Good morning Memphis and Mid-South and all you across the nation on I-Heart radio. I hope you are enjoying a weekend of being thankful during the Thanksgiving weekend. You are on the Real Estate Mortgage Shoppe program with me, Jo Garner, Mortgage Officer with Evolve Bank and Trust. Our co-host today is Attorney Ron Cohen affiliated with Ballen Ballen and Fishman and co-owner of Premium Title Group.
Ron, I have heard of some wonderful solutions you have offered our listeners on working out their real estate title issues. Its always great having you on the program.
Tell our listeners a little about yourself and what you do.
Our featured guest today is back by popular demand—Richard Scarbrough, experienced real estate investor and realtor with First National Realty. Richard has done over 400 real estate purchases in the Memphis area.
Our topic today is “Experiencing A Smooth Mortgage Process and Real Estate Closing.” We are here to talk with YOU about whatever real estate topic you want to discuss—your mortgage, your credit, buying real estate or any questions you have about title or closing. Bring your cup of coffee over to our table and join us by calling (901) 535-WREC. That number again is (901) 535 9732.
This week rates were like holiday travelers—they were all over the place. The market was open yesterday in technical terms but closed in spirit. As of Wednesday evening the 30 yr fixed rates
The 30-year fixed-rate mortgage fell to 3.53 percent from 3.54 percent. The 15-year fixed-rate mortgage fell to 2.86 percent from 2.87 percent. The benchmark 5/1 adjustable-rate mortgage fell to 2.7 percent from 2.72 percent.
Zillow.com reported the largest monthly home price increase in seven years. National home values continued to climb as prices rose in October for the twelfth consecutive month. Inventories on foreclosed and distressed properties are shrinking causing builders to celebrating increasing demand for new homes.
The real estate market today has a lavish table set for homebuyers, complete with historic low rates and home prices still very reasonable. What I am about to share with you is a comparison of where we were in 2006 compared to this week. Rates are less than HALF what they were at the peak of the housing bubble in mid-2006 when the median house price was about $250,000 dollars and the average interest rate was about 6.75% for a 30-year term.
A person who bought a home in 2006 with 20% down would have made payments of $1,300 a month. Today, a person who buys the same house at the current median price of about $162,000, would pay less than half that amount, about $564 a month. Today your mortgage payment per month would be $700 LESS than in 2006 on the same house Its time to buy houses and its time to refinance some.
The Home Affordable Refinance Program or HARP is still top news around the nation. The government HARP program allows underwater homeowners to refinance their homes even though they owe more on the house than the current value. There are some restrictions to qualify for this program –but its been a winner for mine and Susan Belew’s customers.
We have been able to save people a few hundred dollars or several hundred dollars per month on a refinance. In some cases we can save the homeowner several thousand dollars by shortening the term on the loan.
If you do not have a Fannie Mae or Freddie Mac loan that will qualify for the HARP refinance, perhaps you have an FHA loan that can be streamline refinanced to a lower interest rate FHA loan. IF your FHA loan was originated prior to May 31, 2009, then you may qualify for the new lower mortgage insurance program cutting almost all of the unfront Mortgage Insurance and half of the monthly insurance.
My very capable assistant, Susan Belew and I would like very much to talk with you in more detail. You can call us directly OFF the air at 901 482 0354. That number to reach us directly OFF the air is 901 482 0354.
You would be amazed at how many hundreds of dollars we have saved our customers per month by refinancing at rates in the 2’s and 3’s. Its fun to help our customers save tens of thousands of dollars when they shorten the term of their mortgage AND lower the rate at the same time. Even if you are planning on selling your house in the next 3 or 4 years—if we save you enough per month that you recapture your closing costs within less than a year –then there the savings of thousands of dollars is still going in your pocket until you sell the house. Let’s talk (901) 482 0354.
There are plenty of opportunities for you to free up thousands of dollars on your budgets or build wealth for today and your retirement by buying or refinancing real estate. But of course, we all want a smooth loan process and a SMOOTH CLOSING. Attorney Ron Cohen, what advice can you give us on how to ensure a smooth real estate closing.
Questions to be answered by Attorney Ron Cohen:
- What is a limited power of attorney and why is it used at almost every closing?
- Who needs to be at the real estate closing? Why is it important to have a spouse sign specific papers at closing on a primary residence even though they might not be on the note or title?
- What are “good funds” and what are the specific requirements in Tennessee that makes it important to meet all of the criteria for having the right type of funds?
- What are some other tips for having a smooth real estate closing?
Questions to be answered by Richard Scarbrough:
- What are some of the questions you asked on your closing checklist when you are closing on your own property or helping someone else on theirs?
- Answer all of the “w’s” BEFORE the closing. Who? What? Why? Where? And When?
- Working in coordination with realtors and mortgage officers and closers
- What are some of the snafus you have experienced AFTER the closing and how have you learned to avoid these snafus?
Questions to be answered by Jo Garner
1. Question 1 answered by Jo Garner : Home prices are low and so are the rates. It seems like everyone would be buying AND refinancing a home right now. What are some steps to a smooth loan process?
Jo’s answers: If you are buying a home or refinancing one the mortgage rates and historic low prices on homes are like having your own money tree in the back yard producing cash and generating long-term wealth. You don’t want stormy weather to curtail the fruit from your money tree. Protect your real estate transaction by providing detailed income documents and asset documents that are part of the ever-tightening loan requirements.
Today you need to prepared to provide all pages of your signed personal tax returns (and business tax returns if you are self-employed in a corporation. ) My assistant Susan and I would be happy to review your tax returns if you are self-employed. You might be amazed at how much income we can find in your tax returns.
When you are choosing which bank statements to send to the mortgage company, try to choose one that does not have a lot of large deposits other than payroll, because these days underwriting is requiring that you show a paper trail on the source of large deposits. Creating that paper trail can cost you time and trouble.
If you are purchasing a home and using down payment assistance, be prepared to document household income, even if your spouse is not on the loan.
A good mortgage officer can walk you though some of the loopholes and work arounds. So can a good realtor, if you are buying a house.
2. Question for Jo Garner to answer: At least half of the real estate closings are refinances right now. What are some of the advantages of refinancing?
- The No. 1 reason to refi is to get a lower mortgage rate and pay much less interest cost. These borrowers either go back to a 20 or 30 year term and lower their house notes several hundred dollars a month or they choose to shorten the term on their loan and save TENS of thousands of dollars overall.
- Another group of customers come in with adjustable rates and want a fixed rate so if inflation hits and rates start moving up again, they’ll be enjoying a stress-free, low fixed rate.
- Some people see an opportunity and refinance and pull cash out of their property if they have enough equity freed up on the house. They take the cash out from the refinance and pay off other high-interest rate debt, or they use it to buy more real estate for investment and other reasons.
- Changes in the family structure such as divorce or death of a family member can result in the home mortgage needing to be refinanced.
Question for Jo Garner to answer : Question 3:
Real Estate Tip of the Week:
Attorney Ron Cohen’s Tip of the Week: Don’t Panic! Everyone wants your transaction to close—the realtor, the buyer or seller and the mortgage officer. If you are missing something, consult with the appropriate party and go get the missing item.
Jo’s Tip of the Week: (not on the podcast) If you or someone you know is in the process of getting a mortgage loan, here are a few tips:
(1) Read over the loan application and disclosures carefully. Check to make sure your name is spelled correctly, your social security and birthday are correct and the property address is correct. Check the rate and terms of the loan to make sure you are getting what you agreed to on the rate and terms. You may get more than one set of disclosures if anything on your numbers change.
(2) The credit bureaus are sending summaries of your credit report to you in the mail after the mortgage company pulls your credit. These bureaus have a few paragraphs in their report that makes it sound like your credit has problems, but check with your mortgage officer. A lot of the language in the bureau letter are describing their criteria for grading loans in general –not necessarily YOUR loan.
Jo’s announcements: This coming Wednesday at the Better Business Bureau 3693 Tyndale Memphis, TN. Talk Shoppe and the Small Business Chamber will be presenting the Mastermind Principal according to the book Think And Grow Rich by Napoleon Hill. Come prepared to get and share ideas, resources and referrals for your business in small groups. For more information go to www.TalkShoppe.BIZ.
Also next Saturday here News Radio AM 600 WREC the Real Estate Mortgage Shoppe will be talking with Holly and Don Swogger of Homevestors. They will be sharing their wisdom on how to build your real estate business.
Songs: “It’s A Wonderful World” Louis Armstrong
“Thanksgiving Song” by Johnny Cash
“Thank You For Being A Friend” Theme from Golden Girls
Ron’s Notes :
What Should I Bring To Insure A Smooth Closing?
Refinance:
Mortgage Loan Documents:
Why should I bring them? Doesn’t my mortgage lender give them to Premium Title for them to handle?.
They do, but, it is always a good practice to review your mortgage loan documents in advance, if possible (optional: mortgage lender won’t like this).
Does that include the final settlement statement?
Yes. It is commonly referred to as the HUD 1. But, it is also a good practice to review all of the closing figures, at your leisure, prior to the actual closing (optional: mortgage lender won’t like this).
Will I be required to sign any affidavits at the closing such as an affidavit of no liens or encumbrances?
You will.
Aha! But doesn’t Premium Title search the public records to determine if there are any liens against the property? Why are they bothering me with this affidavit? I’m beginning to feel pressured and overwhelmed.
Yes they do, but there is often a gap period between the date that the title was searched and the closing. These liens might not appear on the public records until after the closing. So, sign here.
A friend of mine went to a closing where the lender asked them to sign a limited power of attorney in case any documents needed to be corrected after the closing. Does that mean my mortgage lender can change my interest rate after the closing.
Of course not . the limited power of attorney only allows your lender to correct typos and things that do not relate to the economic terms of your loan.
Purchase:
Okay. I’ve got it (sort of), but what if I am purchasing a property. Is there anything else that I should be receiving at the closing.
Yes. You will then be involved in two transactions. Your first transaction is with your mortgage lender wherein you are borrowing the money necessary to purchase your new property. Your second transaction is with your seller wherein you will receive a deed and other documents necessary to give you good title to your new property.I’m beginning to wonder if this is all worth it.
Of course it is. Jenett at Premium Title will make both transactions seamless.
Okay. I’m starting to feel a little better.
Do I do two separate closings?
No. It all takes place as one simultaneous closing at Premium Title.
This is all sounds so confusing. How will I remember everything?
It’s simple. Premium Title will follow your mortgage lender’s instructions in completing the mortgage loan transaction and will then collect from the seller their documents to make sure that you are receiving good title to your new property. Once Premium Title is satisfied that everything is in order, they will release your money to the seller and will file your new deed putting the entire world on notice that you are the new owner of the property. Congratulations!
What Should I Bring To Insure A Smooth Closing?
Jo Garner, Mortgage Officer Evolve Bank and Trust (901) 482 0354 jogarner@mindspring.com www.MONEYSHOPPE.NET
Ron Cohen, Attorney 312-346-1145 Kusper & Raucci, Chartered Chicago, IL
Richard Scarbrough, Real Estate Investor and Realtor with First National Realty
(901) 489-2979
This podcast is full of tips on how to ensure a smooth real estate closing and how to make the loan process progress smoothly.