Good morning Memphis! And a good Saturday morning to IHEART listeners around the country. You’re on the Real Estate Mortgage Shoppe program with me Jo Garner, mortgage professional with Evolve Bank and Trust. We want to talk with you about WHATEVER real estate or financing topic you want to discuss. Give us a call at 901 535 WREC. That number again is 901 535 9732. Our general topic today is “How To Get The Best Deal On Your Mortgage And On Buying And Selling Your Home.” Our real estate expert in the studio today is Pat Goldstein, a 30+ year veteran real estate professional in the Memphis market. Pat Gold stein, it is great to have you back around the coffee table with us.
You know, Pat, my motto for buying and selling real estate is “If The Deal Works For You Today, Do It Today.” The struggle people have today are the ever changing mortgage regulations and rates and market environment. Seek advice from knowledgeable, experienced real estate professionals with a good reputation. You need an experienced realtor, loan officer, and a good real estate attorney or title company. Depending on your situation you may need a good home improvement contractor or fix-it- guru too
Rates were fairly low and steady all week until Friday.
There are two very different priorities from buying a house compared to refinancing a house. When you are refinancing a home, your main focus is the rate-how low can you get the rate without having to pay a lot of closing costs. When you are PURCHASING a home your emphasis is not so much on the rate but on the overall terms on your financing-like is your payment one that you can live with and were you able to get into the home without spending every dime of your savings. And you want to buy the home that you will enjoy paying for the most After you have purchased your dream home and gotten the keys, its NOT so much important what happens OUTSIDE the house but what happens INSIDE the house that matters most. Your payments need to be comfortable enough for you to enjoy life with your family.
Pat, without a doubt we are getting the most calls from customers preparing to buy a home, a second home or investment property. Houses are so affordable right now with prices still being low following drop we saw a few years ago and rates are still at historic lows. The difference can be a few hundred dollars per month less now than they were when the rates and home prices were higher. There are more opportunities for people wanting to buy real estate for investment because you can get a positive cash flow more often than not. If you don’t know where to start exploring the possibilities on the financing, call me. We can talk more directly off the air at 901 482 0354. My direct number off air is 901 482 0354 or catch me on the blog www.mortgageloansblog.com OR call us ON THE AIR right now at 901 535 WREC or 901 535 9732.
I know I said purchases of homes, 2nd homes and investment properties are where the real opportunities are right now but refinances are still hot for some homeowners. Most of the refinances we are locking in now are for people wanting to cash out and reinvest the money in acquiring more income-producing real estate or in other wealth building investments. Make that money work for YOU. If you have a rate of 5.75% or higher, you can still get a great deal refinancing to a lower payment or shorter term too. It only takes a few minutes. Let’s talk. I can run various scenarios and let’s see how much money we can free up for you. My direct number is 901 482 0354 or connect with me on my blog www.mortgageloansblog.com
If you want to buy a house but you’re short on cash or need to boost your credit scores, let’s talk. My assistant, Susan Belew and I have been trained on the Credit Simulator computer programs. Its like a flight simulator-it can tell you the least expensive way to raise your credit scores the most in the least amount of time. If you are committed to work the program and willing to start right away, Susan and I are ready to help you.
If you are short on funds to close, we can help. The important focus here is to find the money for you to close but to make sure the payment is comfortable enough for you to be able to save for a rainy day. We have 100% financing products and down payment assistance. We have other ideas we can explore with you for sources of funds to close.
Pat Goldstein of Crye Leike in Memphis is in the studio with us today. Pat, now we are getting to the topic of How To Get The Best Deal Buying and Selling Your Home. QUESTIONS ANSWERED BY PAT GOLDSTEIN QUESTIONS ANSWERED BY JO GARNER Here are a few more tips on how to avoid financing pitfalls-When you are budgeting for a new home consider-not just the principal and interest payment but the costs of homeowners insurance. Go ahead and get quotes BEFORE you sign a contract on a house, consider the ACTUAL amount of property taxes on the home-not what you got from a realtor site. Tax rates have gone up lately . Also, if you are buying a condominium property or a planned unit development property-you need to budget in the association fees. On condos the association fees can be $250 per month up to $500/mo. Make sure there are no upcoming association fee increases in the near future. 2. How do I know if I am getting the best terms on a mortgage? 3. How do you determine what is a comfortable payment? Jo has two announcements: Next Saturday on the Real Estate Mortgage Shoppe Terri Murphy of US Learning , author and national speaker will be hosting this show on News Radio 600 WREC. She sits on the board of the National Board of Realtors and will be opening the conversation with you about your real estate topics. Give her a call Transition Music: “Our House” by Crosby, Stills, Nash & Young; “ The House That Built Me” by Miranda Lambert; “Home” by Phillip Phillips Jo Garner’s Bio 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.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. Freddie Mac and Fannie Mae have been in federal conservatorship since August 2008 during which time they have drawn a combined total of $187 billion in government support. Dividends to the Treasury total $146 billion to date, none of which has counted against the debt. Recent changes to the agreement between the GSEs and the Treasury Department guarantee that the GSEs cannot build cash reserves but instead must return all but a small buffer of their net worth each quarter to the Treasury. In the meantime the two companies have returned to profitability, posting several record and near record quarterly earnings and requiring no Treasury draws for over a year. During the conservatorships they have provided the bulk of the country’s mortgage liquidity and completed several million foreclosure interventions. “You have to keep your eye on the prize. If you’re buying a home, the home is the prize. If you’re refinancing, the rate is the prize. Rates took a beating today. Actually a TKO. Keep your eye on the prize.” -Bob Van Gilder, Finance One Mortgage. To be fair, the “decision” isn’t necessarily a singular event where the Fed either announces or not–at least not as far as markets are concerned. They will jump to their conclusions based on the more important pieces of data leading up to the Fed meeting, especially the jobs report on September 6th. Aug 16 2013, 5:42PM In other words, both bonds and stocks “sold-off” (moved lower in price), especially into the afternoon hours, because both stocks and bonds view tapering as something that will cause further losses. Next week is light in terms of data with the exception that Wednesday brings the release of Minutes from the last FOMC Meeting. Markets might get some insight to the nuts and bolts of the Fed’s tapering plans and are cautious ahead of that event, not to mention generally cautious as the “decision time” for tapering grows closer. Loan Originator Perspectives Analysts Call for Salvaging GSEs, Advocate Small Tweaks not Massive Reform Bank of America Merrill Lynch has jumped full on into the debate over the future of Fannie Mae and Freddie Mac (the GSEs). With a recent article from its rates research staff titled “GSE profitability changes the reform landscape” the company joins a very small contingent advocating for a less precipitous approach to determining the fate of the GSEs. Freddie Mac and Fannie Mae have been in federal conservatorship since August 2008 during which time they have drawn a combined total of $187 billion in government support. Dividends to the Treasury total $146 billion to date, none of which has counted against the debt. Recent changes to the agreement between the GSEs and the Treasury Department guarantee that the GSEs cannot build cash reserves but instead must return all but a small buffer of their net worth each quarter to the Treasury. In the meantime the two companies have returned to profitability, posting several record and near record quarterly earnings and requiring no Treasury draws for over a year. During the conservatorships they have provided the bulk of the country’s mortgage liquidity and completed several million foreclosure interventions. Merrill Lynch Rates Strategists Ralph Axel and Priya Misra say that these results provide two key takeaways: Most bills awaiting Congressional action contain this provision, as did the President’s recent Phoenix speech on housing; most other stakeholders seem to assume it as the starting point for their own proposals. The debate is not if, only when; whether they should be wound down over a five-year time frame or placed in more or less immediate receivership. But Merrill Lynch says it is “time to separate useful reform from unnecessary reform.” Designing and implementing reform is not without cost or risk and there are already huge resources being devoted to it while the risk involves the possibility of a significant pullback in both home prices and credit availability. Yet, the paper says, the benefits are questionable. Senate Majority Leader Harry Reid recently “fired the first shot” against major change but the President’s recent speech, while basically restating the administration’s position from a 2011 White Paper, seemed “heavier” because his call for winding down of the GSEs comes as Congress is actually considering it. In calling for an end to the dual government/non-government role of the companies the President said “For too long, (they) were allowed to make huge profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag.” As the two continue to produce strong earnings, Merrill Lynch says, “the bag taxpayers are holding is quickly filling up with cash,” and that could eventually persuade taxpayers to change their outlook on the fate of the GSEs. Looking back at the housing crisis, the authors say they see what needs to be done: The failures of the GSEs in the above areas were not theirs alone and the private sector did not prove any August 16, 2013 In other words, both bonds and stocks “sold-off” (moved lower in price), especially into the afternoon hours, because both stocks and bonds view tapering as something that will cause further losses. Next week is light in terms of data with the exception that Wednesday brings the release of Minutes from the last FOMC Meeting. Markets might get some insight to the nuts and bolts of the Fed’s tapering plans and are cautious ahead of that event, not to mention generally cautious as the “decision time” for tapering grows closer. Single-Family Starts Continue Holding Pattern in July “Because we have to combine several different data sources and make certain assumptions in calculating the cash transaction series, the level of our estimates may be inaccurate,” researchers Charles Himmelberg, Marty Young and Hui Shan noted in an Aug. 14 report. “But the change in the series over time should provide useful information about the underlying market trend.” The report estimates on a four-quarter moving average basis the percent of cash transactions by count and dollar amount as of this year is somewhere between 50% to 60% of the market. It finds it has been trending upward since 2008 from a level that was a little over 30% based on dollar amount or lower than 20% based on count the previous three years. The estimates are part of an analysis Goldman credit strategy researchers did of data from the Mortgage Bankers Association, the Census Bureau, the National Association of Realtors and Lender Processing Services with the aim of determining how much upside there is to purchase lending. The Goldman researchers said they expect “a slow return of the share of home sales financed by cash back to more historically normal levels. “By 2016, we project purchase originations of $1.1 trillion, roughly equal to the level seen in 2002,” they said. According to Goldman, the dollar volume of purchase originations in 2012 was $500 billion and it expects this figure to rise to $750 billion in 2014.
1. What can I do to get my house ready to sell?
2. What are some things I can do to make the house worth more?
3. Care houses worth more now than they were last year?
4. How important is it that I have my home listed on the internet?
5. How true is it that I should make my home look like a model home and not MY home? How do I do that?
6. Do I need to get a loan preapproval before I start looking for houses?
7. What are the steps to buying a house?
8. Should I have a home inspection on the house I am wanting to buy?
9. What are some of the important things to look for in buying a house?
10.
11.
1. What are some tips you can give home buyers to avoid costly mistakes on their home financing? Beware of the 1-800 companies that advertise ultra low rates at no closing costs. Most of them want a $500 upfront, non-refundable fee to process your loan and then—oops sorry-for some reason your loan does not fit the criteria to get that ultra low rate. I have had customers come to me after talking with the “No Closing Costs” companies only to find they got a HIGHER rate than market because the 1-800- number mortgage company covered the closing costs out of premium pricing on the higher than market rate. It would have been cheaper for the homeowner to have rolled the closing costs into the loan because they would have gotten a lower rate for the life of the loan over the entire amount of the loan even with a couple of thousand dollars added to the balance rather than paying NO closing costs but paying a higher rate over the entire loan amount for the entire term of the loan. I can do the numbers for you. Call me.
Don’t’ wipe out every penny of your savings. Make sure you have reserves to fall back on in an emergency.
A. Shop at least three different mortgage companies. But remember the lowest rate is almost NEVER the best deal. Here’s another warning about the 1-800 companies. I have seen their quotes and so many times they leave out large items on the closing costs that the borrower WILL HAVE TO PAY at closing like State real estate transfer taxes and taxes on the mortgage-amongst other things.
B. The rate you end up will largely be based on your credit score. The higher your credit score the lower your rate. If you are just a little bit off from the best rate, let me help you get your score up enough to get the best rate. A credit score of 740 and above gets the best rate quotes. There are several tiers below that with varying rates depending on the score range.
C. Give the lender ALL pages of your last 2 years tax returns, your latest paystubs, W2s, 1099s and all pages of your bank statements up front. There are strict guidelines on how your income and assets are counted. Better to know this up front before spending money on an appraisal or before putting down earnest money to buy a house.
D. If you are self-employed or if you own rental property, there are fewer and fewer loan officers out there who know how to find income in the back pages of your tax returns and corporate returns and K-1s. I have gotten so many self-employed people approved and closed over the last few months than ever before. These are people with good credit who have been turned down at other mortgage companies and banks due to lack of income. When they send me all pages of their tax returns, in so many cases, I have been able to find thousands of dollars of income IN THE BACK PAGES OF THE RETURN. If you are that person or you know someone like this, call me on the air right now at 901 535 WREC or directly off the air at 901 482 0354.
Today the underwriting is done by a computer first before the file ever sees a human underwriter. The computer underwriting systems approve loans by weighing various risk factors and strength factors. I strong borrower can be approved for a house payment than when added to his other monthly debt can go up to 50% of gross income. More riskier borrowers can regularly get approved for a payment when added to other monthly debt goes up to 41% of the gross income. But if your income is NOT going up and you want to be in a place to build wealth or just enjoy life-you need to keep your total income-to-debt ratio, including the total house note with taxes and insurance etc at no more than 36% of your gross income. We can do the numbers for you. Call me.
Real Estate Tip of the Week
(Pat Goldstein as 1 to 1.5 minutes to share a helpful and very practical tip that will save a homeowner or homebuyer time, energy or money)
Talk Shoppe offers the community free networking and education to anyone interested in real estate or business. This Wednesday 9A-10A at DeVry University 6401 Poplar Ave 6th floor in Memphis Jerry Thomas of Sedona Staffing will be talking about tips for successful job interviews in the current market. The events are free. For more information about Talk Shoppe go to www.TalkShoppe.BIZ
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.
Pat Goldstein, Realtor with Crye-Leike (901) 606-2000
Mortgage Rates Sharply Higher After Lukewarm Economic Data
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Mortgage rates rose sharply again today, with best-execution up to 4.75 in most cases, after another round of economic data failed to convince markets that the Fed would reconsider their probable September 18th announcement of a reduction in asset purchases. Much of the interest rate spike of the past 3 months has been in anticipation of so-called “tapering,” and the burden of proof is currently on the various scheduled economic reports to suggest the economy is weak enough that the Fed should reconsider. So far, there hasn’t been such a report, and in fact, the balance of this week’s data was slightly positive.
Even when the data is worse than expected–like today’s Consumer Sentiment and Housing Starts–it hasn’t been enough. While somewhat audible, these second-tier reports are quickly overcome by the ongoing sturm and drang of lackluster growth. Actually it’s the consensus on the Fed’s course of action that possesses the sound and the fury. Lukewarm data doesn’t speak loud enough to be heard unless it’s in the company of many similarly-voiced friends. That was the case today and that’s why the markets took an ever more defensive stance against tapering into the weekend.
Tto be fair, the “decision” isn’t necessarily a singular event where the Fed either announces or not–at least not as far as markets are concerned. They will jump to their conclusions based on the more important pieces of data leading up to the Fed meeting, especially the jobs report on September 6th.
“Ugly Day for markets. Rates began the day higher and only snowballed from there. While we haven’t revisited 12 months highs of 7/5 (yet), we’re very close. Locking at application is the only way to guarantee you’re getting the rate you’re looking at today. Unfortunately, that can change several times in the same day.” -Ted Rood, Senior Originator, Wintrust Mortgage
“You have to keep your eye on the prize. If you’re buying a home, the home is the prize. If you’re refinancing, the rate is the prize. Rates took a beating today. Actually a TKO. Keep your eye on the prize.” -Bob Van Gilder, Finance One Mortgage
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Aug 16 2013, 10:10AM
1. the GSEs function well as government-run entities, and
2. the infrastructure of mortgage finance is not in need of major reform.
While the current debate among stakeholders over housing finance reform presents arguments for and against government guarantees of mortgages, the ownership, management, and structure of a new securitization platform, and the role and regulation of the private sector there is one nearly universal area of agreement, the GSEs must go.
ο Price credit risk fairly to account for long-term losses;
ο Manage risk carefully, especially when home prices are rising;
ο Hold appropriate capital to manage economic downturns smoothly;
ο Recognize that a government guarantee must be explicit and that, even without such a guarantee, government will be the ultimate backstop.
Mortgage Rates Sharply Higher After Lukewarm Economic Data
Mortgage rates rose sharply again today, with best-execution up to 4.75 in most cases, after another round of economic data failed to convince markets that the Fed would reconsider their probable September 18th announcement of a reduction in asset purchases. Much of the interest rate spike of the past 3 months has been in anticipation of so-called “tapering,” and the burden of proof is currently on the various scheduled economic reports to suggest the economy is weak enough that the Fed should reconsider. So far, there hasn’t been such a report, and in fact, the balance of this week’s data was slightly positive.
Even when the data is worse than expected–like today’s Consumer Sentiment and Housing Starts–it hasn’t been enough. While somewhat audible, these second-tier reports are quickly overcome by the ongoing sturm and drang of lackluster growth. Actually it’s the consensus on the Fed’s course of action that possesses the sound and the fury. Lukewarm data doesn’t speak loud enough to be heard unless it’s in the company of many similarly-voiced friends. That was the case today and that’s why the markets took an ever more defensive stance against tapering into the weekend.
Tto be fair, the “decision” isn’t necessarily a singular event where the Fed either announces or not–at least not as far as markets are concerned. They will jump to their conclusions based on the more important pieces of data leading up to the Fed meeting, especially the jobs report on September 6th.
By Brian Collins
Single-family housing starts fell 2% in July from the prior month as construction activity continues to lag expectations and the demand for new homes.
Goldman Estimates Cash Sales Are 50% of Home Purchases
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Estimates by Goldman Sachs Group researchers suggest more than half of all home purchases are done on a cash basis, or at least are financed to a far lesser degree than before the recent downturn, but they say that trend will slowly reverse itself in coming years.