of private mortgage insurance?
- Get your homeowners insurance policy reevaluated every year to two to make sure you are not paying too much
- If you can convert an interest rate from variable to fixed on a long term debt without raising the interest rate more than 1 point, this will eliminate interest rate risk without costing too much overall
- Make prepayments to principal on a mortgage as much as you are comfortable paying in the beginning for the mortgage to save tens of thousands in interest expense. One extra p&I payment per year starting at the beginning of a 30 yr loan will eliminate about 7 to 8 years off the mortgage.
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REAL ESTATE TIP OF THE WEEK: (Tom shares a tip to homeowners and realtors on what steps to take to legally get an out –of-area appraiser bumped off the appraisal assignment)
Announcements: Talk Shoppe offers free education and networking to anyone interested in real estate or business. This Wednesday April 15th, 2015 9A-10A Empower Engagement Through Digital Collaboration by Sherri Henley of Sherri Henley Intelligence and Business Over Coffee International.” at University of Phoenix 65 Germantown Court 1st floor Cordova, TN 38018. For more information about Talk Shoppe, go to www.TalkShoppe.com
- To hear today’s podcast of the Real Estate Mortgage Shoppe and others, go to JoGarner.com (pronounced Jay O Garner dot com)
<when you are going off the air while the music is playing, say, “MAKE YOUR PLAN, WORK YOUR PLAN. IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY.”
Transitional Music: https://www.youtube.com/watch?v=mWGeRgFa-hI Theme from Mission Impossible; https://www.youtube.com/watch?v=PMf2mlHlwAA Theme from Get Smart ; https://www.youtube.com/watch?v=ye8KvYKn9-0 Theme from James Bond 007
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- SPECIAL THANKS TO LINCOLN’S COSTUME SHOP 29 Florence St, Memphis, TN 38104
Phone:(901) 726-6084
www.Lincolncostumes.com for costumes for the post-show promo pictures
- Special thanks to Bob Turner, Hair Stylist Gould’s Day Spa and Salon 3670 S Houston Levee Rd #107, Collierville, TN 38017
Phone:(901) 854-8689
(Bob contributed to the hair style for Jo Garner & not Tom King if anyone was wondering….) J
- Special thanks to Rita Connally, Fitness Trainer at the YMCA at Schilling Farms Collierville, TN 38017 1185 Schilling Blvd E, Collierville, TN 38017
Phone:(901) 850-9622
Thank you Sherry, our awesome, outstanding, creative, multi-tasking producer! Thank you also to the brilliant Brian Jay—technical guru and jack of all trades- all things radio
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ABOUT TOM KING:
Tom is a well- respected and sought after appraiser in Memphis, Tennessee. He is a second generation appraiser with 40 years of experience. He has been elected to the Memphis Area Association of Realtors Board of Directors three times.
Tom is a certified residential appraiser in Tennessee. He have appraised over 20,000 homes in his career. A graduate from the University of Tennessee with a degree in real estate, Tom is also a Certified Relocation Professional (CRP). Tom also has vast experience in dealing with the county and state boards of equalization and in valuations of property for tax appeal purposes. (901) 487-6989
ABOUT JO GARNER:
www.JoGarner.com (901) 482 0354 jo@192.232.195.219 @jogarner
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 clients.
In addition to her work in the mortgage field, Jo Garner is the primary sponsor and founder of Talk Shoppe in Memphis. www.TalkShoppe.BIZ She was also the editor of Power Shoppe, a free weekly e-zine designed for real estate professionals and others indirectly connected to the real estate industry and currently publishes on her blog www.JoGarner.com .
For real estate financing solutions, plug into the Real Estate Mortgage Shoppe program. You can find mortgage rates, FHA Streamline refinance with no out-of-pocket costs, refinancing options, home purchase loan programs, answers and real estate, money-saving tips and more.
From today’s show: