Top of the morning to you Memphis and the Mid-South and around the nation on IHEART radio. You’re 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, co-owner of Premium Title Group and Jenett Rochester, manager of the Premium Title Group office here in the Memphis area.
Attorney Ron Cohen, its always great having you on the show. Tell everyone a little about yourself and Premium Title Group.
Jenett Rochester is in the studio with us. Jenett has been in the real estate closing business for over 30 years. I think you qualify as an expert, Jenett. Tell us a little about yourself and what you do at Premium Title Group.
Terri Murphy, an author, a national speaker with US Learning, and a consultant for the National Association of Realtors has joined us again this morning around the coffee table.
Our general topic today is “Hang Onto The Green Stuff-Your Land & Your Money.” What do YOU want to talk about? If its about your real estate, your financing, your credit or even someone else’s—give us a call on the air at (901) 535-WREC. The coffee’s hot. Drag up a chair and join us by calling (901) 535 9732.
The rates continued to climb in the early part of the week, but consumers voiced their insecurities with the market by moving out of stocks in favor of the more stable bond market. This sent the mortgage rates creeping back down again. We ended yesterday with the conventional rate at about 3.67% to 3.875%. FHA 30 yr rates are around 3.375% to around 3.75. The conventional 15 year fixed rates are around 2.875% to 3.25%.
Word to the wise: The cost to borrow is going up soon. As of May 1st Fannie Mae loans will be priced 2 to 3 basis points higher because the Federal Housing Finance Agency is adding even higher g-fees to each Fannie Mae loan closed after May 1st. Guess who is paying the bill? The borrowers! The FHA loan program is also going up on their mandatory mortgage insurance costs by the end of the month. If the real estate purchase or refinance deal works for you today, do it today.
My very experienced assistant, Susan Belew and I would like very much to help you get financing terms you can brag about. Rates are still low enough that we may be able to lower your interest rate to free up several hundred extra dollars per month. Or you may be able to shorten the term of your loan AND lower your monthly payment all at the same time. You may be able to pull cash out and pay off some higher interest debt. If you’re buying a house, its VERY likely you can purchase a larger home with a lower payment than the rent you’ve been paying on a smaller place. You can talk with Susan and I directly off the air by calling 901 482 0354 . That direct number again is 901 482 0354. Or catch us on our blog www.mortgageloansblog.com. AND we still have the special HARP refinance programs and FHA streamline refinance programs that do not require an appraisal value. If you have an FHA loan and just want to lower your rate and payment, we DO need to verify your employment but not your income so if your self employed with a lot of tax write offs, you can still refinance on the FHA Streamline or the USDA Rural Housing refinance.
The real estate purchase market has taken off like wild fire .
It’s St Patrick’s Day weekend and I know I’ve got my green on. Green always makes me think of those lushious green pastures you see along the roadside in spring—or it makes me think of money. What does the color green bring to mind for YOU?
We have attorney Ron Cohen with us today via hotline. As a banker I can share some tips on how to hang onto your money, but what are some precautions we can take to hang onto our land?
Questions for Attorney Ron Cohen to answer:
1. Ways to keep your land in your family
2. How to avoid adverse possession of your land from another party
Questions for Jenett Rochester to answer:
1. What is it about the real estate closing business that makes you love it so much?
Questions for Terri Murphy to answer:
1. Where are we in the real estate industry cycle today in our nation?
2. If you are a real estate seller what are the steps you can take to put yourself in the best position to sell your home?
Questions for Jo Garner to answer:
1. What kind of financing is available for purchasing land? On commercial development, we typically finance land at 65% of lower of cost or appraisal. Once they have their plans and spec’s for commercial development we would look at the type of property and the strength of the anticipated leases/cash flows and could lend up to 75% of appraised valve or cost.
Home construction is the same approach but for a strong credit we may go up to 80% on construction if we felt there the borrower was strong. We don’t really finance raw land for speculation purposes, but I may be able to give you a loan secured on another property or other asset to provide you with money to buy land.
2. How are some ways you can hang onto your money?
A. First of all, the less you pay in interest rate cost, the more money you get to keep. Making extra principal payments in the BEGINNING of the loan rather than toward the end gets rid of the most interest costs with the least amount of principal pay down. On an amortized mortgage loan, each payment is made up of part principal.
B. Avoid paying the lender private mortgage insurance. On a conventional mortgage you have to have to pay down at least 20% to avoid it. But there are other ways to avoid private mortgage insurance with not so much down. Call me and let’s talk about it. Get on the air with us by calling 901 535 WREC.
Real Estate Tip of the Week : Just say yes: Document temporary licenses and permission that you give to others to use your property
Jo has two announcements:
Talk Shoppe offers the community free education and networking to anyone interested in real estate or business. This Wednesday March 20th 9A to 10A at the Better Business Bureau 3693 Tyndale Memphis, TN 38125, Tom King, certified Shelby County tax appeal expert with King and Vaughn Consultants will talk about “Lowering Your Real Estate Property The Easy Way” For more info go to www.TalkShoppe.BIZ.
Next Saturday on the Real Estate Mortgage Shoppe program will be hosted by Terri Murphy of Terri Murphy Communications with hot tips from nationally recognized experts on the show to discuss credit repair and how to prepare for mortgage approval.
Transition Songs: “River Dance-the final act”
About Attorney Ron Cohen:
About Jenett Rochester:
About Terri Murphy: www.terrimurphy.info harnessing the power of connection,
I’ve been very active with the mortgage community for several years.
Currently, I’m working on an initiative for a certification for the mortgage and real estate industry to better assist our military.
I’m the co-author of a certification for the real estate industry: Certified Military Residential Specialist..
I also work with the mortgage industry on a program called: Your Forever Home – more on that tomorrow..
As an entrepreneur who has built a successful business over the last 28 years, Terri Murphy started out like the rest of us…clueless.
Early in her career, Terri learned to build a strong customer network, propelling her into the top 10 percent of a national sales organization. Terri took what she learned and began her own sales consulting company.
As a consultant to the National Association of Realtors®, and CIO of U. S. Learning, Inc. in Memphis, Tennessee, Terri understands the critical need to interface technology solutions with personal customer care to create truly exceptional relationships. Terri believes in using the power of the internet to build a customer network and profitable sales. As a professional presenter, Terri is dynamic, entertaining and captivating. She is also a best-selling author for Dearborn Financial Publishing, an accomplished columnist, television producer, and business e-communication consultant. She is a published author of 5 books, including her most recent book with Donald Trump. Terri continues to consult with high level industry companies helping them to perfect their services of developing strategic partnerships that provide exceptional levels of service that guarantee true clients for life. Through her dynamic presentations, Terri shares the secrets to maximizing e-commerce opportunities through powerful sales and marketing e-strategies. Terri empowers audience members by providing practical steps on how to build a full and strong Internet presence and use web tools to build a community and business online. She’s been a featured expert on ABC Sunday Morning News, NBC Sunday Morning News, and WREGTV & CNBC. Terri is also the co-author of a certification for the real estate industry: Certified Military Residential Specialist.. In addition she works with the mortgage industry on a program called: Your Forever Home –
Jo Garner’s Bio
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 in Memphis, TN. 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 17 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. She hosts the Real Estate Mortgage Shoppe program on News Radio AM 600 WREC in Memphis and on IHEART radio 9A to 10A CST every Saturday.
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.
NEWS ITEMS RESOURCES FROM WEEK OF MARCH 10TH 2013
A joint survey conducted by the Department of Housing and Urban Development and Census Bureau found that approximately 20% of American households live in multifamily rental buildings.
Re/Max is seeing encouraging signs in its February sales data, including more move-up buyers entering the market.
Buyers pay closer to asking price
The gap is narrowing between the asking prices for homes and final sales prices as house values continue to climb, according to real estate valuation company FNC.
Home prices nationwide rose for the 11th straight month in FNC’s Residential Price Index for January. The composite price index for the 100 largest metro areas was up 5.7 percent compared to January 2012.
Sellers get more pricing power
As home prices rose, sellers gained leverage over buyers. This January, the average house sold for 93.5 percent of its asking price. One year before, houses fetched an average of 90.3 percent of the asking price.
“A limited housing supply and declining foreclosure sales are contributing to the recovery of underlying property values,” FNC said in a news release, adding that foreclosures were 20.2 percent of home sales in January, compared to 26.9 percent of sales a year before.
Use tax refund as down payment?
Coming up with a down payment to buy a home is one of the biggest obstacles that renters stumble on when they want to become homeowners. That’s why during tax season, many first-time homebuyers turn to their tax refunds as a down payment option, mortgage professionals say.
We’re not talking huge amounts
Derek Egeberg, a branch manager for Academy Mortgage in Yuma Ariz., says about half of the homebuyers he is currently assisting plan to use their tax refunds as a down payment to buy a house.
“These are homes in the $100,000 to $125,000 range,” he says. “They need 3.5 percent down, and some are expecting to get $4,000 from their tax returns.”
The average tax refund last year was about $2,800, according to the Internal Revenue Service. Borrowers who qualify for a Federal Housing Administration loan would have to come up with about $6,000 for a 3.5 percent down payment for a home with the median U.S. home price of about $178,000. The tax refund helps even if it doesn’t cover the entire down payment, Egeberg says.
The wisdom of using a refund this way
But is it a smart move to use your tax refund to buy a home?
It depends on whom you ask. Egeberg says it makes financial sense for many clients. With mortgage rates near record lows, borrowers can use their tax refund money to move to bigger homes that often carry lower monthly mortgage payments than what they pay in rent, he says.
But …
But the decision to buy a house shouldn’t be based on whether it’s a good time to buy, says Ed Conarchy, a mortgage planner and financial adviser at Cherry Creek Mortgage in Gurnee, Ill.
“Before you buy a home, you need to make sure that you are ready to buy a home,” Conarchy says.
When buyers rely on their tax refunds as down payment, that’s a sign they have not been able to save money on their own.
“The only reason they have the money is because they paid too much in taxes,” he says. “And if they have not been saving for a down payment, odds are they have revolving debt and don’t have a rainy-day fund.”
What about costly repairs?
The lack of an emergency fund is a concern, even if the buyer’s monthly mortgage payment is less than rent, he says.
“Let’s say it saves you $200 a month. But if all of a sudden you have to replace your roof and spend $5,000, it’s not cheaper anymore, is it?”
What do you think? Would you use your tax refund for a down payment?
Mortgage rates jumped this week as the job market improved, consumer spending increased and the economy gained momentum.
30 year fixed rate mortgage – 3 month trend
The benchmark 30-year fixed-rate mortgage rose to 3.85 percent from 3.73 percent, according to the Bankrate.com national survey of large lenders. The mortgages in this week’s survey had an average total of 0.35 discount and origination points. One year ago, the mortgage index stood at 4.15 percent; four weeks ago, it was 3.79 percent.
It’s the highest the 30-year fixed has reached since August.
The benchmark 15-year fixed-rate mortgage rose to 3.03 percent from 2.96 percent. The benchmark 5/1 adjustable-rate mortgage rose to 2.82 from 2.68 percent.
Rates climbed immediately after the Commerce Department released its closely watched monthly employment report last week. U.S. employers created 236,000 jobs in February, more than economists had expected. The unemployment rate fell to 7.7 percent from 7.9 percent.
Why rates are rising
“Overall, there’s very strong consumer confidence at the moment,” says Jordan Roth, senior branch manager for GFI Mortgage Bankers in New York. “They are seeing rallies in different markets.”
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Retail sales, a key measure of consumer spending, also rose more than expected in February. Sales increased by 1.1 percent, the largest increase since September, according to a report released Wednesday by the Commerce Department.
Confidence in the economy makes investors want to move money out of safer assets such as mortgage bonds and U.S. Treasury notes to seek riskier, higher returns on investments. When demand declines for government and mortgage bonds, mortgage rates tend to rise.
Although the recent jump in rates is more noticeable, this upward trend started a couple of months ago, says Pava Leyrer, president of Heritage National Mortgage in Grandville, Mich.
“I’ve been telling my customers now for a couple of months that rates seem to be going two steps forward and one step back,” she says. “They are inching their way up.”
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With the increase in rates, fewer homeowners are trying to refinance their mortgages. The volume of refinance applications decreased 5 percent last week, compared to a week earlier, says the Mortgage Bankers Association. The volume of purchase applications decreased 1 percent but was 9 percent higher than the same week one year ago.
“The ups and downs of mortgage application volume the past few weeks (are) no reflection on the larger picture of an improving housing market,” says Bob Walters, chief economist for Quicken Loans. “Chances are the drop in mortgage applications is tied to rates ticking up due to a better-than-expected unemployment report that showed the job market is improving, removing investor desire for safer assets.”
How high will rates go?
If the economy continues to improve, rates could reach 4 percent or slightly higher by summer, Roth says.
But even at those levels, rates would still be attractive for buyers and refinancers, he says. Last year, a 4.15 percent rate was a record low.
“Unfortunately, people always want what they couldn’t get,” he says.
The Federal Reserve has artificially kept mortgage rates low for a while now. Eventually, rates will creep back up into the 5 percent range, Leyrer says. It won’t happen overnight — but slowly, rates will rise to “normal” levels.
“We can’t sustain a viable economy with rates staying so low,” she adds. “Unfortunately, people think now that if you are up into the 4 (percent) or 4.5 percent, it’s terrible but it’s really not.”
The higher rates may deter homeowners who refinanced last year and already have somewhat low rates from refinancing again. For those who need rates to drop back to record-low to grab a refinance deal that makes financial sense, Roth says keeping your paperwork ready in case rates drop will help speed up the process.
“They should be prepared to act appropriately, accordingly and expeditiously,” he says. In the unlikely event that rates drop back to record lows, homeowners may have a small window to move, he says.
Highlights
There is more than one way to put extra money toward mortgage principal.
Explain that the extra money is for principal and not for future payments.
Talk to the lender first if you want to prepay a six-figure lump sum.
A lot of homeowners want to pay off their mortgages before the end of the loan term. This is especially true for borrowers who want to repay their home loans before retirement. There are a number of ways to accomplish a mortgage payoff.
The two easiest ways to put more money toward a mortgage are to set up automatic payments from a bank account or use the lender’s website, explains Jerald Banwart, senior vice president of customer operations at Wells Fargo Home Mortgage in Des Moines, Iowa.
“For those who have a plan to pay off their loan, we will go out and withdraw the money from your account to make your payments … or you can go online anytime on our website,” he says.
Automatic payments can be made monthly, bimonthly or biweekly to match the borrower’s employment pay periods, if that’s the borrower’s choice.
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Extra money can be paid in other ways as well. Banwart says borrowers can add an additional sum to a scheduled payment, mail in an extra check between payments, call the bank’s customer service telephone number, or even walk into a branch and arrange the transaction in person with a teller.
Loan must be current
Technically, what most homeowners think of as an extra payment isn’t really a payment because it’s not one of the scheduled installments. Rather, it’s extra money applied to principal, called “curtailment” in bank parlance.
“They’re not really making another payment,” Banwart explains. “They’re sending in funds to pay down the principal.”
Borrowers generally can apply extra funds to principal as long as their loan is current, meaning all the scheduled payments are up to date, adds Vicki Parry, assistant vice president of mortgage and equity servicing at Navy Federal Credit Union in Vienna, Va.
If a prior payment is late or has been missed or the loan is delinquent, the extra funds must be applied to make up that difference before additional principal can be paid.
The same isn’t true for an escrow or impound account used for property taxes and homeowners insurance, however. Banwart says a shortfall there can be paid in a lump sum or spread over a number of future payments, but it needn’t be made up in full before additional sums can be applied to principal.
Clear instructions
Borrowers who want to send in extra money don’t need to call the lender or loan servicer ahead of time.
“There’s really no reason to call and say, ‘Hey, I’m going to do this,'” Banwart says.
That said, communication is crucial to ensure the additional funds are applied to principal and not to the next scheduled payment. Clear instructions are especially important if the borrower’s intention might not be clear, he adds.
“As long as you have a way of telling us either via a coupon or online or through the branch, you can be assured it will be done correctly,” he says. “It’s when you just send in a check and don’t say what to do that issues can arise. We’re doing our best to guess what you wanted.”
Two situations likely to cause confusion: The borrower wants to pay an extra amount exactly equal to the scheduled payment, or the borrower wants to pay an extra amount right before the next scheduled payment is due.
Curtailment limits
Borrowers who want to apply a relative large extra sum to their principal — perhaps because they’ve received an inheritance, bonus or other windfall — can do so, but a few cautions are in order. Some lenders limit the amount that can be paid online to protect against fraud or a typographical error. Wells Fargo, for instance, caps online principal curtailment to $99,999 per transaction, in part to guard against customers accidentally trying to pay $100,000 instead of $10,000.
Another caveat is that the additional money can’t equal or exceed the loan balance, according to Hugh Suhr, a spokesman for SunTrust Mortgage in Atlanta. A loan payoff figure is a moving target due to interest calculations, and thus it’s best discussed with the bank in advance.
No money back
Here’s one more tip: Borrowers who send in extra money by mistake might be able to reverse that error if they contact the lender with haste. But extra money sent in long ago generally can’t be reapplied to current or future payments if, say, financial difficulties arise.
“If it’s within 30 days, it’s typically not an issue,” Banwart says. “But if someone is coming back and asking for the last five years of curtailment, the answer is going to be ‘no.'”