BUY vs. RENT, IT’S NOW OR NEVER BECAUSE THERE’S NO PLACE LIKE HOME, YOUR OWN
Are you trying to decide whether to rent a home or buy a home? In today’s Real Estate Mortgage Shoppe episode, we talk about some of the advantages of owning your own home instead of paying rent for someone else’s. We will cover some questions you ask yourself when you are trying to decide to rent vs buy. Tom King will cover some good ways to scout out the value trends in the neighborhood where you want to live.
If you still have questions or would like to look at real home buying or refinance mortgage numbers for YOUR transaction, contact me at (901) 482-0354 or by emailing me at jo@192.232.195.219 .
To Your Success,
Jo Garner
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Good morning, Memphis! Welcome to our 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 “RENT VS BUY, IT’S NOW OR NEVER BECAUSE THERE’S NO PLACE LIKE HOME-YOUR OWN.” It’s still Elvis Presley week in Memphis, TN so you will sense a very definite Elvis theme during our show today. If you have a question or comment and you’re on Twitter, make them to #JoGarner or call me directly off the show at (901) 482-0354. If you would like to share a short testimonial about the reasons you love owning YOUR own home, please call while we are live at (901) 535-9732 or outside the Memphis area (800) 474-9732 For the people out there who are trying to decide whether to buy their home or continue to rent—what you say on the air today about why you love owning YOUR home could make a positive difference in their decisions. The number to call us while we’re live is (901) 535-9732 or outside the Memphis area (800) 474-9732 Today is August 13th, 2016.
Join us as we talk about some of the advantages of owning your own home instead of paying rent for someone else’s. We will cover some questions you ask yourself when you are trying to decide to rent vs buy. Tom King will cover some good ways to scout out the value trends in the neighborhood where you want to live. Call us while we are live or email me at jo@192.232.195.219 following the show if you are a podcast listener.
Tom King, experienced appraiser with Bill King Company is in co-host chair today on Real Estate Mortgage Shoppe. Tom always amazes me when I hear him fielding questions about areas in Shelby County TN, Tipton County and Fayette County. I don’t think he even needs a GPS. He has a virtual GPS in his head and he can tell you what’s going on with values in just about ANY neighborhood around. <Tom introduces himself>
(Jo) [MARKET NEWS- THEME STORY-ANALOGIES-TRENDS, ETC] story of my first house Mortgage rates dropped again yesterday. Watching the mortgage market go up and down and up and down all week has made me dizzy. I feel like I’ve been riding Elvis Presley’s favorite roller coaster the Zippin’ Pippin. Yesterday low retail numbers and inflation report sent pricing lower on the mortgage rates getting us to the 3-year low mark once again. 30YR FIXED – 3.375%-3.625%; 15 year rates around 2.75% to 3% range. If you or someone you know is trying to decide to rent a house or buy one—I think you are going to be pleasantly surprised at how much house you will be able to afford and for a very low payment. Call me at (901) 482-0354 or connect with me at www.JoGarner.com. But to work with me, you have to talk with me personally. I really want to work with you personally so call me directly. Let’s make your plan, work your plan. Remember, If the deal works for you today, do it today.
<Tom makes about the advantage for borrowers in this low interest rate market >
(Jo) You know Tom, we are talking about there’s no place like home whether you decide to rent or buy your home. But I’m a little biased because I own my home and have experienced all the perks of being a homeowner. I knew several years ago though that I was committed to stay in the Memphis area. But just to leave myself open to the excitement of spontaneity—I mean who knows if adventure or romance may suddenly call your name, you wouldn’t want to miss the opportunity. Every time I have purchased a home, I have always set myself up for more than one exit strategy. Buying the house at a fair price in a stable neighborhood would help you be able to sell fairly easily if you needed to leave the area. Buying at a price that would allow you to turn the property into a rental with enough income each month to pay the mortgage and repairs and make a decent profit is a second exit strategy. If you didn’t pay much down, you might also consider an assumable loan like the government FHA program so if the mortgage rates go back up to around 5 or 6 or 7 in a few years and you are ready to sell, you could advertise that you have an assumable loan at 3 point something that someone could qualify to assume, pay you some equity money and take over a loan that has a few years already paid on it. If you use this strategy, make sure you get a release of liability from your lender so that your credit isn’t negatively affected if the person assuming your loan doesn’t make the payments like you did.
<Tom makes comments including some tips on how to make sure the value trends in the neighborhood are headed in the right direction before buying the house—maybe even share a story from the field to illustrate??>
(Jo) Buying a home is one of the biggest investments a person will make in their lifetime, not just because it is the highest ticket purchase but because it is where they will rear their children and make the memories that are the foundation of the family history. Two of the most important questions that I ask someone who is struggling with the decision to rent or to buy a home are these: 1. Do you plan to remain in the geographic area for at least the next 5 years? Because if you know you are leaving the area in less than 5 years, you may want to rent and not buy a home. 2. The other question to ask yourself is, “Can you afford to the house payment with the cost to maintain the home and what it might costs out of pocket at the closing table to buy the home?” I can recall some of my former clients who confided to me that they had decided to give up on their dream of homeownership. If you have given up your dream of owning your own home, you probably have given up some other dreams too. Life is too precious and short. Don’t give up. Let’s talk. You just might be surprised how much lower a house payment will be compared to rent on the same house. You may be surprised when you look at all of the other perks to owning a house compared to renting. If you don’t think you have money to close, I’m a trophy carrying treasure hunter. If you are a happy homeowner listening the show while we’re live August 13th, 2016, call us and share your story of why owning a home has made YOUR life better. Your story could be just what someone else needs to hear to encourage them to move forward with THEIR dream of owning their own home sweet home.
<Tom launches until break>
______________________________________________________________________[2nd segment after 9:15 break: Our Look Back Memphis Trivia Contest is brought to you by notable Memphis historian, Jimmy Ogle. Jimmy Ogle offers free historic walking tours downtown in the spring and fall. For information about Jimmy Ogle, go to www.JimmyOgle.com . The Look Back Memphis Trivia Contest is sponsored by John and Jennifer Lawhon of Lawhon Landscape (901) 754-7474 the Lawhon’s can help you plan your landscaping if you have a BIG, BIG project or a smaller project . The Lawhons are giving away a $25 gift card to the first person with the correct trivia answer. If you know the answer to our trivia question, call us at 901 535 WREC 901 535-9732.]
TRIVIA QUESTION: Garner # 86 08/06/16 ANSWER IS: GEORGE KLEIN
Question: I was the President of my class at Humes High School in 1953. Who am I?
Hint: I can be heard weekly on SiriusXM Channel 19 Elvis Radio.
Hint: I was a member of a group known as the “Memphis Mafia”.
Hint: I was able to work with Dewey Phillips at WHBQ Radio in the 1950s.
Final Hint: I am also known as “The Jeeker in Your Speaker”!
Answer: George Klein (GK). In honor of Elvis Week this week, we talk about one of Memphis’ biggest fans – not only in music, but also the University of Memphis Tigers, as GK loves his Tiger basketball. In the 8th grade, GK met Elvis at Humes High in North Memphis (1948), he could not have known how important the new kid with the guitar – the boy named Elvis – would become. While in college at Memphis State, GK would get a part-time job at WHBQ assisting with the recreation of baseball game broadcasts. That led him to Memphis’ most famous DJ – Dewey Phillips, then a stint at KOSE in Osceola before returning to Memphis to host radio shows at WDIA, KWEM and WMC. GK followed Wink Martindale as host of Dance Party on WHBQ television, which eventually became Talent Party with the WHBQ Cuties.
From late night pick-up football games at Whitehaven High School to after-midnight buy-outs of the Fairgrounds with Elvis’ favorite ride being the Pippin to private viewings of first run movies at Midtown’s Memphian theatre to late night flights bound for Las Vegas, GK became one of the Elvis’ closest confidants. Elvis was the Best Man in GK’s wedding and GK was a groomsman in Priscilla and Elvis’ wedding in 1967. Through the years, GK was always near Elvis’ side at concerts, movie sets and other appearances – his last being a pallbearer at Elvis’ funeral. GK is at the microphone on the grounds of the Graceland empire every Friday afternoon at 2:00 p.m. playing the best of Elvis memories all over the world on SiriusXM Channel 19 Elvis Radio.
Jimmy Ogle gives free outdoor walking tours on the sidewalks and parks in Downtown Memphis during the Spring and Autumn of each year, with the next Tuesday Tour being on Jefferson Avenue at 11:45am on Tuesday, September 6 at Main Jefferson; the Fairgrounds Walking Tour at 7pm on Sunday, August 28 (assemble at the Coliseum). The D’Army Bailey County Courthouse Tour (indoors): one Thursday each month at 12:00 noon – the next being Thursday, August 18. Go to jimmyogle.com for more information.
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QUESTIONS ANSWERED BY TOM KING-
• What are some specific situations where you can you do an appraisal for a customer that does not have to do through a mortgage company?
• What are some good rules of thumb to use when trying to determine the value trends in a specific neighborhood for a person trying to decide which house they want to buy for their primary residence?
• What are some good rules of thumb to use when trying to determine the value trends in a neighborhood for a person trying to decide which house they want to buy to use as an investment rental property?
• How can someone research what the rental rates are in certain neighborhoods?
• What is your advice to a homeowner who is trying to decide how much to add on to their home or how much to spend on upgrades? (to prevent overbuilding or making the right choice on which items to add or upgrade to get the most boost to value?)
• Pat Goldstein, realtor with Crye-Leike in Memphis and North Mississippi called in and talked about the importance of having experienced problem-solvers on her home-buying team.She and Tom talked about being wise when it comes to investing in a small upgrade like granite countertops or other desireable amenity on a home to help it sell quicker and for more money.
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QUESTIONS ANSWERED BY JO GARNER:
What are some questions you can ask yourself to help you make a wiser decision whether to rent or buy a house?
• How long do you plan on living in the home you buy? If you plan on staying in the geographic area for five years or more, the financial balance is really weighted toward you owning a home instead of renting.
• Would you be happy in the house you buy even if circumstances required you to stay longer? People who bought a “starter” home in 2005 thinking they could sell and buy a bigger home a few years down the road ended up stuck in homes that were worth less than they owed on their mortgages due to the housing crisis. Home prices are rising now, but there is no guarantee they will continue to rise, and the rate of increase has already slowed.
• Is your job and your life stable and not likely to require you to move from the house? If your job will require you to relocate over the next year or two, renting is probably better for you because there are costs to trying to sell a home and move. If the trend for your income is in a downward direction and it doesn’t look likely to improve, then renting gives you the flexibility to move to less expensive rental area. If your income is doing great but you are involved with a long-distance romance, well, you might be moving sooner than you think.
• How do the monthly costs compare? Toward the end of 2015 Trulia did a survey of the 100 top cities in the United States and determined that overall it is 23% cheaper to BUY a house rather than rent. (The only exceptions were Honolulu and the Silicon Valley.) Trulia based their calculations on estimating that buyers would pay down around 10% using a 30 year loan of an average of 3.85% and that the buyers were in a 25% tax bracket. Most first-time homebuyers put a lot LESS than 10% down—more like zero to 5%. But do the math for the specific neighborhood where you will be buying. How much will you pay for property taxes, homeowners insurance, association fees, maintenance and utilities?
• Do you have savings for a down payment? Having an emergency fund is very important for first-time homebuyers and existing homeowners alike. With the variety of mortgage loan products available, first-time homebuyers who qualify for down payment assistance can very often get in for zero down. Most military veterans can use the 100% VA mortgage with very little to nothing down. There is the 100% Rural Housing loan for people who do not want to pay a down payment to purchase a home. Other borrowers want to avoid having to pay mortgage insurance and want to keep their payments low. There are products that can match their requirements too. Many people come into my office and say, “I don’t have any money.” But most people have access to funds. They just need a little help finding it. My assistant Susan and I consider ourselves good treasure hunters. I am happy to go over with you some places you can look to find money you didn’t even know you had. Call me after the show and we can talk (901) 482-0354 (901) 482-0354 or connect with me at www.JoGarner.com
• Do you have savings to pay for repairs? Remember earlier when I mentioned the importance of an emergency fund? Sometimes a large, unexpected repair like an Heating and Air system that goes on the blink can require you to use some of your emergency fund money. Realtors are really good at negotiating sellers to pay for a 1 year home warranty for their buyers. If the seller won’t pay for one, you may want to consider it. Pay attention to what the warranties will cover and what they won’t cover. But having a good home warranty plan on the house can ward off many of the bigger ticket repair surprises.
• Would you be better off financially if you spent the money elsewhere? I would call it looking at your opportunity costs. If you have your savings invested somewhere making you a return and compounded return of over the 3 point something interest rate you are paying on your mortgage, you may not want to disturb that money by using it as a down payment on a house—OR—you may want to find a way to borrow AGAINST that money instead of taking it out of its wealth building account. That’s called using leverage as a tool. But also look at the appreciation rate on the value for the house you want to purchase. Buying a home is an investment too. Most reputable, experienced realtors can show you the right data for free to help you determine what the trends are for the value on a particular house as a preliminary estimate.
2. What are some perks to owning your own home vs renting ?
• Save money by making your home more energy-efficient. Both homeowners and renters can take steps to get some energy-efficiency savings on their utility bills. But homeowners can do a lot more than just keep lights and appliances turned off. Homeowners can invest in replacing their heating and air conditioning system with a much more efficient system, sealing their ducts and installing attic tents, more energy efficient windows, tankless water heaters and the list goes on. Check with your local energy provider for any real money rebates available to you for making energy-efficient improvements. For homeowners in the some of the Southern states, check with Tennessee Valley Authority www.TVA.com Specifically in the Mid-South area Kevin Yee of Save Energy Solutions can inform you on some energy saving options in your home. He has been good with informing business people at the Memphis Talk Shoppe events. www.saveenergysolutions.net/about-us.html.
• 2. You can design and customize your space. As a homeowner you truly get to make your home your very own castle. Paint it whatever color reflects your art deco tastes, add a closet, take out a wall, make the back yard a resort where you look forward to relaxing with your loved ones after a long day at work.
3. Homeowners don’t waste as much money for furniture. Homeowners buy furniture that will fit the space for a lot longer than renters who tend to move more often and have to buy custom furniture that works in the new spaces.
• 4. Owning a home encourages you to save your money. Most homeowners take pride in where they live and learn quickly the happy feeling of saving and having the funds they need to add an improvement, replacement or repair to their home when needed. Also many homeowners are in a position to shelter their income buy writing off as a deduction on their tax returns money they spent for mortgage interest, mortgage insurance and property taxes paid. Check with your certified public accountant on what you are able to write off. I personally learned an important wealth builder when I moved over a 1,000 miles away from home in my 20’s and lived for a month with a single mom renting a room from her until I could find my own place. She and I have stayed friends for over 30 years. She taught me the value of getting a place that, in a pinch, you can rent a room or two to help get you over a financial hump. Every house I have purchased since that time, I have chosen because the layout allowed me to rent out part of the house for income and still maintain relative privacy for myself. By renting part of my house my CPA showed me a happy discovery of being able to write off a portion of my expenses on maintaining the house like plumbing repairs, painting and other improvements. These tax write-offs show up in my bank account when the tax refunds come around each year like a forced savings account finally paying off. The other forced savings account pay off is when you sell your house later and hopefully get the profit on all of the equity built while you lived there.
6. The landlord can’t terminate your lease. YOU are the queen or king over your own castle. One homeowner nicknamed his house the “Dallas Palace” (he lives in Dallas, Texas). Another client of mine now has a nickname for his house—“The No-Hassle Castle” What’s the name you call your haven?
• 8. Unlike rent, a fixed mortgage can’t go up (even if inflation does). Only in the United States of America can you enjoy a fixed interest rate on your mortgage for a full 30 years! Rent rates have been going up over the last several years from 5% to 10% per year in many areas. But homeowners with a fixed 30 year, 20 year or 15 year loan enjoy monthly principal and interest payments that remain the same each year for the term of the loan. Property taxes and insurance and association fees can fluctuate but not the principal and interest payment on the fixed rate mortgage loan. A very sweet deal you can pat yourself on the back for snagging.
REAL ESTATE TIP OF THE WEEK (Tom King shared about what types of renovations or repairs are the best investment when it comes to adding value to the home. He warned about making large additions to the square footage that can cause the home to be overbuilt for the neighborhood):
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 the University of Phoenix 65 Germantown Center 1st floor Cordova, TN. This Wednesday August 17th, 2016 Talk Shoppe presents: “Current Scams and How To Avoid Them” with Nancy Crawford of the Better Business Bureau of the Mid-South. www.bbb.org.
Talk Shoppe events are free thanks to supporters like Kim Hummel, creative director of Sauce Marketing, Talk Shoppe’s webmaster and branding consultant. Throw a little flavor into your marketing. www.saucememphis.com Thank you to a loyal financial supporter of Talk Shoppe, Leah Anne Morse of Cartridge World in Collierville. Leah Anne can save you up to 30% on your printing costs, using scientifically engineered recycled cartridges that work in your printer like the ones from the manufacturer. Give Leah Ann a call at Cartridge World in Collierville, TN. (901) 853-3230. Refill803@cartridgeworldusa.com
2. A big welcome to our Memphis visitors especially those here to celebrate our home-town King of rock and roll. , Elvis Presley. Enjoy your stay!
4. FOR THIS PODCAST OF REAL ESTATE MORTGAGE SHOPPE AND MORE, GO TO JOGARNER.COM
5. Real Estate Mortgage Shoppe reminds you that IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY.
QUOTE CORNER: (Jo) I was trying to think of all of my favorite Elvis Presley songs the other night. See how many of Elvis’ songs YOU can pick out:
“If you have a hunka’ burning love for a house you can’t live without, but your wife is a hard-headed woman, and she thinks YOU’RE a hound dog, and she won’t be moved, don’t be cruel—don’t get all shook up. Tell her that’s alright, mama. It’s all about the Money Honey. It’s Now or Never with mortgage rates this low, the payment won’t be too much. It’s like Santa Is back in town. You don’t have to stay in the Heartbreak Hotel or in the ghetto. Tell her, “Let me be your teddy bear and we can have a party and make memories in the garden—the grass won’t pay no mind at our new house on Blueberry Hill. ____________________________________________________________________________________
REJOINERS:
• Mary Lou Nowak of Home Helpers offering non-medical assistance in the home. www.homehelpershomecare.com (901) 414-9696
• Kim Miller of Arch Private Mortgage Insurance company, Nashville, TN and all over the country (615) 424-1500
• Gwen Christensen, Builders Floors and Interiors. She is a flooring expert and a decorator. You get two talents for the price of one. www.buildersfloorsandinteriors.com 901 382-2155
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Transitional Music: “Money Honey” by Elvis Presley; “There’s No Place Like Home” by Elvis Presley (practice session in the studio) The Millionaire Quartet with Elvis Presley, Johnny Cash, Jerry Lewis and Carl Perkins; “It’s Now Or Never” by Elvis Presley; “Memphis” by Johnny Rivers for Look Back Memphis Trivia contest
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ABOUT TOM KING, APPRAISER WITH BILL KING COMPANY (901) 487-6989
Tom is a well- respected and sought after appraiser in Memphis, Tennessee. He is a second generation appraiser with 40 years 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
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ABOUT JO GARNER-MORTGAGE LOAN OFFICER:
www.JoGarner.com (901) 482 0354 jo@192.232.195.219 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 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.com 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