Good morning Memphis! Que’ bueno! Happy Cinco de Mayo tomorrow. You’re on the Real Estate Mortgage Shoppe program and I’m your host, Jo Garner, mortgage professional with Evolve Bank and Trust. Today we’re talking about “How Low Can They Go: Your Mortgage Rate and Your Property Taxes” and we have the expert right here in the studio with us—Tom King, glad to have you around the coffee table.
Tom, rates took off yesterday like a track star at the starting bell. The pricing on rates (not rates) but the price you PAY for rates spiked .5% higher than the day before due to a better-than-expected jobs report. Those of you who locked your rate and terms earlier in the week are the clear winners-locking the lowest rates for the year. Today the 30 yr conventional rate is around 3.5% and the 15 yr 2.75 to 2.875%. Fha 30 yr rates are around 3.25%. Those of you who have NOT locked your rate and terms still have some cards on the table to play. If you want to see how a lower interest rate could benefit you and your family, call me directly off the air and we can talk directly at 901 482 0354. My direct number again is 901 482 0354. Or catch me on my blog www.mortgageloansblog.com
Grab the good opportunities while they’re in front of you because like a wild, exotic bird, opportunities can take wings and fly away. If you are thinking about purchasing a home or refinancing one—with rates still in the 2’s and 3’s its almost ALWAYS cheaper to buy vs rent a home and almost ALWAYS less expensive in the long run to refinance down to a lower rate to reduce your payment or shorten the term on your mortgage or both. Be sure you work with an EXPERIENCED mortgage loan officer who has exhibited the motivation to help YOU with your goals. Be sure, if you are BUYING a house, to use an experienced realtor to protect you from expensive pitfalls in the buying process. William Wordsworth said that “ In modern business it is not the crook who is to be feared most, it is the honest man who doesn’t know what he is doing. “ A group of knowledgable professionals can save you expensive mistakes.
Bidding wars are still going on with multiple people offering on the same home. Competition! You can gain an advantage by already being preapproved for your loan BEFORE you start making offers on houses. Compare at least a couple of financing options. Just a year ago FHA government financing with a 3.5% down payment was a great option for folks looking for a small amount down. Today, FHA has gone up so high on the monthly mortgage insurance and now on low down payment terms, you may end up paying the high mortgage insurance for the life of the loan—that ‘s tens of thousands of dollars you could avoid paying if you chose a special 3% down payment conventional loan instead.
Here’s an example; Your family member tells you they’re interested in buying a home for $150,000 and they have about 5% to put into the purchase. If they plan to be in the house for the full 30 years they could end up paying about $162 per month in monthly FHA mortgage insurance for 360 months totaling about $158,600 in mortgage insurance fee—and remember the mortgage insurance doesn’t benefit the borrower at all. Now, if this same family member tells you they want to buy a house for $150,000 and they are using a 3% Conventional loan, here’s what they would pay in mortgage insurance. SP 150K Conventional 3% down loan amount $145,500 3.5% 30 yrs $653 P&I + taxes 241+ 80 ins + $139/mo =$1,113/mo or $4,743 single premium up front and $0 per month.
FHA 3.5% down payment base loan amount $144,750 with upfront mip $147,283 3.25% 30 yr $641 P&I + 241 taxes + 80 insurance + 162 MIP=$1,124/mo
In 5 to 10 years you should be able to eliminate All of the conventional monthly mortgage insurance so now your payment on this plan is even lower without the private mortgage insurance. If taxes and insurance is the same your total payment would go from $1113/mo down to $974 while on the FHA you would still be paying about $1124/mo for the life of the loan unless you get your new FHA case number prior to June 3rd. In round about numbers over 30 years you save about $42,324 going the conventional route if you are comparing total payments.
On the FHA Streamline program we have ways to qualify you with both no income verification and no appraisal. If you have a primary residence with an FHA loan on it, a second home or even an investment property with an FHA loan on it, you can refinance with no income verification and no appraisal. Your pricing is better if you have your income verified. My assistant, Susan Belew and I would like very much to work the numbers for you on YOUR loan to see how much we can save you today and how much we can save you over the long term.
The special HARP loans are still available for qualified loans and the HARP program usually does not require an appraisal value. This works for your primary residence, your second home And your investment property with some restrictions, of course.
The USDA Rural Housing loan just rolled out their pilot program for people to refinance with no appraisal if they have a USDA loan now.
If you’re purchasing a home, we have down payment assistance, we have temporary bridge-like loans and we can even do combination loans to help you get the very best terms on a purchase loan and accomplish your goal. If you have not already talked with a mortgage officer, give Susan and ME a call at 901 482 0354. That number again is 901 482 0354. Or go to my blog www.mortgageloansblog.com
Tom, I feel like the right thing to do for us today is to take every opportunity to improve our financial position while we have the chance whether its lowering your mortgage interest or your property taxes. We’ve been talking about taking advantage of the low mortgage rates, but what do we do to lower our real estate property taxes. What steps do we take to begin the process of lowering our property taxes?
Questions for Tom King to answer:
1/How will the raise in the tax RATE affect the property taxes paid even with lower assessment values?
2.How does your 35 years appraisal experience benefit the customer on your tax appeal services?
3. What dates do YOU use as opposed to the dates the customer uses for the tax appeal deadline?
Questions for Jo Garner to answer:
1. You mentioned down payment assistance. What is the best program out there for down payment assistance?
A. Helping Homeowners 1% of own money 2.5% can be a gift and the full $15K can be used for closing costs, prepaid taxes and insurance and reducing the loan amount for a lower rate.
B. THDA rate is a little higher but income limits are more lenient with the seller paying the buyers costs, the buyer can get into a house for zero or very little down
C. Shelby Co DPA,City of Memphis DPA, Fed HELP funds for Mississippi
2. Do you think the rates will go down any lower this year?
3. FHA is about to make another change on the amount of time you pay their monthly mortgage insurance on an FHA loan? How fast do I need to get my case number with FHA to meet that deadline? June 3rd On a 30 yr FHA loan under 90% the borrower pays the monthly mortgage insurance for 11 years. But on a 30 yr FHA loan if you have a loan-to-value over 90%, then you pay the monthly mortgage insurance for the life of the loan. If you or someone you know is planning on getting an FHA loan to refinance a home or if they have a contract to purchase a home, it is important that they go ahead and get the case number on this loan ordered now and not wait. If they are not already working with a loan officer, my assistant Susan Belew and I can help them get this done within the deadline. Just call us at 901 482 0354. Or catch up with us on our blog www.mortgageloansblog.com
4. How can you tell if you have a loan you can refinance using the special HARP program?
REAL ESTATE TIP OF THE WEEK: If you are trying to decide whether to pay some points to get your interest rate down or pay no points, ask yourself these questions (1) How long do I plan to keeping this house (and the mortgage)?
2. How fast can I recapture my extra investment? If you are planning to be it the house for at least 5 years, if you can recapture your investment in 3 years you should be okay. Optimally , you need to try and recapture your cost in 18 months or less.
If you were borrowing $200K for 30 yr term at 3.25% with no points, your principal and interest payment would be about $870/mo. If you could refinance with a lower rate of 3.125% with .625% point then your payment would be $13/mo lower but you would be paying about .625% or $1,250 extra cost to save the $13/mo. How long would it take you to recapture your extra investment? Divide your extra costs of $1,250 by the $13/mo you are saving. It will take you 96 months to recapture your extra investment. That’s too long to wait. The best investment for this example looks like the higher rate with no points.
1. Jo has two announcements to make : Talk Shoppe offers free education and networking to anyone interested in real estate or business. This Wednesday at DeVry University 6401 Poplar Ave Memphis Duane McCrory of Top Quality Service Heating and Air will be talking about “How to Get The Best Benefit From Your Heating and Air System” For more information about Talk Shoppe go to www.TalkShoppe.BIZ
2. Next week on the Real Estate Mortgage Shoppe program here on AM 600, Tom King and I are going to continue our conversation about the Shelby County property tax situation and we are going to continue to look at opportunities for making money on your mortgage. Let us know what topics YOU want to hear.
Transition Songs: “Born To Hand Jive” from the movie Grease; “You Can’t Skate In A Buffalo Herd” Roger Miller; “If My Nose Was Running Money” Aaron Wilburn.
About Tom King. (901) 487-6989 Tom King has been an appraiser in the Memphis area for over 35 years. He cut his teeth on appraising since his father was an appraiser also.
Tom currently is partner in the King and Vaughan Consulting firm with Deanna Vaughan. For this company Tom is a certified Shelby County real estate property tax appeal expert. With the new property tax appraisals coming out, Tom is about to be VERY busy.
In his free time Tom likes to sky dive and is VERY experienced at it. He also lives in the country and has horses. He is a long-time member of Bellevue Baptist church and very active in the Christmas Tree production.
Jo Garner’s Bio
www.MortgageLoansBlog.com www.MoneyShoppe.NET (901) 482 0354 jogarner@mindspring.com
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 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. www.TalkShoppe.BIZ She was also the editor of Power Shoppe, a free weekly ezine designed for real estate professionals and others indirectly connected to the real estate industry and currently publishes on her blog www.MortgageLoansBlog.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.