Do you want to know what the future of the housing market is for 2017? We talk about the future of the mortgage market and the housing market and we share some good rules of thumb to keep your future bright when it comes to housing and your real estate financing terms.
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To Your Success,
Jo Garner
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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 “WHAT IS THE FUTURE OF THE HOUSING MARKET IN MEMPHIS? SOME IDEAS ON HOW TO KEEP YOURS LOOKING BRIGHT.” What do YOU see in the future for the Memphis area housing market? If you’re on Twitter, make your comments to #JoGarner or call me directly off the show at (901) 482-0354. You can call us while we are live at (901) 535-9732 or outside the Memphis area (800) 474-9732 Today is December 10th, 2016.
While we are together today, Tom King and I are going to pull out our “Magic Binoculars” and peer into the future of the Memphis area housing market for 2017. Some of our regular listeners know about the “Magic Binoculars” because you can look in one end of the glass and see back into the murky mists of the past. Turn it around, and you can peek into the foggy future. The lenses ARE a little foggy looking forward, but hey, we usually hit it pretty close. We will be sharing some ideas on how to make sure your financing works for you in the now AND in the future. Tom King will be giving us a glimpse of 2017 home values and how to keep your values tip top.
Tom King is an expert appraiser in the Shelby County, Tipton and Fayette County TN. I believe Tom knows every street in the Memphis and surrounding areas. He started in the appraisal business following his dad who was also an appraiser. Tom tell our new listeners about yourself and what you do. <Tom introduces himself and talks about what he does>
(Jo) Tom and I have been trying to get the Magic Binoculars focused on the future of mortgage rates for 2017. As I said earlier the lenses are a little foggy. With the volatility we have seen following Election Day when the mortgage rates rose from mid 3’s on the 30 year fixed rate program earlier in the year to where they are today in the low 4’s , it looks like mortgage rates will stay around the low to mid 4’s on average throughout next year. But, just like in years past, if some economic event overseas or other game changers occur, mortgage rates could plummet right back down again, but they are expected to stay relatively stable in the low to mid 4’s. The Federal Reserve, however, has been hinting that they plan to raise their Fed overnight rate this month. Even though mortgage rates are NOT tied directly to the Fed rate, the Fed overnight rate adjustment could affect the bond markets which ARE tied to the mortgage rates. Stay tuned!
<Tom comments >
(Jo) Have you ever gone out and bought something for yourself that you really, really want as a reward for accomplishing a goal or maybe just because you feel you deserve it? I have never had satellite radio before until this year. Now I don’t want to get out of my car! During the day I listen to Bloomberg and a number of other talk shows and some really fun stuff too—the comedian channel and a really eclectic collection of music channels. But I caught Federal Reserve chairman, Janet Yellen’s, speech on one of the news channels. She was making her predictions for the economy in 2017. She said due to some initiatives for building infrastructure around the country and other areas of activity, she predicts we will see more inflation popping up. Ms. Yellen said it is her plan to raise the Fed rate as many times as needed to curb climbing inflation if we see this in 2017 and beyond if needed. Most of what I am hearing is indicating the inflation rate to be still low to moderate. However, if the Fed’s overnight rate goes up, chances are that your Home Equity Line of Credit variable rate will be going up too. If you’re sensitive about your interest rates and payments going up, you may want to consider converting the variable rate Home Equity Line to a fixed interest rate while the fixed interest rates are still relatively low. If you would like to take a spin on my calculator, let’s look at the terms refinancing and converting variable rate loans to a fixed rate mortgage. I work all around the country –not just in the Memphis area. 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!
<TOM MAKES COMMENTS>
(Jo) Tom, I guess we’ll see how good our “Magic Binoculars” are next year. But this thing is REALLY heavy. Can you hoist it over that way a little so we can see what’s going to be happening with new home construction? Yep, looks like new home construction is up. Hard to tell if it is just slightly or over 10%. Looks good for new construction nonetheless. Existing home sales still look good but maybe not as robust as in 2016. The higher interest rates might be taking a small bite out of the number of people who can afford to buy a home. While interest rates are low is a terrific time to buy a home and lock in a low fixed rate mortgage rate. As rates offered in the market get higher, the less house you can comfortably afford. Here is a perfect example: In 2006, at the height of the real estate boom, you could buy a house for a median price of $250,000 paying 20% down with an average interest rate of 6.75% for a fixed rate 30-year term. Your principal and interest payment on the loan would have been about $1,300 per month. Today buying the same house at the same price with a 30-year fixed rate of 4.125% no points with 20% down would give you a principal and interest payment of about $969/per month—that is $330 per month LESS than you would have paid for the same house in 2006. $330/mo less in payments for the same house times 12 months is almost $4,000 per year in savings year after year. Rates are still low right now, so IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY.
Tom King has been appraising houses in the Memphis area for over 40 years. Chances are, if you live in the Memphis area, Tom or his father may have appraised YOUR house or one of your neighbor’s houses. He sees the value trends first hand. Tom, what do YOU see happening with home values in the Memphis area in 2017? <Tom launches his topic>
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[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 Answer: ] MEMPHIS QUEEN II
TRIVIA QUESTION: Question: I am currently the most historic boat on the Memphis riverfront. Who am I?
[TRIVIA HINTS] Hint: I have been cruising in the Mississippi River along the Memphis riverfront since 1955.
Hint: I have a family of three other “sister” ships in Memphis.
Hint: I was the first all-steel hull passenger on the Lower Mississippi River (1955).
Final Hint: I was placed on the National Register of Historic Places in 2006.
Answer: MEMPHIS QUEEN II. Built in 1955 by the Dubuque Boat & Boiler Company, The Memphis Queen II was the first all-steel passenger ship on the Mississippi River. Measuring 85 feet long by 43 feet wide, it features two decks, two smokestacks, and a stern wheel reminiscent of a 19th century riverboat. Local residents and tourists boarded this vessel from it’s mooring on the cobblestoned Memphis waterfront for excursions on “Ol Man River.” One July 5, 2006, the Memphis Queen II was listed in the National Register of Historic Places by the U. S. Department of the Interior
In 1955, Capt. Ed Langford brought the MEMPHIS QUEEN II to Memphis to Memphis. When his health failed in 1960, Capt. Tom Meanley bought the company and began building boat hulls in his backyard in Whitehaven, transporting them to the riverfront for launch and finishing the upper decks while at the docks. Sister ships MEMPHIS SHOWBOAT, MEMPHIS QUEEN III and the ISLAND QUEEN ARE PRODUCTS OF THE FAMILY AND CREW – A TRUL;Y “Made in Memphis” story. Now, in its third generation of local ownership, Capt. William Lozier owns and manages the only local passenger excursion business on the Mississippi River between New Orleans and St. Louis (about 1,300 miles)!
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 being the Judge D’Army Bailey County Courthouse Tour (indoors): one Thursday each month at 12:00 noon – the next being Thursday, December 15. Go to jimmyogle.com for more information.
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QUESTIONS ANSWERED BY TOM KING:
- What do you see residential real estate appraisal values doing in the Memphis Metropolitan Area in 2017?
- What type improvements or preparations can a homeowner do to his home for the best chance of getting the highest appraisal value on his home?
- What type appraisals do you do?
- How do the different type appraisals differ in the criteria you use to determine the value?Talk briefly about the mortgage/appraisal firewall.
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QUESTIONS ANSWERED BY JO GARNER:
- What do you see in the future for the Housing and Mortgage market?
Earlier in the show we were looking through our famous “Magic Binoculars.” We turned them so we could look into the future. The lenses are a little foggy looking through that end, but here’s what it looks like so far:
- Mortgage rates will stay relatively low throughout 2017 but higher than they were in 2016. It looks like rates will hover around the low to mid 4’s, maybe dropping back into the high 3’s if something drastic occurs to move the bond markets.
- New construction will have a good year, slightly better than in 2016 and perhaps over 10% better. A good year for builders and for building a house.
- Existing homes looks like they saw their better year in 2016 and will probably be down a little in 2017. The higher interest rates will be whittling away at the number of people who can afford them. Still a good market though for selling or buying.
- Back in July 2016, mortgage rates hit all-time lows, started inching higher and then launched even higher following the presidential election.
- From this vantage point it appears that rates are going to stay about where they are but not getting lower until after our new President takes office. There could be something big and unexpected to happen that might cause rates to drop again fairly quickly but that rates are more likely to continue at the highs where they are for a long while. The low 4’s on a 30 or 20 year fixed rate is still fabulous. It presents a great opportunity to refinance out of variable rates if you have one and lock yourself cozily into a low fixed interest rate. You also have a window to restructure some debt, shorten the term on your mortgage or pull cash out to invest somewhere else.
- What are some good rules of thumb you use when trying to determine when to refinance or which mortgage product to choose when buying a home that will work today and in the future?
- If you are risk adverse, stay away from adjustable rates, especially those with no safety caps like on most Home Equity Lines of Credit. Watch out for accumulating credit card debt. Credit card companies can charge you a double digit interest rate and without a lot of notice. Check with our financial advisors to see where you can eliminate the biggest risks.
- Always keep adequate emergency funds on hand. Don’t pay so much down buying a house that you don’t have the money to move into it. There are low down payment special programs out there if we need to look there. Call me and I’ll help you go treasure hunting for places to get your down payment.
- Make sure you have plenty of breathing room in your budget to make the full payment, including principal, interest, taxes and insurance and any mortgage insurance or association fees. Some gurus say the full house payment should not exceed 25% or 36% of your gross income. But some of the mortgage programs allow you to go a LOT higher than that. You know your personal comfort level. Stay within your comfort level on the payments because, if you’re human, the unexpected life event can come calling on you when you least expect it and it can be expensive.
- Here’s a great rule: If you are on a fixed income, get a fixed rate loan and stay away from adjustable rates. EXCEPT—if you know you are paying down 30% or more on the owed balance on the mortgage within the first year of getting the home. If that’s the case, then let’s you and I pull out my payment calculator because I am thinking the adjustable rate mortgage that changes every year with some tight safety nets called annual and life time rate caps will make it so that your payment is ALWAYS lower year after year even if the rate goes up to the maximum of its annual cap each time, because the payment on the adjustable rate program is calculated ONLY ON THE UNPAID balance. Call me if you want to go through these types of scenarios or others to see if they work for you. But you have to call me directly at (901) 482-0354 or connect with me at JoGarner.com .
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REAL ESTATE TIP OF THE WEEK
(Tom talks about the importance of turning on the utilities so they are fully functional when the appraiser comes to inspect the home. If the utilities are not on, the appraiser will have to schedule a reinspection at an additional cost). Jo shared a tip to borrowers under contract to buy a home. Get your income and asset supporting documentation to the lender early so you can get preapproved before paying for the appraisal. Appraisal money is not refundable in most cases so you don’t want to find out AFTER you pay for an appraisal that your income is not enough to qualify or that you do not have enough money to close the deal.
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 Court 1st floor Cordova, TN. This Wednesday December 14th 2016 Lance and Terri Walker of Walker Auctions will be doing a short tutorial on How To Buy At Auction and then you can bid at the “Miss Vanna Goes Christmas Shopping at the Old Bag Sale” Gift cards and money from $25 to $100 are in the bags to be auctioned. For extra promotion of your company, donate a gift card, product or service worth over $25. Call Lynn before Wednesday to make your donation at (901) 849-7101. Proceeds go to provide YMCA Swim Scholarships to young students who write essays or make posters.
- Talk Shoppe events are free thanks to advertisers Peggy Lau, Independent Representative for World Ventures. Peggy has been showing people how to earn high quality, hassel-free, amenity-filled unique vacations. She can help you immerse yourself in a one-of-a-kind travel community. Make money and have fun doing it. (901) 289-0747 For more about Talk Shoppe, go to www.TalkShoppe.com
- Tom announces the Bellevue Singing Christmas Tree
- 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 podcast pictures for many of our shows throughout the year.
- SPECIAL NOTE: REAL ESTATE MORTGAGE SHOPPE RECOMMENDS THAT YOU CONSULT WITH A FINANCIAL, LEGAL OR OTHER CERTIFIED, LICENSED PROFESSIONAL BEFORE ACTING OR INVESTING ON ANYTHING YOU HEAR OR SEE FROM THE CONTENT ON THIS SHOW OR BLOG POSTS. THE INFORMATION WE SHARE ON REAL ESTATE MORTGAGE SHOPPE IS GENERAL IN NATURE MEANT FOR GENERAL EDUCATIONAL PURPOSES ONLY.
- 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.
QUOTE CORNER:
Anonymous- “The best way to predict the future is to create it.”
Anonymous- “Do something today that your future self will thank you for.”
In-Studio Caller: Doug Embrey, LSI Services we offer are Grand Format Printing, and Promotional Products. Contact: Doug Embrey @ LSI.com
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REJOINERS: Leah Anne Morse, Cartridge World in Collierville, TN (901) 853-3230 Save up to 30% on your printing costs. Consult with Leah Anne Morse for specific ways she can save you and your business time and money.
- Attorney Mark Sterbcow Toll Free: 877-854-2182
Local: 504-523-4930
Fax: 888-241-6248
1734 Prytania St
New Orleans, Louisiana 70130
The RESPA Resource Law Center is owned and operated by Marx David Sterbcow, one of the country’s leading RESPA attorneys and Managing Attorney of the New Orleans based law firm Sterbcow Law Group, LLC
- Peggy Lau, Independent Rep For World Ventures where you can earn first-class vacations and be a part of a one-of-a-kind travel community. ipoa.dreamtrips.com (901) 289-0747
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Transitional Music: “Little Wonders” by Rob Thomas; “Welcome To The Future” by Brad Paisley; “Back In Time” by Huey Lewis and the News; “Memphis” by Johnny Rivers for Look Back Memphis Trivia Contest
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ABOUT TOM KING, APPRAISER WITH BILL KING COMPANY
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